MOTHR INDIA CITY SHELTERS PRIVATE LTD.,COIMBATORE vs. DCIT, COIMBATORE

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ITA 1398/CHNY/2017Status: DisposedITAT Chennai23 August 2017AY 2012-134 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 non-consideration of a statutory provision like Section 40A(3) by the Assessing Officer constitutes an error. Therefore, the Principal Commissioner rightly exercised jurisdiction under Section 263 to revise the order.

What were the facts?

The assessee's appeal challenges an order by the Principal Commissioner of Income Tax revising the Assessing Officer's assessment. The revision was based on an audit objection regarding the non-consideration of Section 40A(3) for cash payments made for land purchase.

What were the issues?

Whether the Principal Commissioner was justified in revising the assessment order under Section 263 when the Assessing Officer failed to consider Section 40A(3) for cash payments.

Which sections of the Income-tax Act were involved?

Section 40A(3),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY

For Respondent: Smt. Ruby George, CIT
Hearing: 03.08.2017Pronounced: 23.08.2017

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the assessee is directed against the order of the Principal Commissioner of Income Tax-1, Coimbatore, dated 31.03.2017 and pertains to assessment year 2012-13.

2.

Shri S. Ramachandran, the Ld. representative for the assessee, submitted that the Assessing Officer completed the assessment after considering the material available on record.

Subsequently, based upon the audit objection, the Principal Commissioner revised the order of the Assessing Officer under Section 263 of the Income-tax Act, 1961 (in short 'the Act').

According to the Ld. representative, since the jurisdiction under Section 263 of the Act was exercised on the basis of audit objection, the same has to be quashed. According to the Ld. representative, the Assessing Officer made proper enquiry and thereafter passed the order, hence, the Principal Commissioner is not justified in revising the order of the Assessing Officer. On a query from the Bench, whether the Assessing Officer considered the provisions of Section 40A(3) of the Act, the Ld. representative submitted that the Assessing Officer has not discussed in the assessment order about the provisions of Section 40A(3) of the Act.

3.

We have heard Smt. Ruby George, the Ld. Departmental Representative also. The Principal Commissioner found that in respect of cash payment made for purchase of land at Coimbatore Maharaja Town, the Assessing Officer failed to consider the provisions of Section 40A(3) of the Act. Therefore, the Principal Commissioner found that there was error in the order of the Assessing Officer. Now the assessee contends that there was audit objection. According to the Ld. D.R., the audit party can always bring to the notice of the Assessing Officer and the Principal Commissioner the facts of the case. When the Assessing Officer has not considered the provisions of Section 40A(3) of the Act, it would not prevent the Principal Commissioner to exercise his power under Section 263 of the Act.

4.

We have considered the rival submissions on either side and perused the relevant material available on record. From the material available on record it appears that the assessee has made payment by cash and cheque also. In respect of payment made by cash, the Assessing Officer has not considered the provisions of Section 40A(3) of the Act. The non-consideration of statutory provision amounts to an error within the meaning of Section 263 of the Act. Naturally, there is loss of revenue. Hence, the Principal Commissioner has rightly exercised his jurisdiction under Section 263 of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

5.

In the result, the appeal filed by the assessee is dismissed.

Order pronounced on 23rd August, 2017 at Chennai.

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