TaxTMI 
TaxTMI 
2016 (10) TMI 552
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....assessment year 2013-14 on 30.9.2013 admitting nil total income. There was a search u/s 132 of the Act, on 20.12.2012 in the Gayatri Group. During the course of search & seizure operation, cash of Rs. 30 lakhs was found and seized in a locker in the name of the assessee in State Bank of India, Kohinoor branch, near Aqua Sports complex, Pandurangapuram, Visakhapatnam. A statement was recorded from the assessee u/s 132(4) of the Act and he was asked to explain the source for the cash. The assessee while deposing before the investigation officer, admitted that the cash found in the locker is his income from profession for the financial year 2012-13 and he had earned professional income in his individual capacity in addition to remuneration received from his partnership firm M/s. Sudhakar and Kumar Associates. The assessee further stated that he would admit entire amount of Rs. 30 lakhs as his personal professional income for the assessment year 2013-14. 3. Consequent to search, the assessee case was notified to Central circle, Visakhapatnam and accordingly notice u/s 153A of the Act was issued. In response to notice, the assessee has filed his return of income for the assessment ye....
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....ction 263 of the Act. 5. In response to show cause notice, the assessee submitted that the order passed by the A.O. u/s 143(3) of the Act dated 11.3.2015 is not erroneous, in so far as it is prejudicial to the interest of the revenue, as the A.O. has examined cash found during the course of search, at the time of completion of assessment u/s 143(3) of the Act. The assessee further submitted that he had admitted cash found during the course of search as his professional income earned in the individual capacity for the financial year 2012-13 and accordingly, declared such income in the return filed for the assessment year 2013-14. The assessee further submitted that he had not maintained regular books of accounts for his profession. Had he maintained regular books of accounts and recorded professional receipts, there would have been cash balance in the books of accounts equal to the amount seized during the course of search. Merely because books of accounts were not produced at the time of search, an inference cannot be drawn that cash found was unexplained. Once the source of cash found was explained and even admitted for tax, the cash balance represented by such income cannot an....
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....provisions of section 115BBE of the Act are applicable only when addition is made u/s 69A of the Act. But, in the present case on hand, the assessee has explained cash found during the course of search as his professional income which was accepted by the A.O. at the time of completion of assessment u/s 143(3) of the Act, therefore, it is not correct to say that the A.O. has ignored the provisions of section 115BBE of the Act. The A.R. further submitted that the CIT ought to have appreciated the fact that the A.O. has initiated enquiries in respect of above issue and as such it is not a case of lack of enquiry to enable the CIT to invoke the provisions of section 263 of the Act. 8. On the other hand, the Ld. D.R. strongly supported the order of the CIT. 9. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The CIT assumed jurisdiction to revise the assessment order for the reason that the A.O. has not conducted proper enquiry before completion of assessment, thereby the assessment order passed by the A.O. u/s 143(3) of the Act, dated 11.3.2015 is erroneous in so far as it is prejudicial to the interes....
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....he A.O. stated that the issue has been examined and no addition is called for. We further noticed that the assessee has explained sources for cash found during the course of search as his professional income right from the beginning and accordingly disclosed said income in his return of income filed for the assessment year 2013- 14. Therefore, we are of the view that the CIT was not correct in coming to the conclusion that the A.O. has not examined the issue of cash seized during the course of search and accordingly the assessment order passed by the A.O. is not erroneous in so far as it is prejudicial to the interest of the revenue. 11. The CIT, assumed jurisdiction to revise the assessment order on the ground that there is a lack of enquiry on the part of the A.O., in examining the issue of cash found during the course of search at the time of completion of assessment u/s 143(3) of the Act. The CIT was of the opinion that the A.O. has applied incorrect provisions of the Act, to deal with cash found during the course of search, as against separate provisions provided by way of section 115BBE of the Act. The CIT further, observed that as per the provisions of section 115BBE of t....
