Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: due date for vat payment :: list of goods taxed at 4% :: VAT RATES :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: empanelment
 
 
From the Courts »
 Commissioner Of Income Tax, Delhi Vs. Maruti Suzuki India Ltd.
 Sunbeam Auto Private Limited Vs. Pr. Commissioner Of Income Tax
 Sc Johnson Products Private Limited Vs. Additional Commissioner Of Income Tax, Special Range-8, New Delhi
  Amira Pure Foods Pvt. Ltd vs. Pr CIT (ITAT Delhi)
 Stovekraft India vs. CIT (Himachal Pradesh High Court)
 CIT vs. Goodwill Theatres Pvt Ltd (Supreme Court)
 DCIT vs. Ace Multi Axes Systems Ltd (Supreme Court)
 Pr. Commissioner Of Income Tax Vs. B. C. Management Services Pvt. Ltd.
 Commissioner Of Income Tax Vs. M/s International Tractor Ltd.
 Maharaj Garage & Company vs. CIT (Bombay High Court)
 Amira Pure Foods Pvt. Ltd vs. Pr CIT (ITAT Delhi)
 Hindustan Coca Cola Beverages Pvt. Ltd vs. CIT (Rajasthan High Court)
 Pr CIT vs. Baisetty Revathi (Andhra Pradesh High Court)
  Pr CIT vs. Paradise Inland Shipping Pvt. Ltd (Bombay High Court)
 

Amira Pure Foods Pvt. Ltd vs. Pr CIT (ITAT Delhi)
December, 05th 2017

S. 263 Revision: Explanation 2 to s. 263 inserted w.e.f. 01.06.2015 does not override the law as interpreted by the various High Courts whereby it is held that the CIT cannot treat the AO's order as being erroneous and prejudicial to the interest of revenue without conducting an enquiry and recording a finding. If the Explanation is interpreted otherwise, the CIT will be empowered to find fault with each and every assessment order and also to force the AO to conduct enquiries in the manner preferred by the CIT, thus prejudicing the mind of the AO, This will lead to unending litigation and no finality in the legal proceedings which cannot be the intention of the legislature in inserting the Explanation

(i) As per instruction no. 3 of 2016, it was not mandatory for the AO to make a reference to TPO. The assessee had explained before the ld. PCIT that its case does not fall under the conditions referred to in the instruction no. 3 of 2016 and as such it wasn’t obligatory for the AO to make a reference to TPO. The ld. PCIT has not dealt with this contention of the assessee and has given a bald finding that AO should have referred to TPO as per instruction no. 3 of 2016. The ld. PCIT has not specified under which condition of instruction No. 3 of 2016, the AO should have referred to TPO. The argument of the ld. DR that selection under CASS was made because of mismatch in foreign remittent and Form 15CA, also doesn’t help the cause of the revenue. As per Rule 37BB, the reporting in Form 15CA is in respect of payment made to nonresident not being a company or to a foreign company. The reporting is not limited or is not particularly in respect of payment made to associated enterprise. We are of the view that the CASS selection was not on the basis of TP risk parameters as envisaged in instruction No. 3 of 2016 and as such the AO was not bound to make a reference to the TPO.

(ii) The assessee had filed various replies to the ld. PCIT in response to notice u/s 263 of the Act stating that all the issues raised by the ld. PCIT have been examined by the AO during the course of assessment. The ld. PCIT has ignored the replies of the assessee. He merely states that the reply has been filed by the assessee but he nowhere discusses the contentions raised by the assessee and why he does not agree with the contentions of the assessee. The ld. PCIT has merely remitted the matter back to the AO without making any enquiry himself. The ld. PCIT has mentioned that the fresh loans have not been examined by the AO. The ld. PCIT has not considered the contentions of the assessee that there is no fresh loan. Similarly, the other replies of the assessee filed during the course of assessment and in response to notice u/s 263 of the Act have been totally ignored. No enquiry has been made by the ld. PCIT. It was incumbent for the ld. PCIT to make some minimum independent enquiry to reach to the conclusion that the order of the AO is erroneous and prejudicial to the interest of revenue. The reliance is rightly placed on the decisions of Delhi High Court in ld. PCIT v. Delhi Airport Metro Express Pvt. Ltd. (supra) and Income Tax Officer v. DG Housing Projects Limited [343 ITR 329]. The Hon’ble Delhi High Court in Delhi Airport Metro Express Pvt. Ltd. (supra) has made the following observation:

“10. For the purposes of exercising jurisdiction under Section 263 of the Act, the conclusion that the order of the AO is erroneous and prejudicial to the interests of Revenue had to be preceded by some minimal inquiry. In fact, if the ld. PCIT is of the view that the AO did not undertake any inquiry, it becomes incumbent on the LD. PCIT to conduct such inquiry.”

(iii) The ld PCIT has not referred to Explanation 2 of section 263 of the Act which has been inserted with effect from 01.06.2015 however we agree with the finding of the coordinate bench in the case of Narayan Tatu Rane v. Income Tax Officer [(2016) 70 taxmann.com 227], wherein it has been held that Explanation cannot said to have overridden the law as interpreted by the various High Courts, where the High Courts have held that before reaching a conclusion that the order of the AO is erroneous and prejudicial to the interest of revenue, the Commissioner himself has to undertake some enquiry to establish that the assessment order is erroneous and prejudicial to the interest of revenue. In the case of Narayan Rane a doubt is also expressed regarding the applicability of Explanation 2, which was inserted by Finance Act 2015 w.e.f. 01.06.2015, the bench also observed that if the Explanation is interpreted to have overridden the law as laid down by various High Courts, then the same would empower the Pr. CIT to find fault with each and every assessment order and also to force the AO to conduct enquiries in the manner preferred by the Pr. CIT, thus prejudicing the mind of the AO, however, the intention of the legislature behind the explanation could not have been so as the same would lead to unending litigation and no finality in the legal proceedings.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Work Flow Workflow Software Software Automation Workflow automation Software Design Workflow Design Business Work Flow Workflow automation tools

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions