2026 (3) TMI 359

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....he Income-tax Act, 1961 (for short 'the Act') on 31.10.2015 declaring total income of Rs. 1,25,45,500/-. The case of the assessee was selected for limited scrutiny through CASS for the following reasons :- (i) Tax credit claimed in ITR is less than tax credit available in 26AS; (ii) Mismatch in sales turnover reported in Audit Report and ITR; and (iii) Substantial increase in capital in the year and sundry creditors. 3. The assessment was completed on 21.11.2017 under section 143(3) of the Income-tax Act, 1961 (for short 'the Act') assessing the income at Rs. 1,44,86,900/- with addition of Rs. 19,41,395/- on account of unverified credit balances outstanding against some labour suppliers or labour contractors/su....

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....dings, the assessee has submitted that the assessee has paid Building & Other Construction Workers Welfare Cess (Labour Cess) amounting to Rs. 13,98,383/-; certified by the auditors in their report in Form 3CD at Sl. No.34 that there is no contractual payment liable for TDS; the payment to the said persons has been made on behalf of labour employed on daily basis through the medium of head labourer; instead of recording the name of all the laborers, the name of the person through whom such laborers had been engaged was recorded in the books of accounts; and there is employer/ employee relation directly between the assessee and the individual labour. The basic flaw in the assessee's argument is that the payment has been made to the Contr....

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....iction under section 263 of the Act, ignoring the fact that the issue in question being not before the Ld. AO as the assessment was done under limited scrutiny, as such there was no error in the assessment order. ii) On the facts and circumstances of the case, the learned Pr.CIT has erred both on facts and in law in ignoring the fact that the proceeding under Section 263 cannot be used for substituting opinion of the Ld. AO by that of the Pr.CIT. 4. On the facts and circumstances of the case, the order passed by Pr. CIT under section 263 of the Income Tax Act is unsustainable as power to revise can be invoked in the case of lack of enquiry, not in the case of inadequate enquiry. 5. On the facts and circumstances o....

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....rejected the submissions of the assessee wholly relying on certain issues which were not the purpose for which the assessment was selected for scrutiny i.e. limited scrutiny. He prayed that the issue under consideration is outside the purview of section 263 of the Act as the Assessing Officer has already took possible view on the material submitted by the assessee on the basis of selection criteria, therefore, he prayed that the appeal preferred by the assessee may be allowed. 7. On the other hand, ld. DR of the Revenue relied on the findings of the lower authorities. 8. Considered the rival submissions and material placed on record. We observed that the assessment in the case of the assessee was selected for the following purposes :-....