2023 (12) TMI 1470

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....January 2023 passed by the Income Tax Appellate Tribunal, 'D' Bench, Ahmedabad (for short, "the Tribunal") in ITA No.169/Ahd/2022 for the Assessment Year 2017-18. [2] The Revenue has proposed the following substantial questions of law for the consideration of this Court: "(i) Whether in the facts and circumstances of the case, the Appellate Tribunal misdirected itself in law so as to ignore the operation and purport of Section 263 of the Income-Tax Act, 1961 more particularly with regard to Explanation 2 of the said Section? (ii) "Whether in the facts and circumstances of the case, the Appellate Tribunal erred in quashing the order passed under section 263 of the Act without appreciating that the assessee has failed to ....

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....eous and prejudicial to the interest of the Revenue. [4] The Principal CIT accepted the contention of the assessee regarding late deposit of PF / ESI and agreed that the same were filed within due date prescribed and the proceedings initiated under Section 263 of the Act on this ground was dropped. However, with respect to the ground regarding non-deduction of TDS, the Principal CIT held that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue as the Assessing Officer did not examine in detail the issue regarding deduction of TDS and certain infirmities in the submissions placed on record by the assessee on the applicable rate regarding deduction of TDS was highlighted. The Principal CIT ....

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....ial on record. In our considered view, this is not a case where there is an absolute lack of enquiry made by the AO in respect of TDS payments. As submitted above, the AO issued notice asking the assessee to provide details of TDS payments and in response to such query, the assessee gave a reply which was duly considered and admitted by the AO and no disallowance under section 40(a)(ia) of the Act was made during the course of assessment proceedings. On the merits of the case, we observe that the assessee during the course of 263 proceedings had submitted that almost all payments had been subject to TDS and a reconciliation of payments and TDS thereon was submitted during course of 263 proceedings, which was also produced before us for our ....

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.... the same cannot be set aside under Section 263 of the Act on the ground of inadequate inquiry. The Tribunal also relied upon the decision of the Hon'ble Bombay High Court in the case of CIT vs. Gabriel India Ltd reported in [1993] 203 ITR 108 (Bom) and after considering the legal position, the Tribunal arrived at findings of fact that the assessee gave a detailed chart regarding payments made towards advertisement expenditure, legal and professional fees and service charges, which, according to the Principal CIT was not satisfactorily explained by the assessee. It was also found by the Tribunal that the assessee also obtained lower withholding tax certificate from the payee and deducted taxes at the rates mentioned in the certificate. It w....