The Tax Publishers2022 TaxPub(DT) 2793 (Chen-Trib)

INCOME TAX ACT, 1961

Section 263

Where queries raised by lower authorities during the course of regular assessment proceedings and assessee's replies thereto did not address the issue as highlighted by Pr. CIT in order, further, Pr. CIT flagged a pertinent issue and fully justified as to how assessment order was erroneous as well as prejudicial to interest of revenue and observation made by Pr. CIT in order could not be faulted with, therefore, revision jurisdiction was perfectly valid and justified.

Revision under section 263 - Validity - Income not examined by AO -

Assessee assailed the revision order under section 263, inter-alia, on the ground that issue of buy back of shares was referred by AO to Transfer Pricing Officer for determination of ALP and the issue was duly examined by AO. Assessee also submitted that the issue raised in the revisional order was duly examined and it was not the case the no enquiries were made by AO. Department, on the other hand, justified the revisional proceedings on the ground that the issues flagged in the revisional order were never subject matter of verification and examination by AO. Held: The issue which was racked up by PCIT in the impugned order was never the subject matter of examination either by TPO or by AO during the course of regular assessment proceedings. The queries raised by lower authorities during the course of regular assessment proceedings and the assessee's replies thereto do not address the issue as highlighted by PCIT in the impugned order. PCIT flagged a pertinent issue and fully justified as to how the assessment order was erroneous as well as prejudicial to the interest of the revenue. Upon perusal of assessment orders, this issue was never delved into by AO or TPO and there was complete non-application of mind on the stated issue. Observation made by PCIT in order could not be faulted with. The revision jurisdiction is perfectly valid and justified.

Followed:Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC), CIT-II, Ludhiana v. Raja Industries (2012) 340 ITR 344 (P&H) : 2012 TaxPub(DT) 0674 (P&H-HC), Jai Bharath Tanners v. CIT (2003) 264 ITR 673 (Mad) : 2003 TaxPub(DT) 0886 (Mad-HC), Ashok Leyland Ltd. v. CIT (2003) 260 ITR 599 (Mad) : 2003 TaxPub(DT) 538 (Mad-HC) and K.A. Ramaswamy Chettiar & Anr. v. CIT (1996) 220 ITR 657 (Mad-HC) : 1996 TaxPub(DT) 485 (Mad-HC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. :



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