SHOBANA SHIVARAM PRASAD,COIMBATORE vs. DCIT CORPORATE CIRCLE 2, COIMBATORE

आदेश / O R D E R

PER INTURI RAMA RAO, ACCOUNTANT MEMBER

ITA No.1814/2018 :- 2 -:

‘’(1) The impugned order of the learned PCIT-1, Coimbatore, u/s 263 of the I.T.Act, 1961, is opposed to law and unsustainable, in the facts and the circumstances of the case.

(2) The learned PCIT has grossly erred in stating in the impugned order that the AO had failed to bring to tax the interest receipts based on the enabling provisions of the Act, contrary to the regular method of accounting followed by the appellant and consistent method of accounting of such income, in the hands of the appellant, every year, in the facts and the circumstances of the case and in law.

(3) The learned PCIT is not correct in stating that the AO did not make the requisite enquiries or examine the genuineness of the claim of the appellant, in the facts and the circumstances of the case and in law.

(4) The learned PCIT is wrong in setting aside the assessment u/s 143(3) of the I.T. Act, 1961, made by the AO, after due application of his mind to the information available in the Return of Income, after due scrutiny of the same, in the facts and the circumstances of the case and in law.

(5) For these and other additional grounds of appeal that may be adduced at the time of hearing, the order of the PCIT-1, is opposed to law and unsustainable, in the facts and the circumstances of the case and in law’’.

The brief facts of the case are as under: 3.

The appellant is an individual deriving income under the heads ‘’income from salaries’’, ‘’business and other sources’’. The return of income for the AY 2013-14 was filed on 29.07.2013 disclosing total income of Rs.24,68,281/-. Against the said return of income, the assessment was completed by the Dy. Commissioner of Income Tax,

ITA No.1814/2018 :- 3 -:

Corporate Circle-2, Coimbatore vide order dated 08.03.2016 passed u/s. 143(3) of the Income Tax Act, 1961 (for short ‘the Act’) at total income of Rs. 25,80,981/-. Subsequently, the ld. PCIT, Coimbatore -1 issued show cause notice u/s.263 of the Act calling upon the assessee as to why the assessment order cannot be set aside as interest earned by the assessee was not assessed to tax. In response to show cause notice, it was submitted by the assessee that it had not received any interest income on which TDS u/s.194A was made. The ld. PCIT after considering the statements held that assessee had failed to offer to tax for the following interest income earned which are reflected in form 26AS.

Particulars Income as TDS as per per 26AS 26AS Interest from Ramasamy 4,50,201 45,021 Jeevanlatha (from M/s.Vijayalakshmi Interest from Servall Engg. 1,34,730 13,473 Works P. Ltd Interest from Dhanalakshmi 4,14,720 41,472 Paper Mills P. Ltd Total 9,99,651 99,966 Accordingly, held that since the Assessing Officer had failed to bring the above interest income to tax, the assessment order passed is erroneous and prejudicial to the interest of the Revenue and accordingly vide order dated 23.03.2018 had set aside the assessment

ITA No.1814/2018 :- 4 -: order and directed the Assessing Officer to redo the assessment after considering the information contained in form 26AS.

On the other hand, the ld. Sr. Departmental Representative 6. placed reliance on the order of ld. PCIT.

Admittedly, the ld. PCIT had brought material in the form of information contained in form 26AS to show that assessee had earned

ITA No.1814/2018 :- 5 -: interest income which was not offered to tax. Apparently the Assessing Officer neither considered the information contained in form 26AS nor made any enquiry as to how the interest income contained in the form 26AS is not taxable and therefore the Assessing Officer had failed to conduct necessary enquiry on the issue and hence the ld. PCIT was justified in exercising his jurisdiction u/s.263 of the Act.

Accordingly, we uphold the order of the ld. PCIT u/s. 263 of the Act and dismiss the appeal of the assessee.

Order pronounced on 9th day of August, 2019, at Chennai.