VIBGYOR ENTERPRISES,KOLKATA vs. PCIT (CENTRAL) - 1, KOLKATA, KOLKATA

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ITA 1058/KOL/2024Status: DisposedITAT Kolkata31 January 2024AY 2019-2020Bench: SHRI RAJESH KUMAR (Accountant Member), SHRI PRADIP KUMAR CHOUBEY (Judicial Member)5 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO took a correct and possible view by accepting the assessee's claim that the salary income was already subjected to tax. Therefore, the PCIT's revisionary jurisdiction under Section 263 was invalidly invoked.

What were the facts?

The assessee offered a portion of partner's salary for taxation, having already paid tax on the balance. The AO accepted this in the assessment. The PCIT revised the assessment under Section 263, considering the deduction of already taxed salary as erroneous.

What were the issues?

Whether the PCIT validly exercised revisionary jurisdiction under Section 263 when the AO had taken a plausible view on already taxed income.

Which sections of the Income-tax Act were involved?

Section 263,Section 133A

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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

For Appellant: Shri Amit Agarwal, AR
For Respondent: Shri PN Barnwal, DR
Hearing: 23.01.2025Pronounced: 31.01.2025

This is an appeal preferred by the assessee against the order of the Pr. Commissioner of Income Tax (Central), Kolkata-1 (hereinafter referred to as the “Ld. PCIT”] dated 13.03.2024 for the AY 2019-20.

2.

The only issue raised by the assessee in the various grounds of appeal is against the invalid exercise of jurisdiction u/s 263 of the Act, thereby setting aside the assessment order framed by the ld. Assessing Officer.

3.

The facts in brief are that the assessee filed the return of income on 31.10.2019, declaring total income of ₹41,86,940/-. The assessee is engaged in the business of supply of materials to hospitals and also

4.

The ld. PCIT on perusal of the said order noted that the assessee only offered 50% of the salary as voluntarily offered by the partners for taxation during the year, however, while offering the said income, the assessee’s claim for set off for tax claimed by the partners and consequently reducing the income of ₹27,16,500/- from the income on which tax was already paid by the partner for which there was no provision in the Act and accordingly, revised the assessment framed by the ld. AO by directing the ld. AO to frame the assessment afresh after offering reasonable opportunity of hearing to the assessee.

5.

After hearing the rival contentions and perusing the materials available on record, we find that the assessee has offered ₹49 lacs

“14. We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act there must be material before the Commissioner to consider that the order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We have already held

7.

In view of the above facts and legal position, we are of the considered opinion that the revisionary jurisdiction has been invalidly invoked and consequently we are inclined to quash the revisionary jurisdiction exercised by the PCIT.

8.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 31.01.2025.

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