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Showing 441 to 460 of 1482 Records
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2023 (6) TMI 1042
Validity of reopening of assessment - jurisdiction of respondent no.3 (ITO, Ward No.1, Shimla) to make an assessment u/s 148 - Transfer of case u/s 127 - HELD THAT:- Admittedly, the order u/s 127(2) of the Act was passed by respondent no.1 transferring to respondent no.4 at New Delhi, the power to assess the petitioner, which was with respondent no.3 (ITO, Ward No.1, Shimla). It was clearly mentioned therein that the said order would come into effect immediately with effect from 12.03.2022.
Therefore, with effect from 12.03.2022, the jurisdiction of respondent no.3 to make an assessment under Section 148 of the Act, qua the petitioner, got extinguished.
When respondent no.3 had issued notice under Clause (b) of Section 148A of the Act to the petitioner on 22.03.2022, the petitioner had brought this fact to the notice of respondent no.3 in his response on the Portal given on 28.03.2022. It was further stated that the order dt. 15.03.2022 issued u/s 127(2) of the Act that respondent no.1 was also available on the Income Tax Portal and a copy of the same was also attached to respondent no.3; and the specific plea was raised that notice dt. 22.03.2022 under Section 148 A (b) of the Act issued by respondent no.3 to the petitioner, was without jurisdiction.
Ignoring the same, the impugned notice under Section 148 was issued on 01.04.2022 by respondent no.3. The respondents cannot place reliance on sub-section (4) of Section 127 of the Act and contend that the transfer of the case can be made at any stage of the proceedings and the notice issued under Section 148 of the Act is not invalidated because in the instant case, the transfer of jurisdiction was done on 15.03.2022, much prior to the issuance of notice under Section 148A(d) and Section 148 of the Act on 01.04.2022. Had the transfer of jurisdiction happened after the issuance of notice of Sec.148 of the Act, the situation would have been otherwise.
Writ petition is allowed; the notice issued u/s 148 by respondent no.3 is quashed and respondent no.3 is prohibited from taking any action pursuant thereto.
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2023 (6) TMI 1041
Refund claim - effect of name change - defective return u/s 139(9) or not - in whose name the refund should be issued? - as change of name of Petitioner, Petitioner ought to have filed revised returns to be entitled to refund and therefore, a notice u/s 139(9) of the Income Tax Act, 1969 - HELD THAT:- As the name change has been reflected in the records of the Income Tax Department. Notwithstanding this, Petitioner has been issued a notice dated 23rd April, 2019 stating that the name mentioned in the return of income does not match with the name as per the PAN database and Petitioner has been advised to correct the name in the return of income as per PAN allotted to Petitioner.
PAN database correction would certainly indicate what was the original name and therefore, Petitioner’s name when it filed the return of income tax was the correct name as it then existed. Therefore, there can never be a defect and notice issued u/s 139(9) was not a valid notice. If AO had checked the database, he would have found answer and could have avoided issuing a notice. Notice is hereby quashed and set aside.
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2023 (6) TMI 1040
Dismissal of appeal by tribunal on non filling of paper book - HELD THAT:- On 23/02/2022, this Court had directed respondent no.1 to file an affidavit after inspecting the Records and Proceedings and make a statement whether such a paperbook was filed. The affidavit has been filed, but it only says that paperbook was not found.
We would, however, agree with Mr. Jain that just because the paperbook is not found in the Records and Proceedings of the Tribunal, it does not mean it was not filed. Petitioner has filed an affidavit through its Director stating that the paperbook was filed. A copy of the paperbook was also served on 01/10/2019 upon the departmental representative through covering letter addressed to the Registrar, Appellate Tribunal, CGO Building, Mumbai.
To the averments of petitioner that such a paperbook was filed, there is no denial. We would lean in favour of petitioner and accept petitioner’s explanation that such a paperbook containing 71 pages was filed. Without going into or dealing with this point, the Tribunal has simply rejected the Misc. applicatoin.
