M/s. Pick Buderus (India) Special Steels P. Ltd., CHENNAI v. ACIT, CHENNAI

ITA 951/CHNY/2011 | 2006-2007
Pronouncement Date: 21-02-2012 | Result: Dismissed

Appeal Details

RSA Number 95121714 RSA 2011
Assessee PAN AABCP6448D
Bench Chennai
Appeal Number ITA 951/CHNY/2011
Duration Of Justice 8 month(s) 29 day(s)
Appellant M/s. Pick Buderus (India) Special Steels P. Ltd., CHENNAI
Respondent ACIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-02-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 21-02-2012
Date Of Final Hearing 21-02-2012
Next Hearing Date 21-02-2012
Assessment Year 2006-2007
Appeal Filed On 23-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER I.T.A. NO. 951/MDS/2011 (ASSESSMENT YEAR : 2006-07) M/S PCK BUDERUS (INDIA) SPECIAL STEELS P. LTD. NO.13 SOUTH WEST BOAG RD. T. NAGAR CHENNAI - 600 017. PAN : AABCP6448D (APPELLANT) V. THE COMMISSIONER OF INCOME TAX CHENNAI III CHENNAI - 600 034 . (RESPONDENT) APPELLANT BY : SHRI C.S. SEETHARAMAN CA RESPONDENT BY : SHRI R.B. NAIK CIT-DR II DATE OF HEARING : 21.02.2012 DATE OF PRONOUNCEMENT : 21.02.2012 O R D E R PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE IT ASSAILS AN ORDER DATED 21.3.2010 UNDER SECTION 263 OF INCOME-TAX ACT 1962 (IN SHORT 'THE ACT') OF COMMISSIONER OF INCOME TAX CHENNAI-III C HENNAI FOR THE IMPUGNED ASSESSMENT YEAR. AS PER THE ASSESSEE LD. CIT SET ASIDE THE ASSESSMENT ON A GROUND THAT TDS DEDUCTIONS WERE NOT DONE WHEREAS SUCH TDS DEDUCTIONS WERE DONE IN ACCORDANCE WITH LAW AND I.T.A. NO. 951/MDS/11 2 DETAILS FURNISHED AT THE TIME OF ASSESSMENT. AGAIN AS PER THE ASSESSEE DETAILS OF DEDUCTIONS AND NON-DEDUCTIONS WERE SATISFACTORILY EXPLAINED TO THE A.O. AND IT WAS FUR THER EXPLAINED TO LD. CIT DURING THE PROCEEDINGS BEFORE HIM UNDER SECTION 263 OF THE ACT. 2. SHORT FACTS APROPOS ARE THAT THE ASSESSEE HAD FI LED RETURN FOR THE IMPUGNED ASSESSMENT YEAR DECLARING AN INCOME OF ` 1 44 66 241/-. ASSESSEE WAS ENGAGED IN THE BUSINES S OF MANUFACTURING INDUSTRIAL STEEL. ASSESSEE HAD ALSO FILED A REVISED RETURN WHEREBY INCOME ORIGINALLY SHOWN WAS BROUGHT DOWN TO ` 8 465/- DURING THE COURSE OF SCRUTINY ASSESSMENT NOTICE WAS ISSUED UNDER SECTION 142(1) OF THE ACT TO THE ASSESSEE AND DETAILS REQUIRED WERE AS PER THE ASSESSING OFFICER FILED. ASSESSM ENT WAS COMPLETED DETERMINING A LOSS OF ` 14 05 982/- WHICH AROSE OUT OF RE-WORKING OF DEPRECIATION ADMISSIBLE UNDER THE ACT. THEREAFTER LD. CIT ISSUED A NOTICE UNDER SECTION 263 OF THE ACT AND ACCORDING T O SUCH NOTICE ASSESSMENT