Search Results For: 263


M/s. Sree Alankar vs. PCIT (ITAT Cuttack)

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DATE: September 12, 2018 (Date of pronouncement)
DATE: September 26, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 263 Revision: U/s 114(e) of the Evidence Act, there is a presumption that a s. 143(3) assessment order is regularly passed after application of mind. If the assessee is consistently following the same method of valuation of closing stock, the CIT is not entitled to disturb the consistent method (all judgements referred)

The conclusions being drawn up as a result of enquiry is a highly subjective exercise and as to what is appropriate conclusion is something on which perceptions vary from person to persons. These variations in the perceptions of the Assessing Officer vis-a- vis that of the Commissioner, cannot render an order erroneous and prejudicial to the interest of the revenue

Ambuja Cements Limited vs. CIT (ITAT Mumbai)

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DATE: November 10, 2017 (Date of pronouncement)
DATE: September 19, 2018 (Date of publication)
AY: 2010-11
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CITATION:
S. 263(1) obligates the CIT to give the assessee an opportunity of being heard before passing of his order. While the CIT is entitled to consider a point which is not stated in the show-cause notice, he cannot pass the revision order unless the assessee is given the opportunity of being heard. Such an order is untenable in the eyes of law (Amitabh Bachchan 384 ITR 200 (SC) followed)

Notably, section 263(1) of the Act obligates the Commissioner to give the assessee an opportunity of being heard before passing of his order. No doubt the Commissioner is not disentitled to consider a point which is not stated in the notice so issued. However, the obligation to given an opportunity to the assessee of being heard on the point on the basis of which he finds it expedient to treat the assessment order erroneous in so far as it is prejudicial to the interests of the Revenue, is definitely cast on the Commissioner, as opined by the Hon’ble Supreme Court in the case of Amitabh Bachchan 384 ITR 200

Rakesh Kumar vs. CIT (ITAT Delhi)

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DATE: August 13, 2018 (Date of pronouncement)
DATE: September 15, 2018 (Date of publication)
AY: 2009-10
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CITATION:
S. 194-H TDS: The law in Idea Cellular 325 ITR 148 (Del) that there is a principal-agent relationship between the telecom company and the dealers does not mean that a similar relationship can be inferred between the dealers and the sub-dealers. The incentive paid by the dealers to sub-dealers cannot be equated with commission as stipulated u/s194H and so there is no requirement for deducting TDS

There is no agency agreement between the assessee and his dealers/sub-dealers. The agency relationship between the assessee and the cellular operators cannot be inferred or presumed in the transaction between the assessee and his sub-dealers. The reason being the SIM cards, vouchers belonged to the cellular operators/cellular entities and these cellular operators/telecom entities ensure that payment is received in respect of those prepaid vouchers and SIM cards which are sold to the subscribers and unsold SIM cards are returned back to them and even if such SIM cards are returned, then these cellular/telecom entities are required to be made payment against them and the SIM card stocked with the distributors are the property of service provider, i.e., the telecom/cellular entities

Torrent Pharmaceuticals Ltd vs. DCIT (ITAT Ahmedabad)

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DATE: August 8, 2018 (Date of pronouncement)
DATE: August 10, 2018 (Date of publication)
AY: 2014-15
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CITATION:
S. 263 Revision: Even after the insertion of Explanation 2, the CIT has to show that the view of the AO is wholly unsustainable in law. It is only in a very gross case of inadequacy in inquiry or where inquiry is per se mandated on the basis of record available before the AO and such inquiry was not conducted, the revisional power so conferred can be exercised to invalidate the action of AO. Otherwise, every order of the AO would become susceptible to S. 263 and, in turn, will cause serious unintended hardship to the tax payer concerned for no fault on his part

The Revisional Commissioner is expected show that the view taken by the AO is wholly unsustainable in law before embarking upon exercise of revisionary powers. The revisional powers cannot be exercised for directing a fuller inquiry to merely find out if the earlier view taken is erroneous particularly when a view was already taken after inquiry. If such course of action as interpreted by the Revisional Commissioner in the light of the Explanation 2 is permitted, Revisional Commissioner can possibly find fault with each and every assessment order without himself making any inquiry or verification and without establishing that assessment order is not sustainable in law. This would inevitably mean that every order of the lower authority would thus become susceptible to Section 263 of the Act and, in turn, will cause serious unintended hardship to the tax payer concerned for no fault on his part. Apparently, this is not intended by the Explanation. Howsoever wide the scope of Explanation 2(a) may be, its limits are implicit in it. It is only in a very gross case of inadequacy in inquiry or where inquiry is per se mandated on the basis of record available before the AO and such inquiry was not conducted, the revisional power so conferred can be exercised to invalidate the action of AO

M/s Indira Industries vs. PCIT (Madras High Court)

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DATE: June 14, 2018 (Date of pronouncement)
DATE: June 21, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 263 Revision (show-cause notice): A Writ Petition to challenge a s. 263 notice is maintainable if the authority issuing the show-cause notice lacks jurisdiction and if the notice is clearly barred by law. As per Alagendran Finance 162 Taxman 465 (SC), the two year limitation period stipulated u/s 263(2) runs from the date of the original assessment and not from the date of reassessment when the s. 263 notice deals with issues which are not subject matter of reassessment proceedings (MAK Data 358 ITR 593 (SC) & Malabar Industrial Co 243 ITR 83 (SC) distinguished)

When a notice under Section 263 raises new issues, which are not subject matter of the re-assessment proceedings, then the two year period contemplated under Sub-section (2) of Section 263 would begin to run from the date of assessment and not from the date of re-assessment. In other words, the ratio laid down in Alagendran Finance 162 Taxman 465 (SC), particularly as elucidated in Paragraph 15 of the Alagendran Finance case, is to the effect that the two year limitation period stipulated under Section 263(2) will run from the date of assessment only and not from the date of reassessment when the Section 263 notice does not deal with the same subject as in assessment and when it deals with other issues which are not subject matter of reassessment proceedings

Indus Best Hospitality & Realtors Pvt. Ltd vs. PCIT (ITAT Mumbai)

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DATE: January 19, 2018 (Date of pronouncement)
DATE: June 13, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 263 Revision: Explanation 2 to s. 263 inserted by the FA 2015 (which confers power upon the CIT to revise assessments where inadequate inquiries have been conducted by the AO) is prospective in nature and does not apply even to a case where the CIT passed the order after Explanation 2 came on the statute. The CIT should show that the view taken by the AO is unsustainable in law. The action of the CIT in directing the AO to conduct enquiry in a particular manner is contrary to the law interpreted by the Delhi High Court in CIT v. Goetze (India) Ltd 361 ITR 505. If such course of action is permitted, the CIT can find fault with each and every assessment order without making any enquiry or verification in order to establish that the assessment order is not sustainable in law

Ld. DR also submitted that in light of the introduction of the Explanation 2 to s.263 by the Finance Act, 2015, the Ld. CIT had power to conduct further enquiry even in a case where inadequate enquiries have been conducted by the Assessing Officer. (a) Crompton Greaves Ltd v. CIT [ITA No. 1994/Mum/2013] dated 01.02.2016, (b) Madhurima International Pvt Ltd v. Pr. CIT [ITA No. 421/Mum/2017] dated 28.04.2017. 23. In this regard, we observe that the aforesaid judgments have been later considered by Hon’ble Mumbai Tribunal in several other cases. Further, in the recent judgments, the Hon’ble Tribunal has taken a view that the provisions to Explanation 2 to s. 263 of the Act introduced by the Finance Act, 2015 is prospective in nature and would not apply to the year under consideration

Rashtriya Chemicals & Fertilizers Limited vs. CIT (ITAT Mumbai)

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DATE: February 14, 2018 (Date of pronouncement)
DATE: February 16, 2018 (Date of publication)
AY: 2012-13
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CITATION:
S. 263: Even if there is lack of inquiry by the AO and the assessment order is "erroneous" under Explanation 2 to s. 263, the order is not "prejudicial to the interests of the Revenue" because Fringe Benefit Tax is not "tax" as defined in s. 2(43) and cannot be disallowed u/s 40(a)(v) or added back to "Book Profits" u/s 115JB

The only question that survives for our consideration is that whether the omission to carry out the stated adjustment in the Book profits as envisaged by Ld. CIT has made the quantum order erroneous and prejudicial to the interest of the revenue and whether the stated adjustment as suggested by Ld. CIT was tenable in law or not? In other words, we are concerned with whether the twin prime conditions viz. erroneous and prejudicial to the interest of the revenue for invoking the provisions of Section 263 was fulfilled in the instant case or not

Daniel Merchants Private Limited vs. ITO (Supreme Court)

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DATE: November 29, 2017 (Date of pronouncement)
DATE: December 5, 2017 (Date of publication)
AY: -
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CITATION:
S. 68 Bogus share capital: Law laid down in Subhlakshmi Vanijya Pvt. Ltd vs. CIT 155 ITD 171 (Kol), Rajmandir Estates 386 ITR 162 (Cal) etc that the CIT is entitled to revise the assessment order u/s 263 on the ground that the AO did not make any proper inquiry while accepting the explanation of the assessee insofar as receipt of share application money is concerned cannot be interfered with

The Commissioner of Income Tax had passed an order under Section 263 of the Income Tax Act, 1961 with the observations that the Assessing Officer did not make any proper inquiry while making the assessment and accepting the explanation of the assessee(s) insofar as receipt of share application money is concerned. On that basis the Commissioner of Income Tax had, after setting aside the order of the Assessing Officer, simply directed the Assessing Officer to carry thorough and detailed inquiry. It is this order which is upheld by the High Court. We see no reason to interfere with the order of the High Court

Amira Pure Foods Pvt. Ltd vs. Pr CIT (ITAT Delhi)

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DATE: November 29, 2017 (Date of pronouncement)
DATE: December 4, 2017 (Date of publication)
AY: 2014-15
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CITATION:
S. 263 Revision: Explanation 2 to s. 263 inserted w.e.f. 01.06.2015 does not override the law as interpreted by the various High Courts whereby it is held that the CIT cannot treat the AO's order as being erroneous and prejudicial to the interest of revenue without conducting an enquiry and recording a finding. If the Explanation is interpreted otherwise, the CIT will be empowered to find fault with each and every assessment order and also to force the AO to conduct enquiries in the manner preferred by the CIT, thus prejudicing the mind of the AO, This will lead to unending litigation and no finality in the legal proceedings which cannot be the intention of the legislature in inserting the Explanation

The ld PCIT has not referred to Explanation 2 of section 263 of the Act which has been inserted with effect from 01.06.2015 however we agree with the finding of the coordinate bench in the case of Narayan Tatu Rane v. Income Tax Officer [(2016) 70 taxmann.com 227], wherein it has been held that Explanation cannot said to have overridden the law as interpreted by the various High Courts, where the High Courts have held that before reaching a conclusion that the order of the AO is erroneous and prejudicial to the interest of revenue, the Commissioner himself has to undertake some enquiry to establish that the assessment order is erroneous and prejudicial to the interest of revenue

BSES Rajdhani Power Ltd vs. Pr CIT (Delhi High Court)

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DATE: November 8, 2017 (Date of pronouncement)
DATE: November 11, 2017 (Date of publication)
AY: 2010-11
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CITATION:
S. 263 Revision: The failure to issue notice on any particular issue does not vitiate the exercise of power u/s 263, as long as the assessee is heard and given opportunity. The lack of opportunity at the revisional stage does not vitiate the entire order, or the proceedings. It is a curable defect. The CIT has power to consider all aspects which were the subject matter of the AO’s order, if in his opinion, they are erroneous, despite the assessee’s appeal on that or some other aspect

It is in the context of the above position that this Court has repeatedly held that unlike the power of reopening an assessment under Section 147 of the Act, the power of revision under Section 263 is not contingent on the giving of a notice to show cause. In fact, Section 263 has been understood not to require any specific show cause notice to be served on the assessee. Rather, what is required under the said provision is an opportunity of hearing to the assessee. The two requirements are different; the first would comprehend a prior notice detailing the specific grounds on which revision of the assessment order is tentatively being proposed

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