Pr. CIT cannot substitute his view with that of the AO u/s. 143 (3) of the Income Tax Act

Last updated: 10 February 2021

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The Income Tax Appellate Tribunal ruled that the Principal Commissioner of Income Tax (Pr. CIT) cannot simply substitute their own opinion for that of the Assessing Officer (AO) when reviewing an assessment made under Section 143(3) of the Income Tax Act. The assessee argued that the AO's assessment order was not erroneous or detrimental to the revenue's interests. The case involved scrutiny of construction expenses for a property.

Court :
ITAT New Delhi

Brief :
With this appeal the appellant has challenged the assumption of jurisdiction u/s. 263 of the Act, 1961 by the Pr. CIT-10, New Delhi.

Citation :
ITA No.2040/DEL/2015

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘A’, NEW DELHI

BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER
AND
MS SUCHITRA KAMBLE, JUDICIAL MEMBER
(THROUGH VIDEO CONFERENCING)

ITA No.2040/DEL/2015
Assessment Year: 2010-11

Yash Dev Mahajan & Sons
(HUF) B-492,
New Friends Colony
New Delhi -110065
PAN No. AAAHY3243D
(APPELLANT)

Pr. CIT
Delhi-10
New Delhi
(RESPONDENT)

Appellant by Sh. Ashok Malik, Advocate
Respondent by Sh. Satpal Gulati, CIT DR
Date of hearing: 01/02/2021
Date of Pronouncement: 03/02/2021

ORDER

PER N. K. BILLAIYA, AM:

With this appeal the appellant has challenged the assumption of jurisdiction u/s. 263 of the Act, 1961 by the Pr. CIT-10, New Delhi.

2. The assessee contends that the assessment order dated 31.03.2010 framed u/s. 143 (3) of the Act, is neither erroneousnor prejudicial to the interest of the Revenue.

3. Briefly stated, the facts of the case are that during thecourse of the scrutiny assessment proceedings the AO noticed that the assessee has completed construction of property No.B- 493, New Friends Colony, New Delhi. The AO further observed that the assessee has shown construction expenses incurred from 14.09.2007 to 31.03.2010 at Rs.12382385/-.

To know more in details find the ataachment file

FAQ :

No, the Pr. CIT cannot substitute their own view for that of the Assessing Officer (AO) if the assessment order under Section 143(3) is not erroneous or prejudicial to the interests of the Revenue.

Section 143(3) relates to the assessment of income where the Assessing Officer (AO) makes a scrutiny assessment after examining the evidence and documents provided by the assessee.

The Pr. CIT has revisional powers under Section 263 of the Income Tax Act, but this power is limited to cases where an assessment order is considered erroneous and prejudicial to the interests of the Revenue.

The appellant challenged the Pr. CIT's assumption of jurisdiction under Section 263, arguing that the AO's assessment order was neither erroneous nor prejudicial to the Revenue.