TaxTMI 
TaxTMI 
2023 (1) TMI 1118
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessing Officer 2.1 The learned Pr.CIT is not justified in outright rejecting the documents/ submissions made by the Appellant 2.2 The learned Pr.CIT has errored in law and facts in not understanding the modus operandi adopted in the due course of its business operations and further drawing preconceived/ biased notions without complete and proper appreciation of the established facts under the facts and circumstances of the case. 2.3 The learned Pr.CIT has erred in not taking into account the details arid explanation furnished by the Appellant during the course of the assessment proceedings. 2.4 The learned Pr.CIT has erred in law and on facts without appreciating the fact that Appellant has offered an explanation about the nature of the expenses incurred during the course of the assessment proceedings, which was also accepted by the Assessing Officer. 2.5 The learned Pr.CIT has ignored the agreements/ documents submitted to substantiate the nature of expenses. 2.6 The learned Pr.CIT has erred in law and facts by holding that the conditions of section 36(2) must be followed. 2.7 The learned Pr.CIT has erred in law in concluding that the learned Assessing Officer has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent and details of parties with regard to advances written off. The PCIT after considering the submissions of the assessee, passed order u/s. 263 by holding that - "3.3 The submission made by the assessee have been carefully considered. It is noticed that assessee has only furnished unregistered copies of sale agreements executed with different parties. The Assessing Officer has also failed to examine that such advance/debt is in compliance with CBDT circular no. 12/2016 dated 30.05.2016 wherein it is held that claim for any debt or part thereof in any previous year, shall be admissible under section 36(1)(v0 of the Act, if it is written off as irrecoverable in the books of accounts of the assessee for that previous year and it fulfills the conditions stipulated in sub section (2) of section 36 of the Act i.e, such debt or part thereof has been taken into account in computing the income of the assessee of the previous year in which the amount of such debt or part thereof is written off or of an earlier previous year. Further, the taxability of the advances so written off in the hands of the recipients as per provision of Section 51 or Section 56(i)(ix) of the Income Tax Act has a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nature of business of the assessee. The ld. AR also submitted that the assessee has explained the nature of expenses incurred during the course of assessment and the AO after examining the taxability accepted the contentions of the assessee while concluding the assessment. The ld AR therefore submitted that the order of the AO is not erroneous or prejudicial to the interests of the revenue. 5. The ld. DR submitted that the AO has not conducted proper enquiry with regard to the advances written off and has not called for any details in this regard. Therefore, the ld. DR submitted that as per Explanation to section 263, the order is erroneous and prejudicial to the interests of the revenue. 6. We have heard the rival submissions and perused the material on record. We notice that the AO has completed the assessment accepting the returned income of the assessee. The observations of the PCIT that the major amount that is written off as bad advances ought to have been verified has merits. The assessee is in the business of construction and claimed to have written off the advances no longer recoverable. However it is important that this write off should be factually verified with the ne....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is entitled to claim deduction in terms of Articles 23(3)(a) and 23(4) of the agreements between India with Canada and Thailand respectively. the question is one of what exactly the entitlement? In the absence of any discussion either in the assessment order or in the computation claim, particularly as the extent of relief that can be claimed under these two articles is only after a specific exercise and though Sri Sarangan has very vehemently urged that it is not necessary for the assessing authority to make all these things explicit, so long as he is satisfied, on the strength of the authority of the Supreme Court not only in the ease of Electro House (supra) and to more so on the basis of the observations and law as declared in the case of Malabar Industrial Co. Ltd. (supra) we are fully satisfied that a situation where a deduction of the present nature is allowed or in the sense deducted from out of the tax liability of the assessee without indicating the basis, can definitely be construed as an order both erroneous and prejudicial, has this is definitely a possibility and it is only because it is per se, not discernible in the revisional order, but definitely gives rise to a s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee, an order of this nature, in fact, could not have been contended as detrimental to the interest of the assessee, as it was always open to the assessee to justify the claim in terms of the double taxation avoidance agreements. In a situation of this nature, we are also of the opinion that it was not a case which warranted interference by the tribunal, more so for setting aside the order of the commissioner and for ensuring that the order passed by the assessing authority was left in tact. 25. One should bear in mind that a relief which is required to be given to any litigant in any given case should be commensurate to the gravity of the situation, to the needs and necessity of the situation and warranting such relief and with reference to the governing statutory provisions. Just, because the tribunal has appellate jurisdiction over the orders passed by the commissioner, it does not mean that the tribunal should interfere with each and every order of the commissioner when it is really not warranted and in a situation of the present nature, by calling in aid all legal principles, particularly questions of jurisdiction and by interpreting a statutory provision, to limit ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies to bear their respective cost." 10. We also notice that the Hon'ble Delhi High Court in the case of Gee Vee Enterprises v .ACIT [1975] 99 ITR 375 (Del) has held as under - "The reason is obvious. The position and function of the Income-tax Officer is very different from that of a civil court. The statements made in a pleading proved by the minimum amount of evidence may be accepted by a civil court in the absence of any rebuttal. The civil court is neutral. It simply gives decision on the basis of the pleading and evidence which comes before it. The Income-tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. The meaning to be given to the word "erroneous" in section 263 emerges out of this context. It is because it is incumbent on the Income-tax Officer to further investigate the facts stated in the return when circumstances would make such an inquiry prudent that the word "erroneous" in section 263 includes the fail....