ITAT relief to Reliance Payment Solutions

ITAT relief to Reliance Payment Solutions

It ruled that the assessment order was neither erroneous nor prejudicial

The Mumbai Branch of the Income Tax Appellate Tribunal has granted relief to Reliance Payment Solutions Private Limited. It has held that the revisional jurisdiction under the Income Tax Act, 1961 cannot be invoked merely because the assessment order was passed without specifying any reasons.

The assessee is engaged in the business of the operations of semi-closed prepaid instruments by the Reserve Bank of India (RBI).

However, the assessing officer (AO) had not made any such observation on this aspect in the assessment order. Thereafter, while invoking the reason, the Principal Commissioner initiated the revision proceedings under the IT Act.

The Coram of Vice-President Pramod Kumar and Judicial Member Kuldip Singh, while relying on decisions taken on other cases as well, held that the action of the AO did not lack bonafide. Therefore, his action in accepting an explanation of the assessee could not be faulted merely because it could have been lawful to make detailed inquiries or because he did not write specific reasons for accepting the explanation.

The bench ruled, "The fact remains that the specific issue raised in the revision order was looked into and detailed submissions were made. These submissions were duly accepted by the AO. Thus, it does not render the assessment order as erroneous and prejudicial to the interest of the IT department."