Heylands Exports Pvt. Ltd. Vs PCIT (ITAT Chennai)
ITAT Chennai held that action of AO based on jurisdictional High Court decision as prevalent on the specified time, which was later on reversed by the Supreme Court, cannot be held to be erroneous and prejudicial to the interest of revenue. Thus, invocation of jurisdiction u/s. 263 unjustified.
Facts- The case of the assessee was selected for scrutiny and the assessment completed u/s.143(3) read with section 144B of the Act on 22.04.2021 by the Faceless Assessment Unit/AO determining the assessed loss at Rs.13,82,109/-. However, PCIT was of the view that the assessment order passed by the AO u/s.143(3) read with section 144B of the Act was erroneous and also prejudicial to the interest of the Revenue. Aggrieved, the assessee has challenged the jurisdiction of PCIT to have invoked revisionary jurisdiction u/s.263 of the Act before this Tribunal.
Conclusion- Held that the action of the AO while framing assessment order in 2021 following the jurisdictional High Court decision in the case of CIT v. Industrial Security & Intelligence India P. Ltd. (supra), on the issue of PF/ESI cannot be said to be erroneous, because it was the law as on the date when he passed the order in April, 2021; and since, the order of the Hon’ble Supreme Court in the case of Checkmate Services P. Ltd., was passed in the year 2022, the action of the AO in following the ratio laid down by the Hon’ble High Court in the case of Industrial Security & Intelligence India P. Ltd.,(supra) can’t held to be erroneous as well as prejudicial to the interest of the Revenue and therefore, on this ground also the action of the Ld.PCIT to exercise his revisional jurisdiction is found to be wholly without jurisdiction and therefore, can’t be countenanced and therefore, assessee succeeds on the legal issue it raised; and consequently, we quash the impugned order of Ld PCIT.
