TaxTMI 
TaxTMI 
2022 (5) TMI 1411
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....iate that there was no failure on part of the appellant to disclose fully and truly all material facts necessary for the assessment and all the material evidences regarding non-deduction of TDS on commission payment were already on the record of department. Hence the issue of Notice under section 263 of the Act is bad in law being void ab-initio, invalid, beyond the authority of law and devoid of legal force. 4. That, on the facts and in the circumstances of the case and in law, the learned Pr.ClT erred in invoking jurisdiction under Section 263 and setting aside the assessment order u/s.143(3) of the Act for reviewing and re-examining the facts, details, documents, evidences already examined by the learned AO, who had already made judgment based on the same and had passed the order of assessment under section 143(3) of the Act. It is well settled that revision cannot be undertaken for reexamining and directing fresh inquiry due to change of opinion. 5. That, on the fact and circumstances of the case and in law, the revisionary proceeding u/s 263 of the I.T.Act, 1961 is bad in law in absence of any new fact, information, corroborative evidence or materials being made available ....
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....cation of revision proceeding U/S 263. The Ld. A.O. has taken a plausible view and allowed the claim of commission after verifying the TDS deducted on commission payments held in the case of PCIT vs Shreeji Prints (p) Ltd ,2021130 taxmann.com 294 (Se). 4. As per the provision of law the Ld. PClT has to verify himself to record the finding that the asst order is erroneous when all the records were readily available before him. The assessee relies upon the following case laws: a) The honourable coordinate bench in the case of Surekha Builders & Developers (p) Itd respectfully following the principles laid down by Honourable Delhi High Court in the case of DG Housing project & Jyoti Foundation. b) The honourable coordinate bench in the case of Nanda Kishore Agarwal. c) Honourable Delhi High Court in the case of DG Housing Projects Ltd. d) Honourable Delhi High Court in the case of Jyoti Foundation. e) Honourable Delhi High Court in the case of Delhi Airport Metro Express(P) Ltd. f) Honourable ITAT, Indorein the case of M/S Radhiswari Developers (P) Ltd. 5. The case law relied upon by The Ld PCIT will not applicable in the assesse's case as held by The Honourable ....
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....rd and from the various ground of the appeal we feel it practical to check the contentions and grievance of the assessee in two parts:- (1) Whether on the facts and circumstances of the case and in law, the Learned PCIT erred in invoking jurisdiction under section 263 and setting aside the assessment order u/s 143(3) of the Act. Specially while the matter is pending before the CIT(A) for adjudication? (2) Whether the revisionary proceedings u/s 263 of the IT Act 1961 are bad in law in absence of any new fact, information, corroborative evidence or materials being made available by the Ld PCIT? 9. In order to discuss and decide the first issue whether proceedings u/s 263 can be initiated when the matter is already pending for appeal with the CIT(A), it is prudent refer to [2021] 132 taxmann.com 302 (Jaipur - Trib.) IN THE ITAT JAIPUR BENCH 'B', in the case of JR Industries v. Principal Commissioner of Income-tax, wherein this issue is discussed and dealt with after due deliberations of decisions of the Hon'ble Apex Court, various Hon'ble High Courts and with reference to language of provisions of Act and relevant Finance bill 1988, where in it is observed as under:- 1....
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....der even on one or two points alone, while a number of High Courts have held that there is only partial merger and not the merger of the whole order in case where only one or some particular aspects have been contested. To eliminate litigation and to clarify the legislative intent in respect of the provisions in the three Direct Tax Acts, it is proposed to clarify the legal position in this regard in the Explanation to the relevant sections. The proposed amendments are intended to make it clear that "record" would include all records relating to any proceedings under the concerned direct tax laws available at the time of examination by the Commissioner. Further, as held by several High Courts, the Commissioner will be competent to revise an order of assessment passed by an Assessing Officer on all matter except those that have been considered and decided in appeal." 12. It is evident from the above, that the power of PCIT u/s 263 extends to such matters which had not been considered and decided in such appeal. The use of the word "considered and decided" leaves no room for doubt that if some issue is decided by CIT(A) in an appeal against the assessment order passed by the AO. Th....
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....ct on issue A but after passing of the appellate order by the CIT(A), now the PCIT can assume jurisdiction u/s 263 of the Act as the Ld. CIT(A) has not considered and decided such issue A in the appellate order. This cannot be the intention of the legislature as time limit is there for passing order u/s 263 of the Act, whereas there is no such limit for the CIT(A) for adjudicating an appeal and this interpretation makes the provisions of section 263 of the Act practically redundant during the pendency of appeal before CIT(A). 13. In another circumstances, if an appeal, against the assessment order passed by the AO, has been filed with the CIT(A) but has not been decided and is pending before CIT(A), then the Doctrine of Merger will even otherwise not apply as there is no order of CIT(A) with which the assessment order could merge and thus, the PCIT will surely have jurisdiction u/s 263 of the Act in respect of all the issues whether contested before CIT(A) or not. Although, it was argued by ld. AR that once an appeal is filed by the assessee against the order of AO, then he surrenders himself to the jurisdiction of CIT(A). Thus, this surrender is unconditional and the assessee ha....
