Bahubali Iron & Steel Company, Ghaziabad V. Pr, CIT, Ghaziabad

ITA 542/DEL/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0128 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-10-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 28-01-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SAURABH GOEL
• Keywords: Revision of order; Set aside
• Section: 263; 143(3)

Judgement Text

1 ITA No. 542/Del/2020 Bahubali Iron & Steel Co. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘A’ NEW DELHI BEFORE DR. B. R. R. KUMAR, ACCOUNTANT MEMBER AND SH. YOGESH KUMAR U.S., JUDICIAL MEMBER I.T.A. No. 542/DEL/2020 (A.Y 2014-15) Bahubali Iron & Steel Company 113, Loha Mandi, Ghaziabad Uttar Pradesh PAN No. AAIFB0498F (APPELLANT) Vs Pr. CIT Ist, Floor, CGO Complex-1, Hapur Road, Kamla Nehru Nagar, Ghaziabad Uttar Pradesh (RESPONDENT) ORDER PER YOGESH KUMAR U.S., JM This appeal is filed by the assessee against the order dated 22/03/2019 passed by the CIT(A)-Ghaziabad, for Assessment Year 2014-15. 2. The grounds of appeal are as under:- “1. That having regard to the facts and circumstances of the case, Ld. Pr. CIT has erred on law and facts in assuming jurisdiction u/s 263 and has further erred in setting aside the assessment order passed on 01.09.2016 for the purpose of examining the authenticity of supplementary partnership deed and allowability of partner's salary and interest and that too without examining the fact that whether assessment order passed is erroneous and prejudicial to Appellant by Sh. Saurabh Goel, CA Respondent by Sh. P. Praveen Sidharth, CIT DR Date of Hearing 18.10.2022 Date of Pronouncement 20.10.2022 2 ITA No. 542/Del/2020 Bahubali Iron & Steel Co. the interest of revenue. 2.That having regard to thefacts andcircumstances of the case, Ld. Pr. CIT has erred in law and on facts in initiating the impugned proceedings u/s 263 more so when conditions for the same have not been complied with and more particularly when the assessment order passed on 01.09.2016 is neither erroneous nor prejudicial to the interest of revenue. 3. Thathaving regardto thefacts andcircumstances of the case, Ld. Pr. CIT has erred in law and on facts in invoking the impugned proceedings u/s 263 whereas there is no iota of discussion in the impugned order about passing of erroneous assessment order and prejudicial to the interest of revenue. 4. That having regard to the facts and circumstances of the case, Ld. Pr. CIT has erred in law and on facts in initiating the impugned proceedings and passing theimpugned order u/s 263 is bad in law as the entire details/information/evidence with respect to the issue involved were submitted and examined by the assessing officer during the course of original assessment proceedings. 5. That having regard to facts and circumstances of the case, the Id Pr. CIT has erred in law and on facts in passing the impugned order u/s 263 which is bad in law against the facts and circumstances of the case and in violation of principle of natural justice. 6. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.” 3 ITA No. 542/Del/2020 Bahubali Iron & Steel Co. 3. The brief facts of the case are that, the assessee has filed its return declaring income at Rs. 17,20,550/-. The case was selected for complete scrutiny. Assessment has been completed u/s 143(3) of the Act on 01/09/2016 on at total income of Rs. 19,20,550/- after making an addition of Rs. 2,00,000/- on account of unverified expenses. 4. A notice u/s 263 of the Act has been issued since some discrepancies/error were noticed in the order of the A.O. An order u/s 263 of the Act has been passed by the Principal Commissioner of Income Tax on 22/03/2019 by setting aside the order passed by the Assessing Officer dated 01/09/2016 and remanded the matter to the file of Ld. A.O for limited purpose of examining authenticity of the supplementary partnership deed and the allowability of the partner’s salary and interest in the light of such supplementary partnership deed. 5. Aggrieved by the order dated 22/03/2019, the assessee has preferred the present appeal on the grounds mentioned above. 6. The Ld. Counsel for the assessee vehemently submitted that Ld. PCIT has erred in setting aside the assessment order without examining the fact that whether the assessment order was passed is erroneous and prejudicial to the interest of revenue or not. The Ld. Counsel for the assessee also submitted that the Ld. A.O. has examined all the material and passed the assessment order which should not have been interfered by the PCIT u/s 263 of the Act. 7. Per contra, the Ld. DR submitted that the Ld. PCIT has passed an order u/s 263 of the Act for the limited purpose of examining the authenticity of the supplementary partnership deed which was produced before the PCIT and also to examine the allowability of partner’s salary and interest in the light of such 4 ITA No. 542/Del/2020 Bahubali Iron & Steel Co. supplementary partnership deed, therefore, the assessee cannot find fault that the order passed u/s 263 of the Act. 8. We have heard the parties, perused the material on record and gave our thoughtful consideration. It is evident from the order of the Ld. PCIT that the representative of the assessee has filed written reply on 11/03/2019 along with a copy of supplementary partnership deed showing amended Clause 6(b) in respect of salary to the partners. Since, the said supplementary partnership deed dated 01/04/2013 has been produced before the Ld. PCIT, the Ld. PCIT has rightly directed the A.O. to examine the authenticity of the supplementary partnership deed as well as the allowability of the partner’s salary and interests in light of such supplementary partnership deed. The said action of the Ld. PCIT found to be well reasoned and the same requires no interference at our hands. 9. It is observed that the Ld. PCIT has set aside the matter to the file of A.O. for the ‘limited purpose’ of examining the authenticity of supplementary partnership deed and the allowability of partner’s salary and interest in the light of such supplementary partnership deed. Therefore, the Ld. A.O. bound to comply with the said direction of the Ld. PCIT without travelling beyond the directions issued by the Ld. PCIT. With the said observations, and for the above discussions, we are inclined to dismiss the grounds of appeal of the assessee. 10. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the Open Court on this 20 th Day of October , 2022 Sd/- Sd/- (B. R. R. KUMAR) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 20/10/2022 R. Naheed * 5 ITA No. 542/Del/2020 Bahubali Iron & Steel Co. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI