AI Drafter 
TaxTMI 
TaxTMI 
2019 (4) TMI 1044
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....ember 2008 reads as under: "Whether the Commissioner of Income Tax correctly exercised his powers under Section 263 of the Income Tax Act, 1961 in cancelling the assessment order passed under Section 143(3) of the said Act and in directing the assessing officer to pass a fresh assessment order on all issues, except those, decided by the Commissioner of Income Tax (Appeals)?" Background facts 4. The background facts are that the Respondent Assessee is engaged in manufacturing and trading of rice. For each of the AYs in question its return was picked up for scrutiny and an assessment order was passed by the Assessing Officer (AO) under Section 143 (3) of the Act. The assessment order for AY 1999-2000 dealt with two of the issues viz., (i) claim of reduction by the Assessee under Section 80 HHC and (ii) deferred revenue expenditure. For AY 2000-2001 four issues were dealt with viz., (i) claim under Section 80 HHC, (ii) claim under Section 80 IA, (iii) issue relating to Section 43B of the Act and (iv) issue relating to Section 40A (7) of the Act. As far as AY 2001-02 is concerned the assessment order under Section 143(3) of the Act dealt with the issues of (i) claim unde....
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.... 9. After considering the reply of the Assessee to the above SCNs, orders were passed by the CIT under Section 22 of the Act on 25th March 2004 (in respect of AYs 1999-2000 and 2000-2001) and 29th March 2004 (in respect of AY 2001-2002). The CIT held that the Assessee's contention that it had furnished complete details of purchase and sales was only partly correct. The quality-wise breakup of rice purchased and sold i.e. Basmati, Tibar, Dubar and Kinki etc. was not furnished. It was noted that out of the Assessee's total sales for all products aggregating to Rs. 340 crores, sale of rice constituted Rs. 244 crores i.e. over 70% for which no item-wise or quality-wise breakup was furnished. 10. As regards closing stock, the CIT observed that their full particulars were not furnished. The Assessee produced its stock register but it was found that they did not contain the record of different qualities of rice. Only the aggregate quantity of rice received and dispatched was recorded therein. However, the sales receipts showed that the different quality of rice was mentioned therein. Consequently, the CIT held that it was not correct to apply the average rate of rice in the closing ....
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.... to determine the assessee's income correctly; (vi) quantitative analysis in respect of packing material and whether the assessee's explanation regarding the steep increase in packing expenses is justified. 17. If considered necessary, the provisions of section 142(2A) may also be invoked." 14. The above order of the CIT was challenged by the Assessee by filing three appeals being ITA Nos.2442, 2443 and 2444/Del/2004 in the ITAT. It was inter alia contended by the Assessee before the ITAT that the CIT had erred on facts and law in assuming that the AO had not made proper quantitative analysis or conducted necessary examination of the assessee's manufacturing and trading results. It was further submitted that the CIT was in error in examining the foreign travel expenses of the relatives of the directors. Impugned order of the ITAT 15. The ITAT framed the following issue which arose for consideration: "whether the assessments had been framed after making proper enquiries, as contended by the assessee both before the CIT and during the course of instant proceedings." 16. The ITAT disagreed with CIT that sales had been suppressed by the As....
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.... may be noticed that the material which the Commissioner can rely includes not only the record as it stands at the time when the order in question was passed by the Assessing Officer but also the record. Nothing bars/prohibits the Commissioner for collecting and relying upon new/additional material/evidence to show and state that the order of the Assessing Officer is erroneous." 20. In the present case, the inquiry undertaken by the AO has been referred to by the ITAT in paras 15 and 16 of its impugned order. The ITAT noted that the AO did examine the Assessee's production record and books of account. The ITAT noted that the nature of the business "remains the same as in the past" as does, "the method of accounting production". It was noted that Assessee had "duly furnished the details of opening stock, closing stock, sales and production i.e. consumption of paddy etc." The ITAT observed: "The Assessing Officer has examined the production records and Books of Accounts. We also notice from the order of assessment that AO has recorded a finding that the nature of business continues as in the past. It is a matter of record that the assessee has been maintaining statutory p....
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....suppression of sales. The CIT has in its impugned order dated 29th March, 2014 refrained from giving a finding on the said issues and therefore failed to come to any conclusion that the order of the AO on these issues was erroneous and prejudicial to the interest of the revenue. This again was not in compliance with the mandate of Section 263 of the Act. 24. Mr. Kapoor, learned counsel for the Assessee, pointed out that an identical issue has been adjudicated by this Court, in the case of this very Assessee for AYs. In CIT vs. Kohinoor Foods Limited (2015) 373 ITR 682 (Del) the issue of suppression of sale was dealt with and decided in favour of the Assessee. No Special Leave Petition was preferred against the said judgment which thus attained finality. A consolidated order was passed by the ITAT for AYs 2002-03 and 2007-08 and in doing it followed the earlier order passed by it for AYs 1999-2000 to 2001-02 which is impugned in the present appeal. 25. Turning to the period prior to AYs 1999-2000 to 2001-02 (which form the subject matter of the present appeals) it is seen that the case of the Assessee was reopened for AYs 1997-98 and 1998-99 by notices dated 25th March, 2004 a....