2020 (9) TMI 245

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....201112. 2. The following questions of law are proposed by the Revenue as the substantial questions of law in the appeal memo: [A] Whether Appellate Tribunal has right in law and on facts by quashing the order passed by the CIT u/s.263 of the Act even though it has clearly been brought out that the order of the Assessing Officer is erroneous in so far as prejudicial to the interest of revenue? [B] Whether Appellate Tribunal has right in law and on facts by quashing the order passed u/s.263 of the Act holding that the issue has been examined at the original assessment stage without appreciating that the issue(s) was never examined by the Assessing Officer during the original assessment proceedings stage? 3. The facts g....

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.... thus there is an under assessment service income of Rs. 6,03,09,004/( 30,00,85,140 - 23,97,76,136). (ii) Provision of Rs. 19,94,560/for non achievement of targets and needs to be disallowed. (iii) Sum of Rs. 14,52,503/needs to be disallowed u/s.40(a)(i) since assessee fail to deduct tax at source u/s.195 of the Act." 3.3 In response to the show cause notice, respondent assessee filed reply on 28th March, 2016 explaining that the presumption of the Revenue that income should also be in direct proportion to the amount of TDS is not correct because at times there are some timing difference between Revenue recognition and deduction of tax at source. It was submitted by the assessee that deductor has effected TDS on account....

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....e and hence, rightly not reflected in the Profit & Loss Account of the respondent - assessee. The Tribunal observed as under:- 4. Heard the respective parties and perused the relevant materials available on record. It appears from the records that the case of the assessee is this that the service tax calculated by the service provider since not the income of the assessee it is not been reflected in the P&L account. Similarly, TDS effected on "reimbursement" of expenses of Rs. 1,46,78,806/is neither the income of the assessee, hence not reflected in P&L account. So far as the difference on account of timing difference of Rs. 2,32,16,538/is concerned, we find that reconciliation statement of difference between service income as per P....

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....xamined by the Assessing Officer during the original assessment proceeding but in the absence of any reflection of the same in the order passed by the Assessing Officer would not lead to a conclusion that the order of Learned AO calls for interference by the Learned CIT u/s.263 of the Act. The alternative submission made by the Learned assessee's counsel is this respect that when two views are possible as regards a particular issue and the AO adopts either of two such views then jurisdiction u/s.263 cannot be invoked by the Learned CIT is also acceptable. We take inspiration from the judgment passed in the matter of Malabar Industrial Co. Ltd. as been relied upon in this respect. Hence, we find that order impugned u/s.263 of Act cannot ....