2022 (9) TMI 1596 - AT - Income Tax

Validity of Revision order u/s 263 - AO failed to conduct enquiries and verification on the issue - computational mistake in the order of the CIT with regard to work in progress and determination of percentage completion method following in respect of projects of Royal Home Town and Ellora Infratech - DR brought out the fact that the correction of the computational mistake would result in a proposition that the order of the AO is not erroneous and prejudicial to the interest of revenue - HELD THAT - DR is fairly agreed that there is a mistake in computation. Hence, we are of the considered opinion and hold that the Tribunal need not exercise the power and authority to an issue which is prima facie rectifiable by the Pr. CIT u/s 154 and hence, the file is being remanded back to the CIT for correction of the computational mistake.

Summary

Issues involved: Appeal against order u/s 263 of the Income Tax Act regarding computational mistake in the order of the Ld. Pr. CIT.

Summary:

Issue 1: Jurisdiction of the Ld. Pr. CIT u/s 263
The Assessee challenged the jurisdiction of the Ld. Pr. CIT u/s 263, arguing that detailed enquiries were conducted and additions were pending before the CIT(A). The Assessee contended that the order u/s 263 was bad in law and against the facts of the case.

Issue 2: Computational Mistake in the Order
The core issue revolved around a computational mistake in the order of the Ld. Pr. CIT concerning work in progress and determination of percentage completion method for projects of Royal Home Town and Ellora Infratech. The correction of this mistake was crucial to establish that the AO's order was not erroneous and not prejudicial to the revenue's interest.

Decision:
After hearing arguments from both parties, it was acknowledged that there was indeed a computational error. The Tribunal concluded that the issue was rectifiable by the Pr. CIT u/s 154. Therefore, the file was remanded back to the Ld. Pr. CIT for correction of the computational mistake. The order was pronounced in the Open Court on 22/09/2022.