Revisionary power u/s 263 cannot be initiated on the basis of audit objection: ITAT

The Income Tax Appellate Tribunal (ITAT Delhi) in the matter of Majestic Properties Pvt. Ltd. vs. Pr.CIT has held that Revisionary power u/s 263 cannot be initiated on the basis of audit objection.

ITAT relied on below mentioned case laws:

(i) CIT vs. Sohana Woollen Mills 296 ITR 0238 (P&H); (ii) Paramjit Sing vs. Pr. CIT (2018) 48 CCH 0199 (Chd) (iii) M/s. Refex Industries Ltd. vs. DCIT, ITA No.972/2014 dated 09.09.2014 (Chennai); (iv) Sartaj Singh vs. Pr. CIT (2016) 179 TTJ 0017 (ASR)(UO); (v) Jaswinder Singh vs. CIT (2012) 150 TTJ 0033 (Chd); (vi) Vikram Kaswan vs. CIT (2016) 46 CCH 0561 (Chd.)

The Relevant Text of the Order:

Upon careful consideration, on the first issue of non-initiation of penalty u/s 271B of the Act, we find that submissions of the ld. Counsel of the assessee in this regard are cogent. The case laws cited duly establish that no issue of satisfaction by the AO is required for initiating this penalty. Hence, this plank of revision is not sustainable and we set aside the order of ld. Pr.CIT in this regard.

As regards the issue of non-disallowance of loss on sale of tower, it is duly emanating that this aspect was raised on the basis of audit objection. The case laws cited by the ld. Counsel of the assessee duly establish that revisionary power u/s 263 cannot be initiated on the basis of audit objection. Hence, we set aside the order passed by the ld. Pr.CIT on this issue.

As regards last issue of disallowance of statutory dues not paid before the due date of return, we find that ld. Counsel has fairly conceded that he will not be contesting this aspect. Hence, revision order is sustained on this issue.

In the result, the appeal filed by the assessee is partly allowed.

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