CHHITAR SINGH SHEKHAWAT Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS appeal of the assessee, for asst. yr. 2009 -10, is directed against the order of learned CIT, Jodhpur, passed under s. 263 of the IT Act, 1961 ('the Act' for short). Briefly stated, the facts of the case are that the assessee filed his return of income (ROI) for asst. yr. 2009 -10 on 30th Sept., 2009, declaring total income of Rs. 8,97,380. The assessment was completed under s. 143(3) of the Act on 31st Oct., 2011, at a total income of Rs. 9,66,500. The AO has made lump sum addition of Rs. 50,000 invoking s. 145(3). He has added a sum of Rs. 19,120 by applying interest of 8 per cent by estimating interest income. On National Savings Certificate (NSCs) worth Rs. 2,39,000. The assessee is engaged in the business of a civil contractor. Subsequently, the CIT called for the records of this assessment order and noticed that the assessee has debited rent of Rs. 3,05,800 for mixture and Rs. 3,10,000 in the P&L a/c relating to asst. yr. 2009 -10 but has not deducted tax at source in terms of s. 194 -I and s. 40(a)(ia) of the Act although this provision applied to the facts of this case. Accordingly, a show -cause notice was sent to the assessee under s. 263 of the Act on 13th Dec., 2011 treating the assessment order as erroneous and prejudicial to the interest of the Revenue. The assessee filed a written submission in response to this notice stating therein that the AO has taken one of the possible views out of the two legal views and has decided it under s. 143(3) after making complete and requisite verification. It was also stated that the case was selected for CASS for making specific enquiries regarding payment received from DFO (District Forest Officer, Udaipur) of Rs. 2,78,833 and from the Nagarpalika, Sadri, of Rs. 10,01,075, and that as per the CBDTs guidelines AO is not competent to make any further enquiry other than the issue(s) referred when once books of account cannot be relied upon. In this backdrop, it was submitted that the assessment order is neither erroneous nor prejudicial to the interest of the Revenue, and hence no action under s. 263 is justified.