TaxTMI 
TaxTMI 
2016 (7) TMI 848
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....011. 2. The only issue to be decided in this appeal is as to whether the ld CIT is justified in invoking revisionary jurisdiction u/s 263 of the Act in the facts and circumstances of the case. 3. The brief facts of this issue is that the return of income for the Asst Year 2009-10 was filed by the assessee on 29.9.2009 declaring taxable income of Rs. 3,82,280/-. The assessment was completed u/s 143(3) of the Act on 30.12.2011 determining the total income at Rs. 11,74,000/- after making certain disallowances. The ld CIT on perusal of assessment records, documents, accounts, submissions etc., it was observed that the assessee had paid a sum of Rs. 6,31,14,006/- to M/s. Gananayak Vincom Pvt. Ltd. and Rs. 7,31,63,040/- to M/s Umang Merchandise....
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....s made from these two parties resulting in short deduction of TDS of Rs. 41,60,372/- [41,77,475 - 10,710]. Conversely it appears that no tax was deducted on expenditure of Rs. 14,25,60,223/- and should have been disallowed u/s.40(a) (ia) of the I. T. Act. No proper compliance was made by the assessee before the ld CIT by giving proper replies to the show cause notice on merits of the case. The ld CIT held that the power of revision by the CIT u/s 263 is very wide and it is in the nature of supervisory jurisdiction. It is well settled that incorrect assumption of facts of application of law satisfies the requirement of the law i.e. "order being erroneous and prejudicial to the interest of revenue". The order passed by the AO without applicat....
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....tances of the case the notice u/s 263 of the Income Tax Act 1961 issued by the learned Commissioner of Income Tax was without jurisdiction and the order passed on the basis of such notice was bad in law hence the same be quashed and or annulled. 3. For that in the facts and circumstances of the case the Learned Commissioner of Income Tax erred in holding that the assessment order passed by the learned assessing officer in the case of the appellant with inadequate inquiry and hence erroneous and prejudicial to the interest of revenue and thereby setting aside the said assessment order u/s 263 of the Income Tax Act 1961. 4. For that in the facts and circumstances of the case the Learned Commissioner of Income Tax erred in holding that the....
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.... quashed. 10.The appellant craves leave to press new, additional grounds of appeal or modify, withdraw any of the above grounds at the time of hearing of the appeal." 4. The ld AR argued that there cannot be any disallowance u/s 40(a)(ia) of the Act in respect of short deduction of tax at source. Reliance in this regard was placed on the decision of the Hon'ble Calcutta High Court in the case of CIT vs S.K.Tibrewal in ITAT NO. 183 of 2012 G.A.No. 2069 of 2012 dated 3.12.2012. He stated that the tribunal order in the case of S.K.Tibrewal was passed in ITA No. 1135/Kol/2010 dated 21.10.2011 wherein it was held that the provisions of section 40(a)(ia) of the Act could not be made applicable for short deduction of tax at source. Hence, the ....
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....sued u/s 133(6) of the Act , and despite the fact that all the data were very much available on record including the section 197(1) certificates, the ld AO had not properly applied his mind on the same. Hence revisionary jurisdiction invoked by the ld CIT directing the ld AO to make proportionate disallowance u/s 40(a)(ia) of the Act for short deduction of tax at source is right in law. 6. We have heard the rival submissions. The facts stated hereinabove remain undisputed and hence the same are not reiterated for the sake of brevity. We find that the ultimate purpose of invoking jurisdiction u/s 263 of the Act is to make proportionate disallowance u/s 40(a)(ia) of the Act for short deduction of tax at source. We find that the short point t....