9911796707
TMI Blog2018 (7) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... . Briefly stated, the facts of the case are that the assessee is engaged in the business of transportation of material. The assessee owns 8 big trucks and also hires outside trucks for carrying out its business. Return for the year was filed on 06.10.2008 declaring net income of Rs. 12.94 lakhs. Return was selected for scrutiny assessment and accordingly statutory notices were issued and serviced upon the assessee. Assessment was completed vide order dated 30.11.2010 framed u/s 143(3) of the Act. The operative part of the assessment order is as under: "After discussion and taking in to consideration the information filed by the counsel of the assessee the assessment is completed here under as:- The assessee is an individual and engaged in transportation of goods/ materials for various big companies under his proprietorship firm. During the course of assessment proceedings, it was found that in the profit and loss account the assessee has claimed expenses at Rs. 2,27,552/- towards repair & maintenance and Rs. 83,138/- towards telephone expenses. On eexamination of books of account and bills/vouchers it was found that the assessee has not provided the bills of repair and main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared Rs, 94,70,611/- for Freight Receipts in his P&L A/c. As such, freight receipts of Rs. 16,81,079/- should have been added back into the income of the assessee, i.e. (Rs. 1,11,51,690 - Rs. 9470,611). The omission has resulted in short levy of tax for Rs. 7,34,247/- per details given below "Tax on Rs. 16,81,079 @ 30% Rs. 5,04,324/- Surcharge (ft) 10% Rs. 50,432/- Total Rs. 5,54,756/- Education Cess @ 3% + Rs. 16,643/- Interest u/s 234.B (w.e.f) Rs. 5,71,399/- 01 .04.2008 to 30. 11.2010) Rs. 1,82,848/- i.e. for 32 months Total Rs. 7,54,247/- The above tax of Rs. 7,54,247/- needs to be revised and recovery from the assessee is proposed, (to be effected u/s i54cfIT Act 1961. As such, the assessee is required to file his objection, if any, to the' proposed .rectification and revision, as aforesaid, within three days of receipts of this Notice,, failing which it would be considered that the assessee accepts the above revision and recovery of the proposed sum of Rs. 7.54,247/- from him, would be made under the specific provisions of section 154 of the Act. (Laljee Prasad) Assistant Commissioner of Income-tax Circle-2,'Meerut 6. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AL FREIGHT RECEIPTS Rs. 2,92,42,202/- TDS Deducted on Freight Rs. 6,35,598/- IDS Deducted on Interest Rs. 6,667/- . Total IDS as claimed by assessee in the return of income Rs. 6,42,265/- . 2 Further it is humbly requested that as per the assessment order u/s 143(3) for the above assessment year a sum of Rs. 369650/- is the amount of tax on total income of 1257525/- whereas the TDS as above is Rs. 642265/-. Hence a sum of Rs. 272614/- + interest till date is payable to the assessee. A request for rectification u/s section 154(2) was also filed before your honor on 01-02-201) which is still pending at your end. The assesses has already filed with you the photocopy of all the TDS certificates on 10th July 2009. Any other information, if required, will be submitted. Hope you will find the above in order. Thanking. You Naresh Saiuja. . Counsel To The Assessee" 7. Thought the notice issued u/s 154 of the Act is dated 17.10.2011, but till date no order has been framed by the officer as pointed out by the representatives of both the sides. 8. Be that as it may, the CIT Meerut assumed jurisdiction u/s 263 of the Act alleging that the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. M/s Rajendra Kumar & Sons 397327 8. Shri Ranjit Singh 8 96784 9. Mrs. Rekha Khanna 2145926 10. Shri Shaeis Ahmad 219523 Total 8425100 During the year under consideration the assessed had paid Freight to I lit eel Tanker owners Rs. 84,25,100/- to the different Parties, but, TDS was not deducted on such * payments. But, the assessee had debited total Freight Expenses before taken into account in Total Freight Received In P & L Account and on which TDS was also . not deducted by the assessee. The assessee >vas liable to deduct TDS on payment of * Freight Rs. 84, 25,100/- u/s 40 (a)(ia) of Income Tax Act, 1961. Hence, the payment of Freight Rs. 84, 25,100/- on which TDS was not deducted by the assessee, to be added to the total income of the assessee u/s 40 (a)(ia) of Income Tax Act, 1961. Income as per Assessment Order Rs. 12, 57.525 Net Profit from Business not shown by the assessee Rs. 26,81,028 Interest Income : Income from Other Sources Rs. 82,827 Insurance Claim : Income from Other Sources Rs. 4, 52,360 Add : u/s 40 (a)(ia) of I.T. Act Rs. 84,25,100 Rs. 1,28,98,840 9. It can be seen from the above that the CIT raised three issues which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue of the order being erroneous prejudice has been caused to the interests of the Revenue. It has, therefore, to be considered firstly as to when an order can be said to be erroneous. We find that the expressions "erroneous", "erroneous assessment" and "erroneous judgment" have been defined in Black's Law Dictionary. According to the definition, "erroneous" means "involving error; deviating from the law". "Erroneous assessment" refers to an assessment that deviates from the law and is, therefore, invalid, and is a defect that is jurisdictional in its nature, and does not refer to the judgment of the Assessing Officer in fixing the amount of valuation of the property. Similarly, "erroneous judgment" means "one rendered according to course and practice of court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal principles". 12. From the aforesaid definitions it is clear th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act there must be material before the Commissioner to consider that the order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We have already held what is erroneous. It must be an order which is not in accordance with the law or which has been passed by the Income-tax Officer without making any enquiry in undue haste. We have also held as to what is prejudicial to the interests of the Revenue. An order can be said to be prejudicial to the interests of the Revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised. There must be material available on the record called for by the Commissioner to satisfy him prima facie that the aforesaid two requisites are present. If not, he has no authority to initiate proceedings for revision. Exercise of power of suo motu revision under such circumstances will amount to arbitrary exercise of power. It is well-settled that when exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on record to sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54F of the Act. Learned counsel for the Revenue however submitted that these inquiries were confined to the claim of deduction under section 54F of the Act in the context of fulfilling conditions contained therein and may possibly have no relevance to the question whether the sale of land gave rise to a long term capital gain. Looking to the tenor of queries by the Assessing Office and details . A.Y. 2009-10 supplied by the assessee, we are unable to accept such a condition. In that view of the matter, the observation of the Tribunal that the Assessing Officer having made inquiries and when two views are possible, revisional powers could not be exercised, called for no interference. Since with respect to computation and assertions of other aspects of deduction under section 54Fofthe Act, the Tribunal has remanded the proceedings, nothing stated in this order would affect either side in considerations of such claim. 7. No question of law arises. Tax Appeals are dismissed." 16. The Hon'ble Supreme Court in Malabar Industrial Co. Ltd., 243 ITR 83, has laid down the following ratio: "A bare reading of section 263 of the Income-tax Act, 1961, makes it clear that the prerequisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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