TaxTMI 
TaxTMI 
2025 (11) TMI 636
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....urred in filing the appeal is due to the reasons beyond the control of the assessee and not due to any negligence on the part of the assessee since the copy of the Ld.CIT was sent to the Counsel who represented the case of the assessee before the Ld.CIT. The assessee explained that the Counsel who represented the matter before the CIT to whom the assessee forwarded a copy of the order of CIT for filing appeal, could not file the appeal as he was not familiar with the matters before the Tribunal and this was communicated to the assessee later and the assessee took steps immediately to engage another Counsel for filing the appeal before the Tribunal and in this process delay of 38 days occurred in filing the appeal and therefore the assessee prayed that the delay since neither willful nor deliberate the same may be condoned. 5. Considering the rival submissions and perusal of the petition for condonation of delay and affidavit filed alongwith petition, we find that there is reasonable cause in not filing the appeal in time before the Tribunal by the assessee. Thus, the delay of 38 days in filing the appeal by the assessee is condoned. 6. Coming to the merits of the case, the as....
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.... the Ld. CIT that the assessee failed to deduct tax at source as per the provisions of section 195 of the Act on the commission debited to Profit & Loss account and therefore the assessment completed u/s 143(3) on 10.03.2014 is erroneous as well as prejudicial to the interest of Revenue. A similar notice dated 29.05.2014 was also issued by the Ld. CIT stated that the assessee failed to deduct TDS under 195(2) on the commission paid to foreign agent and required the assessee to furnish supporting evidence explaining as to why the assessment framed by the Assessing Officer is not to be annulled. 8. Ld. Counsel for the assessee at the outset referring to page one of the Ld. CIT order submitted that as is evident from para 2 and 3, based on the proposal of the AO the Ld. CIT issued show cause notice for revision of the assessment order. It is submitted that such an action of the Ld. CIT is not permissible u/s 263 of the Act and the same is bad in law. Reliance is placed on the decision of the coordinate bench of Pune Tribunal in the case of Volkswagen India Private Ltd. vs. PCIT in ITA Nos. 147 & 148/Pun/2019 dated 19.10.2023. 9. The Ld. Counsel further referring to page 84 of th....
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....nbeam Auto Limited (332 ITR 167). Reliance was also placed on the decisions of the Hon'ble Delhi High Court in the case of CIT vs. DLF Ltd. (350 ITR 555) and CIT vs. Vikas Polymers (341 ITR 537). Reliance was also placed on the decision of the coordinate bench in the case of SSG Infra Tech Pvt. Ltd. vs. PCIT (ITA No.2278/Del/2024 dated 12.03.2025). 12. Ld. Counsel further submitted that in so far as the direction of the Ld. CIT to verify the genuineness of the purchases and export sales are concerned, it is submitted that the Ld. CIT without issuing any show cause notice u/s 263 of the Act directed the AO to frame fresh assessment after examining all aspects in respect of genuineness of purchases and export sales apart from holding that trade discount allowed to non-resident (treating the said nonresident as an agent of the assessee) and assessing the trade discount allowed is nothing but commission paid on export sales, is deemed to accrue are arise in India. The Ld. Counsel submitted that for an issue which was not at all raised in the show-cause notice, the Ld. CIT gave directions on such issue without providing an opportunity, vitiates the proceedings u/s 263 of the Act. Rel....
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.... from the above the AO moved a proposal u/s 263 of the Act proposing to annul the assessment order as he was under the belief that the assessment order framed was erroneous and prejudicial to the interest of Revenue as the AO did not examine the genuineness of purchases. On receipt of the proposal from the AO a show cause notice was issued by the Ld. CIT to the Assessee to show cause as to why the assessment framed by AO u/s 143(3) dated 10.03.2014 may not be annulled. It is amply clear the Ld. CIT exercised his revisional jurisdictional u/s 263 of the Act simply based on the proposal mooted by the AO and not on his calling for record and examining the record and came to the conclusion that assessment order passed by AO is erroneous and prejudicial to the interest of Revenue. 15. We observed identical issue came up for consideration by the Pune Bench of the Tribunal in the case of Volkswagan India (P) Ltd. (supra) and the Tribunal held that the Ld. PCIT exercised his jurisdiction in a wrongful manner observing as under: "5. At this juncture, it is relevant to note the mandate of section 263(1) of the Act providing that: "The Commissioner may call for and examine the rec....
