The Income Tax Appeal Tribunal(ITAT),Chennai Benchrecently, in an appeal filed before it, ruled that review jurisdiction cannot be invoked to redo the assessment, once it has been completed by the assessment officer (AO).
The above observation was made by the Tribunal when an appeal was brought before it by an assessee against the order of the Chief Commissioner of Income TaxCoimbatore, of 13.06.2022, relating to the tax year 2011-12.
The underlying issue of the assessee’s appeal being whether the Principal Commissioner of Income Tax can invoke the u/s.263 review powers of the statute to redo the assessment according to another view possible, it was submitted by Mr. TS Lakshmi-Venkataraman, FCA, the Ld.AR for the assess, that the PCIT erred in invoking jurisdiction u/s.263 of the Act and rescinding the order of valuation issued by AO u/s.143(3) rws147 of the Deed of 29.12.2018, as he did not appreciate the fact that the valuation agent considered the question of the trade discount received of M/s. SKM Food & Feed (India) Pvt. Ltd., and that it was after considering the appraise’s relevant submissions, that he had estimated the gross profit on the trade discount, and therefore that once the valuation agent considered the matter, the PCIT no longer has the ability to review the assessment order on the same issue.
However, with M. M. Raja, Commissioner of Income Tax, (the Ld. DR) on the other hand, supporting the order of the Principal Commissioner of Income Tax and arguing that although the assessee received a trade discount of Rs.23, 16,261/-, the valuation agent had estimated the gross profit at 5.4% and added Rs.1.25 lakhs, thus making the valuation order wrong and detrimental to the interest of the Inland Revenue, the Tribunal consisting of Shri Mahavir Singh, the Vice President and Shri G. Manjunatha, the Accounting Member, while allowing the appeal of the assessee, observed the following:
“In our view, once the AO has taken a position on the matter, the Chief Commissioner of Income Tax no longer has the ability to substitute his view and direct the agent to evaluation to perform an evaluation in a particular way. We note that the issue was dealt with thoroughly and it was after being satisfied with the assessee’s explanation that the AO completed the assessment. Therefore, we are of the view that the PCIT erred completely in rescinding the assessment order issued by the assessment officer u/s.143(3) rws147 of the Income Tax Act income, and therefore, we rescind the order made by the PCIT Act u/s.263”.
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