TaxTMI 
TaxTMI 
2017 (6) TMI 538
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.... to find out new counsel, as a result the delay in filing the appeal on time occurred. We have heard Ld. Counsel for the assessee and Ld. DR for the Revenue. We find that there was sufficient cause which prevented the assessee in filing the appeal within the stipulated time therefore we condone the delay and admit the same. We accordingly decided to proceed for hearing the appeal of assessee. 3. The assessee in this appeal has challenged the impugned order passed by Ld. CIT u/s 263 of the Act by holding the order of AO as erroneous in so far as prejudicial to the interest of Revenue. The Ld. AR at the outset brought to our notice that case was selected for scrutiny under CASS Module (Computer Assisted Scrutiny System.) Under CASS module the cases are selected for scrutiny on the basis of either AIR data or CIB information or for non reconciliation with 26AS Data. The scope of enquiry was limited to verification of these particular aspects only. Therefore, in such cases an Assessing Officer shall confine the questionnaire and subsequent enquiry or verification only to the specific point(s) on the basis of which the particular return has been selected under scrutiny. Thus, it was ....
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....e is a potential escapement of income more than Rs. 10 lacs. 3. It has also been decided that in all the cases which are picked up for scrutiny only on the basis of AIR information, the notice u/s. 143(2) of Income Tax Act should clearly be stamped with "AIR Cases". This should be immediately brought to the notice of all the officers working in your region. In view of the above, it was submitted that the AO has exceeded his jurisdiction while framing his assessment order u/s 143(3) of the Act. The ld. AR also brought to our notice that the assessee against the order under section 143(3) has preferred appeal on the ground of jurisdiction as well. The ld. AR on similar line submitted that the Ld. CIT in his impugned order u/s 263 of the Act has also exceeded his area of jurisdiction by holding the order of the AO as erroneous and prejudicial to the interest of Revenue on those item not listed in AIR. Further, Ld. AR requested the Bench to limit the scope of the case in the context of the order of Ld. CIT passed under section 263 of the Act to the extent of the information emanating from the AIR. On the contrary Ld. DR submitted that the AO was empowered to extend th....
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....ed order passed u/s 263 of the Act covering the points which are not part of the AIR. The ld. Counsel for the assessee submitted before us that it is open to an assessee in an appeal against the order u/s 263 of the Act which seeks to revise an order passed u/s 143(3) of the Act, to challenge the validity of the expansion of order passed u/s.143(3) of the Act covering the points which are not part of the AIR. In this regard we find that Lucknow Bench of Hon'ble ITAT in the case of Inder Kumar Bachani (HUF) vs ITO 99 ITD 621 (Luck) and ITAT Mumbai 'G' Bench in the case of M/s. Westlife Development Ltd. Vs Principal C.I.T. in ITA NO.688/Mum/2016 have taken a view that when an Assessment order passed u/s 147 of the Act was illegal the Ld.CIT cannot invoke the jurisdiction u/s 263 of the Act against such void or non-est order. In the second decision cited the Hon'ble Mumbai bench of the Tribunal has specifically framed the following questions :- "1.Whether the assessee can challenge the validity of an assessment order during the appellate proceedings pertaining to examination of validity of order passed u/s 263? 2. Whether the impugned assessment order passed u/s 143(....
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....d. CIT(A) challenging the jurisdiction exceeded by the AO while framing the assessment order u/s 143(3) of the Act. We find that the impugned issue being legal in nature and goes to the root of the matter therefore we are inclined to proceed with this issue first by holding that, from the above submission and after examining of the records, we find that the Ld. CIT in his impugned order u/s 263 of the Act has exceeded his jurisdiction while holding the order of AO as erroneous in so far prejudicial to the interest of Revenue. In view of the above we hold that the ld. CIT has in his order u/s. 263 of the Act exceeded the jurisdiction by holding the order of AO as erroneous in so far as prejudicial to the interest of Revenue on those items which are not emanating from the AIR. Thus, we are inclined to adjudicate only those matters which are emanating from the AIR as discussed above. 4.2 The assessment was framed by AO for the A.Y. 2011-12 under section 143(3) of the Act vide order dated 29.03.2014 after making certain additions/ disallowances to the total income of assessee. Subsequently, Ld. CIT u/s 263 of the Act observed certain errors in the order of AO, therefore, he was of the ....
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....bmission of assessee has held the order of AO is error and prejudicial to the interest of Revenue by observing as under:- "I have carefully considered the issues with specific reference to the relevant assessment records as well as written submission furnished by the A/R. The AO has not taken cognizance of the following issues, despite being apparent from record:- (1) Addition of Rs. 4 lakhs only was made against total cash deposit of Rs. 17,56,000/- without taking any explanation from the assessee. (2) The balance deposits in another account with HDFC, Porvorim, Goa was not considered in assessment. (3) Interest income from all savings accounts and FDRs was not considered at the time of assessment. (4) Submission of assessee regarding explanation of credit card payment of Rs. 3,76,225/- was partly accepted in assessment without proper verification. (5) Although a salaried person, the assessee's bank account reflect huge transactions/transfer entries, which required further investigation. (6) Long term capital gain of Rs. 19,74,763/- was not properly verified. (7) Loan transactions and interest on loans require....
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....bad in law and void ab-initio. (5) For that on the facts & in the circumstances of the case L'd Pr. CIT was not justified in initiating proceeding u/s. 263. (6) For that your petitioner craves the right to put additional grounds and/or to alter/amend/modify the present grounds before or at the time of hearing." The ld. AR before us filed two paper books which are running from pages 1 to 27 and 28 to 31. The ld. AR before us submitted that the necessary enquiries were made by the AO at the time of assessment. Thus the order of the AO cannot be held erroneous and prejudicial to the interest of Revenue on account of non enquiry whereas the ld. DR vehemently supported the order of the ld. CIT. 5. We have heard the rival contentions & perused the materials available on record. From the foregoing discussion, we find that order of AO has been treated erroneous and prejudicial to the interest of revenue on the ground that proper enquiry was not made by the AO. Therefore, Ld. CIT held that the order of AO is erroneous and prejudicial to the interest of revenue. However, after examining the order of Authorities Below and other relevant records our observations are as ....