9911796707
TMI Blog2022 (12) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has also been considered by the AO, however, no finding is there in the assessment order. It was the submission that the issues have already been considered by the AO. The direction u/s.263 of the Act by the ld. Pr.CIT is nothing but an attempt to impose his opinion over that of the AO. It was the submission that the ld. Pr.CIT has also not done any investigation or verification after receipt of the reply of the assessee. It was the submission that all the details in respect of the issues of the WIP and the TDS on equipment hire charges, location/camp hire charges and vehicle hire charges, were before the AO and the ld. Pr.CIT. It was the prayer that the order of the ld. Pr.CIT passed u/s.263 of the Act is liable to be quashed. 4. In reply, ld. CIT-DR has filed his written submission, which reads as under :- This is the assessee's appeal against the revision order dated 19.03.2020 passed by the Pr. CIT, Cuttack. The Pr. CIT, Cuttack has carried out inquiry and compared the figures of closing stock for the earlier year (AY 2014-15) and that of opening stock for the current year. The Pr.CIT has noticed discrepancies in the figures of closing stock vis-à-vis opening st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Housing & Welfare Corporation Limited (139 taxmann.com 207), it has been rendered on different facts. In the cited case, the profit element in Work-in-Progress (WIP) was directed to be added especially when the profit from such WIP had already been included in the income of the assessee. It was noticed that the AO had in fact called for the details of the closing WIP which had been furnished by the Assessee and had examined it. If the CIT was of the view that the AO had not examined this issue at all, it could then lead to the conclusion that the order of assessment was erroneous. That was not, however, the case there. On the other hand, the CIT simply decided that even for verification of the correctness of the submission of the Assessee, the matter had to be remanded to the AO. Under these circumstances, the Hon'ble Jurisdictional High Court had taken a view that the order u/s.263 of the Act was not sustainable. The observations of the Hon'ble High Court in para-14 are reproduced as under: "14. Section 263 of the Act requires the CIT, after hearing the Assessee, to pass an order by making "such enquiry as he deems necessary". The purpose of such an enquiry would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted any enquiry or examined evidence whatsoever. There was total absence of enquiry or verification. These cases have to be distinguished from other cases (i) where there is enquiry but the findings are incorrect/erroneous; and (ii) where there is failure to make proper or full verification or enquiry". iii.) In the present case, the view taken by the A.O. was not plausible and he had passed the assessment order without applying correct law and without proper application of mind. The Hon'ble Delhi High Court in the case of Gee Vee Enterprises (99 ITR 375) held as under: "The reason is that it is not the Income-tax Officer but a superior officer like the Commissioner who is exercising a revisional jurisdiction suo motu there under. The superior officer could be trusted with a larger power. The only requirement for the exercise of this power is that the Commissioner should consider that the order passed by the Income-tax Officer is " erroneous in so far as it is prejudicial to the interests of the revenue ". What is the meaning of " erroneous " in this context ? It was argued for the assessees by Shri G. C. Sharma that the word " erroneous " means that the order must appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, when the action of the AO would be suggestive of lack of inquiry or inadequate inquiry, will depend upon the facts obtaining in a particular case. What emerges as a broad principle from the various decisions is that where the AO has reached a rational conclusion, based on his inquiries and material on record, the Commissioner should not start the matter afresh in a way as to question the manner of his conducting inquiries. It is not the province of the Commissioner to enter into the merits of evidence; it has only to see whether the requirements of essential inquires and of law have been duly and properly complied with by AO or not. 28.2 It is well settled that before the Commissioner can invoke his powers u/s 263, he has to arrive at a conclusion that the assessment order is erroneous in so far as it was prejudicial to the interests of the revenue. Then only the powers u/s 263 can be invoked. Therefore, if AO accepts or rejects any claim of the assessee without due application of mind and if such failure causes prejudice to revenue, the Commissioner would be well within his powers u/s 263 to intervene in the matter. An inquiry which is just farce or mere pretence of inquiry, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was on account of the typographical error. To substantiate this that the assessee has produced the WIP in respect of the assessment years i.e. for the F.Ys.2012-2013, 2013-2014 and for the relevant F.Y.2014-2015, it is at this point that the ld. Pr.CIT took the stand that the WIP of Rs.22,12,834/- is identical as closing stock for multiple years. Therefore, this is not the issue which was raised in the show cause notice. Once it is not the issue that was raised in the show cause notice, such an issue cannot be directed in a revision proceeding u/s.263 of the Act. 8. Coming to the second issue being the issue of TDS on the expenses under the head TDS on equipment hire charges, location/camp hire charges and vehicle hire charges, a perusal of the assessment order shows that the reason for taking the issue of scrutiny was that the receipt u/s.194C & 194J of the Act as per 26AS are more than the receipt shown in the ITR. Now, the issue of TDS has been looked into by the AO in the course of the assessment proceedings. He has already taken a view. The assessee has also categorically admitted that to such extent where TDS is liable to be done, the TDS has been deducted and where payment ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
