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2016 (12) TMI 863 - ITAT MUMBAIRevision u/s 263 - reliance on audit objection raised by the internal audit party - Held that:- CIT has invoked the provisions of section 263 of the Act based upon the audit objection raised by the internal audit party team. The A.O. has categorically replied vide letter no. ACIT/Circle-8(3)/Audit Objection / 2009-10 dated 19-08-2009 to the objections raised by the internal audit party objections and dismissed audit objections by replying on each and every issue on merit which clearly refects that the AO has gone through every issue on merits and applied his mind before passing assessment orders and the decisions was taken by the AO on merits before passing assessment order. With respect to non-deduction of TDS on usance interest, the AO while replying to audit objection has sought permission to invoke provisions of Section 154 of the Act to rectify the mistake apparent from record. The assessee in proceedings before learned CIT u/s 263 of the Act and also before us duly demonstrated that all the facts were before the AO and the AO has taken a conscious decisions on merits which is a plausible decisions which does not warrant interference u/s 263 of the Act to revise concluded assessment. We have also considered all the replies given by the assessee on merits before AO and CIT as well before us which are set out in preceding para’s and are not repeated for the sake of brevity , and we find that the assessee has convincingly replied on all issues on merits and the view taken by the AO before passing assessment order was a plausible view on merit taken after due enquiries and cannot be categorized as erroneous so far as prejudicial to the interest of the Revenue With respect to the usance interest, the proceedings u/s 154 was contemplated by the AO vide reply to audit objection on 19-08-2009, while ld. CIT issued show cause notice only on 11.03.2011 u/s 263 of the Act. Thus, the record of proposal to take action by the AO u/s 154 of the Act was before the CIT before issuing notice u/s 263 and hence the order of the AO cannot be termed as erroneous so far as prejudicial to the interest of Revenue as the word ‘records’ used in Section 263 of the Act shall also contemplate including the record pertaining to proceedings u/s 154 of the Act arising subsequently out of the assessment order passed by the AO u/s 143(3) of the Act , and such record was before ld CIT before he issued notice u/s 263 of the Act on 11.03.2011. Thus, in our considered view, the assessment order dated 23.12.2008 passed by the A.O. u/s 143(3) of the Act is neither erroneous nor it is prejudicial to the interest of Revenue - Decided in favour of assessee
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