TaxTMI 
TaxTMI 
2026 (1) TMI 1040
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.... asked to submit reconciliation statement for commission disclosed by the assessee in its return of income and as per 26AS. Accordingly, assessee has submitted the same which is reproduced at page 2 of the assessment order, as per which the difference of commission which was not accounted for in the books of account by the assessee and also assessee has taken TDS credit of Rs. 1,94,433/-. The AO proceeded to complete the assessment merely making the addition of TDS credit taken by the assessee instead of commission income which was not declared in the books of account. Accordingly, he issued a notice to the assessee and also after considering the submissions of the assessee treated the assessment order passed u/s 143(3) r.w.s. 147 as erroneous as well as prejudicial to the interest of Revenue by invoking the provisions of section 263 Explanation 2 of the Act and also relied on several decisions. 3. Aggrieved with the above order, the assessee is in appeal before us raising following grounds of appeal :- "Ground No.1 That having regards to the facts and circumstances of the case, the Ld. PCIT has erred in set-aside for re-adjudication by the AO afresh and estima....
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....has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or 4. 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. In these facts and circumstances, by exercise of powers conferred under section 263, the Order u/s 143(3) r.w.s. 144B of the I. T. Act, 1961, passed by the Assessing Officer dated 29.12.2018 is hereby set aside being erroneous and prejudicial to the interest of the revenue to the extent of escaped income not assessed in earlier assessment. I direct the Assessing Officer to pass a fresh order, as per provisions of the Income tax Act, 1961, enhancing the assessment after making proper enquiry and verification. Appellant Submissions The assessing officer's finding: The extracts of Para No. 3 of assessment order dated 29.12.2018 is reproduced below :- From the above it is very clear that then Ld. officer had deeply examined the books of accounts and other relevant records like Bank statement. And find it out ....
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.... No. 3 That having regards to the facts and circumstances of the case, the Ld. PCIT has erred in law in giving his decision without examining the relevant material on record and also in passing his order without rejecting those documents based on which, the assessing officer had given his order. Appellant Submissions Ld. AO Version Para No. 1 & 3 of Assessment Order passed by AO is reproduced below: Ld. PCIT Version Order under Section 263 of the Income Tax Act, 1961 1. The brief facts of the case are that the assessee company filed its return of income declaring income of Rs. 7,15,830/- on 16.03.2012. Subsequently, the case was assessed u/s 143(3) r.w.s. 147 of the I. T. Act, 1961, at an income of Rs. 9,24,098/- by the Assessing Officer 29.12.2018. Subsequently, on perusal of the assessment records, it was noticed that during the year under consideration, the assessee company received an amount of Rs. 62,43,966/- (including Service tax of Rs. 5,83,075/-) from M/s BPTP Ltd. on account of brokerage and TDS was deducted thereon. However, in P&L Account, the assessee company only accounted amount of Rs. 36,66,593/- (exclud....
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....of Rs. 1,99,432/- but corresponding income of Rs. 19,94,298/- [62,43,966 - (36,66,593+5,83,075)= 19,94,298/-] has not been offered for taxation. Consequently, proceedings u/s 263 were initiated and order u/s 263 of the I. T. Act, 1961 in respect of A.Y. 2011-12 was passed in the case of the assessee company on 31.03.2021 by PCIT-7, New Delhi. Appellant Submissions When issue was already examined by Assessing Officer in original assessment proceedings, reopening of assessment was based on change of opinion is not valid. Reopening of assessment on the view taken that there was income difference between Form 26AS Statement and books of account of appellant where the Ld. AO has applied his mind judiciously, was not justified. It is therefore, to say that reopening of assessment on the view taken that there was income difference between Form 26AS Statement and books of account of appellant was not justified. Appellant relies on following case Laws: INCOME TAX : Where during course of assessment, issue relating to bad and doubtful debt and write off of bad debt was specifically explained and figure of Rs. 24.63 crores on account of NP....
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....m 26AS Statement and books of account, reopening of assessment on ground that there was income difference between Form 26AS Statement and books of account of assessee was not justified. (i) P.C. Snehal Engineers (P.) Ltd. vs. ACIT (2023) 147 taxmann.com 54 (Gujarat)" 5. On the other hand, ld. DR of the Revenue relied on the findings of the ld. PCIT. 6. Considered the rival submissions and material placed on record. We observed that the case of the assessee was reopened based on the information received from Investigation Wing that assessee has received commission income of Rs. 54.93 lakhs from BPTP and TDS was accordingly deducted thereon. However, assessee had accounted for an income of Rs. 35.31 lakhs and declared lesser receipts of Rs. 19.61 lakhs. We observed that AO has duly verified the above aspects at para 3 of his order and assessee has accepted that assessee has not declared the commission income to the extent of Rs. 19.94 lakhs and claimed only the TDS benefit. After observing the same, the AO proceeded to treat the TDS benefit claimed by the assessee as income of the assessee. In the 263 proceedings, ld. PCIT has highlighted the exact same issue that the ....
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....098/- Charge interest as per rules. Give credit for prepaid taxes Issue demand notice, challan and copy of order. Penalty proceedings u's 271(1)(C) of the Act, to be initiated separately Document 2 Action uls 147 was taken in this case on the basis of information received from Investigation Wing, Now Delhi that the assesse has received commission income of Rs. 54,93,411/- from BPTP and TDS was accordingly deducted thereon. However, the assesse had accounted for an income of Rs.35,31,741/- and in this way have shown lesser receipt of commission income of Rs. 19,61,670/ -. Accordingly action u/s 147 of the I. T. Act was issued after taking statutory approvals. Notice u/s 148 of the I. T. Act was issued on 27.03.208 after obtaining necessary approvals. The assesse was requested for furnishing the copy of reasons. The assesse vide this office letter dated 02-05-2018 was informed to first file Return of income and there after the reasons were supplied to it. There after notice uls 142[1] dated 19-09-2018 was issued requesting the assesse to furnish Return of Income failing which the assessment may be completed on the basis of material available on record. There after letters date....