TaxTMI 
TaxTMI 
2016 (7) TMI 819
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....or the Asst Year 2009-10 from the AO dated 22.7.2014 and only after attending the hearing on 1.8.2014 before the Ld AO, came to know that there was an order u/s 263 passed by the Ld CIT. Immediately on learning the same, he had contacted Mr Nand Kishore Mittal , an employee who had been looking after the Income Tax Matters in the assessee company, who stated that the order u/s 263 was received by him , who in turn at the time of his resignation with effect from 12.4.2014, had handed over the same to Mr Debnath Mukhopadhyay, Sr.General Manager (Finance & Accounts) of the assessee for taking appropriate action. The affidavit of CFO further stated that Mr Debnath Mukhopadhyay had also thereafter resigned from the services of the assessee with effect from 5.5.2014 without properly handing over the necessary papers to his successor. Due to this misconduct, disciplinary action also has been initiated by the assessee against Mr Debnath Mukhopadhyay vide letters dated 17.5.2014 and 13.6.2014. When further enquired about the order of the Ld CIT u/s 263 , his papers and documents were checked and not finding the same, the assessee had to broke open his drawer on 20.8.2014 in the presence of ....
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....ion is available to the FAAs to condone the delay and admit the appeal. ii). The expression 'sufficient cause' is not defined, but it means a cause which is beyond the control of an assessee. For invoking the aid of the section any cause which prevents a person approaching the FAA within time is considered sufficient cause. In doing so, it is the test of reasonable man in normal circumstances which has to be applied. The test whether or not a cause is sufficient is to see whether it could have been avoided by the party by the exercise of due care and attention. In other words, whether it is bona fide cause, inasmuch as nothing shall be deemed to be done bona fide or in good faith which is not done with due care and attention. What may be sufficient cause in one case may be otherwise in another. What is of essence is whether it was an act of prudent or reasonable man.[Ashutosh Bhadra v. Jatindra Mohan Seal (AIR 1954 Cal.238) and Hisaria Plastic Products v. CST AIR 1980 (All.) 185].Subsequent decision of a Court cannot constitute sufficient cause. iii). In every case of delay, there is some lapse on the part of the assessee. If there are no mala fides and it is not put fo....
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.... circumstance arising after the expiry of the limitation period cannot constitute a sufficient cause. xii). It is said that non-filing of appeal before the FAA, before the end of limitation period, creates a vested right in favour of the Revenue. As a result of not filing of an appeal by an assessee, Department, gets a legitimate and undisputed right over the tax-revenue accruing to it in pursuance of the order of the AO. This right cannot be disturbed in a light-hearted manner. xiii). In the cases of belated appeals matters have to be essentially analysed in the facts of each case-no general formula can be or should be applied, so as to ensure that an otherwise genuine cause of justice is not defeated by adherence to technical precedence." Keeping in view the principles laid down in the aforesaid judgments and in view of the reasoning adduced in the affidavit by the assessee, we find that the delay in filing the appeal by the assessee by 88 days deserves to be condoned in the facts and circumstances of the case. Hence, the appeal of the assessee is admitted herein and taken up for adjudication. 3. The only issue to be decided in this appeal is as to whether the Learned CIT ....
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.... the interest of revenue, provisions of section 263 did not validly lie in this case and in view of the facts and in the circumstances it may kindly be held accordingly and the order made u/s. 263 may kindly be quashed/cancelled. 3. For that in view of the facts and in the circumstances, the order u/s. 263 having been made without proper application of mind and without properly taking into consideration all the details and particulars submitted by your petitioner, such order of the AO u/s. 263 is wholly bad, illegal, unjustified and uncalled for and in view of the facts and in the circumstances it may kindly be quashed/cancelled and in any case without prejudice and even otherwise, the Ld. CIT is wholly unjustified in setting aside the order and directing the AO to frame assessment de-novo. 4. For that in view of the facts and in the circumstances, the AO having raised a specific query regarding write off of loans and advances of Rs. 1,97,37,755/- by letter No.ITO/Wd- 3(4)/Kol/Asst. Proceedings/2011-12/ 610 dt. 17.10.2011 dt. 23.1.2014 and all the details and particulars in this regard having been submitted before the AO by letter dt. 19.10.2011 and the AO having accepted the w....
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....ss whatsoever and had practically closed their operations in the last 4-5 years, there was no other option left to the assessee but to write off the advances given to them as irrecoverable. Moreover, there cannot be any better person than the assessee to come to a conscious conclusion that the advances given to group concerns had become irrecoverable as it has got a firsthand information about the future prospects of revival of the businesses that were closed by the group concerns. He argued that since the said advances were made during the course of its business to protect its business interests, the loss arising therefrom would have to be treated loss incidental to the business. He further argued that the Learned CIT had not brought any material on record as to how the order passed by the Learned AO is erroneous and prejudicial to the interests of the revenue within the meaning of section 263 of the Act. 7. In response to this, the Learned DR argued that the show cause notice issued by the Learned CIT clearly states that the order passed by the Learned AO is erroneous and prejudicial to the interests of the revenue and the same need not be stated again in the final order passed ....
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....l amount paid as under:- Titagarh Papers Limited Rs. 66,44,083 Bhatpara Papers Limited Rs. 1,30,93,672 Total Rs. 1,97,37,755 Both the mills had no operations whatsoever during last 4-5 years. In view of this advance paid to them were not recoverable and hence written off. 8.1. We find that the Learned AO on examining this reply had come to a conclusion that the claim of deduction made by the assessee towards advances written off is in order and accordingly allowed the deduction. Though there is no discussion in the order of assessment , the fact that the Learned AO raised a query and did not make any addition, only means that the explanation given by the assessee has been accepted by the Learned AO. Hence it could be safely concluded that the Learned AO had duly examined this issue and appreciated the replies submitted by the assessee after due examination of the same. We place reliance on the decision of the Hon'ble Bombay High Court in the case of CIT vs Gabriel India reported in (1993) 203 ITR 108 (Bom) wherein it was held that the Commissioner cannot initiate proceedings u/s 263 of the Act with a view to starting fishing and roving enquiries in matters or orders whi....
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....ial to the interests of the Revenue. In the second set of cases, the Commissioner cannot direct the Assessing Officer to conduct further enquiry to verify and find out whether the order passed is erroneous or not. " 8.1.1. We also find that the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd vs CIT reported in (2000) 243 ITR 83 (SC) had held as under:- "Held, dismissing the appeal, (i) that in the instant case, the Commissioner noted that the Income-tax Officer passed the order of "nil" assessment without application of mind. Indeed, the High Court recorded the finding that the Income-tax Officer failed to apply his mind to the case in all perspective and the order passed by him was erroneous. The resolution passed by the board of the appellant-company was not placed before the Assessing Officer. Thus, there was no material to support the claim of the appellant that the said amount represented compensation for loss of agricultural income. He accepted the entry in the statement of the account filed by the appellant in the absence of any supporting material and without making any inquiry. On these facts, the conclusion that the order of the Income-tax Officer was e....