TaxTMI 
TaxTMI 
2018 (11) TMI 1713
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....e tax matters were being looked after by one Sri Syed M. Azam, legal advisor and A.R. The assessment order u/s.143(3) of the Act was passed on 26.02.2013. Subsequently after a gap of one year three months, the assessee received a show-cause notice u/s.263 of the Act, issued by the Ld. C.I.T.-14, Kolkata on 09.05.2014, which was handed over to his said A.R. for proceeding with the representation of the case of the Ld. C.I.T. The order u/s. 263 of the Act was finally passed on 30.03.2015 for de novo assessments on the issues as mentioned in the said 263 order and the order was received by the assessee on 31.03.2015. The assessee thereafter handed over the order to his said A.R., Sri Syed M. Azam, for future course of action to be taken in this regard. However, the said A.R. did not opt for filing any appeal against the said 263 order nor intimated anything to the assessee for any future course of action needs to be taken. In the meantime, the assessee received several notices u/s.142(1) of the Act from the A.O. in pursuance of the said order u/s.263 of the Act and assessment order u/s.263/143(3) was passed on 18.03.2016. Experiencing inaction on the part of the A.R., the assessee him....
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....out this legal right. Later on, when a Senior Lawyer advised assessee to file an appeal, the assessee immediately took steps to file the appeal. Therefore, the delay caused. We note that delay was because of the wrong advice of the Tax Professional for which assessees cannot be penalized. We also rely on the decision of the Coordinate Bench of this tribunal, in the case of M/s. Garg Bros. Pvt. Ltd. & Others vs. DCIT, in ITA Nos.2519 to 2521/Kol/2017, order dated 18.04.2018, wherein under similar set of facts and reasons, the Tribunal was pleased to condone the delay of 211 days. For the ends of justice and having regard to the reasons given in the petition, we condone the delay and admit the appeal for hearing. 5. By way of this appeal, the assessee appellant has challenged correctness of the order dated 30.03.2015, passed by the learned Commissioner of Income Tax (CIT)-14, Kolkata, for the assessment year 2010-11. Grievances raised by the assessee are as follows. (1) That on the facts and in the circumstances of the case, the Ld. CIT erred in initiating and passing the order u/s.263 of the Income Tax Act, 1961. (2) That on the facts and in the circumstances of....
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....return of income was processed u/s 143(1) of the Act. Later on, the assessee's case was selected for scrutiny u/s 143(2) of the Act and the Assessing officer completed the assessment u/s 143(3) of the Act. During the proceedings, under section 143(3) of the Act, the assessing officer examined the details of various expenses and after doing detailed scrutiny made the disallowance on account of material purchased to the tune of Rs. 1,44,880/-, disallowance on account of freight charges to the tune of Rs. 1,62,680/- and disallowance on account of site camp expenses to the tune of Rs. 17,195/-. 7. Later on, Ld. Commissioner of Income Tax (CIT) has exercised his jurisdiction u/s 263 of the Act. The Ld. Commissioner of Income Tax, on examination of the material on record, assessment order and assessment record, it was noted by him that the assessment order under section 143(3) dated 26.02.2013 is erroneous and prejudicial to the interests of revenue on the following counts, reproduced below: (i) On perusal of the record, it is noticed that assessee had not deducted tax at sources at the bill amount/payment on account of Transport Charges of Rs. 1,62,67,980/-. Labour charges o....
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....record, it is noticed that as per AIR information, assessee deposited cash of Rs. 16,53,000/- in the saving Bank account during the year and the Assessing officer has not examined the issue. (v) On perusal of the assessment records, it is noticed that assessee claimed expenses on account of purchases of materials of Rs.l,44,87,985/*, Transport Charges of Rs.l,62,67,980/-, Labour Charges of Rs.l,49,35,423/-& Machinery Hire Charges of Rs. 3,45,650/- and consumable store of Rs. 6,54,188/- during the year and you have not provided fully supporting vouchers & bills as well as detail of payment & mode of payment. Hence, genuineness expenses which were claimed in Profit & Loss A/c. seemed doubt full in absence of supporting bills & vouchers and further provision of Section 40A(3) of the Act. Are attracts if any the payment in cash exceeding Rs. 20,000/- by single entries. (vi) Further, assessee neither provided evidences in support of valuation of works under work-in progress nor reflected closing stock at the end of the year even though assessee was engaged in civil construction works where construction materials is purchased continuously till the month of March, 2010 f....
