2019 (3) TMI 130 - AT - Income Tax

Validity of invoking revisionary jurisdiction by CIT u/s 263 - lack of enquiry on the part of the AO on the list of taxable and non-taxable services - HELD THAT - There is no incorrect assumption of facts and wrong application of law neither on the part of the AO nor has been pointed out by the ld CIT in his section 263 order. Hence it could be safely concluded that though not considering the revised return while completing the assessment on 10.3.2014 would make the order of the AO erroneous, it does not cause any prejudice to the interest of the revenue as all the requisite details were already on record with supporting evidences and the same were duly examined by the AO. Hence it is not the case of lack of enquiry on the part of the AO on the list of taxable and non-taxable services disclosed by the assessee. We hold that the twin conditions precedent for invoking revisionary jurisdiction u/s 263 of the Act is conspicuously absent in the instant case and accordingly by placing reliance on the decision of the Hon ble Supreme Court in the case of Malabar Industrial Company Ltd vs CIT (2000 (2) TMI 10 - SUPREME COURT), revisionary jurisdiction u/s 263 cannot be invoked by the CIT-A - Decided in favour of assessee.

Summary

Issues:
Validity of invoking revisionary jurisdiction by CIT u/s 263 of the Act.

Analysis:
The appeal arose from the order of the Principal Commissioner of Income Tax (IT & TP) against the order passed by the Deputy Director of Income Tax. The assessee, a foreign company, filed original and revised returns for the Assessment Year 2011-12, declaring different taxable incomes due to a change in currency from Poland to Euro. The Assessing Officer (AO) accepted the original return's income without considering the revised return, leading to a demand notice. The CIT invoked revisionary jurisdiction u/s 263, alleging lack of enquiry by the AO. The Tribunal noted that both returns disclosed taxable services, subjected to TDS, and the revised return's additional income was duly paid as self-assessment tax. The assessee provided all details to the AO, and the Tribunal found no prejudice to revenue as tax liability remained unchanged. Citing the decision in Gee Vee Enterprises, the Tribunal held that the AO's order, though erroneous, did not warrant revision as all relevant details were on record. Referring to the Malabar Industrial case, the Tribunal emphasized the absence of conditions for invoking revisionary jurisdiction. Quoting CIT vs J.L. Morrison (India) Ltd, the Tribunal concluded that the AO's assessment was regular, and the CIT's revision order was quashed, allowing the assessee's appeal.

Conclusion:
The Tribunal allowed the assessee's appeal, quashing the CIT's revision order u/s 263 of the Act. The Tribunal found no lack of enquiry by the AO and no prejudice to revenue, as all requisite details were disclosed and examined. Citing legal precedents, the Tribunal upheld the regularity of the AO's assessment and set aside the CIT's revision order.