TaxTMI 
TaxTMI 
2019 (1) TMI 1408
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....ected for scrutiny assessment u/s 143(3) of the Income Tax Act, 1961 through CASS system of ITD for verification of suspicious long term capital gain on shares (inputs from investigation Wing). Statutory notice u/s 143(2) of the Income Tax Act, 1961 dated 18.09.2015 was issued and served upon the assessee. Subsequent notices u/s 143(2) and 142(1) of the Income Tax Act, 1961 alongwith questionnaire were issued and served upon the assessee. Sh. Ashok Kumar Goyal & Sh. Satish Kumar Goyal, Chartered Accountants, counsels for the assessee furnished Power of Attorney duly signed by the assessee and accepted by them and attended the assessment proceedings from time to time and furnished the requisite information/documents/evidence. The requisite details/information/ documents/ evidence filed by the counsel have been placed on record. The books of a/c alongwith original vouchers and other documents were produced by the assessee, which were examined". 2. From the examination of the above Assessment Order it can be deciphered that the Assessing Officer has passively mentioned about the inputs from investigation wing regarding the suspicious long term capital gains on shares and nothing be....
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....unless it is not in accordance with law. If an ITO acting in accordance with law makes certain assessment, the same cannot be branded as erroneous by the Commissioner simply because according to him the order should have been written more elaborately. This section does not visualise a case of substitution of judgment of the Commissioner for that of the ITO, who passed the order, unless the decision is held to be erroneous. Cases may be visualised where ITO while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimates himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and, left to the Commissioner, he would have estimated the income at a higher figure than the one determined by the ITO. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the ITO has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion and ....
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....enue, is a quasi-judicial act because on this consideration or opinion the whole machinery of reexamination and reconsideration of an order of assessment, which has already been concluded and controversy about which has been set at rest, is again set in motion. It is an important decision and the same cannot be based on the whims or caprice of the revising authority. There must be materials available from records called for by the Commissioner. 5. It is further argued by the Ld.AR that if two views are possible and Assessing Officer allows one of the possible views, the CIT cannot sit over the judgement of the AO as held by the Apex Court in the case of CIT vs Max India Ltd [2007] 295 ITR 282 (SC). It was argued that Similar view has been taken by Jurisdictional High Court in the case of CIT vs Kelvinator India Ltd. [2011] 332 ITR 231 (Del). 6. The Ld.AR has also relied on the judgement of the Hon'ble Delhi High Court in CIT vs Sunbeam Auto Ltd 332 ITR 167 (Del)where in it was held that AO in the assessing order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was app....
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....quate that would not by itself give occasion to the Commissioner to pass orders under section 263 and argued that the exemption claimed u/s 10(38) cannot be disallowed due to the fault of the company unless and until there is specific charge against the assessee. 10. It is again argued that the assessee had purchased 30,000 shares of Panchshul Marketing on 16.03.2012 & paid the amount by cheque. These shares were received in his D-mat account no 10001736, copy of his D-mat A/c statement was also enclosed at the time of assessment.Then as per High Court order dt. 21.05.2013 due to merger of Panchshul Marketing with Kailash Auto Finance Limited, the assessee was allotted 30000 shares of Kailash Auto Finance Ltd. And that the assessee had purchased the shares on 16.03.2012 i.e. more than 4 years back and that too of a company named Panchshul Marketing Ltd which then merged with another company and he got the shares of another company as per the directions of the High Court. The assessee as an investor, can only accept the shares allotted to as per the merger agreement of the listed companies and as approved by the High court. 11. He also relied on the case of 'Lalit Jagmohan Jai....
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....acked up by material/evidence including contract notes, demat statement, bank account reflecting transactions, the stock brokers have confirmed the transactions the shares having been sold on the online platform of the stock exchange and each trade of sale of shares were having unique trade number and trade time. It is not the case of the AO that the shares which were sold on the date mentioned in the contract note were not the traded price on that particular date. .....It should be noted that the Stock Exchange and SEBI are the statutory authorities appointed by the Govt, of India to ensure that there is no stock rigging or manipulation. The AO has not brought any evidence on record to show that these agencies have alleged any stock manipulation and it cannot be said that merely because the stock price moved sharply, the assessee was to be blamed for bogus transactions 14. The Ld. AR concluded his arguments highlighting the following prepositions of law and facts : * The order passed by the Assessing Officer is neither erroneous nor prejudicial to the interests of the revenue. * The assessee is not covered in any of the conditions mentioned in Explanation 2 of....