We hereby quash and set aside the impugned order dated 18/05/2021 and remand the matter to the Tribunal.
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2023 (6) TMI 1039
Validity of reopening of assessment - notice against company non existent/ amalgamated - HELD THAT:- As assessee has intimated the concerend AO about scheme of amalgamation and company having ceased to exist as a result of the approved Scheme of Amalgamation, thus legal principle provides that the amalgamating entity ceases to exist upon the approved scheme of amalgamation.
Notice issued under Section-148 in its name[ company amalgamated] would be fundamentally illegal and without jurisdiction. See MARUTI SUZUKI LTD [2019 (7) TMI 1449 - SUPREME COURT] and ADANI WILMAR LTD. [2023 (2) TMI 864 - GUJARAT HIGH COURT] - Decided in favour of assessee.
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2023 (6) TMI 1038
Reopening of assessment u/s 147 - deduction u/s 80-O claimed - change of opinion - claim of deduction u/s 80-O consequent to the amendment w.e.f. A. Y. 1998-99 but copies of the bills were not produced - HELD THAT:- As perused the Assessment Order in which the only issue which has been discussed is the deduction claimed under Section 80-O.
AO has extensively dealt with the submission of bills during the assessment proceedings - AO has also recorded that the assessee even submitted relevant supporting vouchers and bills which have been verified on the test case basis with the detailed statement filed by the assessee. This indicates that what is recorded in the reasons to believe that assessee did not produce bills is incorrect.
As held by this Court in Aroni Chemicals Limited [2014 (2) TMI 659 - BOMBAY HIGH COURT] once a query is raised during assessment proceeding and the assessee has replied to it, it follows that the query raised was a subject of consideration of the A. O. while completing the assessment.
In the case at hand from the Assessment Order, it is quiet clear that the A. O. has not only considered but also extensively dealt with in the Assessment Order the deduction claimed under Section 80-O - Therefore, there can be no doubt in the present facts that the re-opening of the assessment is merely on the basis of change of mind of the A.O. from that held earlier during course of assessment proceedings leading to the Assessment Order. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. Decided in favour of assessee.
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2023 (6) TMI 1037
Claim of interest on refund of "penalty amount and interest paid thereon" - Revision of revision of order u/s 264 - rejecting application of Petitioner to grant interest on refund under the provisions of Sections 244/244A - HELD THAT:- Madras High Court in Needle Industries Pvt. Ltd., [1998 (6) TMI 84 - MADRAS HIGH COURT] has held that the expression “amount” in the earlier part of Section 244 (1A) of the Act would refer to not only the tax but also the interest, and the expression “amount” is a neutral expression and it cannot be limited to the tax paid in pursuance of the order of assessment. The clear intention of the Parliament is that the right to interest will compensate the assessee for the excess payment during the intervening period when the assessee did not have the benefit of use of such money paid in whatsoever character.
Madras High Court further held that in the context of Section 244(1A) of the Act, the expression “tax” would include interest also and the definition of tax under Section 2(43) meaning “income tax” cannot be applied in the context of Section 244(1A) - Court also held that consequently, the interest paid in pursuance of the order of Assessment has to be regarded as forming part of income tax or an adjunct to income tax and the result would be that Assessee is entitled to interest on the interest refunded also.
We are in respectful agreement with the view expressed by the Madras High Court in Needle Industries Pvt. Ltd [1998 (6) TMI 84 - MADRAS HIGH COURT] This has been followed by the Gujarat High Court in Gujarat State Warehousing Corporation (supra) and later Delhi High Court followed Gujarat State Warehousing Corporation [2001 (8) TMI 24 - GUJARAT HIGH COURT] in the Modipon Ltd. [2004 (4) TMI 38 - DELHI HIGH COURT].
We should also add that Section 240 of the Act makes no distinction between refund of tax or penalty paid and refund on other amount collected. The case of Respondent is totally off target because Petitioner is not claiming interest on interest which is due to Petitioner but what Petitioner has claimed is interest on amount which is paid by Petitioner as interest under Section 220(2) of the Act which forms part of refund due to Petitioner. The A.O. had wrongly demanded the amount of the interest under Section 220(2) of the Act.
