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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI AMIT SHUKLA & SHRI GAGAN GOYAL
This appeal by assessee is directed against the order of Ld.Principal Commissioner of Income Tax- 6, Mumbai (for short “Ld. PCIT”) dated 30.03.2021 Fancy Glass Industries Private Ltd. u/s. 263 of the Income Tax Act, 1961 (for short ‘the Act’) for A.Y. 2015-16. The assessee has raised the following grounds of appeal:
“OBJECTION AGAINST INVOKING PROVISIONS OF SECTION 263 OF THE INCOME TAX ACT 1961 (a) On the facts and in the circumstances of the case, the Principal Commissioner of Income-tax, hereinafter referred to as the "Pr. CIT, has erred in invoking the provisions of section 263 of the Income tax Act, 1961 in the case of the appellant and in directing the assessing officer to make a fresh assessment in the case of the appellant. (b) On the facts and in the circumstances of the case, the Pr. CIT has failed to appreciate the fact that the assessing officer has made detailed inquiries as regards the difference between the contract receipts as per Income-tax Return and Service tax Returns of the appellant and that the assessment order was passed after considering all the details furnished by the appellant as a result of such detailed inquiries. (c) Without prejudice to the above, the Pr. CIT has erred in not appreciating the fact that all the figures have been duly reconciled and explained again during the revision proceedings before the Hon. Pr. CIT and that on the basis of the submissions made by the appellant in the revision proceedings, it is clear that there is no error in the assessment order and also there is no prejudice to the interest of revenue on account of the assessment order passed by the assessing officer. (d) The appellant respectfully submits that the assessment order in its case is neither erroneous nor prejudicial to the interest of revenue and accordingly the provisions of section 263 of the Act cannot be invoked in its case. In view of this, the appellant prays that the order dated 30 March, 2021 passed u/s. 263 of the Act shall please be quashed and the assessment order dated 13-12-2017 passed u/s. 143(3) of the Act shall please be restored.”
Brief facts of the case are that assessee filed its return of income on 28.09.2015 declaring total income at Rs. 21,25,410/-, thereafter case was selected for limited scrutiny. Assessee primarily engaged in the business of installation and fitting aluminum glass windows at construction sites.
Fancy Glass Industries Private Ltd.
Case was selected for limited scrutiny because of the fact that assessee has claimed T.D.S. amounting to Rs. 2, 61,494/- without offering the corresponding income for Taxation; hence a show cause was issued that why the amount of T.D.S. claimed should not be disallowed. After considering assessee’s submission AO, accepted the returned income but disallowed the claim of T.D.S. claimed by the assessee amounting to Rs. 2,61,494/-. This assessment order was accepted by both the sides on the terms of assessment order.
Thereafter, the office of Ld. PCIT, Mumbai-6 issued a notice u/s. 263 of the Act vide Dated: 15.02.2021. Ld. PCIT has an apprehension of under booking of revenue hence treated the order as Erroneous in so far as Prejudicial to the Interest of Revenue for the purposes of section 263 of the Act.
We have gone through the order of AO, copy of notice issued u/s. 263 of the Act, Order of Ld. PCIT u/s. 263 of the Act and submissions of the assessee. In our observation case of the assessee was selected for the purposes of that assessee has claimed T.D.S. amounting to Rs. 2,61,494/- without offering the corresponding income for Taxation. This issue was elaborately discussed by the AO in his order and assessee was able to substantiate the reasons for the same, still claim of the assessee w.r.t. TDS was disallowed and both the sides agreed for assessment order’s terms. As far as a reason for limited scrutiny was concerned there is no further inquiry was warranted/ authorized.
Still, Ld. PCIT has chosen the case as Erroneous in so far as Prejudicial to the Interest of Revenue for the purposes of section 263 of the Act. We have gone through the submissions before us through paper book, filed before the AO and Ld. PCIT Also, wherein, assessee was amply clear in terms of reconciliations of various differences like revenue booked in ROI vs. Service Tax Return and ROI vs. Maharashtra VAT Return and ITNS-TDS vs. 26AS and ROI vide page nos. 30, 66-69 and 29 respectively.
Fancy Glass Industries Private Ltd. 6. For ready reference we are reproducing the charts of reconciliations submitted by the assessee as under: (Insert page nos. 29,30 and 66-69).
Fancy Glass Industries Private Ltd.
Based on above reconciliations chart produced by the assessee before the AO and Ld. PCIT, we don’t see any reason to confirm the order of Ld. PCIT passed u/s. 263 of the Act as there is no order which can be said to be Erroneous in so far as Prejudicial to the Interest of Revenue for the purposes of section 263 of the Act. We further observe that accounting practice followed by the assessee is regularly deployed policy and being consistently maintained by the assessee and there is no possibility of either tax evasion or tax deferment.
In the result order of the Ld. PCIT passed u/s. 263 is set aside and order of AO passed u/s. 143(3) is confirmed as per the terms therein.
In the result appeal of the assessee is allowed.
Order pronounced in the open court on 15th day of May, 2023.