Diganta Deka Vs PCIT (ITAT Guwahati)
The present article delves into the details of an income tax appeal directed against the order of the ld. Principal Commissioner of Income Tax, Guwahati-1, dated 31st March 2021, for the Assessment Year (A.Y.) 2015-16 under Section 263 of the Income Tax Act. The crux of the appeal revolves around the contention that the ld. Commissioner erred in assuming power under Section 263, leading to the setting aside of the assessment order dated 18th December 2017 under Section 143(3) of the Income Tax Act.
Background
The assessee, having filed the return of income electronically on 9th October 2015, declared a total income of Rs.1,04,68,750/-. The case underwent limited scrutiny based on the notice dated 21st September 2016 issued under Section 143(2). The issues flagged for scrutiny included discrepancies in income from various sources, contract receipts/fees, sales turnover, and tax credit.
The ld. Assessing Officer conducted the scrutiny assessment under Section 143(3) on 18th December 2017.
Commissioner’s Intervention
The ld. Principal Commissioner, upon perusal of the record, formed an opinion that the assessment order was both erroneous and prejudicial to the interest of revenue. A show-cause notice was issued, citing specific reasons, primarily focusing on two items: ‘Loss on shares’ and ‘Expenses on let out property’ and ‘Expenses against Rental Income.’ The Commissioner contended that these were allowed in contravention to the provisions of the Income Tax Act.
The assessee, failing to respond to the notice, led the Commissioner to set aside the assessment order, deeming it erroneous and prejudicial to the interest of revenue. The case was remitted back to the ld. Assessing Officer for fresh inquiry and the issuance of a new assessment order on the identified issues.
