MIRUM DIGITAL PRIVATE LIMITED GHATKOPAR WEST,MUMBAI vs. PCIT, MUMBAI-6, MUMBAI-6

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ITA 1489/MUM/2022Status: DisposedITAT Mumbai02 January 2023AY 2017-1810 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the PCIT's order under Section 263 was justified because the AO had not properly verified crucial aspects like revenue reconciliation and expense reimbursement. The assessee's failure to appear before the PCIT further supported this decision.

What were the facts?

The assessee company, engaged in website maintenance and digital advertising, filed its return of income. The PCIT initiated proceedings under Section 263, alleging the Assessing Officer's (AO) order was erroneous and prejudicial to revenue due to lack of proper verification regarding turnover reconciliation and expense reimbursement.

What were the issues?

Whether the PCIT was justified in revising the AO's assessment order under Section 263 due to alleged lack of proper inquiry and verification by the AO regarding the assessee's turnover and expenses.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(6)Show list

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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI

Before: SHRI VIKAS AWASTHY & SHRI GAGAN GOYAL

For Respondent: Dr. Mahesh Akhade, CIT-DR
Hearing: 06/10/2022Pronounced: 02/01/2023

per se justified and mandated further enquiry or investigation but the Assessing Officer had erroneously not undertaken the same. However, the said finding must be clear, unambiguous and not debatable. It is evident that the assessee, by not responding to the notice issued us 263 has unwarranted any further enquiry on this issue. • In CIT v Amitabh Bachchan (2016] 384 IT 200 (SC) the Apex court held that Section 263 does not require any specific show cause notice detailing specific grounds on which revision of assessment order is tentatively being proposed. Commissioner is free to exercise his jurisdiction on all issues, provided an opportunity of hearing is afforded to assessee to contest facts on basis of which he had exercised revisional jurisdiction, Even if AO has applied his mind, CIT may initiate 263 as he was of the view that the matter needed further investigation. the Hon'ble Kolkata High Court in the case of Rajmandir Estates Private Limited vs. Pr. CIT 386 ITR 162 (Cal) which has been affirmed by the Hon'ble Supreme Court in the case of Daniel Merchants Private Limited vs. ITO pronounced by the Hon'ble Supreme Court on 29.11.2017, that the CIT is entitled to revise the assessment order us. 263 of the Act on the ground that the Assessing officer did not make any proper enquiry while accepting the explanation of the assessee.”

13.

We found the decision of honorable jurisdictional high court in the case of CIT Vs. Ballarpur industries Ltd. (2017) 85 Taxmann.com 10 (Bom.) relevant on this issue and ITAT Chennai Bench in the case of Sify Software Ltd. v/s ACIT (2017) 80 Taxmann.com 273 also followed the case of Ballarpur Industries Ltd. (supra).

14.

In view of the above facts and judicial pronouncements we are of the opinion that matter of revenue reconciliation and reimbursement of expenses was not done at all to ascertain the income properly. We sustain the order of Ld. PCIT as he has to relied upon the records of assessment proceedings only as assessee has not turned up to attend the hearing u/s. 263 on the subject matter. 15. In these terms we sustain the order of Ld. PCIT with a safeguard that a proper opportunity of being heard and represent the matter before AO to the assessee. Assessee is directed to co-operate with the AO and bring on record the relevant evidences to substantiate his claims like relevant agreements, role of each party i.e. Payer, payee and agent, compliances with reference to T.D.S etc. 16. In the result, appeal filed by the assessee is dismissed. Order pronounced in the open court on 2nd day of January, 2023.

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