TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 433
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.... BREACH OF THE PRINCIPLES OF NATURAL JUSTICE 1.1. The Learned Commissioner of Income - tax - 2, Mumbai ["Ld. CIT"], erred in framing the revision order u/s. 263 of the Income - tax Act, 1961 ["the Act"] by not giving proper, sufficient and effective opportunity of being heard to the Appellant. 1.2 It is submitted that in the facts and the circumstances of the case, and in law, the order is required to be held as bad and illegal in breach of the principles of natural justice, as well as non-application of mind to the facts and the contentions brought on record by the Appellant. 2. REVISION ILLEGAL 2.1 The Ld. CIT erred in passing the order u/s. 263 of the Act, revising the assessment order passed by the A.O. u/s. 143 (3) of the Act. 2.2 It is submitted that in the facts and the circumstances of the case, and in law, the order is bad, illegal and void as necessary preconditions for initiating the revision proceeding as well as the completion thereof were not fulfilled. 2.3 Without prejudice to the generality of the above, the CIT failed to appreciate that: (i) The order which he was seeking to revise had already merged with the appellate order and, accordingly, was not the "re....
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....mpt from tax under provisions of the Act. Thus, it was observed by the learned CIT that the assessment order u/s. 143(3) of the Act passed by the AO was without conducting proper inquiries and without proper application of mind and was an erroneous order in as much as the same was prejudicial to the interest of Revenue. Notice u/s 263 of the Act were issued to the assessee company on 17th January, 2013 and the assessee was asked to file objections, if any, to the proposal to set aside the assessment order dated 21-12-2011 passed by the AO u/s 143(3) of the Act under the revisionary powers of the learned CIT u/s. 263 of the Act. The assessee was also given opportunity of personal hearing by the learned CIT. The assessee filed the submissions before learned CIT whereby the assessee objected to the notice dated 17-01-2013 issued by the learned CIT u/s 263 of the Act mainly on technical grounds and not on merits. The learned CIT observed that the A.O. had accepted the assessee's contention regarding interest expenditure in the assessment order dated 21.12.2011 passed u/s. 143(3) of the Act without any verification . The learned CIT observed that the AO had made the disallowance w....
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....with respect to the disallowance u/s 14A of the Act and the A.O. after applying his mind disallowed an amount of Rs. 6,05,192/- u/s 14A read with Rule 8D(2)(iii) of Income Tax Rules 1962 and since the assessee has voluntarily made disallowance of Rs. 1,20,000/- in the return of income filed with the Revenue, balance addition of Rs. 4,85,192/- was confirmed by the AO vide assessment order dated 21-12-2011 passed by the AO u/s. 143(3) of the Act. The ld. Counsel drew our attention to the assessment order of the A.O. u/s 143(3) of the Act dated 21st December, 2011 wherein the detailed observations were given by the AO with respect to the disallowance u/s 14A of the Act after considering the submissions of the assessee . It was submitted that the assessee carried the matter before the ld. CIT(A) in the first appellate proceedings who deleted the additions as were made in the assessment order dated 21.12.2011 u/s. 143(3) of the Act, vide appellate orders dated 19-12-2012 passed by learned CIT(A). It was submitted that after the passing of the appellate order by the ld. CIT(A) dated 19th December, 2012, the Revenue invoked revisionary powers u/s. 263 of the Act vide notice dated 17th Jan....
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....investments in securities capable of yielding exempt income held by the assessee as at 31-30-2009 and 31-03-2008 as borne out from audited accounts. The said audited financial statements are placed in paper book /page 2-22. The assessee drew our attention to notice dated 17-01-2013 issued u/s 263 of the Act by the learned CIT , which is placed in paper book/page 91. The learned counsel for the assessee drew our attention to assessment order dated 21-12-2011 passed by learned AO u/s 143(3) of the Act, which is placed in paper book page 86-90. The assessee submitted that complete details were submitted before the learned AO whereby details as to financials of Head Office and factory at Gandhidham were submitted separately reflecting complete bifurcations of these two profit centre's in the company for which even separate books of accounts are maintained by the assessee, the said financials are placed at page 70 /paper book which clearly shows that investments in securities are reflected in profit centre HO and was Rs. 12.31 crores as at 31-03-2009 while own funds of HO is Rs. 23.49 crores as at 31-03-2009, which clearly reflects that the assessee's own funds are much higher than inve....
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....assessment u/s 143(3) of the Act , wherein the assessee submitted replies with respect to disallowance u/s 14A of the Act which are placed in paper book page 43-75 filed by the assessee before the Tribunal vide written submissions dated 15-11-2011 and 08-12-2011 along with enclosures/annexures. The assessee submitted details with respect to the disallowance u/s 14A of the Act which was considered by the A.O. before framing assessment u/s 143(3) of the Act. Perusal of the written submission filed by the assessee before the AO, it was observed that the assessee submitted details of secured loans raised from banks and utilization thereof, raising of unsecured loans by the assessee and details of interest expenditure, granting of interest bearing loans by the assessee, details of dividend received , working of disallowance u/s 14A of the Act read with Rule 8D of Income Tax Rules, 1962. The bank statements were submitted by the assessee before the AO. The assessee also submitted that company has not made investments during the year out of borrowed funds . It was also submitted before the AO that separate books of accounts are maintained for Head Office(HO) and factory at Gandhidham. It ....
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....ney with Oriental Power Cables Limited for which the assessee has given the details that this investment is made out of interest free funds raised by the company from Sakarwadi Trading Company Private Limited which is placed at paper book page 79-80 . The assessee has also submitted bank statement to that effect which is placed at paper book page 99. Further, profits of the company before depreciation are to the tune of Rs. 59.46 lacs during the year which are also more than sufficient to cover incremental investment of Rs. 40 lacs made during the year. It was stated vide reply dated 08-12-2011 before the AO that separate books of accounts have been maintained by the assessee for Head office and factory at Gandhidham and said factory has paid interest for term loan and cash credit facility. Further, the assessee has brought before the AO that the assessee has paid interest on HO account for the first time this year on ICD's raised during the year which were deployed to repay old loans as well to grant interest bearing loans from which interest income of Rs. 27.87 lacs were earned by the assessee . In our considered view, the A.O. has taken a plausible and possible view while framin....