M/s. S. S. International, Veraval V. The Pr. CIT-1, Rajkot, Rajkot

ITA 154/RJT/2022

AI Insights

The case involves M/s. S.S. International, the appellant, contesting an order by the Pr.CIT-1 Rajkot, which was based on a perceived discrepancy in export figures reported in the company's books and those in the Income Tax Department's ITS data. The Pr.CIT exercised revisionary powers under section 263 of the Income Tax Act, 1961, claiming the original assessment order was erroneous and prejudicial to the Revenue because the Assessing Officer (AO) did not examine the discrepancy. The Tribunal, however, found that the data provided was insufficient for a detailed reconciliation and that the Pr.CIT's order did not meet the legal standards for exercising revisionary powers.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133707 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2023
• Appeal Filed By: Assessee
• Order Result: AllowedAllowed
• Bench Allotted: DB
• Next Hearing Date: 22-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 01-05-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHISH SHAH
• Keywords: Revision of order; Set aside
• Section: 263; 143(3)

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, राजकोट 瀈यायपीठ 瀈यायपीठ瀈यायपीठ 瀈यायपीठ, , , , राजकोट IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted Through Virtual Court) ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SMT. MADHUMITA ROY, JUDICIAL MEMBER, JUDICIAL MEMBER ITA No.154/RJT/2022 Assessment Year :2017-18 M/s.S.S. International Plot No.604/605 GIDC, Veraval. PAN : ABCFS 9693 N Vs. The Pr.CIT-1 Rajkot. 0 अपीलाथ / (Appellant) यथ /(Respondent) Assessee by : Shri Ashish Shah, ld.AR Revenue by : Shri Shramdeep Sinha, ld.CIT-DR स ु नवाई क तार ख/Date of Hearing : 10/04/2023 घोषणा क तार ख /Date of Pronouncement: 16/06/2023 आदेश/ O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the assessee against order passed by the ld. Commissioner of Income Tax (Appeals)-1, Ahmedabad[hereinafter referred to as “Ld.CIT”] by exercising revisionary power under section 263 of the Income Tax Act, 1961 ("the Act" for short) dated 7.3.2022 pertaining to the Asst.Year 2017.18. 2. As transpires from order of the ld.Pr.CIT, the error noted by the ld.Pr.CIT in the order passed by the AO under section 143(3) of the Act was that he had considered the total exports of the assessee of frozen fish during the year as reflected in its P& L account of Rs.87,50,91,292/-, though ITS data of the assessee reflected the ITA No.154/RJT/2022 2 total invoice value of goods exported at Rs.87,79,91,536/-. As per the ld.Pr.CIT there was a difference of Rs.29,00,244/- in the export data as per ITS data and that reflected by the assessee in its books of accounts, and the AO having not examined the issue, and sought explanation from the assessee on this aspect, the order passed by theAO was an error causing prejudice to the Revenue. 3. Further perusal of the order of the ld.Pr.CIT reveals that on show causenotice being issued to the assessee under section263 of the Act, the assessee requested the ld.Pr.CIT to provide relevant ITS data so as to make submission inthis regard. The same was provided to the assessee, in response to which the assessee submitted that the details submitted in the data are inconsistent and not comparable with books of accounts and also the data was summary, with only one single entry and no break-up of the bills from which it was compiled. During the course of hearing before us, the ld.counsel for the assessee drew our attention to the submission made before the ld.Pr.CIT in this regard by the assessee, placed before us at page no.6 to 8 as under: ITA No.154/RJT/2022 3 ITA No.154/RJT/2022 4 ITA No.154/RJT/2022 5 4. The ld.Pr.CIT, we have noted, went on to hold that CBEC report was very clear containing specific information and since the same was needed to be examined with the books of accounts,therefore, necessary directions in this regard were given to the AO to examine the same. The findings at para-5 of the order are as under: “5..... Assessee’s submission has been examined and it is noticed that there are number of fields given in the CBEC report summary data which are very clear containing specific information therefore assessee’s plea that the same are inconsistent does not appear to be correct. Since the same needs to be examined with the books of accounts therefore necessary direction in this regard are being given to the AO in subsequent paras of this order to examine the same. Since the AO has failed to examine the original assessment proceedings therefore the order passed by the AO is erroneous and prejudicial to the interest of revenue.” He further goes to hold the assessee has failed to fileany reconciliation for difference of Rs.29 lakhs noted and the AO having ITA No.154/RJT/2022 6 not examined this issue, the assessment order was erroneous causing prejudice to the Revenue. 5. The ld.counsel for the assessee, besides drawing our attention to the letter submitted to the Ld.Pr.CIT stating that in the absence of specific information of the invoices raised by the assessee as per the ITS data, no reply could be filed by the assessee nor could any reconciliation be furnished of the exports as reflected in the ITS and as reflected in the books of accounts of the assessee. The ld.counsel for the assessee also drew our attention to the data which the assessee itself extracted from ICEGATE portal (Custom Department’s Portal). Screen-shots were produced before us at PB Page no.9 to 14. The ld.counsel for the assessee pointed out that the same revealed 198 entries while ITS data revealed 196 entries; he pointed out that there was no bill-wise detail provided either in the ITS data or data provided in the Custom’s Portal ICEGATE; that in the absence of any specification information, the assessee was not in a position to file any reconciliation whatsoever of the exports reflected in the custom data and that reflected in the books of the assessee. 6. The ld.DR at this juncture was asked as to what explanation/reconciliation was expected from the assessee, when no specific data of the bills raised by the assessee, as available in the ITS data or with the Custom Department, was available. The ld.DR was unable to give satisfactory reply. 7. Considering the same, we hold that the entire exercise of the ld.Pr.CIT in holding the assessment order as erroneous proceededon a premise which did not exist and was totally unjustified. In the absence of break up, bill wise, of the exports of the assessee reflected in the ITS data, any explanation or reconciliation of the ITA No.154/RJT/2022 7 difference in the said exports from that reflected in the Books of the assessee was virtually impossible. The ITS data ,giving no breakup of export sales, therefore, we hold, had not been rightly considered by the AO during assessment proceedings for seeking any explanation from the assessee for difference from the export sales reflected in the books of the assessee. This being the only information with the Ld.PCIT , we hold, that there was no error in the order of the AO for not seeking any explanation on account of the information in ITS data. Further even as per the ld.Pr.CIT, the issue was restored back to the AO for verification of this aspect of export sales, for which purposes revisionary powers u/s 263 of the Act cannot be exercised. There has to be a finding of error in the order of the AO causing prejudice to the Revenue for exercising revisionary jurisdiction u/s 263 of the Act. A direction for verification of an issue, means there is no prima facie finding of error. Thus the exercise of revisionary powers u/s 263 of the Act in the present case we hold, is not in accordance with law for this reason also. For the above reasons, we hold that the order of the ld.Pr.CIT passed u/s 263 of the Act is not sustainable in law and is accordingly directed to be set aside. 8. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 16 th June, 2023 at Ahmedabad. Sd/- Sd/- (MADHUMITA ROY) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad, dated 16/06/2023