TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 782
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....isions of the Act and is devoid of merits and are contrary to facts on record and applicable law and has been completed without adequate inquiries and as such is liable to be quashed. 1.2. The Ld. CIT has finalized the Impugned Order with improper conclusions as a result of misapplying the provisions of the Act and by adopting faulty assessment procedure to finalize the adjustment, without considering the information, arguments and evidence provided by the Appellant. 2. Grounds on validity of revisionary proceedings under section 263 of the Act 2.1. The impugned order passed by the Ld. CIT is without jurisdiction as the twin conditions prescribed under section 263 of the Act, ie. the order of the Ld. AO shall be 'erroneous' and 'prejudicial to the interests of the revenue', are not satisfied. 2.2. The Id. CIT erred in concluding that the reassessment order passed under section 143(3) read with section 147 for the impugned AY is erroneous and prejudicial to the interests of the revenue, without appreciating the material on record and submissions made by the Appellant. 2.3. The Ld. CIT erred in passing the Impugned Order, on the allegation that the Ld. AO ha....
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....The Appellant craves leave to add to and/or to alter, amend, rescind, modify the grounds herein above or produce further documents before or at the time of hearing of this Appeal''. 3. Brief facts of the case are as under:- ''Keller (M) SDN BHD ("Keller Malaysia" or "the Company" or "the Appellant"), is company incorporated under the laws of Malaysia and had established a branch office in India on September 21, 2017, for the purpose of carrying out a construction project awarded by Rail Vikas Nigam Ltd. Owing to the project, the Appellant was cast with a liability under section 139(1) of the Act to furnish its return of income for the subject AY. However, the Appellant was under a bona fide belief that it did not have any obligation to furnish its return of income in India since appropriate withholding of taxes had been deducted. On being aware that the bona fide belief was incorrect in law and that the Appellant had an obligation to furnish a return of income under the Act, the time limit for furnishing the return of income for the subject AY had expired (i.e., last date to furnish belated return for the impugned AY was March 31, 2019). Given the same, the Appellant had fil....
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....roceedings under Section 148 of the Act 4 31-Mar 23 Notice under section 148 of the Act 5 28-Apr 23 Income tax return filed in response to notice under section 148 6 09- June 22 to 18 Oct 22 (a) Notice under section 142(1) of the Act dated 09-Jun-22 and 07-Oct-22 were issued against which Appellant filed response dated 20-Jun-22 and 18-Oct-22 respectively b) Notice under section 143(2) dated 03- Oct-22 against which assessee had filed response dated 07-Oct-22. Query was issued on subcontracting expense 7 18- Mar 23 Show cause notice ("SCN) issued by AO 8 21 Mar 23 Response to SCN 9 10 Mar23 Notice under section 133(6) of the Act issued on Keller Ground Engineering India Private Limited ("Keller India") Query was raised as to whether Keller India offered the unbilled revenue to tax 10 20 Mar23 Response filed by Keller India against notice under section 133(6) of the Act 11 23 Mar23 Order under section 147 of the Act Issue of sub-contracting expense was examined and AO passed a clean order under section 147 of the Act after taking consideration response filed under section 133(6) by Keller India III. Rectification proceedings under section ....
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.... expenses). The ld. AR contended that in reassessment proceeding, the assessee pursuant to notice u/s. 133 (6) of the Act has filed reply dated 20.03.2023 and explained the queries raised by the ld. AO. The ld. AR taken us to the paper book and referred documents relied upon in connection with reassessment proceedings which are as under:- Sl.no Particulars Page No. I. Documents relied upon in connection with delay condonation proceedings before the Central Board of Direct Taxes ("CBDT") 1 Application dated January 18, 2021, for condonation of delay filed before the CBDT 1 1.1. Form 26AS of the Appellant for AY 2018-19 5 1.2. Form 26AS of the Appellant for AY 2019-20 9 1.3. Tax Audit Report in Form 3CA and 3CD of the Appellant for AY 2018-19 13 1.4. Tax Audit Report in Form 3CA and 3CD of the Appellant for AY 2019-20 25 1.5. Return of income ("ROI") of the Appellant for AY 2019-20 37 2 Submission dated July 2018, 2023, filed before CBDT in response to letter issued by CBDT dated July 05, 2023 123 2.1. Letter issued by CBDT dated July 05, 2023 126 II. Documents relied upon in connection wit....
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....1. Notice under section 154 of the Act dated July 26, 2023, issued by the Ld. AO 345 10.2. Circular No. 9 of 2015 issued by the CBDT 347 11 Order under section 154 of the Act dated August 08, 2023 issued by the Ld. AO, received vide mail dated August 24, 2023 349 V. Documents relied upon in connection with proceedings under section 263 of the Act 12 Submission dated August 31, 2023, filed with the Ld. Commissioner of Income Tax ("Ld. CIT"), in response to the SCN dated August 18, 2023 361 12.1. SCN under Section 263 of the Act dated August 18, 2023, issued by the Ld. CIT 372 12.2. Financial statements of Keller India for FY 2017-18 375 The ld. AR referred show cause notice dated 18.03.2023 (Pg 238 of PB) and specific reply dated 21.03.2023 (233 to 237 of PB) by assessee with regard to the sub contract expenses claimed to the tune of Rs. 44.85 crores. The ld. AR further taken us to the reply dated 31.08.2023 filed with the ld. CIT in response to show cause notice dated 18.08.2023, the same has been reproduced verbatim by the ld. CIT in his order from pages 4 to 14. Hence, we are reframing reproducing again herein and may be read....
