Case Number: ITA 823/DEL/2021
Appellant: M/s R.K. Jain Infra Projects P Ltd, Delhi
Respondent: Pr Commissioner of Income Tax, Delhi-7, Delhi
Assessment Year: 2015-16
Result: 2015-16
Case Filed on: 2021-07-02
Order Type: Final Tribunal Order
Date of Order: 2021-11-30
Pronounced on: 2021-11-30
This appeal was filed by M/s R.K. Jain Infra Projects Pvt. Ltd. against the order dated 25.03.2021 passed by the Principal Commissioner of Income Tax (Pr. CIT), Delhi-7 under Section 263 of the Income Tax Act, 1961 for the assessment year 2015-16.
The assessee raised several grounds of appeal, primarily challenging the assumption of power by the Pr. CIT under Section 263, which declared the assessment order dated 12.10.2017 as erroneous and prejudicial to the interests of revenue. The main contention was that the Assessing Officer (AO) had not conducted independent inquiries or verifications of the details provided.
The assessee company is engaged in road construction, civil construction by the PWD Department, and the collection, operation, and management of toll plazas. The return of income was filed on 01.10.2015, declaring an income of Rs.7,19,24,790/-. The case was selected for limited scrutiny under the CASS to verify the following:
The AO, after examining the details provided by the assessee, passed an order on 12.10.2017 under Section 143(3) of the Act, accepting the return of income.
Later, the Pr. CIT issued a show cause notice under Section 263, raising five distinct issues:
In response, the assessee provided a detailed reply, arguing that the scope of inquiry in a limited scrutiny assessment did not encompass all the issues raised. The Pr. CIT partially accepted this contention but highlighted issues related to large other expenses and non-deduction of TDS on payments to contractors.
The Tribunal examined the arguments and evidence presented by both parties. The key findings were:
The Tribunal concluded that the AO had conducted sufficient inquiries and the Pr. CIT’s invocation of Section 263 was not justified. The assessment order was upheld, and the appeal was allowed.
The Tribunal’s decision in favor of M/s R.K. Jain Infra Projects Pvt. Ltd. underscored the importance of thorough and appropriate inquiries by the AO and highlighted the limitations of invoking Section 263 without substantial grounds. The case emphasized the need for tax authorities to balance their scrutiny with practical considerations of the business operations under review.
Order Pronounced: 30/11/2021
Judges: Dr. B.R.R. Kumar (Accountant Member), Amit Shukla (Judicial Member)
R.K. Jain Infra Projects P Ltd vs Pr. CIT Delhi: Dispute Over Job Work Expenses
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