Loading judgment…
No AI summary yet for this case.
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” : HYDERABAD
Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU
O R D E R PER S.S.GODARA, J.M. :
This assessee’s appeal for AY.2014-15 arises from the Pr.CIT-5, Hyderabad’s order dated 28-01-2019, u/s.263 of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.
We straight away advert to the relevant basic facts culminating in the learned Pr.CIT’s revision jurisdiction exercise u/s.263 of the Act. The Assessing Officer had admittedly framed his Section 143(3) regular assessment on 16-12-2016 disallowing the assessee’s Section 35(2AB) claim of Rs.5,19,59,503/-. The CIT thereafter sought to exercise his section 263 revision jurisdiction terming the same as an erroneous one so far as it caused prejudice to interest of the Revenue for the reason that there was no valuation certificate qua the assessee’s shares sold having face value of Rs.10/- with premium of Rs.16.40. The assessee strongly supported the impugned assessment on the ground that the Assessing Officer had finalised the same after making all due enquiries. It also buttressed the foregoing valuation as per report dt.26-03-2014 under rule 11UA of the Income Tax Rules, 1962.
We notice in this factual backdrop that the Pr.CIT has quoted rule 11UA of the Income Tax Rules stipulating that the accountant; as defined therein, means a fellow of the institute of Chartered Accountants of India, wherein the meaning of the Chartered Accountants’ Act 1949 (38 of 1949), who is not appointed by the company as an auditor u/s.44AB of the Act or u/s.224 of the Companies Act, 1956. Learned Pr.CIT thereafter concludes that the assessee’s accountant signing the impugned valuation is none other than its auditor only. Meaning thereby that it is a case of clear-cut violation of foregoing rule 11UA of the Income Tax Rules which very much renders the regular assessment herein above as an erroneous one causing prejudice to the interest of the Revenue inviting exigibility of Section 263 jurisdiction. He has thus set aside the same followed by directions to the Assessing Officer to frame a fresh one.
Learned authorised representative vehemently contended during the course of hearing that the assessee had rightly gone by a duly obtained valuation report under rule 11UA of the Income Tax Rules and therefore, the impugned revision action is not sustainable. He fails to dispute the Pr.CIT’s clinching finding that the accountant issuing the assessee’s foregoing valuation report is also an auditor of the company itself u/s.44AB of the Act. This clinching aspect has gone un- rebutted from the assessee’s side therefore. We thus quote hon'ble apex court’s landmark decision in Malabar Industrial Co. Vs. CIT (2000) [243 ITR 83] (SC) that an assessment which does not confirm to four corners of the provisions of the Act lacking all due enquiries is itself an erroneous one causing prejudice to the interest of Revenue and therefore, revisable u/s.263 of the Act. We accordingly uphold the Pr.CIT’s revision direction on the foregoing issue. No other argument has been raised before us.
This assessee’s appeal is dismissed.
Order pronounced in the open court on 26th April, 2021