TaxTMI 
TaxTMI 
2019 (8) TMI 1330
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.... has erred in setting aside the assessment order passed under section 143(3) of the Act by the Assessing Officer on the ground that lack, of investigations' have been carried out by Assessing Officer. 4. That the Pr CIT has failed to appreciate that details were filed as required by the AO and the assessment order has been passed after due application of mind. 5. That having regard to the facts and circumstances of the case, Pr, CIT has erred in invoking the provision of Section 263 in reference to disallowance u/s 14A of the Act without appreciating that Assesses did not earn any exempt income during the relevant AY, hence no disallowance was warranted u/s 14A of the Act. 6. That having regard to the facts and circumstances of the case, Pr. CIT has erred in invoking the provision of Section 263 in reference to interest income of NIL shown under the head income from other sources without appreciating that the same has been shown as business income in the return of income. 7. That having regard to the facts and circumstances of the case, Pr. CIT has erred in invoking the provision of Section 263 in reference to mismatch of Rs. 1,34,82,973/-in sale/turnover reported in Au....
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....at the assessment order passed by the AO u/s 143(3) dated 12/12/2016 is erroneous, in so far as, it is prejudicial to the interest of the revenue. 4. In response to show cause notice, the assessee vide letter dated 27/1/2019 submitted that the assessment order passed by the AO u/s 143(3) is neither erroneous nor prejudicial to the interest of the revenue, because the AO has examined the issues questioned by you, in your show cause notice dated 18/02/2019 and after satisfied with explanations furnished by the assessee completed assessment without there being any additions towards disallowances of interest and mismatch in turnover reported in financial statements and ITR form. Therefore, the assessment order passed by the AO cannot be termed as erroneous, in so far as, it is prejudicial interest of the revenue. 5. The Ld.PCIT after considering relevant submissions of the assessee and also by relied upon various judicial precedents observed that in respect of Part B and C of show cause notice regarding interest income of Rs. 'Nil' shown under income from other sources, which is lesser than gross interest receipts of Rs. 1,34,82,973/- and mismatch of Rs. 1,34,82,973/- in sales turnov....
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....tions furnished by the assesse, chosen not to make any additions in respect of disallowances of interest u/s 14A, which is evident from the fact that the Ld. PCIT had accepted in his order that the AO, during assessment proceedings on 06/12/2016, in order sheet entry recorded that the Authorized Representative of the assessee attended and filed necessary details to prove that the assesee has not earned any exempt income, for the year under consideration, consequently no expenditure could be disallowed u/s 14A of the Act. The PCIT having accepted the fact that there is no exempt income earned for the year under consideration, erred in directing the AO to re-do the assessment, in respect of disallowances of expenditure u/s 14A of the Act. 7. The Ld. DR, on other hand, strongly, supporting order of the Ld.PCIT submitted that assessment order passed by the AO is erroneous, in so far as, it is prejudicial to the interest of the revenue, in respect of two issues taken up by the PCIT, which is evident from the fact that the Ld.PCIT has brought out various facts in its order, in respect of non application mind by the AO, while completing assessment, on the facts of present case and in lig....
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....vise assessment order u/s 263 of the I.T.Act, 1961. In this legal background, if you examine the assessment order passed by the AO, we find that although, the assessment order passed by the AO is brief and cryptic, but the aspect of disallowance of 14A and mismatch between interest income declared under the head income from other sources and turnover difference, as per ITR and audit report has been examined by the AO, during assessment proceedings, which is evident from the fact that the Ld.PCIT had accepted the fact that the AO has recorded in order sheet entry, dated 06/12/2016 regarding submissions made by the assessee, in respect of application of provision of section 14A r.w. Rule 8D , when the assessee has not earned any exempt income, for year under consideration. Once, the AO has examined the issue, during the course of assessment proceedings and after being satisfied with explanation offered by the assesse chosen not to make any additions, then the Ld.PCIT cannot assume jurisdiction to revise assessment order, on the ground that the AO ought to have carried out further enquiries or there is a lack of enquiry, on the part of AO to examine the issue, which he ought to have v....