M/s. Storewell Construction & Engineers, Jalna V. Pr. Commissioner of Income-tax -2, Aurangabad

ITA 768/PUN/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2317 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-12-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 16-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY , JM . / I TA NO.768 /PUN/20 19 / ASSESSMENT YEAR : 2014 - 15 M/S. STOREWELL CONSTRUCTION & ENGINEERS, SAKLECHA NAGAR, BHOKARDAN ROAD, JALNA - 431 203. PAN : AAKFS9061M ....... / APPELLANT / V/S. THE PR. COMMISSIONER OF INCOME TAX - 2, AURANGABAD. / RESPONDENT A SSESSEE BY : SHRI GIRISH LADDA REVENUE BY : SHRI S.B PRASAD / DATE OF HEARING : 03 .12 .2019 / DATE OF PRONOUNCEMENT : 05 .12 .2019 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. PR. COMMISSIONER OF INCOME TAX - 1, AURANGABAD DATED 22.03.2019 PASSED U/S.263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR THE ASSESSMENT YEAR 2014 - 1 5 AS PER THE GROUNDS OF APPEAL ON RECORD. 2 ITA NO. 768 /PUN/20 19 A.Y. 2014 - 15 2. THE CRUX OF THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THE ASSUMPTION OF REVISIONARY JURISDICTION BY THE LD. PR. COMMISSIO NER OF INCOME TAX U/S.263 OF THE ACT. 3. AT THE VERY OUTSET, THE LD. AR INVITED OUR ATTENTION TO THE ASSESSMENT ORDER AT PARA 2 WHEREIN, IT SPECIFICALLY STATES THAT THE CASE WAS SELECTED FOR LIMITED SCRUTINY UNDER CASS. THE ISSUES FOR WHICH THE LIMITED S CRUTINY WAS DONE ARE FOR TWO REASONS: I) HIGHER TURNOVER REPORTED IN SERVICE TAX RETURN COMPARED TO ITR; II) MISMATCH IN AMOUNT PAID TO RELATED PERSONS U/S.40A(2)(B) REPORTED IN AUDIT REPORT AND ITR. THE LD. AR DEMONSTRATED THAT IN THE ASSESSMENT ORDER ITSELF ON THOSE TWO ISSUES THE LIMITED SCRUTINY OF THE ASSESSEE WAS DONE AND THE ASSESSING OFFICER DEALT WITH THESE TWO ISSUES AND HAVE ACCEPTED THE INCOME FILED BY THE ASSESSEE. AS PER PARA 3 OF THE ASS ESSMENT ORDER, IT CLEARLY STATES AFTER VERIFICATION OF INFORMATION AS AVAILABLE ON THE RECORDS, INFORMATION FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND AFTER VERIFICATION OF BOOKS OF ACCOUNTS, THE INCOME FILED BY THE ASSESSEE IS HEREBY ACCEPTED. 4. THE LD. PR. COMMISSIONER OF INCOME TAX ON THE OTHER HAND INVOKED THE REVISIONARY JURISDICTION U/S.263 OF THE ACT TO LOOK INTO THE OTHER ISSUES RELATING TO THE ASSESSEE WHICH WERE NOT WITH IN THE PURVIEW OF THE LIMITED SCRUTINY. THE CBDT CIRCULAR VIDE ITS LETTER F - NO.225/26/2006 - ITA - II (PT.), 8 TH SEPTEMBER, 2010 HAS DESCRIBED THE PROCEDURE FOR HANDLING LIMITED SCRUTINY CASES WHEREIN THE ASSESSING OFFICER SHALL REMAIN CONFINED ONLY TO THE SPECIFIC REASONS/ISSUES FOR WHICH CASE HAS BEEN PICKED UP FOR SCR UTINY. IN THIS CASE, THE ASSESSING OFFICER HAS ALREADY VERIFIED THOSE ISSUES FOR WHICH LIMITED 3 ITA NO. 768 /PUN/20 19 A.Y. 2014 - 15 SCRUTINY WAS CONDUCTED. THE LD. PR. COMMISSIONER OF INCOME TAX WANTS THE ASSESSING OFFICER TO LOOK INTO VARIOUS OTHER ISSUES OF THE ASSESSEE WHICH WERE NOT COVER ED WITHIN THE PURVIEW OF THE LIMITED SCRUTINY. THIS IS NOT PERMITTED WITHIN THE FRAMEWORK OF THE INCOME TAX ACT. 5. THAT FURTHER ON PERUSAL OF THE CBDT CIRCULAR AND THE FACTS OF THE CASE, IT IS CLEAR THAT THE ORDER OF THE ASSESSING OFFICER IS NEITHER ERR ONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF MALABAR INDUSTRIAL CO. LTD., (2000) 243 ITR 83(SC) HAS SPECIFICALLY HELD THAT IN ORDER TO ASSUME THE REVISIONARY JURISDICTION U/S.263, THE ORDER OF TH E ASSESSING OFFICER MUST BE ERRONEOUS SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THE FACTS OF THE PRESENT CASE, THESE CRITERIA ARE NOT MET SO FAR AS THE ASSESSMENT ORDER IS CONCERNED AND THEREFORE, WE QUASH THE ORDER PASSED BY THE LD. PR. COMMISSIONER OF INCOME TAX U/S.263 OF THE ACT. WE ORDER ACCORDINGLY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED ON 05 TH DAY OF DEC EMBER , 201 9 . SD/ - SD/ - R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 05 TH DECE MBER , 2019 . SB 4 ITA NO. 768 /PUN/20 19 A.Y. 2014 - 15 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE PR. CIT - 1, AURANGABAD. 4 . , , , / DR, ITAT, A BENCH, PUNE. 5 . / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 5 ITA NO. 768 /PUN/20 19 A.Y. 2014 - 15 DATE 1 DRAFT DICTATED ON 03 . 12 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 03 .12 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER