9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 223 - AT - Income TaxRevision u/s 263 - tds credit issue non examination by AO - Held that - In the present case when the AO had noticed that there was a claim for credit of TDS on a sum of ₹ 74,19,860/- he is duly bound to examine whether the said sum has been offered to tax or not. Failure to do so by the AO renders the assessment order erroneous and prejudicial to the interest of the revenue and it is not the case of the appellant that this issue was examined by the AO during the course of regular assessment proceeding nor the appellant made any effort to demonstrate before us that any enquiry was caused by the AO during the course of assessment proceedings on this aspect. Therefore, it was held by the Hon ble Supreme Court in the case of Malabar Industrial Co. Ltd., Vs. CIT 2000 (2) TMI 10 - SUPREME Court that non examination of an issue by the AO renders the assessment erroneous and prejudicial to the interests of the revenue and even in the decision of the jurisdictional High Court in the case of CIT Vs. Infosys Technologies Ltd. 2012 (1) TMI 76 - KARNATAKA HIGH COURT is squarely applicable to the fact of the case. We may add here that the learned CIT had only set aside the issue for denovo examination by the AO, which is permissible as per the decision of the jurisdictional High Court in the case of Infosys Technologies Ltd. - Decided against assessee.
Issues:
1. Revision of assessment order under section 263 of the Income Tax Act, 1961. 2. Whether the sum not offered to tax should be brought to tax. 3. Justification of exercising power of revision by the CIT. 4. Examination of TDS credit claim on a specific sum. Analysis: 1. The judgment revolves around the revision of an assessment order under section 263 of the Income Tax Act, 1961. The appeal was filed against the order of the CIT(A)-III, Bangalore dated 18.02.2014. The appellant raised multiple grounds challenging the revision, arguing that the order was against the law, equity, and facts of the case. The appellant contended that the CIT erred in revising the order without any error or prejudice to the revenue's interest. The CIT was accused of ordering a fresh assessment without proper material support, leading to a legal challenge based on principles of natural justice and equity. 2. The main issue in question was whether a specific sum of ?74,19,860, on which TDS was deducted, should be brought to tax. The appellant claimed that this sum represented earnest money deposit and further security deposits, not forming part of the appellant's income. The CIT(A) issued a show cause notice proposing to revise the assessment based on this sum not being offered to tax. The appellant argued that the order sought to be revised was not erroneous or prejudicial to the revenue's interest, questioning the CIT's jurisdiction to revise the assessment order. 3. The judgment also delves into the justification of the CIT's exercise of power of revision. The CIT(A) concluded that the appellant had not declared the sum of ?74,19,860 as income, and the AO had failed to conduct a necessary enquiry on this aspect. Citing relevant legal precedents, the CIT set aside the issue for denovo examination by the AO after affording an opportunity to the appellant. The appellant contested this decision, reiterating that the sum in question was not income and challenging the CIT's exercise of revisionary powers. 4. Furthermore, the judgment analyzed the examination of the TDS credit claim on the specific sum of ?74,19,860. The appellant's claim for TDS credit was not fully granted by the AO, leading to discrepancies in the assessment. The CIT justified the revision based on the AO's failure to scrutinize whether the sum had been offered to tax. The judgment highlighted the legal principle that non-examination of an issue by the AO renders the assessment erroneous and prejudicial to the revenue's interests, justifying the CIT's decision to set aside the issue for further examination. In conclusion, the judgment addresses the complexities surrounding the revision of an assessment order, the treatment of specific sums not offered to tax, the exercise of revisionary powers by the CIT, and the examination of TDS credit claims. The legal analysis provided insights into the application of relevant laws and precedents to determine the correctness of the assessment and the justification for revising the order.
|
