9911796707
TMI Blog2022 (6) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... t and fair if the matter is restored to the file of the Ld. AO for decision afresh. Ld. AO shall give reasonable opportunity to the assessee to present its case and to bring on record all the material in support of its claim that its case falls under Rule 6DD. Thereafter, Ld. AO shall pass reasoned and speaking order in accordance with law. Appeal is partly allowed - ITA No.2877/Del/2019 - - - Dated:- 15-3-2022 - DR. B.R.R. KUMAR, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER Assessee by: None Department by : Shri Umesh Takyar, Sr. DR ORDER PER ASTHA CHANDRA, JM The appeal by the assessee is directed against the order dated 28.2.2019 of the Ld. Commissioner of Income Tax (Appeals), Ghaziabad ( CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. AO, notice under section 154 of the Act issued by him remained uncomplied with. Neither the assessee nor its representatives filed any reply which led him to recompute the total income of the assessee at Rs. 23,86,38,577/- including therein disallowance of Rs. 23,72,40,000/- under section 40A(3) as per the audit objection raised by the RAP. 4. The assessee challenged the rectificatory order under section 154 of the Act before the Ld. CIT(A). In its grounds of appeal, the assessee stated that the order under section 154 was perse without jurisdiction and that the disallowance under section 40A(3) was not justified as the Ld. AO neither in the order under section 154 nor in the assessment order disputed the genuineness of the expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , inter alia that section 40A(3) is mandatory provision of law which had been overlooked in the original assessment under section 143(3) of the Act and that it was a mistake rectifiable under section 154 as held by Hon ble Supreme Court in ITO vs. Ashok Textile Ltd. 41 ITR 732 (SC). 6. This has brought the assessee before us by reiterating the same grounds which were taken before the Ld. CIT(A). 7. On request of the assesee the appeal was fixed on out of turn basis to which the Ld. AO had no objection. However, adjournment was sought thrice by the Counsel of the assessee which was granted. On 23.11.2021 the date fixed for hearing, the Counsel withdrew as authorised representative of the assessee. Hence, the hearing was adjourned to 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AP that in the original assessment made by him, he overlooked the mandatory provision of section 40A(3) of the Act. Ld. AO, therefore, after giving opportunity to the assessee passed the rectificatory order making the impugned disallowance. Assumption of power by the Ld. AO under section 154 was agitated by the assessee before the Ld. CIT(A) as also before us on the ground that the impugned disallowance is a debatable issue and hence outside the ambit of section 154 of the Act. We are unable to subscribe to this view. Overlooking the mandatory provision of law in the original assessment is apparent mistake of law which is rectifiable under section 154 as held in the case of the ITO vs. Ashok Textile Limited and Janatha Steel Mills Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve provision may be seen from circular No. 1 dated 27.3.2009 reported in (2009) 310 ITR (St) 42 which states as below:- 13.2 Sub-section (3) of section 40A is an anti tax evasion measure. By requiring payments to be made by an account payee instrument, it is possible to verify the genuineness of the transaction. Thereby the risk of evasion is substantially mitigated. 9.2 Rule 6DD prescribed by the Board has been substituted by the Income Tax (Seventh Amendment) Rules, 2008 w.e.f. assessment year 2009-10. 10. Perusal of the order under section 154 reveals that during the rectificatory proceedings the Ld. AO required the assessee to show cause as to why its income be not recomputed as payments amounting to Rs. 23,72,40,000/- for ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
