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2022 (6) TMI 1439 - HC - Income Tax


Issues:
1. Challenge to the judgment and order of the Income Tax Appellate Tribunal for the assessment year 2013-2014 under section 260A of the Income Tax Act, 1961.
2. Disallowance of payments made to a contractor and a milk producer under sections 40(a)(ia) and Rule 6DD of Income Tax Rules.
3. Validity of the order passed under section 263 of the Act by the Principal Commissioner of Income Tax-2, Surat.
4. Justification for quashing the order passed under section 263 by the learned Tribunal without proper verification and inquiries by the Assessing Officer.

Analysis:
1. The respondent-assessee, engaged in manufacturing dairy products, filed its return for the assessment year 2013-2014, declaring total income. The Assessing Officer assessed the total income, leading to the challenge by the Revenue under section 260A.
2. The Principal Commissioner noticed cash payments to a contractor and a milk producer. The contractor's payment was not subject to TDS, leading to a proposed disallowance under section 40(a)(ia). The milk producer's payments were examined under Rule 6DD, with discrepancies in cash payments leading to proposed disallowances.
3. The PCIT issued a show cause notice, and the assessee contended that the issues were considered in the original assessment. The PCIT found lack of proper verification by the Assessing Officer, leading to the order being set aside for fresh assessment.
4. The Tribunal, in the appeal, quashed the PCIT's order, stating the Assessing Officer had examined the issues during assessment and took a possible view. The Tribunal found no error or prejudice to the revenue's interest, leading to the dismissal of the Tax Appeal.

This comprehensive analysis covers the challenges, disallowances, validity of orders, and justification for quashing the order under section 263, providing a detailed understanding of the judgment's key aspects and legal implications.

 

 

 

 

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