2023 (12) TMI 1364 - HC - Income Tax

Validity of Revision u/s 263 - substantial question of law or fact - there were discrepancies in the figure with regard to value of current assets and current liabilities shown in the balance sheet as on 31.03.2008 vis- -vis the cash flow statement filed before the AO - Whether question of law admitted by this Court may not be treated as the substantial question of law as the ITAT has already answered the query of the appellant and the issue of difference in balance sheet and cash flow are factual issues which have already been considered by the revisional authority under the ambit of Section 263? HELD THAT - CIT(A) has dismissed the appeal exparte. Appeal had been filed before the Tribunal and the Tribunal had exparte restored the issue back to the file of CIT(A). CIT(A) also dismissed the appeal for non-compliance. Tribunal in the interest of natural justice had restored the issue to the file of the CIT(A) so that the assessee could be granted the opportunity to substantiate its case. This clearly shows that the assessee is not interested in showing the reconciliation but is attempting to use technical reasons to avoid the responsibility. This scathing remark from the ITAT showcases the triviality of the matter at hand. Additionally the submissions made with regard to the section 255 of the Act showcases the intention of the petitioner to delay the case. While scrutinizing the documents at hand it is clear that due compliance has been made with respect to the reassessment proceedings and all the subsequent appeals. Additionally the petitioner has been provided with the regular chances to submit his representation. However the petitioner has been delaying the same. The submission of the petitioner cannot be entertained. ITA is hereby dismissed.

Summary

Issues:
Challenge to order dated 02.06.2022 by the Income Tax Appellate Tribunal for Assessment Years 2008-09.

Analysis:
I. Factual Matrix of the Case:
The appellant, a construction and real estate firm, filed income tax returns with the ACIT. Subsequently, the CIT issued a notice under section 263 of the Act, leading to an appeal before the ITAT. The appellant challenged the jurisdiction of ITAT based on amendments in the Finance Act, 2021, specifically section 255 (7, 8, & 9), asserting that ITAT lacked jurisdiction without a government directive.

II. Appellant's Submissions:
The appellant argued that the ITAT's dismissal of the appeal was illegal, lacked jurisdiction, and violated natural justice principles. They contended that the order under section 263 was unlawful and not based on proper assessment, seeking quashing of the order.

III. Respondent's Submissions:
The respondent highlighted discrepancies in the appellant's balance sheet and cash flow statement, leading to a revision under section 263. The ITAT upheld the revisional authority's decision, emphasizing the AO's failure to consider crucial information, justifying the revision under section 263.

IV. Court's Reasoning and Analysis:
The Court noted the appellant's attempts to delay proceedings by invoking section 255 of the Act and observed their lack of interest in providing necessary reconciliation. It concluded that the appellant had sufficient opportunities for representation but chose to delay, leading to dismissal of the appeal by the ITA.

In summary, the Court dismissed the appeal, emphasizing the appellant's delay tactics and lack of substantive grounds for challenging the revision under section 263. The judgment upheld the ITAT's decision, highlighting the importance of timely compliance and due process in tax assessment matters.

*(Dr.S.K. Panigrahi) Judge*
*G. Satapathy, J. I agree. (G. Satapathy) Judge*