Hemant Mangaldas Bhanushali Vs ITO (ITAT Mumbai)- The main ground on which the CIT exercised jurisdiction under section 263 of the Act, was the failure on the part of the Assessing Officer to make enquiries with regard to the applicability of the provisions of section 194C to the payments made by the assessee to other truck owners in the course of his business of transportation of cargo and the consequent dis-allowance that could be made under the provisions of section 40(a)(ia) of the Act. In para 3.1 of the impugned order of the CIT, the CIT has concluded that the order was erroneous and prejudicial to the interest of the revenue because of the lack of enquiry and application of mind by the Assessing Officer on the above aspect.
The fact that the CIT in the order under section 263 of the Act, has discussed the other contentions raised by the assessee, does not mean that the CIT has pronounced on the applicability of the provisions of section 194C to the payments made by the assessee to the other truck owners. In para 3.2, 3.3 and 3.4 of the impugned order of the CIT, the applicability of the provision has been considered, but the CIT has not expressed any opinion and has merely held that the required details were not filed by the assessee. Thus the assessee is at liberty to raise all the plea that he has sought to put forth before us in the proceedings pursuant to the order under section 263. Similarly the dis-allowance of expenses whether they are to be 1% or 10% is also a matter which requires examination by the Assessing Officer. We are, therefore, of the view that the order passed under section 263 of the Act is proper and has to be upheld. As already stated the assessee will be at liberty to raise all the issues with regard to the applicability of the provisions of section 194C before the Assessing Officer in the proceedings consequent to the order under section 263 of the Act. With these observations the appeal of the assessee is dismissed.