DONE BY THE ASSESSING OFFICER WAS ERRONE OUS INSOFAR IT WAS PREJUDICIAL TO THE INTERESTS OF REVENUE. AS PE R LD. CIT ASSESSEE OUGHT TO HAVE DEDUCTED TAX ON THE FOLLOWING EXPENSE S DEBITED TO ITS PROFIT & LOSS ACCOUNT : I.T.A. NO. 951/MDS/11 3 ` 1. FORWARDING AND CLEARING CHARGES 50 98 416 2. FREIGHT CHARGES 60 03 289 3. TRANSPORT EXPENDITURE 22 81 046 4. MACHINING CHARGES 12 74 423 5. SAWING CHARGES 1 57 62 103 6. RENT _22 39 065 TOTAL 3 28 58 342 3. LD. CIT NOTED THAT THE QUARTERLY TDS RETURNS AVA ILABLE ON FILE REFLECTED TAX DEDUCTIONS ONLY FOR AN AMOUNT OF ` 57 66 220/- AND FOR THE BALANCE AMOUNT OF ` 2 70 92 122/- THERE WERE NO TAX DEDUCTIONS MADE BY THE ASSESSEE BEFORE EFFECTING THE PAYMENTS. THEREFORE ACCORDING TO LD. CIT ASSESSEE ATTRACTED PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. IN RESPONSE TO THE NOTICE A SSESSEE SUBMITTED WRITTEN SUBMISSIONS AND ALSO FILED A DETAILED TABUL ATION SHOWING THE TOTAL PAYMENTS AND QUANTUM OF PAYMENT ON WHICH ASSE SSEE WAS LIABLE FOR TDS THE RATE OF TAX AND THE TAX DEDUCTI BLE THEREON. ASSESSEE ALSO FILED REASONS FOR NOT DEDUCTING TAX O N SOME PORTIONS OF THE PAYMENTS. IT SEEMS A NUMBER OF TDS CHALLANS WE RE ALSO FILED BEFORE LD. CIT ALONG WITH THE WRITTEN SUBMISSIONS. SUBMISSIONS OF THE ASSESSEE FOR NON-DEDUCTION OF TAX AT SOURCE WERE AS UNDER:- I.T.A. NO. 951/MDS/11 4 (I) FORWARDING AND CLEARING CHARGES ` 50 98 416/- IT IS EXPLAINED THAT THE ENTIRE CHARGES WERE PAID T O SEA KING CARGO SERVICES. SEA KING CARGO SERVICES HAVE RAISED TWO SETS OF INVOICES ONE UNDER THE HEAD AGENCY CH ARGES AND THE OTHER IN RESPECT OF REIMBURSEMENT OF EXPENDITURE. ON THE TOTAL AGENCY CHARGES OF ` 8 67 021/- TAX HAS BEEN DEDUCTED AT 2.04%. ON REIMBURSEMENT O F EXPENSES NO TAX IS DEDUCTIBLE. THEREFORE THERE IS NO DEFAULT IN DEDUCTING TAX IN RESPECT OF THIS PAYMENT . (II) FREIGHT CHARGES ` 60 03 289/- IT IS EXPLAINED THAT TAX WAS DEDUCTIBLE ONLY IN RES PECT OF AGGREGATE PAYMENT OF ` 54 43 615/- AND HAS BEEN DULY DEDUCTED AT 2.04%. IN RESPECT OF THE BALANCE NO T AX WAS DEDUCTIBLE SINCE THE INDIVIDUAL PAYMENTS DID NOT EX CEED ` 20 000/-. (III) TRANSPORTATION EXPENDITURE ` 22 81 046/- UNDER THIS HEAD TAX WAS DEDUCTIBLE ONLY IN RESPECT OF EXPENDITURE AMOUNTING TO ` 12 24 943/- AND HAS BEEN DEDUCTED AT 2.04%. IN RESPECT OF THE BALANCE NO T AX WAS DEDUCTED SINCE THE INDIVIDUAL PAYMENTS DID NOT EXCE ED ` 20 000/-. (IV) MACHINING CHARGES ` 12 74 423/- UNDER THIS HEAD TAX WAS DEDUCTIBLE ONLY IN RESPECT OF EXPENDITURE OF ` 7 16 