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....roperly dealt with during the course of assessment proceedings rendering the assessment order amenable to revision. It goes without saying that if some lacunae is left in the assessment order, which comes to the notice of the AO, he has ample power to take corrective measures either by way of rectification u/s.154 or revision u/s.147. Insofar as the revision u/s.263 is concerned, it is the sole prerogative of the Pr. CIT, who needs to take suo motu action on calling for and examining the record of any proceedings under this Act and on the basis of such examination considering the assessment order erroneous and prejudicial to the interest of the Revenue. It is evident from the show cause notice that the ld. PCIT initiated revisionary proceedings just on the basis of the AO's report without carrying out any independent examination of the record followed by independently satisfying himself that the assessment order required revision. 7. The ld. AR relied on certain orders of the Tribunal, including the order dt. 02-11-2021 passed by the Pune Tribunal in Alfa Laval Lund and AB Vs. CIT (ITA No.1287/Pun/2017), holding the initiation of revision proceedings, based only on the....
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....d to the material placed before him and satisfy himself that it is a case where he ought to exercise his revisional power". Again, it is manifest that there is no bar on the AO placing certain information or material before the CIT justifying the invocation of power u/s.263, but ultimately, it is the CIT who must apply his independent mind to such material and satisfy that the revision is warranted. What should follow from the examination of material, including that placed by the AO, is the independent satisfaction of the CIT, after due application of mind, that the assessment order was erroneous and prejudicial to the interest of the Revenue requiring revision. If such satisfaction of the CIT, which is crucial and sine qua non, is missing and the notice is based simply on the proposal sent by the AO for revision, as is the case under consideration, the revision cannot take-off. 9. In view of the foregoing discussion, we are satisfied that the ld. PCIT exercised his jurisdiction to initiate the revision proceedings in a wrongful manner, which, ergo, cannot be accorded our imprimatur." 16. Further have perused the show-cause notices dated 05.05.2014 and 29.05.2014 issued....
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....r should be erroneous and it should be prejudicial to the interests of revenue. In other words the twin conditions have to be satisfied, namely, (i) the order of the Assessing Officer sought to be revised should be erroneous (ii) it should be prejudicial to the interests of the revenue. Both the conditions must be satisfied. In case the order of the Assessing Officer is erroneous but is not prejudicial to the interests of the revenue, the Commissioner would not be competent to exercise jurisdiction under section 263. In a case, where two views are possible and the Assessing Officer has taken a view with which the Commissioner does not agree, the said order cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the Assessing Officer is unsustainable in law. 21. The Hon'ble Delhi High Court the case of CIT vs. DLF Ltd. reported in 350 ITR 555 (Del). It is also not a case of- "lack of enquiry" or "lack of investigation". It is submitted that perusal of the show cause notice itself would show that it has not been stated in any manner how the learned Assessing Officer has failed to apply his mind, particularly when it has not ....
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.... reported in 343 ITR 329 (Del) to has held that in cases of wrong opinion or wrong finding on merits, the CIT has to come to the conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under Section 263 is passed. It was held as under: "19. In the present case, the' findings recorded by the Tribunal are correct as the CIT has not gone into and has not given any reason for observing that the order passed by the Assessing Officer was erroneous. The finding recorded by the CIT is that "order passed by the Assessing Officer may be erroneous". The CIT had doubts about the valuation and sale consideration received but the CIT should have examined the said aspect himself and given a finding that the order passed by the Assessing Officer was erroneous. He came to the conclusion and finding that the Assessing Officer had examined the said aspect and accepted the respondent's computation figures but he had reservations. The CIT in the order has recorded that the consideration receivable was examined by the Assessing Officer but was not properly examined and therefore the assessment order is "erroneou....
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....eral Trading LLC, Dubal. The buyer is a partnership Firm, in Dubai. Both the partners are from Dusal. They don't have any / Business connection in India. Ako it is further submitted that there is no Son/ Commission agent appointed in india for interaction between the and the Buyer. Assesser directly interact with the Buyer for getting export hout any third party intervention. The Assessee has no link with the purchase The Buyer. No payment was made by the Assessce to the Purchase Agents of DE they have not provided any services to the Assessee. Also we would ike Ett as per order received from Buyer, the buyer has to deduct 12% against it 12% & in nature of trade discount given by Seller to Bryer. The Buyer Doing this amount in foreign currency, has remitted balance amount. We have mitted the copy of inward remittance certificates and copy of order for your niso it is further submitted that section 230 & Section y of the Income tax is not applicable , as the Assessee has not paid any amount during the year to President Certified True Copy 85 ROUT AGRAWAL & CO. Chartered Accountants D-134, 3rd Floor, Central Market, CA Tel .: 011-41627300 lune Tas officer, New De....