Pr. CIT held assessment order as erroneous and prejudicial to the interest to the revenue on the ground that AO simply accepted the income returned at Rs. 3 crores as assessed income without any adjustment whatsoever by a brief and a non-descript order. Held: Having regard to the sweeping conduct of AO in finalizing assessment without making requisite enquiry as regards abnormal character of outstanding expenses having direct bearing on assessed income, there was an apparent plausibility in the action of Pr. CIT by resorting to powers under section 263 which are of wide amplitude. As narrated, circumstances clearly existed which demanded enquiry which was not done by AO while discharging its statutory function. Thus, armed with fairly extensive powers, Pr. CIT, had taken action compatible with circumstances.
IN THE ITAT, AHMEDABAD BENCH
PRADIP KUMAR KEDIA, A.M. & MADHUMITA ROY, J.M.
Synthesis Developers (P) Ltd. v. Pr. CIT
I.T.A. No. 550/Ahd/2019
20 February, 2020
Appellant by: S.N. Soparkar & Parin Shah, A.Rs.
Respondent by: Rita Dokania, CIT, D.R.
Pradip Kumar Kedia, A.M.
The captioned appeal has been filed at the instance of the assessee against the order of the Principal Commissioner of Income Tax-4, Ahmedabad ('CIT' in short), dated 6-3-2019 arising in the assessment Order, dated 16-11-2016 passed by the assessing officer (AO) under section 143(3) of the Income Tax Act, 1961 (the Act) concerning assessment year 2014-15.
2. The assessee, in the present case, has challenged the revisional jurisdiction of the Pr. CIT invoked under section 263 of the Act whereby the order of the assessing officer under section 143(3) of the Act dated 16-11-2016 is sought to be set aside by the Pr. CIT for fresh assessment on the grounds of lack of enquiry into certain vital aspects.
3. Briefly stated, the assessee, a private Company, is engaged in the business of construction and selling of residential flats. The return of income of assessee for assessment year 2014-15 was subjected to scrutiny assessment and consequently, assessment order was framed under section 143(3) of the Act. The assessing officer simply accepted the income returned at Rs. 3,73,08,493 as assessed income without any adjustment whatsoever by a brief and a non-descript order. On verification of assessment records, the Pr. CIT found that the assessment order passed by the assessing officer is erroneous and prejudicial to the interest of the Revenue. The Pr. CIT accordingly invoked revisional jurisdiction conferred under section 263 of the Act to show cause the assessee on the alleged infirmity in the assessment order which is broadly narrated hereunder for ready reference :--
'Sub.: Show cause notice under section 263 of the Income Tax Act, 1961 for assessment year 2014-15--Regarding
Please refer to the above.
2. In this case, the return of income for assessment year 2014-15 was filed on 30-9-2014 showing total income of Rs. 3,73,08,493 and the assessment was completed vide order under section 143(3) of the Income Tax Act, 1961 dated 16-11-2016 by the DCIT, Circle-4(1)(1), Ahmedabad, accepting the returned income.