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....t the assessment order passed by the A.O. is neither erroneous nor prejudicial to the interest of the revenue, as there is no prejudice is caused to the revenue. 12. The CIT has power to revise the assessment order u/s 263 of the Act, but to invoke the provisions of section 263 of the Act, the twin conditions must be satisfied i.e. (1) the order of the A.O. is erroneous (2) further it must be prejudicial to the interest of the revenue. Unless both the conditions are satisfied, the CIT cannot assume jurisdiction u/s 263 of the Act. It is not necessary that every order which is erroneous must be prejudicial to the interest of the revenue or vice versa. In some cases, the order passed by the A.O. may be erroneous, but it may not be prejudicial to the interest of the revenue or vice versa. Unless the order passed by the A.O. is erroneous and also prejudicial to the interest of the revenue, the CIT cannot assume jurisdiction to revise the assessment order, this is because the twin conditions i.e. the order is erroneous and the same is prejudicial to the interest of the revenue are co-exist. In the present case on hand, on perusal of the facts available on record, we find that the A.O....
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....sfied with the explanations furnished by the assessee has accepted the income returned. Therefore, ITAT are of the view that once the issues which are subject matter of revision u/s 263 of the Act, have been examined by the A.O. at the time of assessment, the CIT has no jurisdiction to entertain fresh enquiry on the same issues, because he has a different opinion on the issues. In ITAT considered opinion, the issue of net profit and TDS on rent and hire charges has been examined by the A.O. at the time of assessment, therefore, the CIT was not correct in coming to the conclusion that the A.O. has not examined the issues". 14. Considering the facts and circumstances of this case and also respectfully following the ratio of the coordinate bench, we are of the view that the assessment order passed by the A.O. u/s 143(3) of the Act dated 11.3.2015 is not erroneous in so far as it is prejudicial to the interest of the revenue. Therefore, we quash the order passed by the CIT u/s 263 of the Act and restore the order passed by the A.O. u/s 143(3) of the Act. 15. In the result, the appeal filed by the assessee is allowed. ITA 32/Vizag/2016: 16. The assessee has filed this appeal....
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.... CIT(A), the assessee reiterated the submissions made before the A.O. The assessee further submitted that the A.O. was not correct in levying penalty u/s 271(1)(b) of the Act, as he has fully cooperated with the A.O. for smooth completion of assessment, which is evident from the fact that the assessment order is passed u/s 143(3) of the Act. The assessee further submitted that the A.O. has issued all these notices with short period of 7 days to furnish huge information for a period of 7 years. Since, the information called for by the A.O. is huge, he is unable to gather information within a span of 7 days, accordingly, could not appear on the date fixed for hearing. The assessee further submitted that non-appearance before the A.O. is not purposeful. Because of voluminous materials required to be collected, he could not attend, however, the fact remains that he had submitted all the information required by the A.O. and the A.O. has completed the assessment u/s 143(3) of the Act. Therefore, the A.O. was not correct in holding that the assessee has failed to comply with statutory notices which warrants penalty u/s 271(1)(b) of the Act. In support of his contentions relied upon the fo....
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...., the A.O. has rightly levied penalty and his order should be upheld. 21. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The A.O. levied penalty u/s 271(1)(b) of the Act for failure to comply with statutory notices issued u/s 142(1) of the Act. The A.O. was of the opinion that the assessee has failed to offer proper explanation for nonattendance as on the date of hearing. It is the contention of the assessee that non-attendance as on the date of hearing is not intentional, as the A.O. has called for voluminous information for 7 assessment years within a short period of 7 to 15 days. The information called for by the A.O. is voluminous and he could not gather all the information and accordingly, not able to appear before the A.O. as on the date of hearing. We find force in the arguments of the assessee for the reason that the assessee has appeared on all the occasions and furnished necessary information for completion of assessment which is evident from the fact that the A.O. has completed the assessment u/s 143(3) of the Act. Though, assessee initially not appeared before the A.O. in one or two occa....