Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (2) TMI 247 - AT - Income TaxRevision u/s 263 - whether the AO before concluding the Assessment did make any enquiry on this aspect? - service tax input written off allowability - HELD THAT:- Assessee could not substantiate before us as to how the AO made enquiries on this issue before concluding the assessment, except by pointing out that all facts were laid before the AO and it can be presumed that he had taken note of this aspect while concluding the assessment. The fact that the AO himself initiated proceedings u/s.154 of the Act to rectify error apparent on record on the aspect of having allowed service tax input written off as a deduction goes to show that he had while completing the Assessment not enquired or was not conscious of the merits of the claim for deduction of the aforesaid sum while computing income. The law is well settled that if there is a failure on the part of AO to make an enquiry on the issue which calls for an enquiry, that by itself will render the order of assessment erroneous and prejudicial to the interests of the revenue. We need not examine the arguments of the learned counsel for the Assessee in this regard because Explnation-2 is only a deeming provision and if on facts it is found that the AO did not make any enquiries before concluding the assessment on the question whether service tax input written off can be allowed as a deduction in computing income from business, there is no need to take recourse to the deeming provisions. As far as the merits of the claim made by the learned counsel for the Assessee that the service tax input written off is an allowable deduction, he relied on the decision of Delhi ITAT in the case of Maruti Suzuki Ltd. [2015 (9) TMI 20 - ITAT DELHI] . We do not think it necessary to deal with the merits of the claim of the Assessee as the same will be examined by the AO in the set aside proceedings. We, however, make it clear that the observations of the CIT in paragraphs 6 & 7 of the impugned order with regard to correctness of the claim of the Assessee regarding deductibility of the sum in question are not warranted because the jurisdiction u/s.263 of the Act is invoked on the ground that the AO failed to make necessary enquiry which he ought to have made before completing the assessment. The aforesaid observations in the impugned order should not therefore have any effect in the set aside proceedings before the AO and the subsequent appellate authorities. - Decided against assessee.
|