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....u/s 33A of the Act, (a) if the appeal against the order lies to CIT(A)/ITAT and the time to file such appeal has not expired or (b) the order is pending on an appeal before the CIT(A) or has been made the subject of an appeal to the ITAT or (c) the order has been made more than one year previously. It may be mentioned that the above proviso to section 33A of 1922 Act is conspicuous by its absence in section 263 of the Act of 1961. Thus, these judicial pronouncements of Hon'ble Apex Court as relied upon by the ld. AR are of no help to the assessee. In the case of Shri Arbuda Mills Ltd. (supra), the assessment of the assessee-company was completed under section 143(3) read with section 144B wherein the ITO made certain additions and disallowances and also accepted certain claims relating to three items. The assessee-company filed an appeal and the three items in respect of which the decision was in its favour were not the subject-matter of the appeals. In respect of these three items, the Commissioner exercised his power U/s 263. The assessee contended that the order of the ITO regarding the said three items in respect of which the assessee had no occasion to prefer an appeal had....
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....he order of the first appellate authority as the subject-matter of appeal before the first appellate authority was different. Therefore, on the basis of the decisions of the Supreme Court in the case of CIT v. Shri Arhuda Mills Ltd. [1998] 231 ITR 50/98 Taxman 457 and Shree Manjunathesware Packing Products & Camphor Works case (supra), the Tribunal was not correct in holding that there was a merger of the order of the ITO with the order of Commissioner (Appeals) precluding the Commissioner from exercising his revisional powers. Our answer to the second question of law also is in the negative and in favour of the revenue." 15. We noticed from perusal of the record that vide its letter dated 15-9-2021, the ld. AR has relied upon the following judicial pronouncements: ♦ CIT v. Vam Resorts & Hotels (P.) Ltd. [2019] 111 taxmann.com 62/418 ITR 723 (All.) ♦ Smt. Renuka Philip v. ITO [2019] 101 taxmann.com 119/[2018] 409 ITR 567 (Mad.) ♦ ACC Ltd. v. CIT (LTU) [IT Appeal No. 3576 (Mum.) of 2019, dated 8-7-2020. In this regard, we noticed that the judicial pronouncements as relied upon by the ld. AR, the important words "considered and decided in such appeal" appe....
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....at he has already filed income tux appeal before the ld. CIT(A) against the order of the assessment dated 26/12/2017 and the entire issue was at large now before the Appellate Commissioner and that the ld. CIT(A) while hearing the assessee 's appeal has power to enhance the assessment. If he was of the opinion that not only limited additions made by the A.O. hut much larger additions were justified., then in that eventuality, he could have certainly exercised such powers by putting the assessee to notice. For ready reference, we reproduce clause (c) of Explanation 1 of section 263 of the Act as under: "263(1) (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal [filed on or before or after the 1st day of June, 1988], the powers of the [Principal Commissioner or] Commissioner under this sub-section shall extend [and shall he deemed always to have extended] to such matters as had not been considered and decided in such appeal.]" From the above proposition of law, we noticed that the power of ld. Pr.CIT or the ld. CIT under the provisions of Section 263 shall extend to such matters as had not been con....
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....the provisions of section 194H of the Act, any person who is responsible for paying commission or brokerage to a resident is required to deduct tax thereon at the rate in force at the time of credit of such income to the account of payee if the amount of such payment exceeds Rs. 15,000/-((Rs.5,000/- up to May 31, 2016) during the financial year. Under the provisions of section 40(a)(ia) of the Act, 30% of expenditure towards payment shall not be allowed where TDS has not been deducted. Here, Payment of commission less than Rs.15,0001-(Rs.5,OOOI- up to May 31, 2016) to individual agents during the previous year cannot be ruled out. But onus lies with the assessee to prove that section 194H has been followed in paying commission with documentary evidence. But assessee has not furnished anything in support of non-deduction of TDS on payment of commission. Hence, the issue of non-deduction of TDS on payment of commission was required to be examined. 5. Thus, in view of the above, it appeared that the order dt. 28.12.2018 passed by the A.O. as discussed above is erroneous in so far as it is prejudicial to the interest of revenue and it was proposed to revise the said assessment orde....
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....n the case of Duggal & Co v. CIT (1996) 226 ITR 456(Del), wherein it has been held as under: "The ITO is not only an adjudicator but a/s() an investigator. He cannot remain passive in the face of a return which is apparently in order but calls further enquiry It is incumbent on the AO to further investigate the facts stated i(l the return, when circumstances would makes such an enquiry prudent. The word "erroneous" in section 263 includes the failure to make such enquiry." . . In Malabar Industrial Co Ltd. Vs. CIT 243:ITR 83(SC), the Hon'ble Apex Court observed: There can be no doubt that he provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase prejudicial to the interests of the revenue is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it ....