MASANI ENGINEERING COMPANY PVT LTD, MUMBAI V. PCIT-2, MUMBAI

ITA 1122/MUM/2023

AI Insights

The case involves Masani Engineering Company Pvt. Ltd, which appealed against the order of the Principal Commissioner of Income Tax (PCIT), Mumbai, under section 263 of the Income Tax Act, 1961. The PCIT had revised the assessment for the assessment year 2018-19, citing discrepancies between the receipts shown in the Profit and Loss account and those reported in Form 26AS. The Tribunal examined the records and found that the discrepancies were addressed during the assessment proceedings and were due to various legitimate reasons such as TDS on VAT, un-reversed credit notes, and TDS on advances received. The Tribunal concluded that the PCIT's order was based on a mere change of opinion and set it aside.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123397 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-06-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 05-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Difference of opinion; Change of opinion; TDS; Set aside
• Section: 263; 143(3); 142(1); 143(2); 64; 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No. 1122/Mum/2023 (A.Y.2018-19) Masani Engineering Company Pvt. Ltd, 111-A, Currimji Building, M. G. Road, Opp-Mumbai University, Mumbai-400 001 PAN: AAECM7256M ...... Appellant Vs. PCIT-2 Aayakar Bhavan, Mumbai-400 020 ..... Respondent Appellant by : Shri Bhupendra Shah Respondent by : Smt. Riddhi Mishra, CIT-DR Date of hearing : 27/06/2023 Date of pronouncement : 07/08/2023 ORDER PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of PCIT, Mumbai dated 29.03.2023 u/s. 263 of the Income Tax Act, 1961 (in short ‘the Act’) for A.Y. 2018- 19. The assessee has raised the following grounds (revised) of appeal:- 1. In the facts of the case and in Law, the learned PCIT erred in invoking Section 263 to the case of the Appellant only by way of change of opinion, without pointing out 2 ITA No. 1122/Mum/2023 Masani Engineering Company Pvt. Ltd any error in the order of the A.O. and also by disregarding detailed submissions made to him from time to time. 2. In the facts of the case and in Law, the Show Cause Notice & or order u/s 263 alleging errors and prejudice, itself is erroneous on one count as follows. a. In the facts of the case and in Law, the learned PCIT has erred in invoking the provision of sec. 263 merely because he wants to take a view different from the one taken by the Assessing Officer and thereby changing the opinion of the Assessing Officer by his opinion and even though this specific query was duly answered during the course of assessment proceedings. b. In the facts of the case and in Law, the learned PCIT has erred in holding that the Assessing Officer failed to examine and verify as to why there is a difference of receipts amounting to Rs. 22,82,138/- between for 26AS and Profit and loss a/c. c. In the facts of the case and in Law, the learned PCIT has erred in passing the order u/s. 263 by disregarding the adjournment request in reply to show cause notice and thereby passing the order not tenable in law. [B] Relief Prayed: The appellant therefore prays as follows, 1. To quash the order u/s. 263 because PCIT had no proper jurisdiction to invoke provisions of revision. [C] General:- The appellant reserve rights to add alter or delete any portion of this appeal before its conclusion. This appeal is filed in time and be fully allowed. 3 ITA No. 1122/Mum/2023 Masani Engineering Company Pvt. Ltd A Detailed paper book along with case laws will be submitted at the time of hearing. 2. The brief facts of the case are that assessee filed its return of income for the year under consideration on 31.10.2018 declaring total income of Rs. 13,65,900/-. Subsequently the case was selected for scrutiny under CASS for the reason of High Ratio of refund to TDS, Low net profit shown by construction contractors and claim of large refund. Notices u/s. 143(2) and 142(1) were served upon assessee. In response, assessee furnished various details and submissions to the AO. Accordingly, assessment u/s. 143(3) finalized on return income of Rs. 13, 65,900/- was made by the AO. 3. Thereafter Ld. PCIT, Mumbai-2 called for case records and examined the records. In his examination, he found that there is mismatch in total receipts as per 26AS i.e. Rs. 23, 38, 48,997/- vis-a-vis receipts shown in P & L a/c. i.e. Rs. 23, 15, 66,859/-. This resulted into a difference in receipts of Rs. 22, 82,138/-. On this ground, Ld. PCIT issued notice u/s. 263 vide dated 21.03.2023. Copy of notice issued is reproduced herein below:- 4 ITA No. 1122/Mum/2023 Masani Engineering Company Pvt. Ltd 5 ITA No. 1122/Mum/2023 Masani Engineering Company Pvt. Ltd 4. To verify the concern of Ld. PCIT i.e. whether assessee has under stated its receipts or otherwise, we need to examine the notices issued during assessment proceedings and response of the assessee thereon. In this regard, we are reproducing the notice issued u/s. 142(1) vide dated 23.12.2020 alongwith its annexure wherein relevant issue has been enquired:- 6 ITA No. 1122/Mum/2023 Masani Engineering Company Pvt. Ltd 7 ITA No. 1122/Mum/2023 Masani Engineering Company Pvt. Ltd 8 ITA No. 1122/Mum/2023 Masani Engineering Company Pvt. Ltd 9. In the annexure reproduced (supra) in point no. 4 & 5 of para B, the relevant issue has already been enquired by the AO. Assessee’s response to the same is furnished vide page no. 64 and 72 of the paper book. 9 ITA No. 1122/Mum/2023 Masani Engineering Company Pvt. Ltd 10 ITA No. 1122/Mum/2023 Masani Engineering Company Pvt. Ltd 10. We have gone through the response of the assessee and found the same to be in order. It is pertinent to mention here that the documents /replies furnished to us are available on the record of the AO and Ld. PCIT also. This fact is not under challenge but the same has been ignored by the Ld. PCIT while passing order u/s. 263, dated 29.03.2023. It is observed that issues relating to revenue of the assessee for the relevant financial year were duly examined with reference to the books of accounts and response of the assessee during assessment proceedings. The allegation of the Ld. PCIT that 11 ITA No. 1122/Mum/2023 Masani Engineering Company Pvt. Ltd revenue has been under stated is found to be baseless as the difference in the figure of TDS claimed vis-à-vis amount of receipts declared in the P & L account is arisen because sometime TDS is deducted on VAT amount also, credit notes not reversed by the customer, but TDS amount is still there, TDS deducted applying extra rate and TDS deducted on advance received which assessee disclosed in next year etc. Resultantly, the order of AO is found to be correct and not an erroneous order in so far as prejudicial to the interest of revenue for the purposes of section 263 of the Act. In the result, grounds raised by the assessee are allowed and order of Ld. PCIT is set aside. 11. In the result appeal of the assessee is allowed. Order pronounced in the open court on 7 TH day of August, 2023. Sd/- Sd/- (VIKAS AWASTHY) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, दिन ांक/Dated: 07/08/2023 Sr. PS (Dhananjay) Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकर आयुक्त(अ)/The CIT(A)- 4. आयकर आयुक्त CIT 5. दवभ गीय प्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 6. ग र्ड फ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar) ITAT, Mumbai