Case Law Details
Shakti Basmati Rice (P) Ltd. Vs PCIT (ITAT Delhi)
When the Assessing Officer has conducted proper enquiry and the assessee has furnished all documentary evidences and has offered proper explanation for the low net profit shown, merely because, the assessment order is cryptic one without discussing in detail the nature of enquiry conducted and the evidences furnished by the assessee, it cannot be said that the order is erroneous and prejudicial to the interest of Revenue.
Reading of the impugned order of learned PCIT would reveal that he has considered the assessment order to be erroneous and prejudicial to the interest of Revenue only for the reason that the Assessing Officer has not made proper enquiry on the issues, on which, the case was selected for limited scrutiny. However, the facts on record are contrary to the allegation made by learned PCIT. Further, while holding the assessment order to be erroneous and prejudicial to the interest of Revenue, learned PCIT has directed the Assessing Officer to conduct detailed enquiries on the limited scrutiny issues by examining documentary evidences in respect of huge expenses shown by the assessee. When in course of assessment proceeding, the Assessing Officer has called for the documentary evidences relating to the commission expenses and the assessee has furnished them, it is not understood what more documentary evidences learned PCIT wanted the assessee to furnish. It is very much evident, learned PCIT has not mentioned the nature of evidences to be furnished by the assessee. Therefore, the direction to the Assessing Officer appears to be in vacuum and without any substance. When all the evidences relating to commission/brokerage paid by assessee both to domestic as well as overseas agents are available on record, what more evidences are required to be furnished by the assessee is beyond comprehension. When the facts on record reveal that the Assessing Officer has made proper enquiry on the issues, on which limited scrutiny was directed, by merely referring to Explanation 2(a) to section 263 of the Act, the assessment order cannot be held to be erroneous and prejudicial to the interest of Revenue by making a general observation that proper enquiry, which the Assessing Officer ought to have made was not made. When the Assessing Officer has conducted proper enquiry and the assessee has furnished all documentary evidences and has offered proper explanation for the low net profit shown, merely because, the assessment order is cryptic one without discussing in detail the nature of enquiry conducted and the evidences furnished by the assessee, it cannot be said that the order is erroneous and prejudicial to the interest of Revenue.
FULL TEXT OF THE ORDER OF ITAT DELHI
Captioned appeal has been filed by the assessee calling into question the validity of order dated 20.03.2021 passed by learned Principal Commissioner of Income Tax (PCIT), Rohtak, under section 263 of the Income-tax 1961 (for short ‘the Act’) for the assessment year 2015-16.
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