SARASWATI DEALMARK PVT LTD,HOWRAH vs. PCIT-5, KOLKATA

The present appeal has been preferred by the assessee against the order dated 02.03.2020 of the Principal Commissioner of Income Tax-5, Kolkata [hereinafter referred to as ‘PCIT’]. The assessee is aggrieved by the action of the PCIT in invoking the jurisdiction u/s 263 of the Income Tax Act (hereinafter referred to as the ‘Act’) thereby setting aside the assessment order dated 06.12.2017 with a direction to the Assessing Officer (in short the ‘A.O’) to examine the following issues: “(i) Low profit before interest and tax (PBIT) shown (ii) Low net profit or loss shown from large gross receipt.” The PCIT had directed the A.O to pass fresh assessment order on the aforesaid two issues.

No one has put in appearance on behalf of the assessee despite notice. Therefore, we proceed to decide this appeal on merits after going through the records and after hearing the ld. DR.

A perusal of the impugned order of the ld. PCIT passed u/s 263 of the Act reveals that the same is a vague order and there is no clarity as to what error has been pointed out by the ld. PCIT in the assessment order in relation to the aforesaid two issues for which the matter has been remanded back to the A.O. A perusal of the relevant paras of the impugned order reveals that the ld. PCIT has not pointed out any error, discrepancy or otherwise any incriminating material justifying his exercise of revision jurisdiction u/s 263 of the Act relating to the aforesaid two issues. The only issue raised by the ld. PCIT in para 6 of the impugned order is relating to non-deduction of TDS by the assessee on carriage inward loading and unloading expenses, however, while setting aside the assessment order, the ld. PCIT has not directed to the Assessing Officer to examine the aforesaid issue of non-deduction of TDS. He has directed the Assessing Officer to examine the aforesaid two issues relating to low profit before interest and tax shown and low net profit or loss shown from large gross receipts. However, the ld. PCIT himself has not given any finding relating to the aforesaid issues. In our view, the ld. PCIT must have some basis to form the opinion that the order of the Assessing Officer was erroneous and prejudicial to the interest of the Revenue and that basis should have been pointed out in the impugned order by the ld. PCIT. The assessment records were available to the ld. PCIT but he failed to point out any defect or discrepancy in the accounts of the assessee. In view of this, we do not find any justification on the part of the ld. PCIT in passing the impugned order u/s 263 of the Act and the same is therefore, quashed.

In the result, the appeal of the assessee stands allowed. Kolkata, the 28th March, 2022.