2022 (8) TMI 124

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....ort), partly allowing the assessee's appeal contesting it's assessment under section 143(3) read with section 147 of the Income Tax Act, 1961 ('the Act' hereinafter), dated 28/12/2018 for Assessment Year (AY) 2011-12. The background facts 2. The assessment in the instant case was completed in the first instance on 28/03/2014 at an income of Rs. 1570.51 lacs, as against a returned income of Rs. 1500.87 lacs, u/s. 143(3) of the Act (PB pgs. 30-33). The adjustments made included a disallowance u/s. 40(a)(ia) at Rs. 4,96,350, being in respect of payment for training and refresher course without deduction of tax at source. Order u/s. 201(1)/201(1A) of the Act was also passed on the same day (i.e., 28/03/2014), holding the a....

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....ault vide order u/s. 201(1) dated 28/03/2014. The AO in the reassessment proceedings accepted the assessee's explanation qua four transactions aggregating to Rs. 1266.97 lacs, and effected disallowance u/s. 40(a)(ia), i.e., for nil or short deduction of tax at source, for the balance of Rs. 246.93 lacs, vide order dated 28/12/2018. In appeal, the Ld. CIT(A) allowed relief to the assessee on merits, even as he dismissed the assessee's legal grounds, holding as under:- "4.1 Ground Nos. 1 to 6: through these grounds of appeal, appellant has challenged the legality of assessment order passed u/s. 147 r.w.s. 143(3) of the Act. The AO during the course of search assessment proceedings observed that the assessee has bogus transact....

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....ith reference to the order u/s. 201(1) dated 28/03/2014, mentioning para numbers thereof, that there has been non/short deduction of tax at source by the assessee, which is required to be disallowed u/s. 40(a)(ia). It may be that the order u/s. 201(1) dated 28/03/2014, as indeed would be the case, came to the notice of the AO after the passing of the order u/s. 143(3) on 28/03/2014. Even so, unless the reason recorded informs as to what fact had been misstated or misrepresented by the assessee in its reply dated 27/03/2014, and on the basis of which no disallowance, save for Rs. 4,96,350, was made, i.e., with reference to the facts mentioned or found in sec. 201(1) order, there could be no valid reason to believe escapement of income in law....