PCIT Vs Agfa India Pvt. Ltd. (Bombay High Court)
Bombay High Court held that reopening of assessment by AO by merely acting under dictation or on borrowed satisfaction without independent application of mind to materials on record is not justifiable in law. Hence, appeal of revenue liable to be dismissed.
Facts- The assessee, engaged in the business of distributing photographic and electronic imaging systems. The Respondent’s return was selected for scrutiny assessment, and the original assessment was completed u/s. 143(3) of the Income Tax Act, 1961 on 22 December 2010 by accepting the returned income of Rs.12,30,39,783/-.
However, the TPO, while finalizing its order u/s. 92CA (3), suggested an adjustment of Rs. 11,22,74,613/-. Based on this, the assessee’s case was reopened by invoking the provisions of Section 147 of the IT Act. An order u/s. 143 r.w.s. 147 was passed on 25 March 2013 without referring to the TPO.
Pr. CIT-1, Thane, vide order dated 05 February 2015, exercised revisional jurisdiction u/s. 263 of the IT Act and set aside the AO’s order dated 25 March 2013, being erroneous and prejudicial to the interest of revenue. AO was directed to undertake de novo assessment after referring to the TPO. Accordingly, an order u/s. 143(3) r.w.s. 144C(13) of the IT Act was passed on 24 October 2017 by assessing the income at Rs.23,53,14,390/- after making an addition of Rs.11,62,91,948/- to the total income of the assessee. CIT(A) dismissed the appeal of the assessee. However, ITAT allowed the same. Hence, this Appeal by the Revenue u/s. 260A of the IT Act.
