2018 (5) TMI 847 - AT - Income Tax

Tribunal affirms Commissioner's tax order revision, stresses proper enquiry by Assessing Officer.

M/s D.D. Deposits And Advances Pvt. Ltd. Versus Commissioner of Income Tax, Kolkata

M/s D.D. Deposits And Advances Pvt. Ltd. Versus Commissioner of Income Tax, Kolkata - TMI Issues Involved:1. Validity of the order passed under Section 263 of the Income Tax Act, 1961.2. Jurisdiction of the Commissioner of Income Tax (CIT) to revise the assessment.3. Service and validity of notices under Sections 143(2) and 142(1).4. Adequacy of enquiry conducted by the Assessing Officer (AO).5. Limitation period for passing the order under Section 263.6. Territorial jurisdiction of the CIT.7. Validity of assessment order in the absence of proper enquiry.Detailed Analysis:1. Validity of the Order Passed Under Section 263:The assessee challenged the CIT's order under Section 263, terming it arbitrary, illegal, and without jurisdiction. The tribunal upheld the CIT's order, stating that the AO's failure to conduct a proper enquiry rendered the assessment erroneous and prejudicial to the interest of the Revenue. The tribunal emphasized that inadequate enquiry is as good as no enquiry, thus empowering the CIT to revise the assessment order.2. Jurisdiction of the CIT to Revise the Assessment:The tribunal confirmed that the CIT had the jurisdiction to revise the assessment order under Section 263. It was noted that the CIT's jurisdiction was upheld up to the apex court, affirming the CIT's power to direct the AO to conduct a thorough enquiry.3. Service and Validity of Notices Under Sections 143(2) and 142(1):The assessee argued that no notices under Sections 143(2) and 142(1) were issued, rendering the assessment null and void. However, the tribunal found that the assessment records indicated the issuance of these notices. The tribunal relied on Section 114(e) of the Indian Evidence Act to presume that the AO performed the official act of completing the re-assessment as per the prescribed procedure.4. Adequacy of Enquiry Conducted by the AO:The tribunal held that the AO's enquiry was inadequate, and the CIT was justified in revising the assessment order. The tribunal noted that the AO's failure to give a logical conclusion to the enquiry warranted the CIT's intervention under Section 263.5. Limitation Period for Passing the Order Under Section 263:The tribunal observed that the limitation period for passing the order under Section 263 should be counted from the date of passing the order under Section 147 read with Section 143(3) and not from the date of intimation issued under Section 143(1). It was confirmed that the orders were passed within the time limit.6. Territorial Jurisdiction of the CIT:The tribunal upheld that the CIT having jurisdiction over the AO who passed the order under Section 147 read with Section 143(3) had the territorial jurisdiction to pass the order under Section 263.7. Validity of Assessment Order in the Absence of Proper Enquiry:The tribunal concluded that the AO's failure to conduct a proper enquiry rendered the assessment order erroneous and prejudicial to the interest of the Revenue. The tribunal rejected the assessee's claim that the re-assessment was non est and void, affirming that the CIT's observation about the non-issuance of statutory notices was against the assessment records.Conclusion:The tribunal dismissed the assessee's appeal, upholding the CIT's order under Section 263. The tribunal emphasized the importance of proper enquiry by the AO and confirmed the CIT's jurisdiction to revise the assessment order, thereby protecting the interest of the Revenue. The tribunal's decision was based on a detailed examination of the case records, relevant legal provisions, and judicial precedents.