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....ngs enquiry was not done properly. He further contended that prejudice is done while granting refund to assessee. 8. We have heard the rival submissions and gone through the record, paper books and impugned order. We may refer recent judgment of the Hon'ble Delhi High Court dated 01.03.2024 passed in ITA No.1428/2018 in the case of Pr. Commissioner of Income Tax -2, Delhi Vs M/s Clix Finance India Pvt. Ltd. which after considering section 263 of the Act and various settled judgments of the Hon'ble Supreme Court and Hon'ble High Courts held as under: ''15. We have heard the learned counsel appearing on behalf of the parties and perused the record. 16. Vide order dated 06.11.2019, this Court framed the following question of law:- A. Whether, in the facts and circumstances of the case, the Hon'ble ITAT was justified in quashing the order under Section 263 of the Income Tax Act? 17. The brief controversy involved in the present appeal pertains to the invocation of revisional jurisdiction under Section 263 of the Act by the CIT to set aside the original assessment order dated 30.03.2005. 18. Before adverting to the merits of the case, it is apposite to refer to the power ....
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.... conditions and circumstances when the order passed by the AO can be said to be erroneous and prejudicial to the Revenue. 20. Clause (a) of Explanation 2 to Section 263 of the Act further stipulates that if an order is passed without making an enquiry or verification which should have been made, the same would bestow a revisional power upon the Commissioner. However, the said Clause or any other condition laid down in Explanation 2 does not warrant recording of the said enquiry or verification in its entirety in the assessment order. 21. Admittedly, in the instant case, the questionnaire dated 02.11.2004, which has been annexed and brought on record in the present appeal, would manifest that the AO had asked for the allowability of the claims with respect to the issues in question. Consequently, the respondent-assessee duly furnished explanations thereof vide replies dated 09.12.2004, 20.12.2004 and 06.01.2005. Thus, it is not a case where no enquiry whatsoever has been conducted by the AO with respect to the claims under consideration. However, this leads us to an ancillary question? whether the mandate of law for invoking the powers under Section 263 of the Act includes the c....
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....3 ITR 108 (Bom), law on this aspect was discussed in the following manner (page 113) ** 23. A similar view was taken by this Court in the case of CIT v. Anil Kumar Sharma [2010 SCC OnLine Del 838], wherein, it was held that once it is inferred from the record of assessment that AO has applied its mind, the proceedings under Section 263 of the Act would fall in the category of Commissioner having a different opinion. Paragraph 8 of the said decision reads as under:- 8. In view of the above discussion, it is apparent that the Tribunal arrived at a conclusive finding that, though the assessment order does not patently indicate that the issue in question had been considered by the Assessing Officer, the record showed that the Assessing Officer had applied his mind. Once such application of mind is discernible from the record, the proceedings under section 263 would fall into the area of the Commissioner having a different opinion. We are of the view that the findings of facts arrived at by the Tribunal do not warrant interference of this court. That being the position, the present case would not be one of "lack of inquiry" and, even if the inquiry was termed inadequate, following t....
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....awfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. 10. The phrase ''prejudicial to the interests of the Revenue'' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income Tax Officer is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the Revenue. (See 'Rampyari Devi Saraogiv CIT[(1968) 67 ITR 84(SC)] and in ''Tara Devi Aggarwalv.CIT[(1973) 3 SCC 482:1973 SCC (Tax) 318:(1973) 88 ITR 323].....
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....Rs. 1114.68 lacs, Rs. 834.22 lacs already stood disallowed in the original assessment order. The balance amount represented actual write off which was palpably clear from page 2 of the impugned order itself. No deduction on account of any such provision was, therefore, allowed to the assessee. Hence, there is no error or prejudice to the interest of revenue. As regards second issue it was noted that interest rate swap was an actual loss and only the net loss of Rs. 114.05 lacs after setting of gain of interest rate swap was claimed as deduction. However, we find that both these issues were duly examined by the AO vide Questionnaire dated 2.11.2004 (Page 1-2 of the Paper Book) to which replies dated 9.12.2004, 20.12.2004 and 6.1.2005 (Page No. 3-39 of Paper Book-1) were furnished and, therefore, the finding of the Ld. CIT that the issues were not examined properly was not correct. Even the Ld. CIT has not pointed out the definite and specific error in the original assessment order and observed that the inquiry made by the AO was inadequate or improper without first pointing out the error in the original assessment order passed by the AO, particularly because both the aforesaid issue....