×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
This is an appeal filed by the assessee against the order of ld. Pr. CIT-III, Jaipur dated 15.03 2019 wherein the assessee has taken the following grounds of appeal:-
“1. On the facts and in circumstances of the case and in law the learned Pr. Commissioner of Income Tax-III, Jaipur erred in invoking the provision of the section 263 of the income tax act without appreciating the facts that the assessment order under consideration was passed after thorough examination and enquiry regarding the “Payment of Commission” for selling the residential plot of the company.
2. The learned Pr. Commissioner of the Income Tax-III, Jaipur also erred in brushing aside all our submission made not only at the time of assessment proceedings before AO, but also during hearing opportunity given under section 263 of income tax act.
3. On the facts and in the circumstances of the case, the learned Pr. Commissioner of Income Tax-III, Jaipur was not justified in setting aside the order of the assessing officer.”
2. Briefly stated, the facts of the case are that the assessment in this case was completed u/s 143(3) on 30.11.2016 assessing total income at Rs. 21,93,000/-. Subsequently, a show cause u/s 263 was issued by the Pr. CIT on 16.01.2019 and after taking into consideration the submissions of the assessee, the order passed by the Assessing Officer u/s 143(3) was set aside for the limited purposes of examining the allowability of the commission expenses claimed by the assessee company. Against the said findings of the ld. Pr. CIT, the assessee is now in appeal before us
3. During the course of hearing, the ld. AR submitted that the assessment order passed by the Assessing Officer u/s 143(3) is neither erroneous nor prejudicial to the interest of the Revenue. Further, there is neither lack of inquiry or inadequate inquiry regarding the payment of commission paid by the Assessing Officer for selling its plots or shops and therefore, the conditions for invoking the provisions of section 263 of the Act are absent in the instant case. It was submitted that the ld. Pr. CIT has misapprehend the facts of the case that the appellant company has paid the commission in the year under consideration and no commission was paid in the previous financial year. It was submitted that in previous financial year, the company has paid a commission of Rs. 50,53,305/- and the same is apparent from the financial statement of the assessee company. It was further submitted that the ld. Pr. CIT, Jaipur has opined that proper inquiries and verification was not made by the Assessing Officer before passing the assessment order regarding the payment of the selling commission by appellant company to brokers/agents for selling its plots and shops. In this regard, our attention was drawn to the notice issued by the Assessing Officer u/s 142(1) of the Act dated 24.06.2016 wherein vide query No. 25, the appellant company was asked to file the details of payments of commission in the prescribed format. It was submitted that the assessee company in compliance to the same has vide letter dated 11.11.2016 submitted the details of commission. Further, during the assessment proceedings, the assessee company produced all the books of accounts as well as relevant documents before the Assessing Officer which contained the complete details like name of the broker, his address, PAN details, amount of commission paid, details of plots/shops sold by respective broker, amount of TDS, rate of commission and registered values of the plots/shop sold by these brokers. It was accordingly submitted that the Assessing Officer has thoroughly examined the matter by calling the specific details and the explanations on the issue involved. Regarding explanation-2 inserted by Finance Act, 2015 with effect from 01.06.2015 invoked by the ld Pr CIT, the ld. AR submitted that the said explanation no way means tha the enquires should have been made in the manner as desired by Pr. CIT It was submitted that the said explanation does not authorize or give unfettered powers to the ld. Pr. CIT to revise each and every order. If that be the case, then the ld. Pr. CIT can find fault with each and every assessment order. She can also force the AO to conduct the enquiries in the manner preferred by her, thus prejudicing the independent application of mind by the Assessing officer. It was submitted that the same could not be the intention of the legislature in inserting Explanation 2 to section 263 of the Act, since it would lead to unending litigations and there would not be any point of finality in the legal proceedings. In the present case, the Assessing officer collected necessary details, examined the same and then framed the assessment order u/s 143(3) of the Act. It was further submitted that even ld. Pr. CIT is also not confident enough in holding the assessment order as erroneous which is causing prejudice to the interest of the Revenue as she has given the findings that some aspects of the issue should be seen by