Successful appeal against PCIT's order under sec 263 IT Act by ITAT Kolkata. PCIT's order quashed as vague.

The appeal against the Principal Commissioner of Income Tax-5, Kolkata's order invoking jurisdiction under section 263 of the Income Tax Act was successful. The Appellate Tribunal ITAT Kolkata allowed the assessee's appeal and quashed the PCIT's order under section 263 on 28th March 2022. The Judicial Member found the PCIT's order vague and lacking a basis for deeming the Assessing Officer's order erroneous, ultimately leading to the decision in favor of the assessee.

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Issues:
Appeal against PCIT order invoking jurisdiction u/s 263 of the Income Tax Act - Low profit before interest and tax shown - Low net profit or loss shown from large gross receipt.

Analysis:
The appeal was filed against the Principal Commissioner of Income Tax-5, Kolkata's order invoking jurisdiction under section 263 of the Income Tax Act. The PCIT set aside the assessment order dated 06.12.2017, directing the Assessing Officer to examine two issues: low profit before interest and tax shown, and low net profit or loss shown from large gross receipts. Despite notice, no one appeared on behalf of the assessee during the appeal proceedings. The Judicial Member noted that the PCIT's order lacked clarity regarding the errors pointed out in the assessment order related to the specified issues. The PCIT did not provide any incriminating material justifying the exercise of revision jurisdiction under section 263. While the PCIT raised a non-deduction of TDS issue, the direction to the Assessing Officer was to examine the two issues of low profit before interest and tax and low net profit or loss from large gross receipts. The PCIT did not provide any findings on these issues, and the Judicial Member found the PCIT's order to be vague and lacking a basis for deeming the AO's order erroneous. Consequently, the Judicial Member quashed the PCIT's order under section 263.

In conclusion, the appeal of the assessee was allowed, and the order passed by the PCIT under section 263 was quashed. The decision was made on 28th March 2022 by the Appellate Tribunal ITAT Kolkata, with Shri Sanjay Garg as the Judicial Member.

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