TaxTMI 
TaxTMI 
2019 (8) TMI 1401
X X X X Extracts X X X X
X X X X Extracts X X X X
.... mind and after considering the submissions filed by the Appellant and accordingly, the order passed by the learned AO is not erroneous and prejudicial to the interest of revenue. c. The learned CIT has based on irrelevant considerations, erred in concluding that assessment order is erroneous and prejudicial to the interest of revenue. d. The Learned CIT erred in initiating proceedings under section 263 of the Act and hence the impugned order is bad in law and void ab-initio. Ground No 2 - Disallowance of export freight of Rs. 2,03,66,683 paid to the Inter Ocean Shipping and Logistic Services Without prejudice to ground no 1 - a. On the facts and circumstances of the case and in law, the learned CIT erred in directing the Assessing Officer to disallow export freight paid to Inter Ocean Shipping and Logistic Services of Rs. 2,03,66,683 on account of non-deduction of tax at source. b. On the facts and circumstances of the case and in law, the learned CIT has erred in not considering the submission of the Appellant that tax was not required to be withheld in view of the CBDT circular 723 dated 19 September 1995. Ground No 3 - Direction in r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s made to the TPO. He has further noticed that in assessment year 2013-14 also, there was export sale made by the assessee to its related party. On verification through ITD system, the Pr. CIT found that the assessee had not filed 3CEB Report in respect of the international transaction entered into by it during the Financial Year 2012-13 relating to assessment year 2013-14 electronically. The assessee had submitted form 3CEB electronically for assessment year 2014-15 but no such form 3CEB for the year under consideration was submitted electronically as prescribed in the IT Rules. Therefore, the Pr. CIT observed that failure to keep, maintain and report international transaction as prescribed in the I.T. Rule attracts penalty of amount equally to 2% of the value of international transaction which resulted into short levy of income tax to Rs. 22,90,358/-. In the light of the facts and circumstances, the Ld. Pr. CIT observed that while passing the order u/s. 143(3) of the act, the assessing officer has not taken into consideration the above cited discrepancies and failed to make proper inquiry in respect of above issues. Therefore, a notice u/s. 263 of the act dated 6th March, 2018....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent order passed by the ITO, Wd.4(l)(2), Ahmedabad for A.Y.2013-14 u/s. 143(3) dated 23.03,2016 in the case of the assessee company should not be held to be erroneous in ss much as it is prejudicial to the interest of revenue and be set aside and modified to the extent mentioned in para 2 and 3 above. 5. You are hereby an opportunity of being heard in person along with documents and evidence justifying your submission. You may, If you- so desire, submit your contentions in writing or through an authorized 'representative also. The hearing for this purpose is fixed on 15.03.2018 at 11.30 a.m." In response to notice issued u/s. 263, the assessee has submitted its written submission. The relevant part of the submission is reproduced as under:- "3.1 Export freight of Rs. 2f03,66,683/- paid to Inter ocean Shipping and Logistic Services: 3.1.1. During A.Y. 2013-14, Summit has paid export freight of Rs. 203 66 683/- to Inter Ocean Shipping and Logistic Services ('inter Ocean). This freight was paid by Summit to Inter ocean so as to be able to export goods outside India. 3.1.2 On the said payments to Inter Ocean, Summit did not deduct IDS unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as duly filed form 3CGBPB on 30th September, 2013 to the jurisdictional AO which Is before due of date of filing". The ld. Pr. CIT has not accepted the submission of the assessee in view of the following reasons reproduced as under:- 5. I have considered the matter and the submissions of the Ld. A.P.. for the assessee carefully but the same are riot acceptable in view of the following reasons;-(i) The assessee has argued that the notice u/s 263 of the Act, is bad in law. The assessee has cited several judicial pronouncements to buttress its claim. The case laws cited by the assessee have been carefully perused but are not found applicable in the instant case as in the instant case, there are no assumption of facts where two views are possible based on any such assumption, but the issues here are something very apparent from records where only a single view can be formed. Moreover, there was failure on the part of the A.O, as much as not to make the enquiry and verification in respect of the above issues. Therefore, the said case laws are not applicable in the case of the assessee. Reliance in this regard is placed on the recent judgment of Daniel Merch....