474/- AND TAX HAS BEEN DEDUCTED AT 1.02% APPLICABLE TO SUB-CONTRACTS. IN RESPECT OF T HE BALANCE NO TAX WAS DEDUCTIBLE SINCE THE INDIVIDUAL PAYMENTS DID NOT EXCEED ` 20 000/-. (V) SAWING CHARGES ` 1 57 62 103/- IN RESPECT OF THE PAYMENT OF ` 1 54 04 540/- TAX HAS BEEN DEDUCTED AT 1.12% THE RATE CHARGEABLE TO SUBCONTRA CTS. I.T.A. NO. 951/MDS/11 5 (VI) RENT ` 22 39 065/- OUT OF THIS EXPENDITURE TAX HAS BEEN DEDUCTED AT 1 5.30% ON A TOTAL PAYMENT OF ` 18 07 825/-. AS FOR THE BALANCE IT IS EXPLAINED THAT THIS WAS THE RENT PAID ON BEHALF OF AN EMPLOYEE IN LIEU OF HRA. THEREFORE TAX HAS NOT BEE N DEDUCTED. HOWEVER LD. CIT WAS NOT IMPRESSED. ACCORDING TO HIM THE CLASSIFICATION OF EXPENDITURE QUANTIFICATION OF PA YMENTS LIABLE FOR TDS ETC. WERE FILED FIRST TIME BEFORE HIM ONLY. SIMILA RLY THE CLASSIFICATION OF DIFFERENT PAYMENTS FOR THE CONTRACTS AND SUB-CON TRACTS WERE ALSO FOR THE FIRST TIME FILED BEFORE HIM AND THESE WERE NOT AVAILABLE OR FURNISHED BEFORE THE ASSESSING OFFICER. NONE OF TH E DETAILS WERE FILED BEFORE THE ASSESSING OFFICER AND ASSESSING OFFICER HAD COMPLETED THE ASSESSMENT WITHOUT EXAMINING THE ISSUE IN ITS E NTIRETY. SINCE ASSESSING OFFICER HAD ALLOWED THE ENTIRE CLAIM AND HAD NOT EXAMINED THE TDS DEDUCTIONS THAT WERE TO BE MADE AND APPLICA BILITY OF SECTION 40A(IA) OF THE ACT LD. CIT CAME TO A CONCLUSION TH AT THERE WERE ERRORS IN THE ASSESSMENT WHICH WERE PREJUDICIAL TO THE INT ERESTS OF REVENUE. HE THEREFORE SET ASIDE THE ORDER PASSED BY THE AS SESSING OFFICER AND DIRECTED HIM TO PASS A FRESH ORDER IN ACCORDANC E WITH LAW AFTER GIVING OPPORTUNITY TO THE ASSESSEE. I.T.A. NO. 951/MDS/11 6 4. NOW BEFORE US LEARNED A.R. STRONGLY ASSAILING THE ORDER OF LD. CIT SUBMITTED THAT THE ASSISTANT COMMISSIONER OF I NCOME TAX DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD RE QUIRED DETAILS OF VARIOUS ITEMS AND VIDE ITS LETTER DATED 22 ND DECEMBER 2008 (PLACED A COPY IN PAPER-BOOK PAGES 1 TO 5) ASSESSEE HAD FILE D SUCH DETAILS WHICH INTER-ALIA INCLUDED COPIES OF PROOF FOR COMPL IANCE WITH TDS AND COPIES OF QUARTERLY RETURNS OF TDS. THEREFORE ACC ORDING TO HIM ASSESSING OFFICER HAD ALLOWED THE CLAIM OF EXPENSES AFTER CAREFUL CONSIDERATION OF THE MATERIALS PLACED BEFORE HIM A FTER APPLYING HIS MIND AS TO WHETHER DEDUCTIONS OF TAX AT SOURCE WERE DONE BY THE ASSESSEE IN ACCORDANCE WITH LAW. AGAIN ACCORDING TO LEARNED A.R. ASSESSEE HAD GIVEN DETAILED EXPLANATIONS BEFORE LD. CIT ALSO DURING THE COURSE OF PROCEEDINGS BEFORE HIM AND THIS WOULD SHOW THAT THERE