Case Law Details
R.M. Tradelink Vs PCIT (ITAT Rajkot)
In our considered view, this is not a fit case for initiation of proceedings under 263 of the Act for the following reasons. Firstly, we observe that from the facts before us, simply because TCS has not been collected on certain purchases does not automatically imply that the said purchase is non-genuine/bogus. The counsel for the assessee has brought on record sufficient evidence to prove the genuineness of transactions so conducted with the seller. Secondly, we observe from the memo of appeal before CIT(Appeals) filed by the assessee against the original assessment order that the issue whether the purchase is bogus or not is also the subject matter of appeal before Ld. CIT(Appeals). It is well-settled law that once the proceedings are before Ld. CIT(Appeals) in respect of certain issues, then the same issue again cannot be re-agitated by taking recourse to proceedings under section 263 of the Act as held in the case of CIT v. Vam Resorts and Hotels Private Limited 418 ITR 723 (Allahabad) and in the case of Smt. Renuka Philip v. ITO 409 ITR 567 (Madras) where it is not held that when an appeal is pending before Commissioner (Appeals), exercise of jurisdiction under section 263 by Principal Commissioner would be barred. Thirdly, it is a well-settled law that every loss of revenue as a consequence of an order of Assessing Officer cannot be treated as prejudicial to interests of Revenue. In the case of Gokuldas Exports [2012] 20 taxmann.com 491 (Karnataka), the High Court held that if in given facts and circumstances of a case, two views are possible and one view has been adopted by Assessing Officer, then that view alone would not be sufficient to exercise powers under section 263 by Commissioner. Therefore, in the instant facts, if the AO after giving due application of mind on the issue before him during the course of assessment proceedings has disallowed 30% of the expenditure by invoking the provisions of 40(a)(ia) of the Act, then the Principal CIT cannot, in our view, resort to proceedings u/s 263 of the Act on the basis that the AO ought to have disallowed the entire expenditure u/s 69C of the Act and erred in invoking 40(a)(ia) of the Act. Therefore, in our considered view in the light of the facts/legal position discussed above, this is not a fit case for invoking the provisions of section 263 of the Act. In the result, appeal of the assessee is allowed.
FULL TEXT OF THE ORDER OF ITAT RAJKOT
This is an appeal filed by the assessee for A.Y. 2018-19 against the order of the Principal Commissioner of Income Tax, PCIT, Rajkot-1 dated 03-02-2022, in DIN & Order No. ITBA/REV/F/REV5/2021-22/1039348803(1), in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.
2. The assessee has taken the following grounds of appeal:-
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