PCIT Must Explain How Income Tax Assessment Order is Erroneous u/s 263: ITAT Allows Appeal [Read Order]

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, allowed the appeal by the assessee and held that PCIT has not explained how the assessing officer erred in assessment order regarding the income of the assessee thus making it erroneous.

The facts of the case state that the assessee completed under Section 143(3)) read with Section 144B of the Income Tax Act (the Act) vide order dated 06.09.2022, assesses the total income at INR 93,87,13,869/- after making the addition of INR 85,87,129/- as expenditure on cess was disallowed.

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The Principal Commissioner of Income Tax (PCIT), Faridabad, noticed that TDS has been deducted on the fees of INR 5,45,71,846/- paid by the assessee for professional or technical services. However as per the return of income they have been claimed at INR 3,27,75,797/-. The difference is observed to have no explanation and the Assessing Officer (AO) had not sought such explanation. The salary that the assessee paid in the assessment year was amounting to INR 11,55,18,514/- on which TDS has been deducted. On the return of income, the salary was claimed at INR 20,93,51,160/-. Again, no explanation was sought nor given.

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