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TMI Blog2012 (6) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, assessment done by the Assessing Officer was erroneous insofar it was prejudicial to the interests of Revenue. As per ld. CIT, assessee ought to have deducted tax on the following expenses debited to its Profit & Loss account : Rs. 1. Forwarding and clearing charges 50,98,416 2. Freight charges 60,03,289 3. Transport Expenditure 22,81,046 4. Machining charges 12,74,423 5. Sawing charges 1,57,62,103 6. Rent 22,39,065 TOTAL 3,26,58,342 3. Ld. CIT noted that the quarterly TDS returns available on file reflected tax deductions only for an amount of Rs.57,66,220/- and for the balance amount of Rs.2,70,92,122/-, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieu 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 before him and these were not available or furnished before the Assessing Officer. None of the details were filed before the Assessing Officer and Assessing Officer had completed the assessment without examining the issue in its entirety. Since Assessing Officer had allowed the entire claim and had not examined the TDS deductions that were to be made and applicability of Section 40a(ia) of the Act, ld. CIT came to a conclusion that there were errors in the assessment which were prejudicial to the interests of Revenue. He, therefore, set aside the order passed by the Assessing Officer and directed him to pass a fresh order in accordance with law after giving opportunity to the assessee. 4. Now before us, learned A.R., strongly assailing the order of ld. CIT, submitted that the Assistant Commissioner of Income Tax, during the course of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visionary 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 declaring income of Rs.1,44,66,241/- claiming a refund of Rs.35,88,896/- and subsequently filed a revised return on 13.02.2007 declaring income of Rs. 8,465/- claiming a refund of Rs.36,88,837/-. The revised return was processed arriving at a refund of Rs.53,62,831/- and notice u/s 143(2) was issued on 09.10.2007 by the Income Tax Officer (OSD), Company Circle V(2), Chennai. The case was assigned to the Assistant Commissioner of Income Tax, Company Circle V(4), Chennai and reposted for hearing. In response to notice issue u/s 142(1), details were filed by the assessee. The assessee's Authorized Representative Shri C.S. Hariharan, FCA, and Shri S. Seetharaman of M/s C.S. Hariharan & Co. appeared and filed details. The details were verified. During the course of hearing the assessee's authorized representative submitted that the closing WDV for A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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 and the very nature of expenses would show that TDS provisions might have been applicable, order framed without considering such provision would cause prejudice to the interests of Revenue. As held by Hon'ble Delhi High Court in the case of Gee Vee Enterprises v. Addl. CIT (99 ITR 375), the Commissioner had to reach only a prima facie view as to how the order of the Assessing Officer was erroneous and leave the matter at that with the direction to the Assessing Officer to conduct a de novo enquiry and pass fresh order. What the ld. CIT has done is exact the same. In the case of CIT v. Seshasayee Paper and Boards Ltd. (242 ITR 490), it was held by Hon'ble jurisdictional High Court as under:- "It is no doubt true that for making a valid order under Section 263 of the Act, it is essential for the Commissioner to record an express finding that the order sought to be revised was erroneous as well as prejudicial to the interests of the Revenue. In the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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