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act. Thus, the contention of the assessee that as the agent Is covered u/s 172 of IT Act and that provisions of| Section 195/194C would not be applicable in the case of the assessee is not acceptable. The AO is therefore, directed to take further necessary action in this regard. The A.O. has not enquired about the applicability of the TDS provisions or-Circular No, 723 of CBDT, which is claimed to have been in application on the facts of assessee. (iii) The assessee has not complied with the provisions of filing Form 3CEB electronically. The assessee contention that the same had been filed physically cannot be accepted as the said form is Null and Void and without any merits. In respect of filing of Form 3CEB, the assessee was required to file .it-electronically and filing the same before the Assessing officer manually implies that the Form 3CEB is non-est in respect of the assessee and therefore, warrants invoking of penal provisions of .Section 271BA of the IT Act. Further, as per Section 92E every person who had entered into an international transaction during a previous year shall obtain a report from an accountant and furnish such report on or before the spe....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., dated 23.03.2016 in the case of the assessee for the A.Y. 2013-14 and, direct the A.O. to make a fresh assessment after making proper enquiries and verification about the issues noted above including reference to TPO, penalty proceedings u/s. 271BA of the I.T. Act and applicability of circular No, 723, Section 172, 194C or 195 of the I.T. Act etc. 7. The Assessing Officer shall pass fresh assessment order after providing opportunity of being heard to the assessee in view of the directions given in this order." 4. During the course of appellate proceedings before us, the ld. counsel has submitted paper book containing detailed submission filed before the Ld. Pr. CIT along with annexures and copy of 3CEB for assessment year 2013- 14. The ld. counsel has also placed reliance on a number of judicial pronouncements placed in the paper book. The ld. counsel contended that during the course of assessment proceedings, the assessing officer has asked the assessee to furnished copies of ledger account and bills of parties along with details of TDS payments including the detail in respect of export freight amounting to Rs. 2,03,66,683/-. It was further submitted that assessee ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the asesseee could not be referred to the TPO, therefore, he has justified the order of the Pr. CIT passed u/s. 263 of the act. 6. We have heard both the sides and perused the material on record carefully. The assessing officer has passed order u/s. 143(3) of the act on 22nd March, 2016 accepted the total loss as shown in return of income filed by the assessee. We have gone through the assessment order passed u/s. 143(3) of the act in which the assessing officer has concisely concluded that on the basis of information and detail obtained from the assessee from time to time during the course of assessment proceedings the total loss of Rs. 1,35,18,193/- declared by the assessee in the return of income filed has been accepted. No other issue has been particularly elaborated in the order passed u/s. 143(3) on 22nd March, 2016. Therefore, we have gone through material on record placed in the paper book which was furnished before the assessing officer during the course of assessment year. Regarding issue of nondeduction of TDS in respect of export fright amounting to Rs. 2,03,66,683/- made to Inter Ocean Shipping and Logistics Services, it is discerned from the detail that as per page....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... observe that ld. Pr. CIT has failed to consider that during the course of assessment proceedings the assessee has furnished the relevant material in respect of export freight payment and the ld. Pr. CIT has also not controverted the these undisputed facts and findings brought to his notice by the assessee during the course of proceedings u/s. 263 of the act. Considering above material facts of the case, we observe that the Pr. CIT has failed to justify how the order passed u/s. 143(3) of the act in respect of non-deduction of tax on payment of export freight amounting to Rs. 2,03,66,683/- was erroneous and prejudicial to the interest of revenue. Therefore, we are not inclined with the decision of Pr. CIT on the issue of non-deduction of TDS on freight payment as the Ld. Pr. CIT has failed to substantiate that order passed by the assessing officer is erroneous and prejudicial to the interest of Revenue. Therefore, the decision of Ld. Pr. CIT to revise the order u/s. 263 on the issue of export freight payment is not justified. This part of ground of appeal of the assessee is allowed. 6.2 In respect of other part of ground of appeal of the assesse pertaining to non-submission o....