Case Number: ITA 1104/DEL/2020
Appellant: Auto Engineers Services Centre, New Delhi
Respondent: Pr. CIT, New Delhi
Assessment Year: 2015-16
Result: Final Tribunal Order
Case Filed On: 2020-03-18
Date of Order: 2021-10-11
Pronounced On: 2021-10-11
This case pertains to the revisionary jurisdiction under Section 263 for the assessment year 2015-16 involving Auto Engineers Services Centre, New Delhi, and the Principal Commissioner of Income Tax (Pr. CIT), New Delhi. The primary issue in this appeal was the order passed by the Pr. CIT setting aside the assessment order, claiming it was erroneous and prejudicial to the interest of the revenue.
Auto Engineers Services Centre, New Delhi, filed an appeal against the order dated 07/02/2020 passed by Pr. CIT-XII, Delhi, under Section 263 of the Income Tax Act, 1961, for the assessment year 2015-16. The Pr. CIT claimed that the assessment order passed by the Assessing Officer (AO) was erroneous and prejudicial to the interest of the revenue due to inadequate inquiry.
The AO had completed the assessment under Section 143(3) on 09/10/2017, determining the total income at Rs. 26,56,570/-. The AO made certain additions to the expenses debited to the profit and loss account but did not find any discrepancies in the purchases and sales, which were primarily from the Indian Oil Corporation (IOC).
The Pr. CIT, in his revisionary jurisdiction under Section 263, claimed that the AO had not conducted adequate inquiries regarding the purchases, the shortage of goods, and the fall in the gross profit (GP) ratio. The Pr. CIT set aside the assessment order and directed the AO to conduct a fresh examination of these issues.
The ITAT analyzed the submissions and the circumstances surrounding the revisionary order passed by the Pr. CIT. The key points discussed were:
Appellant: Shri P. Roy Chauduri, Adv.
Department: Shri Satpal Gulati, CIT-D.R.
The appellant argued that the AO had conducted adequate inquiries during the assessment proceedings. The appellant’s books of accounts, purchase and sale bills, and agreements with IOC were duly examined by the AO. The appellant contended that the Pr. CIT’s order was based on the belief that the inquiries were inadequate, which does not justify the invocation of Section 263.
The CIT-D.R. argued that the AO had not conducted adequate inquiries, particularly regarding the purchases, the shortage of goods, and the fall in the GP ratio. The CIT-D.R. supported the Pr. CIT’s decision to set aside the assessment order for fresh examination.
The Tribunal analyzed the submissions and found that the AO had conducted inquiries and verified the relevant details during the assessment proceedings. The key findings were:
Therefore, the Tribunal concluded that the Pr. CIT’s order was not sustainable and quashed the impugned order under Section 263.
The ITAT concluded that the revisionary jurisdiction under Section 263 for the assessment year 2015-16 involving Auto Engineers Services Centre, New Delhi, and Pr. CIT, New Delhi, was not justified. The AO had conducted adequate inquiries during the assessment proceedings, and the Pr. CIT’s order was quashed. As a result, the appeal filed by the appellant was allowed.
Order pronounced in the open court on 11th October 2021 by Amit Shukla, Judicial Member, and Dr. B.R.R. Kumar, Accountant Member.
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