Case Law Details
Daffodills Pharmaceuticals Ltd Vs PCIT (ITAT Delhi)
ITAT Delhi held that invocation of revisionary power u/s 263 of the Income Tax Act without satisfying two conditions i.e. order was erroneous and it was prejudicial to the interest of revenue is unsustainable in law and liable to be quashed.
Facts- The assessment was completed by PCIT-1 u/s. 143(3) r.w.s. 147 of the Act, wherein the A.O. accepted the returned income at Rs.40,87,730/-. PCIT on examination of the assessment records issued a show cause notice u/s. 263 of the Act.
On receipt of the show cause notice, the assessee gave reply. PCIT on not satisfying with the reply given by the Assessee, observed that Assessee is involved in infamous NRHM scam and was raided by CBI and the key persons of the assessee company namely were made accused. According to the PCIT, the original assessment was completed on 28.03.2014 u/s. 143(3) of the Act making addition of Rs.16,573/- on account of unverified sundry creditors and disallowed expenditure of Rs.4,74,445/-. Later on, examining the records of the case along with detailed report received from DDIT, the AO had reason to believe that there was a difference of Rs.12,98,24,582/- between turnover and credit in the bank account, which are not reconciled during the original assessment proceedings.
According to PCIT, during the course of reassessment, AO did not enquire the issues properly and there was lack of enquiry on the part of AO resulted the proceedings in erroneous as well as prejudicial to the interest of revenue.
Please become a Premium member. If you are already a Premium member, login here to access the full content.