POUN POULTRY FARM,PALANI vs. ACIT, CIRCLE-1, DINDIGUL

The appeal filed by the assessee is delayed by five days in filing the appeal and filed a petition for condonation of delay in the form of an affidavit to which; the ld. DR has not raised any serious objection.

The issue involved in this appeal is whether the order passed by the ld. PCIT under section 263 of the Act is correct or not. In this case, the assessee filed its return of income by admitting total income of ₹.14,85,130/-. Subsequently, the case was selected for compete security under CASS and the assessment was completed under section 143(3) of the Act on 30.12.2019 after making an addition of ₹.3,50,000/- and determined the income of the assessee at ₹.18,35,130/-.

By exercising the powers conferred under section 263 of the Act, the ld. PCIT made verification of assessment records for the assessment year 2017-18 and noted that the assessee has claimed following expenses in the profit and loss account: Sl. No. Type of expenses Amount 1. Contract Farm Charges 2,30,74,120 2. Freight charges 48,86,698 3. Interest paid to others 20,87,774 4. Interest ICICI bank OD 4,16,568 The above expenses are liable for TDS under section 194C [SL. No. 1&2] and 194A of the Act, [SI. No. 3&4]. On perusal of the records, the ld. PCIT has noted that the assessee has reported in the Form 3CD that tax has

Accordingly, the ld. PCIT issued show cause notice to the assessee on 23.02.2022 under section 263 of the Act. In response to the show- cause notice, the assessee filed its written submissions before the ld. PCIT and submitted that the Assessing Officer has examined all the details and the assessment order was passed by the Assessing Officer

On being aggrieved, the assessee carried the matter in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that with regard to the TDS, the Assessing Officer has asked the explanation of the assessee by issuing notice under section 142(1) of the Act dated 26.07.2019, wherein, he has specifically asked as under: “16. Please furnish the details of TDS deducted for expenses debited to P & L Account: Please furnish details regarding TDS deducted and TD no deducted details and TDS quarterly return copy challan for the payments on which TDS was applicable, in given format: The ld. Counsel for the assessee has submitted that there was a specific question with regard to TDS deduction by the Assessing Officer and therefore, the Assessing Officer has examined the issue. Thus, the assessment order cannot be said that the order is erroneous.

On the other hand, the ld. DR has submitted that the Assessing Officer has asked the assessee with regard to the TDS deducted and TDS not deducted. However, no such details were furnished by the assessee during the course of assessment proceedings.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, since the Assessing Officer has not examined the TDS deduction made towards the expenses incurred by the assessee and failed to verify the applicability of section 40(a)(ia) of the Act, the ld. PCIT set aside the assessment order and directed to pass fresh assessment order. During the course of appeal hearing, the Bench has specifically asked the ld. Counsel for the assessee as to whether the assessee has filed the details in response to the questionnaire issued by the Assessing Officer along with the notice issued under section 142(1) of the Act. The ld. Counsel for the assessee fairly submitted that no such details were filed before the Assessing Officer. Having called for the details of TDS deduction from the assessee and without examining the same, the Assessing Officer passed the assessment order. Thus, we find that the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of Revenue and the ld. PCIT has rightly set aside the assessment order

In the result, the appeal filed by the assessee is dismissed. Order pronounced on 17th May, 2023 at Chennai.