QUATTRO WELL PRIVATE LIMITED,DELHI vs. PCIT DELHI-4, DELHI

That on the facts and circumstances of the case and in law, the Ld PCIT erred in law while framing the order under section 263 of setting aside the Assessment Order passed u/s 143(3) r.w.s. 144B of the Income Tax Act by wrongly enhancing the scope of scrutiny assessment by directing the AO for in depth examination Page 2 of 6 /investigation of three issues namely Low PBIT, paid receivable written off and FMV for Slump Sale as the issues for which the case was selected for scrutiny whereas as per the assessment order the case was selected for scrutiny to verify the business expenses as the assessee had reported very low PBDIT ratio during the year under consideration.

That on the facts and circumstances of the case and in law, the CIT erred in exercising jurisdiction under section 263 of the Act setting aside the assessment framed under section 143(3)/144B of the Income Tax Act, 1961 ('the Act') as erroneous and prejudicial to the interest of the Revenue without appreciating that the original assessment order under section 143(3)/144B of the Act having been passed under the faceless assessment scheme where the Assessment is completed by the Assessment Unit under the supervision of the National E Assessment Centre and Review Unit as prescribed under the faceless Assessment Scheme and hence the by no stretch to imagination, can the provisions of section 263 be attracted in the present case 7. That on the facts and circumstances of the case and in law, the Ld. PCIT erred in setting aside the assessment order by exercising powers under section 263 of the Act. without appreciating that: (a) it was not a case of lack of enquiry on any of the issues raised; (b) the view taken by the assessing officer in respect of the various issues was, in any case, a plausible view; and (c) revisionary proceedings under could not be initiated on a mere presumption and assumption of non-examination/ investigation by the AO which is Page 3 of 6 not a reason specified under section 263 for setting aside the assessment 7.1 That on the facts and circumstances of the case and in law, the CIT erred in alleging that the order of assessing officer was erroneous and prejudicial to the interest of the revenue in as much as Ld. PCIT failed to appreciate the detailed reply submitted by the Assessee to explain the low PBIT and quoted some part of the reply to held non application of mind and non in depth examination/investigation to pass as order u/s 263. 7.2 That on the facts and circumstances of the case and in law, the Ld PCIT failed to appreciate that accounting entries are not determinative of the taxability of any claim of income or deductibility of expenditure under the provisions of the Income tax Act 1961.

That on the facts and circumstances of the case, the impugned order having been passed by the PCIT in undue haste without: (a) affording reasonable opportunity of being heard by not serving the proper notice to the Appellant and (b) granting oral/ personal hearing, is illegal, bad in law and liable to be quashed.

The appellant craves leave to add to, alter, amend or vary the aforesaid grounds of appeal before or at the time of hearing."

At the very outset, the ld counsel of the assessee vehemently submitted that the PCIT has passed an ex-parte order u/s 263. The ld. counsel for the assessee submitted that the PCIT has not afforded Page 4 of 6 reasonable opportunity of being heard by not serving proper notice to assessee. Per contra, the ld. DR relied upon the orders of the authorities below.

We have heard the rival contentions and perused the materials on record. Having heard the rival submissions, we are of the considered view that the PCIT ought to have given a reasonable and adequate opportunity of being heard to the assessee. Therefore, in the interest of justice and fair play, we deem it fit to restore the appeal to the file of the PCIT for reconsideration. The PCIT is directed to decide the matter afresh after affording a reasonable and adequate opportunity of being heard to the assessee and considering the evidences/material furnished by the assessee. The assessee is directed to cooperate with the proceedings and furnish documents/evidence as required by the Assessing Officer. allowed for statistical purposes.