Petitioner had paid interest on outstanding amount of penalty. On deletion of penalty, Petitioner became entitled to refund of amount of penalty paid by Petitioner as well as the interest thereon paid under Section 220(2) of the Act. The amount of interest paid by Petitioner under Section 220(2) of the Act, in our view, thus became part of refund envisaged under Section 240 of the Act. Therefore, Petitioner is entitled to interest on the said amount under the provisions of Section 244(1A).
Impugned order passed u/s 264 after going through the same and examining the question of the legality thereof, to quash, cancel and set aside the same.
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2023 (6) TMI 1036
Request for personal hearing through video conferencing with the second respondent rejected - violation of principles of natural justice - HELD THAT:- As the petitioner claim that it has to produce voluminous documents before the Authority and hence, personal hearing through video conferencing was not provided to the petitioner. However, the AO is sitting at Chennai on 03.05.2023 at Non - Corporate Circle – 11 (1), BSNL Building Tower, Greams Road, Chennai – 600 006 and without prejudice to the rights of the respondents, the petitioner will be given opportunity.
In view of the fair submission made by the learned Senior Standing Counsel (Income Tax) appearing for the respondents, the impugned orders passed by the second respondent dated 14.03.2023 are set aside and the matter is remanded back to the AO for fresh consideration.
The petitioner is directed to appear before the Assessing Officer during the sitting at Chennai on 03.05.2023 in Non - Corporate Circle – 11 (1), BSNL Building Tower, Greams Road, Chennai – 6 at 11.00 a.m. and produce all the necessary documents without seeking any further adjournment. On hearing the petitioner, the Assessing Officer shall pass appropriate orders, as early as possible.
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2023 (6) TMI 1035
Penalty u/s 271(1)(c) - Defective notice - non specification as to whether penalty is being initiated for "concealment of income" or for "furnishing inaccurate particulars of income"? - HELD THAT:- A notice issued for imposing penalty u/s 271(1)(c) has to specify the charge and it cannot be omnibus notice. Hence, we agree with the assessee to conclude, penalty imposed u/s 271(1)(c) of the ACT will not be sustainable if the penalty notice does not specify the specific charge. In the present case, this ground has been raised for the first time before us.
We remit the issue to AO. AO shall examine the records and follow the judicial principle as enunciated herein above which has also the mandate of Hon’ble jurisdictional High Court. Needless to add, assessee should be provided an opportunity of being heard. Appeal of the assessee is allowed for statistical purposes.
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2023 (6) TMI 1034
Levying penalty u/s 271(1)(c) - Proof of concealment of income by the assessee - AO in quantum proceedings dismissed excess claim of assessee u/s 54 - HELD THAT:- As identical facts and circumstances of the case quite similar and identical to the case of ITO Vs. M. Narayanswami [2010 (10) TMI 670 - ITAT, BANGALORE] wherein, held that the assessee has furnished all particulars regarding sale of immovable property and claimed exemption u/s 54 of the Act which was partly denied by the AO.
In such a situation the claim of deduction u/s 54 centres around interpretation of a provision based on various judgment of Hon'ble High Court and orders of the Tribunal.
The identical situation is clearly discernable from two of the assessment orders wherein, the AO by relying and referring to certain judgments and factual matrix of the case recalculated the long term capital gain and allowed ½ share to the assessee u/s 54 of the Act and remaining ½ part was disallowed making addition in the hands of the assessee.
Penalty u/s 271(1)(c) cannot be lead on the assessment by alleging that the assessee had concealed particulars of income and also furnished inaccurate particulars of income particularly when the AO himself has in the assessment order at page 3 only alleged that the assessee had deliberately or without any reasonable cause concealed the particulars of income without making further allegations.
As in the case of CIT Vs. Reliance Petro Products Pvt. Ltd [2010 (3) TMI 80 - SUPREME COURT] held that merely because the claim of assessee was not accepted or not found to be acceptable by the revenue authorities does not entitle the AO to impose penalty u/s 271(1)(c) of the Act. Decided in favour of assessee.
