TaxTMI 
TaxTMI 
2025 (9) TMI 1628
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....crutiny under CASS to examine the issue of "Claim of any Other Amount Allowable as Deduction in Schedule BP" along with other issues. The assessment was ultimately completed, and the total income was assessed at Rs. 284,96,70,790/-, after making an addition of Rs. 3,77,91,656/- on account of cess, treating it as non-business expenditure. Consequently, tax was levied on the assessed income. Invoking the provisions of Section 263, the Ld. PCIT observed from Clause 34(a) of the Tax Audit Report (TAR) that in Column 5, under Section 195 "Other sums," the tax auditor had reported a total payment of Rs. 9,97,14,451/-. Out of this, the amount on which tax was required to be deducted and collected was reported at Rs. 5,91,44,605/-. According to the Ld. PCIT, this implied that tax was not deducted on the balance amount of Rs. 4,05,69,846/-, which was prejudicial to the interests of the revenue. The Ld. PCIT further observed that the Ld. AO, during assessment proceedings, had not verified this balance payment of Rs. 4,05,69,846/- in respect of non-deduction of TDS. Accordingly, the Ld. PCIT invoked the provisions of section 263 of the Act and issued a notice to the assessee. The assessee dul....
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....hin the statutory period, the bona fides of the assessee cannot be doubted. We place reliance on the judgment of the Hon'ble Supreme Court in N. Balakrishnan vs. M. Krishnamurthy, AIR 1998 SC 3222 / (1998) 7 SCC 123, dated 03/09/1998, wherein it was held as under: "Rules of limitation are not meant to destroy the rights of parties. They are meant to ensure that parties do not resort to dilatory tactics but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. The law of limitation fixes a life-span for such legal remedy. Time is precious and wasted time never revisits. During the efflux of time, newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. Thus, a life span must be fixed for each remedy. Unending period for launching a remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicae ut sit finis litium (it is for the general welfare that there be an end to litigation). Rules of limitation are not meant to destroy the rights of parties, but....
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.... the submission of the assessee in relation to deduction and non-deduction of TDS related to foreign remittance. The relevant para of the impugned assessment order is extracted below:- "(B) We are the firm of advocates and solicitors and have many foreign clients through which we earn foreign legal fees in foreign currency. Further is pertinent to note that the foreign remittance is only approx. 1.84% of the gross turnover and hence, the turnover cannot be termed as low as compared to the remittances. Accordingly, you will please appreciate that it can not be construe that Turnover is low as compared to the total remittances. Also, the foreign remittance vis-à-vis gross revenue for preceding 3 Financial year 2018-19, 2017-18 and 2016-17 was 0.99%, 1.27% and 1.68% of the turnover of the respective financial years." 9. The Ld.AR further stated that in impugned revisional order of the Ld.PCIT has not pointed out any of the specific lacuna for non-deduction of TDS to the foreign entity related to the foreign remittances. He further stated that when the issue was already verified by the Ld.AO and had taken cognizance in the assessment order, the invoking of provisions....
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....] 35 Taxman 522/171 ITR 698 (Allahabad) 42. Lastly, it is also observed by us that neither the survey team in course of survey, nor the AO in course of assessment proceedings, has brought any adverse material on record, to prove the fact that the assessee had any income other than the business of cosmetics and the assessee has also explained the source of the income so surrendered before the survey team to have arisen out of business of cosmetics itself, and the said explanation has also been accepted by the AO after adequate enquiry and verification of documents produced before him, and he has arrived at a logical conclusion, which a prudent person, would have arrived under the circumstances, 43. Under the circumstances we are of the opinion that the AD aher careful examination of the submissions made by the assessee and after conducting detail enquiry, has taken a plausible view that the provisions of section 115BBE of the Act 61, is not applicable in the instant case and the said assessment cannot be set aside merely on the ground of inadequacy of enquiry by the AO with respect to source of surrender of income. 44. On this issue various High courts has....
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....xpenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the ITO on being satisfied with the explanation of the assessee. Such decision of the ITO cannot be held to be 'erroneous' simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an expenditure of capital nature. He simply asked the ITO to re-examine the matter that, in our opinion, is not permissible. Further inquiry and/or fresh determination can be directed by the Commissioner only after coming to the conclusion that the earlier finding of the ITO was erroneous and prejudicial to the interests of the revenue. Without doing so, he does not get the power to set aside the assessment. In the instant case, the Commissioner did so and it is for that reason that the Tribunal did not approve his....
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....order, direction or instruction issued by the Board under section 119, or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person]." 13. The Ld. DR further stated that the non-deduction of TDS related to foreign remittances not properly enquired by the Ld.AO which is erroneous and prejudicial to the interest of the revenue. In the assessment order, the Ld.AO considered the education cess and added back with the total income, but related to non deduction of TDS was not elaborately discussed and even no verification was made. He respectfully relied on the order of Addl. CIT vs Mukur Corporation (1978) 111 ITR 312 (Gujarat) where it was held that for revision of orders prejudicial to the interest of revenue for A.Y. 1965-66, it was held that "whether it is not obligatory to Commissioner acting under section 263 to enter into regular enquiry in all cases before original assessment order is cancelled and ITOs are directed to make fresh assessment. He further relied on the order of Hon'ble High Court of Himachal Pradesh ....