IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “B”, LUCKNOW BEFORE SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER AND SHRI SUBHASH MALGURIA, JUDICIAL MEMBER (Assessment Year: 2018-19)

Future Pharma Pvt Ltd v. PCIT-1

119/471, Darshan Purwa, Aayakar Bhawan, 16/69, Current Address: Civil Lines, Kanpur-

119/41, Nasimabad, 208001.

Darshanpurwa, Kanpur-

208012.

PAN:AABCF3392E (Appellant) (Respondent) Appellant by: Shri Rakesh Garg, Adv.

Respondent by: Shri Sunil Kumar Rajwanshi, Addl.

CIT(DR)

O R D E R PER ANADEE NATH MISSHRA, A.M.:

(A) This is an appeal filed by the assessee against the impugned order of the Ld. Principal Commissioner of Income Tax [hereinafter referred to as the “PCIT”], Kanpur dated 31.03.2024 for assessment year 2018-19 passed under section 263 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”). The grounds of appeal of the assessee are as under: -

“1. Because the PCIT, Kanpur-1 has erred on facts and in law in setting aside the order passed u/s 143(3) of the Act, 1961 holding it to be erroneous and prejudicial to the interest of the revenue which is contrary to facts and to the provisions of law, the order passed u/s 263 be quashed.

2. Because the order passed u/s 143(3) r.w.s. 144B dated 21.04.2021 passed by the AO is neither erroneous nor prejudicial to the interest of the revenue, the PCIT has erred on facts and in law in holding it to be otherwise, the order passed u/s 263, be quashed.

3. Because the order passed u/s 143(3) r.w.s. 144B was the result of the case being selected under CASS and the assessment being framed after deep scrutiny accompanied with detailed questionnaire, all the issues being examined, the PCIT has erred on facts and in law in holding the same to be erroneous and prejudicial to the interest of the revenue, the order passed u/s 263 is bad in law, be quashed.

4. Because the order passed u/s 143(3) r.w.s. 144B, having being passed after scrutiny of the accounts and the documents filed is neither a case of no enquiry nor lack of enquiry or inadequate enquiry, the order passed by the PCIT u/s 263 is bad in law, be quashed.

5. Because the PCIT has failed to make any independent enquiry which is the core mandate of section 263 nor has demonstrated as to how the order is erroneous or prejudicial to the Interest of revenue, failure to conduct independent enquiry by the PCIT makes the order passed u/s 263 bad in law, the same be quashed.

6. Because without prejudice to the above, on merits the case, return was selected under CASS to examine large commission expenses and low net profit, that matter being thoroughly examined and_ disallowance of Rs.2,40,442/- having being made out of commission made, it is incorrect on the part of the PCIT to state that the matter regarding commission was not examined by the AO, the order passed by the PCIT is bad in law, be quashed.

7. Because on perusal of the notice issued u/s 263, it is not appreciable on the part of the PCIT to state that no audit report in the prescribed Form 3CD was filed which report was filed alongwith the return on 28.10.2018 which inter-alia contains all the relevant information vis-a-vis commission and salary paid alongwith details of applicability’ of section 40A(2)(b) and TDS u/s.194H/194), if any, which were examined by the AO, thus to say that the AO failed to examine the same, would be incorrect, the order passed by the PCIT be quashed.”

8. Because complete details were furnished as raised in the questionnaire as issued to the notice issued u/s 142(1) and the AO having examined the issue in detail, being satisfied, framed the assessment, the expenses claimed are neither unverifiable nor incurred for purposes other than business and there being no finding by the PCIT contrary to the finding of the AO, the order passed u/s 263 being devoid of merit, the same be quashed.

9. Because without prejudice to the above grounds of appeal, the PCIT has not justified in setting aside the entire order to be framed afresh, as against the specifi