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2023 (6) TMI 1033
Unexplained expenditure u/s 69C - Difference in net taxable income declared and as per TRACES form 26AS TCS - assessee disclosed only an amount on account of purchase of beedi leaves in the profit and loss account, AO called for the reasons for difference - HELD THAT:- On a calculation of the CGST and SGST at 9% each on the net purchase amount as pleaded by the assessee it is found that cumulative GST comes to Rs. 17,39,806/- and this amount has to be added not to the total amount of purchase as found in the profit and loss account, which includes the other expenses relating to the purchase, but to the amount which was subject to TCS.
In that case, it comes to Rs. 1,12,10,164/-. This amount tallies with the invoice amount of Rs. 1,12,10,160/-. The difference of Rs. 2 lakhs, observed by the learned CIT(A), was due to the non-consideration of the contention of the assessee by CIT(A) that there are other expenses like godown rent, charges on late payment etc., to the tune of Rs. 1,95,235/-; and when that amount is considered, absolutely there is no difference and highly probablises the case of the assessee.
No discrepancy in the case of the assessee. The addition is not warranted - Appeal of assessee is allowed.
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2023 (6) TMI 1032
Deduction u/s 80P(2)(a)(i) - interest derived by the assessee on the deposits in the State Bank of Hyderabad on the credit balance available therein - HELD THAT:- Undisputedly, the interest arose on the credit balances with reference to the regular course of business of the assessee.
As decided in Vavveru Co-operative Rural Bank Ltd. [2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT] held that, if the original source of the investments made by the petitioners in nationalized banks is admittedly the income that the petitioners derived from the activities listed in sub-clauses (i) to (vii) of clause (a), then the character of such income may not be lost, especially when the statute uses the expression "attributable to" and not any one of the two expressions, namely, "derived from" or "directly attributable to".
Interest credited by the State Bank of Hyderabad to the account of the assessee on the credit balances does not lose its character as the income derived from the activities of the assessee covered by 80P(2)(a)(i) - Thus disallowed interest in this matter, as a matter of fact is eligible for deduction under section 80P(2)(a)(i) - Decided in favour of assessee.
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2023 (6) TMI 1031
Addition u/s 69 - unexplained investment - HELD THAT:- CIT(A) decided the issue without considering the explanation offered by the assessee. By way of statement of facts and grounds of appeal, the assessee had offered explanation regarding source of cash deposited in bank account hence, to sub-serve the principle of natural justice, atleast the assessee should get opportunity to represent its case before the appellate authority. We, hereby, set aside the impugned order and restore the issue to the file of Ld.CIT(A) to decide the grounds of appeal raised before him afresh after giving opportunity of being heard to the assessee.Appeal of the assessee is allowed for statistical purposes.
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2023 (6) TMI 1030
Assessment proceedings u/s 153C - unexplained share capital - addition made on protective basis - Settlement Commission has not admitted the application of the assessee on the grounds that the assessee does not qualify as a “related” person to the “specified person”- HELD THAT:- Addition was confirmed in the hands of other Assessees and not on the assessee here in by the settlement Commission, the protective assessment made in the hands of the assessee does not survive.
Addition on substantive basis, as incriminating material found during the search is pertaining to Assessment Year 2010-1 and not pertaining to Assessment Year 2009-10, further, even before us the Revenue has not refuted the finding of the Ld. CIT(A).
As relying on of Sinhgad Technical Education Society case [2017 (8) TMI 1298 - SUPREME COURT], we find no error or infirmity in the order of the CIT(A) in deleting the addition and find no merit in the grounds of Appeal of the Revenue.
