2016 (11) TMI 1019 - HC - Income Tax

Revision u/s 263 - tds liability u/s 194C - Held that - AO in his order has clearly mentioned that relevant records were produced and verified on test check basis and the assessment was framed after discussions, the information/ letter supplied by the assessee stands on record. This leads to an inference that AO has considered all the relevant aspects about the assessment, and there is no case of lack of enquiry in this behalf during assessment. The level of enquiry in assessment proceedings is always a debatable proposition depending on the authority concerned. It has been held that conceptual difference on the manner of inquiry cannot make the assessment order erroneous or prejudicial to the interest of revenue. Even on merits, there is no loss to the Revenue inasmuch as it is not disputed that tanker receipts surplus has been shown by AKHK and is asssessed at same rate. All the transactions are duly disclosed and it cannot be held that AOs order is erroneous or prejudicial to the interest of revenue. The Tribunal has thus given a finding that all the transactions are duly disclosed and it cannot be held that AOs order is erroneous or prejudicial to the interest of revenue. - Decided in favour of assessee.

Summary

Issues:
Challenge to Tribunal's judgment quashing CIT's order under Section 263 of the Act.

Analysis:
The appellant challenged the Tribunal's decision to quash the CIT's order under Section 263 of the Act. The appellant contended that the Tribunal erred in disregarding the provisions of law under Section 194 C of the Act. The Tribunal found merit in the argument presented by the assessee's counsel, stating that all transactions were duly disclosed, and the AO had considered all relevant aspects during the assessment. The Tribunal concluded that there was no lack of inquiry during the assessment process, and the assessment order was not erroneous or prejudicial to the revenue's interest. The Tribunal's decision was based on the fact that the AO had conducted discussions, verified records on a test check basis, and considered the information provided by the assessee. The Tribunal held that the assessment order was not detrimental to the revenue's interest as there was no loss, and all transactions were properly disclosed and assessed. Consequently, the Tribunal confirmed its decision to quash the CIT's order under Section 263 of the Act.

In light of the Tribunal's findings and reasoning, the High Court upheld the Tribunal's decision. The High Court agreed with the Tribunal that all transactions were appropriately disclosed, and there was no evidence to suggest that the AO's order was erroneous or prejudicial to the revenue's interest. Therefore, the High Court found no substantial question of law to consider and dismissed the appeal, stating that it lacked merit. The High Court's judgment affirmed the Tribunal's decision and concluded that the Tribunal's observation regarding the assessment order was just and proper, leading to the dismissal of the appeal challenging the Tribunal's judgment.