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....ndly be considered with regard to validity of proceedings u/s 263 of I.T.Act: 1. Hon'ble Supreme Court in the case of Deniel Merchants Pvt. Ltd. vs. ITO (Appeal No. 2396/2017) dated 29.11.2017. (copy enclosed). The relevant judgement of Hon'ble Calcutta High Court in this case is also enclosed. In this group of cases, Hon'ble Supreme Court has dismissed SLPs in cases where AO did not make any proper inquiry while making the assessment and accepting the explanation of the assessee(s) insofar as receipt of share application money is concerned. On that basis the Commissioner of Income Tax had, after setting aside the order of the Assessing Officer, simply directed the Assessing Officer to carry thorough and detailed inquiry. 2. Malabar Industrial Co. Ltd. Vs CIT r20001 109 Taxman 66 (SC)/r20001 243 ITR 83 (SC)/r20001 159 CTR 1 (SC) (Copy Enclosed) where Hon'ble Supreme Court held that where Assessing Officer had accepted entry in statement of account filed by assessee, in absence of any supporting material without making any enquiry, exercise of jurisdiction by Commissioner under section 263(1) was justified 3. Rajmandir Estates (P.) Ltd. Vs PCIT T70 taxmann....
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.... Hon'ble ITAT F-Bench in the case of PTC Impex (India) Pvt. Ltd. Vs CIT, ITA No. 2860/Del/2010 dated 03.04.2018 Hon'ble ITAT Delhi F- Bench has held as under: "21. We have carefully considered the rival contention and also gone through the order of the Ld. CIT u/s 263 and the order of the assessing officer passed u/s 143 (3) of the act which was subject to revision by the CIT. We have also perused the various case laws cited before us by the parties. According to section 263 of the Act, Commissioner of Income tax can resort to corrective measures by revising the assessment order passed by the Assessing Officer, if after examining records such assessment order passed by the Assessing Officer, he (the Commissioner of Income-tax) found that such an order passed by the Assessing Officer is erroneous and prejudicial to the interest of revenue. In Malabar industrial Co Ltd versus CIT 243 ITR 83 (SC) Hon'ble Supreme Court held the Commissioner has satisfied of twin conditions namely (i) that the order is erroneous, (ii) that it is prejudicial to the interest of revenue. As held in several judicial precedents that Commissioner does not have power to revise the order of the Ld. ass....
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....fore AO as per version of the assessee on 26/12/2007. This too is the submission of the assessee before CIT (A) which has not been adjudicated by CIT (A). Even otherwise, mere production of books of accounts does not make the issues before us fall in to the category of inadequate inquiry". If we agree to such an argument then, in all cases where the books of accounts were produced before the Id AO, then the case would fall outside the purview ITA No. 2860/Del/2010 A Y 2005- 06 PTC Impex (India) pvt Ltd Vs. The Commissioner Of Income tax of section 263 of the act. Further No records of communication by the AO to assessee and reply by assessee to Id AO was shown to us to show on these four issues that the Assessing Officer had applied his mind on any of them. According to us case before us is of Jack of inquiry" and not absence of any inquiry. All judicial precedents relied up on before us related to „ absence of adequate inquiry but none of them dealt with the issues of complete lack of inquiry as in case before us. Hence, we do not have any hesitation in upholding action of Id CIT in invoking his jurisdiction u/s 263 of the act. Hence, order passed u/s 263 of the act by the I....
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.... find that the Ld. PCIT has clearly brought about the error in the assessment order and has also directed the Assessing Officer to take remedial action to take action as per the law after providing due opportunity to the assessee. Thus, it can be said that the Ld. PCIT has not exceeded his jurisdiction nor directed the Assessing Officer to pass the assessment order in any particular way thus not interfering in the judicial function of the Assessing Officer. 17. On going through the facts, it can be observed that the Assessing Officer has not conducted any enquiry and this is a clear case of lack of enquiry not a case inadequate enquiry. Further non application of mind by the Assessing Officer can be easily gauzed from the fact that the information available with the Assessing Officer has not been utilised during the assessment proceedings which makes the case fit for applying the provisions of explanation 2 (a) of section 263. Thus based on the facts on record the contention of the assesee cannot be held to be valid in which are detailed as under :- (a) The order passed by the Assessing Officer is neither erroneous nor prejudicial to the interests of the revenue : The o....