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2023 (6) TMI 1029
Income chargeable to tax in India - consideration received by the assessee from supply / distribution of its copy righted software products - Whether income from royalty as defined in Article 12 of the agreement for avoidance of double taxation between the India and Ireland? - HELD THAT:- This quarrel has now been settled by the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence Pvt. Ltd [2021 (3) TMI 138 - SUPREME COURT] amounts paid by resident Indian end- users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to In section 195 of the Income Tax Act were not liable to deduct any TDS u/s 195. Decided in favour of assessee.
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2023 (6) TMI 1028
Year of taxability of gains arising on transfer of immovable property situated at Kolhapur - HELD THAT:- As on perusal of clause of the sale deed, it would reveal that the parties intended that the ownership of property would be transferred to the seller only upon receipt of the entire consideration by the assessee firm is condition precedent.
Therefore, the ratio of the decision of the Hon’ble Supreme Court in the case of Kaliaperumal [2009 (2) TMI 825 - SUPREME COURT] is squarely applicable to the facts of the present case.
No hesitation to hold that the transfer of property had not taken place during the previous year relevant to the assessment year under consideration. Consequently, the profits or gains arising on sale of such property cannot be brought to tax for the year under consideration. No illegality or perversity in the findings of the ld. CIT(A) for requiring our interference.
The contention of CIT-DR that the assessee firm had received full consideration stipulated in the sale deed inclusive of alleged on-money consideration cannot be accepted for the reason that the effect of the sale deed should be considered with reference to the sale consideration stipulated in the sale deed. Therefore, there is no merit in the grounds of appeal nos.1 and 2 filed by the Revenue.
Payment of On-money consideration at the time of purchase of property - assessee firm had paid on-money consideration in cash over and above the sale consideration stated in sale deed based on the information received from the ACIT, CC, Kolhapur - HELD THAT:- From the contents of letter received from ACIT, CC, Kolhapur, it is clear that there was no reference to any document or loose sheets suggesting the payment of on-money consideration. AO had neither proved nor had brought on record any corroborative, independent evidence in support of such allegation of on-money consideration, as well as, no independent enquiries were conducted by the AO. It is very well settled position of law that no addition can be made merely based on the information received from another AO without any independent corroborative evidence on record. No illegality and perversity in the findings of the ld. CIT(A) deleting the addition made by the AO. Thus, the ground of appeal nos.3 and 4 filed by the Revenue stands dismissed.
Assessment u/s 153C - transaction of alleged receipt of on-money consideration on sale of immovable property - HELD THAT:- As no material was placed before us in support of contention that no approval of Pr. CIT was obtained. It is further contended that the assessment order is silent as to the approval accorded by the Pr. CIT to convert the limited scrutiny into complete scrutiny. The approval of the Pr. CIT need not form part of the assessment order, if it form part of the record is sufficient, the assessee firm could not discharge the onus proving that no such approval was obtained. Thus, all the contentions raised by the assessee firm are devoid of merits and, accordingly, dismissed.
As regards to the contention of the assessee firm that invalidity of the assessment order on the ground that since the assessment is based on the information received consequent to the search and seizure operations of third party, the assessment should be done u/s 153(C) not under regular assessment are devoid of any merit for the reason that the assessee firm had failed to prove the existence of condition for exercise the jurisdiction u/s 153C - Moreover, during the course of regular assessment proceedings, any information received from third party can be used against the assessee after affording an opportunity of rebuttal. Accordingly, the additional ground of appeal as well as original ground of appeal nos.1 and 2 filed by the assessee firm stands dismissed.
Whether or not there was the evidence of receipt of on-money consideration on sale of property? - We are of the considered opinion that in the absence of any conclusive material brought on record by the Assessing Officer establishing the receipt of on-money consideration, it cannot lead to the conclusion that the assessee had received on-money consideration. Therefore, the findings of the lower authorities are hereby reversed and we direct the Assessing Officer to delete the addition.
