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2024 (7) TMI 877 - AT - Income TaxRevision u/s 263 by CIT - addition of fixed asset in the year under consideration on which depreciation and additional depreciation was claimed by the assessee but AO has not inquired during the assessment proceedings anything about it - PCIT found that the assessee has made payment of commission to the foreign parties without deducting TDS and assessee has claimed deduction u/s 80JJAA HELD THAT - There were enquires conducted by the AO during the assessment proceedings and therefore it cannot be said that the assessment has been framed by the AO without the application of mind - PCIT has not pointed out any flaw in the submissions made by the assessee in response to the notice issued u/s 263 of the Act. As perused the report in form 10DA relating to the deduction claimed u/s 80JJAA and find that it was duly filed by the assessee for claiming the deduction. PCIT has not pointed out any specific defect in such report furnished in form 10DA for claiming the deduction u/s 80JJAA - Thus the assessment has been framed by the AO after necessary verification and application of mind. In the case before us, there was proper verification and application of mind applied by the AO while framing the assessment u/s 143(3) of the Act. Hence, the order passed by the Ld. PCIT u/s 263 of the Act is not sustainable. Thus, the ground of appeal of the assessee is hereby allowed.
Issues Involved:
1. Whether the assessment order passed under s. 263 of the Income Tax Act, 1961 for the Assessment Year 2018-2019 was erroneous and prejudicial to the interest of revenue. Analysis: 1. The Assessee appealed against the order of the Learned Principal Commissioner of Income tax, Ahmedabad-1, challenging the assessment framed under s. 143(3) r.w.s. 143(3A) & 143(3B) of the Act as erroneous. The issues highlighted by the Assessee included the addition of fixed assets, non-deduction of TDS on commission payments to foreign parties, and the claim of deduction u/s 80JJAA of the Act. 2. The Principal Commissioner observed discrepancies in the assessment, noting that the AO did not inquire about the purchase of fixed assets and the depreciation claimed. Similarly, the AO did not verify the non-deduction of TDS on commission payments and the deduction claimed u/s 80JJAA. The Principal Commissioner proposed to revise the assessment under s. 263, considering the lack of necessary verification and examination of the law's provisions. 3. The Assessee contended that the assessment was done after due verification and application of mind by the AO. The Assessee pointed out the notices issued u/s 142(1) of the Act and the replies provided. The Assessee argued that the assessment was valid and relied on previous tribunal orders to support their claim. 4. The Tribunal analyzed the contentions of both parties. It noted that the AO had conducted inquiries during the assessment proceedings, refuting the claim that the assessment was done without due application of mind. The Tribunal found no flaws in the Assessee's submissions and the report filed for claiming the deduction u/s 80JJAA. It distinguished the case laws cited by the Revenue and concluded that the assessment was properly conducted, rendering the order under s. 263 unsustainable. 5. Ultimately, the Tribunal allowed the Assessee's appeal, stating that the assessment had been done after necessary verification and application of mind. The Tribunal found the order passed by the Principal Commissioner under s. 263 of the Act not sustainable, thereby allowing the appeal filed by the Assessee. 6. The Tribunal's decision, delivered in Ahmedabad, on 29/11/2023, favored the Assessee, concluding that the assessment order was valid and the appeal was allowed.
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