WAS NO PREJUDICE WHATSOEVER CAUSED TO THE INTERESTS OF REVENUE. ACCORDING TO LEARNED A.R. SPECIALIZED STEEL IN DIF FERENT SIZES WERE IMPORTED FROM GERMANY AND SAWING WORK WAS SUB-CONTR ACTED TO ONE M/S PCK BUDERUS TOOL STEEL CO. THUS M/S PCK BUDE RUS TOOL STEEL CO. WAS A SUB-CONTRACTOR AND APPLICABLE RATE OF TDS WAS THAT WHICH HAD TO BE APPLIED TO A SUB-CONTRACTOR AND TDS WAS DEDUCTED ACCORDINGLY. IN RESPECT OF CLEARING AND FORWARDING CHARGES THE BILLS ISSUED BY M/S SEAKING CARGO SERVICES INDIA PVT. LTD . CONSISTED I.T.A. NO. 951/MDS/11 7 THEREIN SERVICE CHARGES AND EXPENSES INCURRED IN CO NNECTION WITH CLEARING AND FORWARDING. AS PER LEARNED A.R. ASSE SSEE HAD DEDUCTED TDS ON SERVICE CHARGES ONLY SINCE NO DEDU CTION OF TAX WAS REQUIRED ON EXPENSES REIMBURSED. ACCORDING TO HIM OUT OF FORWARDING AND CLEARING CHARGES OF ` 50 98 416.40 TAX WAS DEDUCTIBLE ONLY ON ` 8 67 021.40 ON FREIGHT CHARGES OF ` 60 03 289.24 THE AMOUNT ON WHICH TAX WAS DEDUCTIBL E WAS ONLY ` 54 43 615.00 AGAINST TRANSPORT EXPENDITURE OF ` 22 81 046.17 TAX WAS DEDUCTIBLE ONLY ON ` 12 24 943.67 AGAINST THE MACHINING CHARGES OF ` 12 74 423.40 TAX WAS DEDUCTIBLE ONLY ON ` 7 16 474.40 AGAINST SAWING CHARGES OF ` 1 54 04 540.00 THE RATE AT WHICH TDS WAS DEDUCTIBLE WAS ONLY 1.12% AND AGAINST RENT AMO UNT OF ` 22 39 065.00 THE AMOUNT ON WHICH TAX WAS DEDUCTIBL E AT SOURCE WAS ONLY ` 18 07 825.00. ASSESSEE AS PER THE LEARNED A.R. H AD ACCORDINGLY DEDUCTED THE TAX AT SOURCE AND REMITTED SUCH TAX TO THE GOVERNMENT. THEREFORE THERE WAS NO PREJUDICE CAUS ED TO THE INTERESTS OF REVENUE IN THIS REGARD. LEARNED A.R. ALSO PLACED ON RECORD A COPY OF THE FRESH ORDER PASSED BY THE ASSE SSING OFFICER PURSUANT TO REVISIONARY ORDER OF LD. CIT UNDER SECT ION 263 OF THE ACT. 5. PER CONTRA LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF LD. CIT. I.T.A. NO. 951/MDS/11 8 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. ORIGINAL ASSESSMENT ORDER PASSED UNDER SECTION 143( 3) OF THE ACT IS REPRODUCED HEREUNDER:- THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.11.2006 DECLARING INCOME OF ` 1 44 66 241/- CLAIMING A REFUND OF ` 35 88 896/- AND SUBSEQUENTLY FILED A REVISED RETURN ON 13.02.2007 DECLARING INCOME OF ` 8 465/- CLAIMING A REFUND OF ` 36 88 837/-. THE REVISED RETURN WAS PROCESSED ARRI VING AT A REFUND OF ` 53 62 831/- AND NOTICE U/S 143(2) WAS ISSUED ON 09.10.2007 BY THE INCOME TAX OFFICER (OSD) COMPANY CIRCLE V(2) CHENNAI. THE CASE WAS ASSIGNED TO THE ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE V(4) CH ENNAI AND REPOSTED FOR HEARING. IN RESPONSE TO NOTICE ISSUE U/S 142(1) DETAILS WERE FILED BY THE ASSESSEE. THE ASSESSEES AUTHORIZED REPRESENTATIVE SHRI C.S. HARIHARAN FCA AND SHRI S . SEETHARAMAN OF M/S C.S. HARIHARAN & CO. APPEARED AN D FILED DETAILS. THE DETAILS WERE VERIFIED. DURING THE COURSE OF HEARING THE ASSESSEES AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE CLOSIN G WDV FOR A.Y. 2005-06 HAS NOT BEEN BROUGHT DOWN AS OPENING W DV FOR A.T. 2006-07 AND SUBMITTED A REVISED COMPUTATION OF DEPRECIATION AS PER INCOME-TAX ACT. THE OPENING WD VS WERE CHECKED WITH THE LAST YEARS CLOSING WDVS AND THE REVISED DEPRECIATION CLAIM IS ALLOWED AS PER ANNEXURE A. HENCE THE BUSINESS INCOME IS RECOMPUTED AS DISCUSSED BELOW: BUSINESS INCOME AS PER REVISED RETURN ` 8 465 ADD: DEPRECIATION AS PER REVISED RETURN ` 32 37 854 I.T.A. NO. 951/MDS/11 9 ` 32 46 319 LESS: ADMISSIBLE DEPRECIATION AS PER ANNEXURE A ` 46 52 301 ASSESSED BUSINESS LOSS ` 14 05 982 AS PER THE ASSESSEE ALL THE DETAILS REGARDING TDS WERE FURNISHED TO THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS VIDE ITS LETTER DATED 22 ND DECEMBER 2008. THE SAID LETTER ATTACHED THEREWITH COPIES OF QUARTERLY TDS ( PLACED AT PAPER- BOOK PAGES 2-5). SUCH TDS RETURNS SIMPLY GAVE THE NUMBER OF DEDUCTEE RECORDS TOTAL AMOUNT PAID AND TOTAL TAX D EDUCTED AT SOURCE. IT DOES NOT SHOW UNDER WHAT HEADS TAX WAS DEDUCTED AT SOURCE WHAT WAS THE AMOUNT ON WHICH TAX WAS DEDUCTED AT SOURCE AND WHETHER THERE WERE ANY TYPE OF PAYMENTS ON WHICH THOUGH PRI MA-FACIE TAX WAS DEDUCTIBLE NO TAX WAS DEDUCTED FOR VALID REASO NS. A LOOK AT THE ASSESSMENT ORDER REPRODUCED ABOVE CLEARLY SHOWS THA T THERE WAS NO APPLICATION OF MIND BY THE ASSESSING OFFICER WITH R EGARD TO THE PROVISIONS LAID DOWN REGARDING TAX DEDUCTION AT SOU RCE AND THE EFFECT OF NON-DEDUCTION ON VARIOUS PAYMENTS MADE BY THE AS SESSEE. NO DOUBT THE ORDER OF AN A.O. WHICH IS CRYPTIC BY ITS ELF MIGHT NOT BY ITSELF SHOW THAT THERE WAS LACK OF APPLICATION OF MIND BY THE A.O. BUT NEVERTHELESS AN ORDER WHICH IS CRYPTIC WHERE NO D ETAILS RELEVANT TO THE ISSUE WERE CALLED FOR BY THE A.O. AND NO DETAIL S WERE FURNISHED I.T.A. NO. 951/MDS/11 10 CANNOT BE CONSIDERED AS ONE WHERE THERE WAS AN APPL ICATION OF MIND. NON-APPLICATION OF PROVISIONS WHICH OUGHT HAVE BEEN APPLIED IN AN ASSESSMENT AND WHICH HAS BEEN OMITTED TO BE CONSIDE RED WILL DEFINITELY RENDER THE ASSESSMENT ORDER ERRONEOUS. BUT AS HELD BY HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIA