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of <h1>Tribunal reverses Commissioner's order due to lack of prejudice to Revenue under section 263.</h1> <h3>Vishnu Kumar Agarwal, Sanjeev Kumar Agarwal, Gopal Kumar Agarwal, Smt. Meghna Agarwal Versus ITO (International Taxation), Visakhapatnam</h3> Vishnu Kumar Agarwal, Sanjeev Kumar Agarwal, Gopal Kumar Agarwal, Smt. Meghna Agarwal Versus ITO (International Taxation), Visakhapatnam - TMI Issues:1. Non-deduction of TDS on property purchase from a Non-Resident.2. Rectification of order u/sec. 201(1) & 201(1A) by the Assessing Officer.3. Validity of the order passed by the Commissioner u/sec. 263.4. Application of section 263 - erroneous and prejudicial to the interest of the Revenue.5. Similarity of facts in multiple appeals.Detailed Analysis:1. The case involved the purchase of an immovable property from a Non-Resident where TDS was not deducted as required under section 195 of the Income Tax Act. The Assessing Officer passed an order u/sec. 201(1) & 201(1A) treating the assessee as in default for non-deduction of TDS.2. The assessee filed for rectification of the order by providing details that the Non-Resident had already offered the income for taxation by filing a return of income before the relevant authority. The Assessing Officer, after considering the explanation, rectified the order on 14/06/2018, stating that the assessee need not pay any tax.3. The Commissioner, exercising powers under section 263, set aside the rectification order, deeming it erroneous and prejudicial to the interest of the Revenue. The Commissioner held that the original order passed by the Assessing Officer was valid, as non-deduction of TDS made the assessee liable to be treated as in default.4. The Tribunal, upon appeal, found that the Commissioner failed to establish any prejudice caused to the Revenue by the rectification order. To invoke section 263, both conditions of an order being erroneous and prejudicial to the Revenue must be met. As the Commissioner could not establish the latter, the Tribunal reversed the Commissioner's order and restored the Assessing Officer's order.5. In other similar appeals, the Tribunal applied the decision from the main appeal, stating that the facts were analogous. Consequently, all appeals filed by the assessees were allowed, with the order pronounced on 22nd January 2020.
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