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TMI Blog2024 (6) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... paid taxes on such sum and the assessee is not an assessee in default . In the instant case, it has been argued before us that so far as salary and commission is concerned, the recipient has offered such income in their respective returns of income and have paid due taxes thereon. However, the Ld. PCIT has omitted to consider and analyze these arguments during the course of 263 proceedings. Accordingly, in so far as the issue of non-deduction of TDS on aforesaid two payments are concerned, we are of the considered view that the assessee was not could not be held to an assessee in default once the recipient of income has offered such income in their return of income and paid due taxes thereon. With respect to the disallowance of commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two conditions must be fulfilled viz. the impugned assessment order must be erroneous and that error must be prejudicial to the interest of the revenue. In the present case, Ld. AO passed the assessment order after analysing and being satisfied with all details furnished by the Appellant and adopted one of the possible views. Hence, there was no error in the impugned assessment order so as to justify action u/s. 263 of the Act. Under the circumstances, the very assumption of power u/s. 263 of the Act is unjustified and bad in law and therefore, order u/s. 263 of the Act deserved to be quashed. 4. The subject order u/s. 263 passed by Ld. PCIT is illegal and bad in law in absence of any finding of Ld. PCIT how the alleged error of AO has resu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e returned income of Rs. 3,20,88,190/-. 4. The Principal Commissioner of Income Tax initiated proceedings under Section 263 of the Act on the ground that assessee had not deducted tax at source on part of the salary amounting to Rs. 1,94,800/- and on account of non-deduction of tax on commission / brokerage payment of Rs. 42,71,900/-. Since, the assessee has not deducted tax at source on payment of Rs. 44,66,700/- provisions of Section 40(a)(ia) of the Act are attracted. However, the Assessing Officer did not made disallowance of Rs. 13,40,010/- (30% of Rs. 44,66,700/-) under Section 40(a)(ia) of the Act, and hence the assessment order is erroneous and prejudicial to the interest of the Revenue. 5. The assessee is in appeal before us agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as TDS on payment of Rs. 1,94,800/- is concerned, there is not prejudice to the Revenue on account of non-deduction of tax at source, on the part of the assessee. 6. With respect to non-deduction of TDS on commission / brokerage payment amounting to Rs. 42,71,900/-, the Counsel for the assessee submitted that such commission is related to transfer of land by the assessee during the impugned assessment year. The Counsel for the assessee submitted that the assessee has not claimed the aforesaid commission / brokerage as expenses while computing business income and therefore, there is no question of making disallowance under Section 40(a)(ia) of the Act. In support of the aforesaid contention, the Counsel for the assessee submitted acknowledg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. We have heard the rival contentions and perused the material on record. 9. We are in agreement with the contentions of the Ld. Counsel for the assessee that once the recipient of income has offered the income on which no taxes were deducted by the assessee at source and paid due taxes thereon, in view of Second Proviso to Section 40(a)(ia) of the Act, the assessee is deemed to have deducted and paid taxes on such sum and the assessee is not an assessee in default . In the instant case, it has been argued before us that so far as salary amounting to Rs. 1,94,800/- and commission of Rs. 40,10,900/- is concerned, the recipient has offered such income in their respective returns of income and have paid due taxes thereon. However, the Ld. PC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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