TMI Blog2012 (6) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... nai-III, Chennai, for the impugned assessment year. As per the assessee, ld. CIT set aside the assessment on a ground that TDS deductions were not done, whereas such TDS deductions were done in accordance with law and details furnished at the time of assessment. Again, as per the assessee, details of deductions and non-deductions were satisfactorily explained to the A.O. and it was further explained to ld. CIT during the proceedings before him under Section 263 of the Act. 2. Short facts apropos are that the assessee had filed return for the impugned assessment year declaring an income of Rs.1,44,66,241/-. Assessee was engaged in the business of manufacturing industrial steel. Assessee had also filed a revised return whereby income originally shown was brought down to Rs.8,465/- During the course of scrutiny assessment, notice was issued under Section 142(1) of the Act to the assessee and details required were, as per the Assessing Officer, filed. Assessment was completed determining a loss of Rs.14,05,982/- which arose out of re-working of depreciation admissible under the Act. Thereafter, ld. CIT issued a notice under Section 263 of the Act and according to such notice, assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 12,24,943/- and has been deducted at 2.04%. In respect of the balance, no tax was deducted since the individual payments did not exceed Rs. 20,000/-. (iv) Machining charges Rs.12,74,423/- Under this head, tax was deductible only in respect of expenditure of Rs.7,16,474/- and tax has been deducted at 1.02% applicable to sub-contracts. In respect of the balance, no tax was deductible since the individual payments did not exceed Rs.20,000/-. (v) Sawing charges Rs.1,57,62,103/- In respect of the payment of Rs.1,54,04,540/- tax has been deducted at 1.12%, the rate chargeable to subcontracts. (vi) Rent Rs.22,39,065/- Out of this expenditure, tax has been deducted at 15.30% on a total payment of Rs. 18,07,825/-. As for the balance, it is explained that this was the rent paid on behalf of an employee in lieu of HRA. Therefore tax has not been deducted. However, ld. CIT was not impressed. According to him, the classification of expenditure, quantification of payments liable for TDS etc. were filed first time before him only. Similarly, the classification of different payments for the contracts and sub-contracts were also for the first time filed bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctible only on Rs.8,67,021.40, on freight charges of Rs.60,03,289.24, the amount on which tax was deductible was only Rs.54,43,615.00, against transport expenditure of Rs.22,81,046.17, tax was deductible only on Rs.12,24,943.67, against the machining charges of Rs.12,74,423.40, tax was deductible only on Rs.7,16,474.40, against sawing charges of Rs.1,54,04,540.00, the rate at which TDS was deductible was only 1.12%, and against rent amount of Rs.22,39,065.00, the amount on which tax was deductible at source was only Rs.18,07,825.00. Assessee, as per the learned A.R., had accordingly deducted the tax at source and remitted such tax to the Government. Therefore, there was no prejudice caused to the interests of Revenue in this regard. Learned A.R. also placed on record a copy of the fresh order passed by the Assessing Officer pursuant to revisionary order of ld. CIT under Section 263 of the Act. 5. Per contra, learned D.R. strongly supported the order of ld. CIT. 6. We have perused the orders and heard the rival submissions. Original assessment order passed under Section 143(3) of the Act is reproduced hereunder:- The assessee filed its Return of Income on 30.11.2006 declarin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-deduction on various payments made by the assessee. No doubt, the order of an A.O. which is cryptic by itself might not by itself show that there was lack of application of mind by the A.O. But, nevertheless, an order which is cryptic, where no details relevant to the issue were called for by the A.O. and no details were furnished cannot be considered as one where there was an application of mind. Non-application of provisions which ought have been applied in an assessment and which has been omitted to be considered will definitely render the assessment order erroneous. But, as held by Hon ble Apex Court in the case of Malabar Industrial Co. Ltd. v. CIT (243 ITR 83) , not only that order has to be erroneous but it has to cause prejudice to the interests of the Revenue. Non-deduction of tax at source where such tax is deductible, calls for application of Section 40a(ia) of the Act and where a disallowance as stipulated under such Section has not been done, it will definitely cause prejudice to the interests of Revenue. Loss of tax certainly is a prejudice caused to the Revenue. When the Assessing Officer is not applying his mind at all where such an application was called for an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper course for the Commissioner was not to express any final opinion as regards the controversial points. 7. The position and function of the Income Tax Officer is very different from that of a civil court. The statements made in a pleading proved by the minimum amount of evidence may be accepted by a civil court in the absence of any rebuttal. The civil court simply gives decision on the basis of the pleading and evidence which comes before it. On the other hand, Assessing Officer is not only an adjudicator but also an investigator. He should not remain passive in the face of a return which is apparently in order but calls for further enquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. It is, in this context, the word erroneous meant in Section 263 has to be understood. Viewed from any angle, we are of the opinion that the order of the A.O. was erroneous insofar as it was prejudicial to the interests of Revenue. Assessee might have submitted some details before Assessing Officer. But a cursory look at the said details placed at pages 8-11 itself shows that the assessee has cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
