TaxTMI 
TaxTMI 
2015 (11) TMI 1131
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....diction u/s 263 not being satisfied, the order passed u/s 263 is bad in law and liable to be quashed. 1.2 The learned CIT, B'lore III, B'lore has erred in assuming jurisdiction u/s 263 of the IT Act, 1961 and in passing the revisional order without appreciating that for the year under consideration, the appellant had filed objections before the Hon'ble Dispute Resolution Panel and the AO has passed the order in conformity with the directions of the Hon'ble Panel in accordance with provisions of sec. 144C. The order of the AO having been passed in conformity with the directions of the DRP cannot be treated either as erroneous or prejudicial in nature. The order of the CIT u/s 263 being bad in law is liable to be quashed. 1.3 The learned CIT, B'lore III, B'lore has erred in not appreciating that the DRP is a committee of three Commissioners on whose directions the assessment order is framed and a single Commissioner cannot 'sit over' the decision of three Commissioners. 1.4 The learned CIT, B'lore III, B'lore has erred in not appreciating that whether payment towards data link charges is liable to withholding tax is a debatable issue and order of the AO cannot be termed as erro....
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....putation of taxable income. The international transaction of the assessee, as specified in 92(B) of the Income-tax Act 1961 and reported in Form 3CEB exceeded Rs. 5 crore. The case was therefore referred to Additional Director of Income-tax(Transfer Pricing) vide Reference No.TP/ITO-W-12(1)/2008-09 dated 14.5.2008, after receiving approval for the reference from the Commissioner of Income-tax, Bangalore-III, vide No.TPO/CIT-B.III/2008-09 dated 12.12.2008, with a view to examine the international transaction of the assessee and suggest any adjustment in respect of arms length price u/s 92CA. The Jt. Director (Transfer Pricing)-II, B'lore vide order u/s 92CA dated 20.10.2009 determined the 'arms length price' in respect of the software service at Rs. 21,49,71,327/- as against Rs. 12,08,02,549/- shown by the taxpayer. The difference of Rs. 9,41,68,778/- was determined as an adjustment u/s 92CA. In this regard a communication was issued to the assessee company to file its objections, if any, for the proposed above adjustments in arms length price. The submissions against the proposed adjustments filed by the assessee company on 20.11.2009 were examined. All the submission made by....
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....matter, the learned CIT issued a show cause notice requiring the assessee to show cause why proceedings u/s 263 of the Act should not be initiated in its case and calling upon the assessee to file objections if any to these proposed proceedings us/ 263 of the Act. In response thereto, the assessee filed written submissions in the course of hearings on 26/3/2012, 4/6/2012 and 22/10/2012. As there was a change in incumbent in office, the assessee was afforded fresh opportunity of being heard on 6/2/2013, wherein the assessee restricted the arguments put forth in the earlier proceedings. 3.3 The learned CIT, then made an analysis of the records in paras 10 to 11 of the impugned order and thereafter came to the conclusion that the assessing officer ought to have, but did not carry out any examination/investigation/verification on the issue of whether the payments amounting to Rs. 3,41,92,524/- being data link charges and issuance charges paid/payable outside India to 4 parties, namely MCI World Com Communication Inc (USA), Novatel (USA), Verizon Communication Inc (USA) and Singapore, Telecommunications (Singapore) were liable for TDS thereon as the incomes were chargeable to tax in In....
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....AO has adopted one of the courses permissible under law or where two views are possible and the AO has taken one view with which the CIT does not agree. It cannot be treated as an erroneous order, unless the view taken by the AO is unsustainable under law. (vi) If while making the assessment, the AO examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determine the income, the CIT, while exercising his power u/s 263 is not permitted to substitute his estimate of income in place of the income estimated by the AO. (vii) The AO exercises quasi-judicial power vested in his and if he exercises such power in accordance with law and arrive at a conclusion, such conclusion cannot be termed to be erroneous simply because the CIT does not fee stratified with the conclusion. (viii) The CIT, before exercising his jurisdiction u/s 263 must have material on record to arrive at a satisfaction. (ix) If the AO has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation by a letter in writing and the AO allows the claim on being satisfied with the explanation of the assess....
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....t. The statements made in a pleading proved by the minimum amount of evidence may be accepted by a civil court in the absence of any rebuttal. The civil court in neutral. It simply gives decision on the basis of pleading and evidence which comes before it. The ITO is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. The meaning to be given to the word 'erroneous' in sec. 263 emerges out of this contract. It is because it is incumbent on the ITO to further investigate the facts stated in the return when circumstances would make such an inquiry prudent that the word 'erroneous' in sec. 263 includes the failure to make such an inquiry. The order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct." 4.4 In the light of the above proposition, if we peruse and consider the material on record, it would reveal that in the ....