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2016 (11) TMI 1655 - AT - Income TaxRevision u/s 263 - HELD THAT - There was no occasion for the Assessing Officer to make any inquiry and the Assessing Officer accepted the return without proper inquiry as a result of which substantial amount of taxable income was not brought to tax. We also hold that no rule of universal application can be laid down for exercise of revisional powers u/s 263 of the act. It will depend on the facts of each and every case but the Commissioner of Income Tax must be satisfied of existence of twin conditions that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. - Decided against assessee.
Issues Involved:
1. Condonation of delay in filing appeals. 2. Validity of the order passed under Section 263 of the Income Tax Act. 3. Examination of discrepancies in TDS claims and cash deposits. 4. Verification of cost of acquisition for capital gains. 5. Analysis of interest-free loans to sister concerns. 6. Scrutiny of assessment orders and reconciliation with Form 26AS. Detailed Analysis: 1. Condonation of Delay in Filing Appeals: The appeals were barred by limitation by 27, 42, and 23 days, respectively. The assessee argued that the delay was due to the illness of their senior counsel, Shri H.P. Verma, who could not prepare the appeals in time. The opposing party, the learned DR, opposed the condonation request. After hearing both parties, the Tribunal decided to condone the delay and proceed with the appeals. 2. Validity of the Order Passed Under Section 263 of the Income Tax Act: The common issue in all appeals was the order of the Commissioner of Income Tax passed under Section 263 of the Act. The Commissioner of Income Tax found the assessment orders to be erroneous and prejudicial to the interest of the Revenue due to the lack of proper inquiry by the Assessing Officer. The Commissioner relied on various judicial precedents, including Ram Pyari Devi Saraogi vs. CIT and CIT vs. Seshasayee Paper & Boards Limited. 3. Examination of Discrepancies in TDS Claims and Cash Deposits: In ITA No. 607/Ind/2016, the company declared a loss and claimed a refund based on TDS. However, there was an undisclosed TDS of ?4762 and delays in TDS deposits ranging from 1 to 240 days. The cash deposits amounting to ?542450 were not verified with reference to the books of accounts. The assessee argued that the difference in TDS was reconciled and that all cash deposits were accounted for in the books, which were produced during the assessment. 4. Verification of Cost of Acquisition for Capital Gains: In ITA No. 609/Ind/2016, the assessee sold land and claimed a cost of acquisition that was not fully examined. The Commissioner noted discrepancies between the claimed cost and the actual purchase price. The assessee provided details and argued that the cost included registration expenses, and the issue was examined during the assessment. 5. Analysis of Interest-Free Loans to Sister Concerns: The assessee had given substantial interest-free loans to sister concerns, which the Assessing Officer did not thoroughly examine. The assessee contended that the Assessing Officer had indeed examined this aspect during the assessment, and the findings were opposed to the facts. 6. Scrutiny of Assessment Orders and Reconciliation with Form 26AS: In ITA No. 608/Ind/2016, the Commissioner found that the assessment order was prejudicial to the Revenue as it lacked proper verification of various issues, including the reconciliation of receipts as per Form 26AS. The assessee argued that all relevant details were provided and verified during the assessment. Tribunal's Conclusion: The Tribunal upheld the Commissioner's order under Section 263, agreeing that the Assessing Officer did not have sufficient time to conduct a proper inquiry, leading to an erroneous and prejudicial assessment order. The Tribunal referred to previous decisions, including those from the Hon’ble jurisdictional High Court, which supported the view that inadequate inquiry by the Assessing Officer warranted revision under Section 263. Final Judgment: The appeals were dismissed, and the assessment orders were remanded to the Assessing Officer for fresh examination, ensuring compliance with natural justice and providing adequate opportunity to the assessee. The order was pronounced in open Court on 21st November 2016.
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