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2023 (6) TMI 1027
Correct head of income - letting out of Hotel/Resort as running business - treatment of revenue receipts from operation of Hotel/Resort - Contract for managing the business from the said premises on a consideration of management license basis - No fixed consideration - addition qua revenue from House Property or business income - HELD THAT:- As in the agreement executed by Assessee with M/s Four Seasons, not a single term or condition reflects the essence of rent agreement. The Assessee had received the receipts/income from the revenue generated by M/s Four Seasons on fluctuation basis and undisputedly has not received any fixed amount, which can be termed as “rental income”, hence, we do not have any hesitation to hold that the revenue receipts generated by the Assessee from M/s Four seasons, are undoubtedly income from the Business and therefore, should be treated under the head “Business Income” but not as rental income from “House Property” as determined by the authorities below. Consequently the AO is directed to delete the addition on this issue and re-compute the liability.
Disallowing the claim of set off of brought forward unabsorbed depreciation losses of earlier years - In view of our decision in treating the receipts as income under the head “Business Income”, Assessee shall be eligible for unabsorbed depreciation as claimed for. AO is directed to allow the set off of the unabsorbed depreciation.
Appeal filed by the Assessee stands allowed.
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2023 (6) TMI 1026
Deduction u/s 80P(2)(a)(i) - net profit earned by the assessee from carrying on business as Co-operative Society - HELD THAT:- As in the case of the assessee before us the surplus funds parked by way of short-term deposit with the co-operative bank, viz. Malavia Urban Co-operative Bank Limited are inextricably interlinked, or in fact interwoven with its business of providing credit facilities to its members, therefore, the same as claimed by the Ld. AR, and rightly so, would duly be eligible for deduction u/s.80P(2)(a)(i).
We, thus, in terms of our aforesaid observations, direct the AO to allow deduction u/s. 80P(2)(a)(i) of the Act on the interest income earned by the assessee society on its deposits with the co-operative bank - Appeal of assessee allowed.
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2023 (6) TMI 1025
Receipts on sale of Renewable Energy Certificates [REC] & ESCERTS - capital receipt or revenue receipt - DR placed that the claim of the assessee as not related to carbon credit, so, it is not covered u/s 115BBG or as exempted income - DR argued that the revenue had properly taken it as an income from business - HELD THAT:- The assessee claimed the transfer value of REC/ESCs amounting to Rs. 17,77,26000/-in return under section 1115BBG and paid tax. During the time of assessment, the assessee amended the claim and treated the income as capital receipt. As relied on the orders My Home Power Ltd, [2014 (6) TMI 82 - ANDHRA PRADESH HIGH COURT] and Maheshwari Devi Jute Mills Ltd. [1965 (4) TMI 10 - SUPREME COURT] the income is offshoot from environmental concern not from offshoot of business concern. The nature is fully related to environmental health. We find that said income is capital in nature and not liable to tax under business income.
Amendment of claim in assessment stage - The transfer value of REC/ESCs was duly claimed as capital receipt in assessment stage. As relying on case of Goetze (India) Ltd [2006 (3) TMI 75 - SUPREME COURT] & case of Ankit Metal & Power Ltd [2019 (7) TMI 878 - CALCUTTA HIGH COURT] Both the orders have not impinged the power of ITAT u/s 254 to allow the claim duly amended by assessee after filing the return. The revised claim made by the assessee during the time of assessment is duly accepted. We set aside the order of CIT(A) and restore the claim of assessee.
Commission paid by the assessee was treated as bogus and added back u/s 69C - DRP issued the SCN for enhancement, through e-mail, for the first time on 27th June, 2022 and the assessee was allowed time up to 28.06.2022 to respond to the same and the order making enhancement was passed by the DRP on 29.06.2022 - grievance of the assessee is that the ld. DRP has acted beyond jurisdiction u/s 144C(8) - HELD THAT:- After submission of requisite documents as evidence of transaction, the ld. DRP had not considered the same. Considering the submission of assessee the Tax Invoice, transaction through bank account and the TDS certificate are duly placed before the bench as proof of transaction with M/s Zylo International.
DR has not made any objection about the assessee’s submission and not able to submit any contrary judgment against the assessee. It is pertinent to mention the revenue was not able to submit any transaction with M/s Rolmex International Prop. Jaswant Singh with the assessee. The addition cannot be on basis of surmises and conjectures. See Umacharan Shaw & Bros [1959 (5) TMI 11 - SUPREME COURT]. In our considered view the addition amount is quashed.
