9911796707
TMI Blog2022 (10) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... ct should have been enquired during the course of assessment proceedings. In our view, this glaring difference should have been enquired during the course of assessment proceedings, which the Ld. Assessing Officer omitted to do. In the case of L.A. Developers [ 2022 (6) TMI 1321 - ITAT CUTTACK] ITAT held that failure on part of Assessing Officer to examine or make addition in respect of difference between cash flow and balance sheet had clearly made assessment order erroneous and consequently prejudicial to interest of revenue. Therefore, Commissioner was right in invoking his powers u/s. 263 of the Act. In view of the above facts and the judicial precedents on the subject, in our considered view, reconciliation should have been sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order passed by the AO was erroneous as well as prejudicial to the interest of the revenue on the ground that such order was passed without making proper enquiries/verification regarding reconciliation of purchase value as per books and purchase value as per data of custom department. The order passed by PCIT is requires to be quashed and may kindly be quashed. 4. The learned Pr. CIT erred on facts as also in law in setting aside the assessment order dated 13.12.2019 passed u/s. 143(3) of the Income Tax Act, 1961 directing the AO pass a fresh assessment order. The order passed u/s. 263 of the Act by the learned Pr. CIT is totally unjustified on facts as also in law therefore the same may kindly be quashed. 5. Your Honour' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly mentioned to reduce the net profit of the Firm and the same has not been verified by the AO at the time of finalizing the assessment under Section 143(3) of the I.T. Act on 13.12.2019. Therefore, Ld. Pr. Ld. CIT(A), after taking on record the submission filed by the assessee, set aside the order of AO as erroneous as well as prejudicial to the interest of Revenue. The Ld. Pr. CIT made the following observations, while passing the order passed u/s. 263 of the Act order: 8. I have gone through the records and the submissions made by the assessee during the proceedings. The assessee has submitted that the issue raised in the present proceedings has been verified in detail by the AO. Further it was submitted that the custom duty has alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of Revenue. 10. In view of the above discussion it is apparent that such cases where the assessment has been completed without conducting any inquiries/verification or incorrect application of law tantamount to erroneous orders as also order prejudicial to the interest of Revenue. 11. From the above, it is evident that there was incorrect application of law. It is settled position that incorrect application of law constitutes an error and as such the assessment is erroneous and prejudicial to the interests of the Revenue since there is loss of Revenue. 5. The assessee is in appeal before against the order passed by Ld. Pr. CIT. Before us, Ld. Counsel for the assessee submitted that the issues raised in the notice und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s year is matching with the records of the custom department and there is no case of wrongly mentioning of the purchase value/invoice value to reduce net profit of the firm as alleged. The Ld. Counsel for the assessee submitted that the AO has finalized the assessment after considering the details furnished and after due application of mind, the assessment order cannot be termed as erroneous or prejudicial to the interest of Revenue. As such any modification thereto would be tantamount to change of opinion which is not permitted tinder the Act in response, Ld. Departmental Representative relied on the observations made by Ld. Pr. CIT in the order passed u/s. 263 of the Act order. 7. We have heard the rival contentions and perused the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Assessing Officer. The Commissioner noted that there was a glaring difference in valuation of current assets and current liabilities as shown in assessee's balance sheet as compared to its cash flow statement, and said information was very much available during reassessment proceedings. He therefore invoked provision of section 263 in order to set-aside/modify assessment order passed by Assessing Officer. It was noted that Assessing Officer had called for details regarding difference arising in books of account however had not applied his mind to issue or formed any opinion towards same. The ITAT held that failure on part of Assessing Officer to examine or make addition in respect of difference between cash flow and balance sheet had ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
