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Income Tax Appellate Tribunal, DELHI BENCH “C” DELHI
Before: SHRI KUL BHARAT & SHRI PRADIP KUMAR KEDIA
The captioned appeal has been filed by the assessee against the revisional order of the Principal Commissioner of Income Tax, Meerut (Pr.CIT) dated 14.07.2014 passed under Section 143(3) of the Act concerning Assessment Year 2012-13.
The assessee-company is engaged in the business of manufacturing of Point and Crossing, Switches, Switch Expansion Joints, Steel Sleepers, Fasteners and other related items to Railway Track Material. The assessee filed return of income (ROI) showing total income at Rs.42,49,480/- for the Assessment Year 2012-13 in question. The return was subjected to scrutiny assessment and the assessment was carried out at Rs.44,16,649/- after making certain additions and disallowances. On examination of the assessment records, the Pr.CIT invoked the revisional power conferred under Section 263 of the Act. A show cause notice dated 15.04.2015 was issued to the assessee showing the discrepancy in the action of the Assessing Officer while framing the assessment order. The show cause notice is reproduced hereunder: “(i) During the course of examination of records, balance sheet profit & loss A/c it is observed that: (ii) The case was selected under scrutiny due to high ratio of refund to TDS and large interest expenses relatable to exempt investment u/s. 14A no verification of TDS is available on records. (ii) Similarly no investigation was done by the AO in respect of issue related to sec. 14A of I.T. Act. (iii) In note 16(A) of a/cs it is mentioned that bank guarantee of Rs.5 Crore has been given in respect of loan taken by subsidiary Co. M/s Shree Vasu Automobiles Ltd. On the other hand in note 12 bank guarantee commission debited is shown at Rs.23.49.591/-. The expenditure to above bank guarantee is not allowable as the same is not related to your business. (iv) AO has not made any enquiry whether TDS was deducted on following expenses debited to P&L a/c and any such failure to deduct TDS would attract the mischief of section 40(a)(ia) of IT Act, 1961. (i) Legal & Service charges Rs. 17,06,455/- (ii) Rent & (Rates & Taxes) Rs.30,98,620/- (v) As per note 23 bad debts have been written off at Rs. 9,35,382/- but no detail in this regard has been obtained by the A.O.
In view of para 2 above, the assessment order passed by the Assessing Officer is apparently erroneous and prejudicial to the interest of revenue Therefore, you are hereby called upon to show cause as to why art appropriate order under section 263 of the Income Tax Act, 1961 may not be passed in your case. You may attend my office and required to furnish your explanation either in person or through an authorized representative with documentary evidences in support of your contention alongwith complete books of a/cs, bills, vouchers, registers & copies of bank statements etc. as maintained by you on 29.04.20I5 at 03:00 P.M.”
3. Thus, the Pr.CIT raised wide ranging discrepancies and lack of inquiry on several aspects of the assessment as per the show cause notice. In response, the assessee filed certain submissions and contended that the relevant details have been examined by the Assessing Officer in the assessment proceedings. The Pr.CIT however was not satisfied with the reply of the assessee and claimed that necessary details and explanation which ought to have been obtained were not examined by the Assessing Officer while framing the assessment. In essence, it was alleged that the Assessing Officer has passed the assessment order without application of mind. Thus, the impugned assessment order is erroneous insofar as prejudicial to the interest of the Revenue. Consequently, the Pr.CIT Meerut has set aside the impugned order of the Assessing Officer with a direction to consider the issues as mentioned in the show cause notice afresh and make detailed inquiry in accordance with law.
Aggrieved by the revisional action, the assessee preferred appeal before the ITAT. 5. When the matter was called for hearing, none appeared for the assessee. It is noticed that multiple opportunities were given to the assessee in the past owning to non attendance. It is thus gauged that the assessee is not interested in pursuing the appeal. Consequently, we are constraint to proceed ex-parte. 6. We have heard the submissions made on behalf of the Revenue and also perused the assessment order as well as revisional order. No separate paper book is available on record from either side. 7. On perusal of the facts and circumstances emerging from the case records, we do not find any mitigating circumstances existing in the case to dislodge the revisional action of the Pr.CIT as alleged in the show cause notice. The Assessing Officer has failed to make any inquiry in respect of several issues such as claim of bad debt, disallowance under Section 14A, nature of bank guarantee commission, deduction of TDS on expenses incurred etc. From the revisional order, it is not known as to what defense has been put to justify the assessment order. Under the circumstances, to our mind, the Pr.CIT has rightly observed that the assessment order has been passed without application of mind and without looking into crucial aspects. No evidence has been filed on behalf of the assessee before the Tribunal in its rebuttal. Under the circumstances, we see no reason to interfere with the revisional order. 8. In the result, the appeal of the assessee is dismissed ex- parte. Order pronounced in the open Court on 12/01/2023.