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| The Tax Publishers2022 TaxPub(DT) 2242 (Del-Trib) INCOME TAX ACT, 1961
Section 263
Order passed by PCIT under section 263 was not sustainable because PCIT had done no homework on any aspect for which further enquiry was expected from AO but restricted to interpretation of relevant entry of nature of business activity and held that enquiry done by AO in 'complete scrutiny' proceedings were not satisfactory. Accordingly, order under section 263 was set aside.
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Revision under section 263 - Validity - Eligibility for deduction under section 80-IC - PCIT failed to perform its duty while issuing notice under section 263
Assessee filed appeal against the order under section 263 passed by Pr. CIT in regard to the assessee who had filed return of income for assessment year 2014-15 declaring NIL income after deduction under section 80-IC and it was selected for compete scrutiny for the reason of mismatch in amount paid to related persons under section 40A(2)(b) reported in Audit Report and large deduction claimed under Chapter VI-A. Considering the written submissions, AO had allowed claim of deduction under section 80-IC. However, Pr. CIT considered the assessee not eligible for deduction under section 80-IC as assessee was engaged in computer programming and data processing. Further it has also been observed that no independent verification in respect of sundry creditors have been made, which should have been made. Held: Pr. CIT had done no homework on any aspect for which further enquiry was expected from AO but restricted to interpretation of relevant entry of nature of business activity and held that enquiry done by AO in “complete scrutiny” proceedings were not satisfactory. It can be observed that AO had specifically put a query No (xvii) 'Furnish details of amounts paid to related persons covered under section 40A(2)(b) and furnish a comparative chart of the same shown in the Balance Sheet and in Audit Report.” This certainly included admissibility of such expenses as per the provisions of the act. Pr. CIT had not enquired and discussed a word as to how any of these expenses were not admissible and concluded that enquiry conducted by AO was not satisfactory and accordingly, order under section 263 was set aside.
Relied:CIT, Mumbai v. Amitabh Bachchan 2016, 384 ITR 200 (SC) : 2016 TaxPub(DT) 2291 (SC), Pr. CIT - 3, New Delhi v. Delhi Airport Metro Express (P) Ltd. [ITA No. 705/2017, Order dated 5-9-2017] : 2017 TaxPub(DT) 4058 (Del-HC), Dwarkadhis Buildwell (P) Ltd C/o N.K. Jain, Advocate Naya Bazar [ITA No. 3097/DEL/2014 decided on 1-7-2019] : 2019 TaxPub(DT) 5897 (Del-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
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