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2021 (4) TMI 988 - AT - Income TaxRevision u/s 263 - Order of the Ld.CIT(A) annulling the assessment order passed u/sec143(3) - HELD THAT - As decided in RELIANCE MONEY INFRASTRUCTURE LTD. VERSUS PRINCIPAL COMMISSIONER OF INCOME TAX, MUMBAI 2017 (10) TMI 630 - ITAT MUMBAI it is not permissible for the Pr CIT to disturb a concluded assessment on the ground that the AO has not dealt with or discussed in the assessment order the issues examined by him during the assessment proceedings. It is enough if the AO has elicited information/explanations from the assessee and the assessee has filed the same before the AO so long as there is no incorrect appreciation of facts or the assessment is not contrary to or not in accordance with law.The amendment to section 263 is also prospective. Thus, the reversionary proceedings u/s 263 of the Act are not validly initiated in view of the facts that the issues raked up by the Pr.CIT stand examined by the AO in the assessment proceedings and the ld Pr CIT has failed to state as to how the order of AO is erroneous and not in accordance with law or settled legal position. Even on merit, the assessee is entitled to all the deductions/claims as per the provisions of the Act. When the revision order u/s 263 of the Act was set-aside being invalid and any subsequent proceedings shall become infructuous. The Ld.DR could not controvert the findings of the Ld.CIT(A) with any new cogent material or information but relied on the Assessing officer order. Accordingly, we do not find any infirmity in the order of Ld.CIT(A) who has relied on the Hon ble tribunal decision and passed a reasoned order and we upheld the same and dismiss the grounds of appeal of the Revenue.
Issues:
1. Justification of annulling the assessment order passed under section 143(3) read with section 263 of the Income Tax Act, 1961. 2. Allegations of furnishing inaccurate particulars by the assessee during assessment proceedings. 3. Observations regarding unusual expenditures and transactions made by the assessee. 4. Validity of the revisionary proceedings initiated under section 263 of the Act. 5. Acceptance and contestation of decisions by the revenue authorities. Issue 1: The appeal filed by the revenue challenges the annulment of the assessment order under section 143(3) read with section 263 of the Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) -3, Mumbai had set aside the assessment order, leading to the appeal. The revenue contested the validity of this annulment, citing ongoing adjudication before the Hon'ble Bombay High Court regarding the quashing of proceedings under section 263 of the Act. Issue 2: Allegations of furnishing inaccurate particulars by the assessee during assessment proceedings were raised. The revised computation of income filed by the assessee, reducing claims of depreciation, deductions, and profit on sale of assets, was deemed indicative of inaccurate particulars. The provisions of Section 271(1)(c) of the Income Tax Act, 1961, were invoked based on these discrepancies. Issue 3: Observations regarding unusual expenditures and transactions made by the assessee were highlighted. The Principal Commissioner of Income Tax noted high hedging and transportation costs, questionable equity share capital purchases, and deduction claims for demerger expenses and excess payments. These observations were deemed irregular and not in compliance with the assessment completed under section 143(3) of the Act. Issue 4: The validity of the revisionary proceedings initiated under section 263 of the Act was scrutinized. The Commissioner of Income Tax (Appeals) annulled the reassessment order, citing precedents where revision orders were quashed by higher authorities. The order passed pursuant to the revision order was deemed void, leading to the annulment of the reassessment order under section 251(1)(a) of the Act. Issue 5: Acceptance and contestation of decisions by the revenue authorities were discussed. The Hon'ble Tribunal's decision to set aside the revision order under section 263 of the Act was upheld, leading to the annulment of the assessment order. The revenue's appeal against the annulment was dismissed, emphasizing the invalidity of the revisionary proceedings and the consequential order passed by the Principal Commissioner of Income Tax. This detailed analysis covers the various issues raised in the legal judgment by the Appellate Tribunal ITAT Mumbai.
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