L CO. LTD. V. CIT (243 ITR 83) NOT ONLY THAT ORDER HAS TO BE ERRONEO US BUT IT HAS TO CAUSE PREJUDICE TO THE INTERESTS OF THE REVENUE. N ON-DEDUCTION OF TAX AT SOURCE WHERE SUCH TAX IS DEDUCTIBLE CALLS F OR APPLICATION OF SECTION 40A(IA) OF THE ACT AND WHERE A DISALLOWANCE AS STIPULATED UNDER SUCH SECTION HAS NOT BEEN DONE IT WILL DEFIN ITELY CAUSE PREJUDICE TO THE INTERESTS OF REVENUE. LOSS OF TAX CERTAINLY IS A PREJUDICE CAUSED TO THE REVENUE. WHEN THE ASSESSIN G OFFICER IS NOT APPLYING HIS MIND AT ALL WHERE SUCH AN APPLICATION WAS CALLED FOR AND THE VERY NATURE OF EXPENSES WOULD SHOW THAT TDS PRO VISIONS MIGHT HAVE BEEN APPLICABLE ORDER FRAMED WITHOUT CONSIDER ING SUCH PROVISION WOULD CAUSE PREJUDICE TO THE INTERESTS OF REVENUE. AS HELD BY HONBLE DELHI HIGH COURT IN THE CASE OF GEE VEE ENTERPRISES V. ADDL. CIT (99 ITR 375) THE COMMISSIONER HAD TO REA CH ONLY A PRIMA FACIE VIEW AS TO HOW THE ORDER OF THE ASSESSING OFF ICER WAS ERRONEOUS AND LEAVE THE MATTER AT THAT WITH THE DIR ECTION TO THE ASSESSING OFFICER TO CONDUCT A DE NOVO ENQUIRY AND PASS FRESH ORDER. I.T.A. NO. 951/MDS/11 11 WHAT THE LD. CIT HAS DONE IS EXACT THE SAME. IN TH E CASE OF CIT V. SESHASAYEE PAPER AND BOARDS LTD. (242 ITR 490) IT WAS HELD BY HONBLE JURISDICTIONAL HIGH COURT AS UNDER:- IT IS NO DOUBT TRUE THAT FOR MAKING A VALID ORDER U NDER SECTION 263 OF THE ACT IT IS ESSENTIAL FOR THE COM MISSIONER TO RECORD AN EXPRESS FINDING THAT THE ORDER SOUGHT TO BE REVISED WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERES TS OF THE REVENUE. IN THE INSTANT CASE THE COMMISSIONER HAD RECORDED SUCH A FINDING AND WITH REFERENCE TO SOME OF THE IT EMS HE POSITIVELY FOUND THAT THE ORDERS WERE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. BUT IN OUR OPINI ON THERE IS NOTHING IN SECTION 263 OF THE ACT TO SHOW THAT THE COMMISSIONER OF INCOME-TAX SHOULD IN ALL CASES RECORD HIS FINAL CONCLUSION ON THE POINTS IN CONTROVERSY BEFORE HIM. THE ABOVE PO SITION OF LAW IS WELL-SETTLED BY THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF ADDL. CIT V. MUKUR CORPORATION (111 ITR 312 ) WHEREIN THE GUJARAT HIGH COURT HELD AS UNDER (PAGE 325): NOW EVEN ON THIS QUESTION WE FIND THAT THERE IS NOTHING IN SECTION 263(1) TO SHOW THAT BEFORE PASSING THE F INAL ORDER UNDER THAT SECTION THE COMMISSIONER MUST NECESSARI LY AND IN ALL CASES RECORD FINAL CONCLUSIONS ABOVE THE POINTS IN CONTROVERSY BEFORE HIM. AS ALREADY NOTED BY US ABOVE WE WOULD HAVE EXPECTED HIM TO RECORD FINAL CONCLUSIONS