TaxTMI 
TaxTMI 
2026 (9) TMI 1687
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....ssing officer accepted the return of income of the assessee on the basis of assessee's submissions and material available on record. Ld Assessing Officer completed the assessment, vide order dated 28.03.2024 passed u/s 143(3) r.w.s. 144B of the Act. 3. In exercise of revisional power u/s 263 of the Act, ld PCIT observed that the assessee was involved in the business of wholesale and retail of timber hardware during the year under consideration and made purchases of Rs. 2,67,56,453.19/- and made sales of Rs. 2,55,08,295.51. The GP was shown as Rs. 13,09,205.32/- @ 5.13% and NP was shown as Rs. 8,29,813.40 @ 3.25% and claimed refund of Rs. 5,95,550/- out of TCS amount of Rs. 6,45,952/- which was more than 92%. The revisional authority observed that the assessee failed to file any ledger or relevant document except copy of audit report during the proceedings u/s 263 of the Act. He further noticed that the genuineness of the transactions, correctness of the expenses claimed and reasonableness of profit margin in light of timber business norms and scale of operations remained unverified. Ld PCIT, thus observed that failure to make proper enquiries/verification of complete facts makes....
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....v. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del) and consistently followed by various Benches of this Hon'ble Tribunal. The present case being one in which the FAO did make enquiries and accepted a plausible explanation, the same is squarely outside the scope of Section 263. 6. That on the facts and in law, the Ld. PCIT erred in exceeding the scope of CASS-selected scrutiny. The case having been selected solely for verification of "Low income from TCS receipts (Scrap)" an issue duly examined by the FAO - the Ld. PCIT could not, in exercise of revisionary jurisdiction, expand the enquiry to (a) genuineness of transactions, (b) correctness of expenses and (c) reasonableness of profit margin in light of "timber business norms". 7. That the Ld. PCIT erred in law in passing the impugned order without conducting any minimal enquiry of his own, and in merely remitting the matter to the AO for fresh enquiry - thereby impermissibly "outsourcing" the revisionary function. 8. That the Ld. PCIT erred in law in invoking Explanation 2(a) to Section 263 in a mechanical manner, failing to appreciate that the said Explanation does not authorise revision of every order wh....
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..... Shreeji Prints (P.) Ltd., (2021) 130 taxmann.com 293 (Guj-H.C.) r/w Supreme Court order dated 27.08.2021 passed in SLP(C) No. 333 of 2021, (2021) 130 taxmann.com 294 (SC) and PCIT vs. Delhi Airport Metro Express (P.) Ltd., (2018) 99 taxmann.com 382 (Del- H.C.) 9. Ld CIT(DR) has supported the impugned order. 10. We have gone through the assessment order and the impugned revisional order passed by the ld PCIT. It is pertinent to reiterate the assessment order dated 28.03.2024 as under: "Assessment Order 1. The return of the assessee filed for Assessment Year 2022-23 vide e-Filing Acknowledgement Number 529773621240922 on 24.09.2022, subsequently, the case was selected for Scrutiny Assessment under CASS (Computer Aided Scrutiny Selection). 2. Based on the material available on record and submission/explanation received from the assessee on the above mentioned issue, no addition is made [adjustments made in 143(1) is not disturbed as it is beyond scope). 3. The assessment of income is done as per computation sheet and the sum payable is determined as per the demand notice which is part of this assessment order." 11. We notice that the aforesaid ....
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....10) 9 SCC 496, Hon'ble Supreme Court, while dealing with the requirement of passing a reasoned order by an authority whether administrative, quasi judicial or judicial, has vide, para 51 of its order laid down the following propositions: "a. In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. b. A quasi-judicial authority must record reasons in support of its conclusions. c. Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well. d. Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power. e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations. f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. g. Reaso....