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2023 (6) TMI 1024
Disallowance of expenses u/s 36(1)(iii) - non charging of interest on advanced amount - advance was paid from interest free fund which has related to assessee’s sundry creditors where assessee is advancing interest free loan - HELD THAT:- Actually, the total ‘interest free funds’ available with the assessee which comprises of interest free sundry creditors and other payables and which is also apparent from the balance sheet of the assessee and these are interest free funds available with the assessee, as the assessee has not to pay any interest on the amount due to the parties.
The assessee utilized the interest free fund to advance/loan, to party. Assessee claimed that the entire amount was utilized from the non-interest-bearing fund. We respectfully relied on the orders which are duly relied by the ld. AR, are ITAT Chandigarh Bench in the case of M/s Gourav Malhotra & Co. [Supra] and the order of Hon’ble Apex Court in the case of Reliance Utility and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] and Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT]. Accordingly, the assessee’s payment for advance from non-interest-bearing fund is not attracted any interest.
So, the assessee has not contravened the section 36(1)(iii) for payment of interest free advance. The issue was first time explained before the Bench. The appeal is remanded back to the ld. CIT(A) for further adjudication on basis of the observation of the bench indicated above. Appeal of assessee allowed for statistical purpose.
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2023 (6) TMI 1023
Revision u/s 263 - Accepting the claim of assessee without enquiry - CIT justification in invoking jurisdiction u/s 263 in respect of the issues other than the commission expenses - HELD THAT:- As per the documents placed before us by assessee, it is clear and evident that it was a case of complete scrutiny and not limited scrutiny as canvassed by assessee before us.
Therefore, argument of assessee that the ld.Pr.CIT’s order on issues other than those mentioned for scrutiny selection was beyond the scope of revisionary power, does not survive.
Even otherwise, the finding of the error by the PCIT of non-examination of disproportionately large claim of expenses by the assessee in the impugned year, as compared to the preceding year is in relation to and has direct bearing on the aspect of low net profit earned by the assessee which was one of the reasons for scrutiny selection. Therefore, for this reason also the contention of the assessee that other than the issue of commission no other issues could have been dealt by the ld.Pr.CIT, we find, has no merit, and is therefore rejected.
Assesses case was selected for scrutiny on account of large commission expenses, the facts before us reveal that the AO merely accepted whatever reply was filed by the assessee, which as noted above by us did not even justify the increase in commission expenses but contrarily revealed infirmities which should have prompted further inquiry by the AO.
The finding of the ld.Pr.CIT, we hold, are correct that the assessment order was erroneous on account of no inquiry at all having been conducted on the issue of large commission expenses claimed.
Issue of commission expenses and the issue of low net profit, we find that there was no inquiry conducted by the AO at all, and therefore, the ld.Pr.CIT was right in holding that the assessment order was erroneous causing prejudice to the Revenue.
The assessee’s arguments therefore that the issues were examined during the assessment proceedings is dismissed. Also since we have found the AO to have not conducted any inquiry on the issues for which complete scrutiny was directed in the present case, there cannot be any question of any view formed by the AO on the issues and hence the argument advanced on behalf of the assessee that where two views were possible, revisionary proceedings are unjustified, needs to be rejected.
In the present case, the show cause notice issued by CIT pointed out the reasons found by the ld.Pr.CIT for finding the assessment order passed in the present case to be erroneous. Due reply was filed by the assessee, and finding no satisfactory reply given by the assessee, the ld.Pr.CIT went on to hold that the assessment order as erroneous.
Therefore, CIT had examined the order passed by the AO on merits, giving assessee due opportunity during the revisionary proceedings to establish its case on merits, but clearly, the assessee failed to do so. Therefore, his order restoring the case to the file of the AO for denovo assessment is in accordance with law, and we do not find any infirmity in the same. Decided against assessee.
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9911796707
