9911796707
TMI Blog2024 (1) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... on order for the sake of convenience. 2. We shall first adjudicate the appeal of the assessee in ITA No.1119/Ahd /2015 challenging the order of the ld. Pr.CIT passed under section 263 of the Act. 3. The grievances of the assessee in this appeal are reflected in the following grounds of appeal: " 1.0 The learned Commissioner of Income Tax-1, Baroda has erred in law and on facts in holding that the assessment order dated 13-02.2013 under section 143(3) of the Income Tax Act, 1961 is erroneous and prejudicial to the interest of revenue and thereby erred in invoking the provisions of section 263 of the I T Act. 2.0 The learned Commissioner of Income Tax-I , Baroda has erred in invoking and applying the provisions of section 40(a)(ia) of the I T Act for the year under consideration, the assessment of which has already been finalized under section 143(3) of the I T Act. 3.0 The learned Commissioner of Income Tax-I, Baroda erred in law and on facts has held that the aggregate payments of Rs. 1,69,44,850/- have been made without deducting tax at source and has thereby directing the Assessing Officer to make addition of Rs. 1,69,44,850/- under section 40(a)(ia) of the I T Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction and transmission activities at the divisions and circle offices; that the mentioning of their names in the Annexure-5 during the assessment proceedings for the impugned year was an inadvertent typographical mistake in the form of cut & pastes; that all the relevant documents showing processing of payments and TDS deductions were submitted to the AO, and the AO had considered the same, and finding no error, he passed assessment order under section 143(3); that the payments were accounted for in the subsequent year and TDS thereon was made, therefore, there was no loss to the Revenue, much less any prejudice to the Department so as to invoke the provisions of section 263 of the Act. However, the Pr.CIT did not accept the submissions of the assessee. He maintained that since the assessee was following mercantile system of accounting, though the payments were made in subsequent financial year, the payments relating to the F.Y.2009-10 relevant to A.Y. 2010-11 were required to be credited in the year under consideration on accrual basis. Since the assessee failed to do so, he directed the AO to invoke provisions of section 40(a)(ia) of the Act and disallow the impugned payment mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have also perused the materials provided by the assesses in the paper book submitted before us. The decision of the Pr.CIT to invoke provisions of section 263 was based on the presumption that details of the payments made to two parties, namely M/s. Sintex Industries and Hiren B. Engineer, amounting to Rs. 84,92,987/- and Rs. 84,51,863/- respectively, totaling to Rs. 1,69,44,850/-, were listed in Annexure- 5 furnished by the assessee during the assessment proceedings. The Pr.CIT assumed that the assesses had not deducted Tax Deducted at Source (TDS) while making the payments to these parties. Consequently, the assessee was deemed to be in default for the failure to deduct TDS during the payments, leading to the disallowance of the aforementioned payment of Rs. 1,69,44,850/- under section 40(a)(ia) of the Act. 8. During the proceedings, the counsel for the assessee pointed out that the details of these two parties were inadvertently included in the Annexure-5 attached to a letter dated 29.1.2013, and that no TDS was actually withheld for these parties. The inclusion of these details was a clerical error made while consolidating extensive financial data from the assessee's records. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoke power under section 263 of the Act. 10. Moreover, it is important to note that there is no revenue implication, and no prejudice has been inflicted upon the Revenue, as the applicable tax rate for the invoice payment in the subsequent year, during which the invoice payment was properly accounted for, included the appropriate TDS deduction. Considering the above, we find support from the decision of Hon'ble Calcutta High Court in the case of Pr.CIT Vs. Britannia Industries Ltd., in ITAT/211/2022. The relevant ratios of the decisions laid down therein are as under: "11. The assessee also furnished the relevant extracts of the financial statement for the financial year 2015-2016 highlighting all the relevant details. Further the location wise break up of those items of expenses as reflected in the profit and loss account were also placed before the learned tribunal and it was explained that the items set out in the Column (B)(C)(D)(E) in the above table formed part of the depreciation on scientific research assets; assets written off and profit and loss on sales of asset debited in the profit and loss account. Thus, it was explained that the sum of Rs. 1,34,45,166/- was adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken one view with which the CIT does not agree, it cannot be treated as an erroneous order, unless the view taken by the assessing officer is unsustainable under law. Furthermore, on facts the tribunal found that the PCIT has not carried out any enquiry on his own and merely set aside the assessment order and sent the file back to the assessing officer to re-examine the issues which is contrary to the law as laid down in several decisions and the tribunal rightly noted the decision in Income Tax Officer Versus DG Housing Projects Limited." Therefore, considering the lack of substantial grounds for the Pr.CIT to exercise authority under section 263 of the Act, and in light of the absence of justifiable reasons to alter the assessment framed by the AO under section 143(3) of the Act, we hereby quash and set aside the impugned order of the ld.Pr.CIT passed under section 263 of the Act and restore the original assessment order of the AO passed under section 143(3) of the Act. Thus, the grounds of appeal of the assessee are allowed 11. In the result, the appeal of the assessee in ITA No.1119/A/2015 challenging the order of the ld.PCIT is allowed. 12. So far as the appeal of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
