2016 (3) TMI 827 - AT - Income Tax

Tds u/s 194A - non deduction of tds on interest on deposits - revision u/s 263 - Held that - the direction of the Ld. CIT to re-do the assessment is due to non-submission of the requisite details by the assessee before him. Under section 263 of the Act, CIT has wide powers but does not have unfettered discretion to revise the assessment order and the condition necessary for invoking the power must exist. The CIT can come to the conclusion of the assessment order to be erroneous if the A.O. has not made necessary enquiries before completing the assessment but to come to the conclusion that the assessment order is also prejudicial to the interests of the Revenue, he has to go through the relevant material. But since the assessee did not produce the required details, the CIT proceeded to revise the assessment order by remanding it to the file of the A.O. Now that the details are filed before us, we deem it fit and proper to admit the same and remit the issue to the file of the Ld. CIT with a direction to re-look into the matter in the light of paper book filed by the assessee. Needless to say that assessee shall be given a fair opportunity of being heard. - Decided in favour of assessee for statistical purposes.

Issues:
1. Revision of assessment order under section 263 of the I.T. Act for A.Y. 2010-2011.
2. Non-submission of requisite details by the assessee before the CIT.
3. Powers of the CIT under section 263 of the Act.
4. Direction to re-do the assessment by the CIT.
5. Admissibility of details submitted by the assessee before the ITAT.
6. Opportunity for the assessee to be heard before the CIT.

Analysis:

1. The appeal pertains to the revision of the assessment order for the Assessment Year (A.Y.) 2010-2011 under section 263 of the Income Tax Act. The appellant contested the order of the Ld. CIT which proposed to revise the assessment to determine the interest on deposits where TDS was not deducted as required by Section 194A of the Act.

2. During the proceedings, the appellant's counsel highlighted that the CIT initiated the revision proceedings based on a show cause notice and requested various details regarding TDS on interest paid on deposits. The appellant explained that all branches underwent tax and statutory audits, and details of TDS were verified. However, due to the inability to provide all details to the CIT, the assessment order was set aside for revision, prompting the appellant to appeal.

3. The appellant's counsel submitted a paper book containing branch-wise TDS statements for the A.Y. 2010-2011, which were not previously submitted to the CIT. The counsel requested an opportunity for the appellant to represent before the CIT, emphasizing the need for a remand of the matter to the CIT for reconsideration.

4. The ITAT considered the arguments presented by both parties and noted that the CIT's direction to re-do the assessment stemmed from the non-submission of essential details by the appellant. It was emphasized that the CIT, while possessing broad powers under section 263, must have valid grounds to revise an assessment order. The ITAT highlighted that for an assessment order to be deemed prejudicial to the Revenue, relevant material must be considered. As the appellant subsequently provided the necessary details, the ITAT decided to admit the information and remit the issue back to the CIT for review, ensuring the appellant's right to a fair hearing.

5. Ultimately, the ITAT allowed the appeal of the assessee for statistical purposes, indicating that the matter would be reconsidered by the CIT in light of the details submitted by the appellant. The decision was pronounced in an open court session on 24.2.2016, concluding the legal proceedings.

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