The Income Tax Appellate Tribunal (ITAT), Mumbai bench while sustaining the revision order passed under section 263 of the Income Tax Act , 1961 held that the assessment was completed in a routine and mechanical manner without due diligence and due application of mind .
The assessee,Jaydeep Construction is a partnership firm and is involved in real estate business. On examination of records, PCIT observed that assessment order suffers from infirmities warranting revision within the scope of section 263 of the Act and Based on the observations he issued notice under section 263 of the Act on 04.03.2023.
In response, the assessee has submitted details and After considering the detailed submissions of the assessee PCIT set aside the assessment order and directed the Assessing Officer to redo the assessment denovo after giving reasonable opportunity of being heard to the assessee and directed to pass the speaking order.
Aggrieved, the assessee filed an appeal before the tribunal.
During the proceedings Tanmay Phadke, Counsel for assessee in respect of one of the issue mentioned in the revision proceedings argued that assessee has undertaken projects having two wings “A” and “B. assessee has started the project before the introduction of section 43CA of the Act i.e., before 01.04.2014 and brought to our notice the advances received from the parties and agreement of sale was registered before 01.04.2014.e new provision brought into statute was subsequent to the sale agreement executed by the assessee, therefore the above provision will have no application.
Thus Pr.CIT has overlooked the above aspect of the legal issues and remitted the issue back to the file of the Assessing Officer.
Ujjawal Kumar Chavan , Counsel for Revenue, argued that provisions of section 263 of the Act are applicable in this case considering the fact that the assessment order passed by the Assessing Officer is cryptic and not speaking
The tribunal observed from the record that the assessment order is cryptic and it is not a speaking order. Further in the revision order several issues were raised by. Pr.CIT like the issue of 43CA, GST Payable, Non-declaration of profits of the project and unsecured loans.
Therefore the tribunal after analyzing each issue determined that assessment was completed in a routine and mechanical manner without due diligence and without due application of mind.
After reviewing the facts and records, the two-member bench Of S. Rifaur Rahman(Accountant member ) and Narender Kumar Choudhry,(Judicial Member) dismissed the appeal filed by the assessee.
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