- (1.) THE Court: The Assessing Officer by his order dated 29th December, 2009 passed under section 143(3) of the Income Tax Act, hereinafter referred to as the said Act, held as follows: Considering the above discussion, I am inclined to treat the above payment as payments made to transport contractors for which the assessee is liable to deduct TDS under Section 194C of the I.T. Act. After giving concession for those payment where the single payment does not exceed Rs. 20,000 and Rs. 50,000 in an aggregate in year for which 194C is not attracted amounting to Rs. 12,34,540/ - and on the remaining amount of Rs. 1,20,52,564/ - the assessee is liable to deduct TDS under section 194C. This amount of Rs. 1,20,52,564/ - represents payment to transport contractors. However, as information from all the parties were not available at time of assessment and inspection is done on random basis on selected parties. Considering the above I am disallowing on estimate basis 20% of the balance i.e. Rs. 1,20,52,564/ - amounting to Rs. 24,10,512/ - under section 40a(ia) of the I T Act as the assessee fails to deduct TDS under 194C of the said act.
(2.) THE CIT in exercise of power under Section 263 passed an order dated 20th March, 2012 holding that the assessment order was erroneous and prejudicial to the interest of the revenue. The reasons assigned by the CIT, inter alia, were as follows: On verification of record it has come to my notice that the reimbursed amount of Rs. 1,32,87,104/ - was bifurcated by the assessing officer in two components: (i) Rs. 12,34,540/ - being the sum total of payments not exceeding Rs. 20,00 (individual payment/credit in a day) or Rs. 50,000/ - (aggregate payment/credit during the year to a particular person) and (ii) Rs. 1,20,52,564/ - being the sum total of payments/credit which attracts provision of Sec. 194C of the Act. Accordingly, the AO made disallowance U/s. 40a(ia) only on 20% of Rs. 1,20,52,564/ -, which comes to Rs. 24,10,512/ -. However, I find that there is no provision for disallowing part expenses U/s. 40a(ia) of the Act. We are told that the assessee had also preferred an appeal against the assessment order dated 29th December, 2009, which is still pending before the CIT(A).
(3.) AGGRIEVED by the order passed under section 263, the assessee preferred an appeal before the Income Tax Appellate Tribunal, which by its impugned judgment and order dated 22nd May, 2013 held as follows: A perusal of the order sheet noting recorded in the course of assessment also clearly supports this view. Further, a perusal of the order passed u/s. 263 of the I.T. Act, 1961 clearly shows that the Ld. CIT has directed the re -examination and re -verification of an issue which is already being verified and assessed by the AO. The powers u/s. 263 of the I.T. Act, 1961 cannot be used for directing a re -verification. Once an opinion has been formed by the AO the Ld. CIT by taking recourse to the powers u/s. 263 of the I.T. Act, 1961 cannot take a stand that the examination done by the AO was not adequate. Adequate enquiry is a subjective issue and just because the Ld. CIT feels that the AO should have done more enquiries does not make it a case for invoking the powers u/s. 263 of the I.T. Act, 1961. This view of ours also finds support from the decision of the coordinate Bench of this Tribunal in the case of Elite Shoe Company in ITA No. 772/Kol/2011 dated 22.05.2012 where under similar circumstances the revision order passed u/s. 263 of the I.T. Act, 1961 have been quashed. In view of the above, we are of the view that the revision as directed by the Ld. CIT by invoking his powers u/s. 263 of the I.T. Act, 1961 cannot be sustained and consequently the said order stands quashed.;