WHICH HE THOUGHT PROPER IF HE WAS TO SETTLE THE ASSESSMENT FINALLY B UT SINCE HE HAS NOT SETTLED THE ASSESSMENT FINALLY AND HAS PREFERR ED TO DIRECT THE INCOME-TAX OFFICER TO MAKE AN ORDER FOR FRESH A SSESSMENT IT WAS PROPER THAT HE DID NOT EXPRESS ANY FINAL CON CLUSIONS AND RECORDED ONLY PRIMA FACIE CONCLUSIONS AT WHICH HE H AD ARRIVED WITH REFERENCE TO THE FACTS OF THE CASE. HERE IT S HOULD BE NOTED THAT AS THE ASSESSMENT WAS TO BE FRESHLY MADE BY T HE INCOME- TAX OFFICER THE ONLY PROPER COURSE FOR THE COMMISS IONER WAS NOT TO EXPRESS ANY FINAL OPINION AS REGARDS THE CON TROVERSIAL POINTS. I.T.A. NO. 951/MDS/11 12 7. THE POSITION AND FUNCTION OF THE INCOME TAX OFFI CER IS VERY DIFFERENT FROM THAT OF A CIVIL COURT. THE STATEMEN TS MADE IN A PLEADING PROVED BY THE MINIMUM AMOUNT OF EVIDENCE MAY BE ACC EPTED BY A CIVIL COURT IN THE ABSENCE OF ANY REBUTTAL. THE CI VIL COURT SIMPLY GIVES DECISION ON THE BASIS OF THE PLEADING AND EVIDENCE WHICH COMES BEFORE IT. ON THE OTHER HAND ASSESSING OFFICER IS NOT ONLY AN ADJUDICATOR BUT ALSO AN INVESTIGATOR. HE SHOULD NO T REMAIN PASSIVE IN THE FACE OF A RETURN WHICH IS APPARENTLY IN ORDER B UT CALLS FOR FURTHER ENQUIRY. IT IS HIS DUTY TO ASCERTAIN THE TRUTH OF THE FACTS STATED IN THE RETURN WHEN THE CIRCUMSTANCES OF THE CASE ARE SUCH AS TO PROVOKE AN INQUIRY. IT IS IN THIS CONTEXT THE WORD ERRONEO US MEANT IN SECTION 263 HAS TO BE UNDERSTOOD. VIEWED FROM ANY ANGLE W E ARE OF THE OPINION THAT THE ORDER OF THE A.O. WAS ERRONEOUS IN SOFAR AS IT WAS PREJUDICIAL TO THE INTERESTS OF REVENUE. ASSESSEE MIGHT HAVE SUBMITTED SOME DETAILS BEFORE ASSESSING OFFICER. B UT A CURSORY LOOK AT THE SAID DETAILS PLACED AT PAGES 8-11 ITSELF SHO WS THAT THE ASSESSEE HAS CLAIMED A NUMBER OF PAYMENTS AS NOT LI ABLE FOR DEDUCTION OF TAX AT SOURCE SINCE THE PAYMENTS DID N OT EXCEED ` 20 000 / 50 000/-. IT HAD ALSO CLAIMED THAT PART O F CHARGES WERE ARISING ONLY OUT OF SUB-CONTRACTS. ALL THESE ASPEC TS WERE NEVER EXAMINED BY THE A.O. LD. CIT WHILE EXERCISING HIS POWER UNDER I.T.A. NO. 951/MDS/11 13 SECTION 263 OF THE ACT HAD THEREFORE RIGHTLY SET ASIDE THE ORDER OF A.O. CONSIDERING IT ERRONEOUS INSOFAR AS IT WAS PRE JUDICIAL TO THE INTERESTS OF REVENUE. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT. 8. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 21 ST FEBRUARY 2012. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 21 ST FEBRUARY 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT CHENNAI-III CHENNAI (4) D.R. (5) GUARD FILE