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....s. 60,34,719/-, party wise details of Transport & Hire charges for Rs. 38,00,000/-, details of Closing stock & work-in-progress and copies of Profit & Loss Account and Balance Sheet. The assessee was asked to furnish details of PAN of the person to whom payment was made in relation to transportation & labour charges. In response, Mr. S. M. Azam, authorized representative of the assessee, appeared and filed payment sheet of wages for the month of July, 2009 and Register of attendance of persons for the Month of November, 2009. 11. However, the ld CIT, rejected the contentions and submissions of the assessee and held that the assessment order u/s. 143(3) of the Income Tax Act dated 26-02-2013 passed by assessing officer, is erroneous in so far as it is prejudicial to the interest of revenue due to inadequate scrutiny of detailed facts and making such assessment in haste, without proper enquiries & verification and without examination of books of accounts & other records, and accordingly the order u/s.143(3) of the Income Tax Act dated 26-02-2013 was set aside with the direction to pass a fresh assessment order. 12. Aggrieved by the order of Ld. CIT u/s 263 of the Act, the asses....
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....item/ materials bill-wise (e)Value/amount of bill (d) Amount paid mentioning cheques no. and names & addresses of the drawee banks (e) Closing Balance, if any. 4. Self-certified copy of all bank accounts & statements along with original ones. 5. Rs. 18,99,579/- has been shown in the balance sheet under the head Finished /Traded goods under the head 'Current Assets'. In this regard submit a statement depicting detailed method of valuation of such finished/traded goods explaining input of raw materials vis-a-vis each lot of such finished/traded goods. 6. Details of party-wise cost of contract mentioning (a) Names & mailing address of the party, concerned (b) copy of Work Order (c) cost of raw-materials consumed (c) other expenditures, like cost of wages/labour charges etc. (d) value of contract received. 7. No VAT/Sales Tax is found debited or credited in the P&L A/c. Submit a statement on purchase bill-wise payment of VAT if your proprietorship firm paid any such taxes. If such expenditure is incurred then how the same has been accounted for? If maintained, produce VAT/ Sales Tax assessment record along copy of return (quarterly/ annual) s....
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.... of account regarding personal income & expenditure etc. and cash flow statement 17.Furnish details of 'Other current assets' (Rs. 9,22,989/-). 18. You have claimed deduction of 'contribution to recognized provident Fund' (Rs. 19,20,891/-). Produce the challans depositing such contribution within specified date/s. Also produce the recognition certificate from the appropriate authority. 19. Books of accounts, bills & vouchers, cash memos, Salary & wages registers and other registers etc. if any maintained. Enclo : Notice u/s. 142(1). Yours faithfully, Sd/- [S K SARKAR] DCIT, CIRCLE: MURSHIDABAD. Shri Tulsiyan explained the Bench that whatever, the documents, evidences and explanations demanded by the assessing officer by issuing notice under section 142(1) of the Act, as noted above, have been submitted by the assessee during the scrutiny proceedings under section 143 (3) of the Act. The assessing officer after doing detailed examination of the documents, evidences and explanations, passed the order under section 143(3) of the Act, therefore, the order passed by the assessing officer U/s 143(3) dated 26.02.2013 is....
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....3 (3) of the Act was passed by the assessing officer in haste, without proper enquiries and verification and without examination of books of accounts & other records. The concluding remark of ld CIT, under section 263 is given below for ready reference: "11. It is observed that, the assessment order u/s. 143(3) of the Income Tax Act dated 26-022013 passed by erstwhile ACIT, Murshidabad amounts to inadequate scrutiny of detailed facts and making such assessment in haste, without proper enquiries & verification and without examination of books of accounts & other records rendering it erroneous and prejudicial to the interest of revenue. In view of aforesaid errors, inadequacies and omission on part of A.O., the order passed u/s. 143(3) of the Income Tax Act, 1961 dated 26-02-2013 is considered erroneous in so far as it is prejudicial to the interest of revenue and accordingly the order u/s.143(3) of the Income Tax Act dated 26-02-2013 is set aside with the direction to pass a fresh assessment order after examining the evidence and documents and after giving opportunity to the assessee and in accordance with the law" We note that the assessee is a Govt. Licenced Electrical....
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....nducted by the assessing officer within a period of one year and five Months. Therefore, it can not be said that assessment under section 143(3) was completed "in haste, without proper enquiries & verification and without examination of books of accounts & other records" as alleged by the ld CIT in his order under section 263 of the Act. Hence, we do not agree with the ld CIT that assessment under section 143(3) was completed in haste, without proper enquiries & verification and without examination of books of accounts & other records. 17. We note that the Ld. CIT issued show-cause notice u/s. 263 of the Act dated 0701-2016 on his alleged supposition that the A.O. passed assessment order in haste by making inadequate scrutiny of details facts and without examining the books of accounts and other records. We note that during the course of 263 proceeding, as recorded by the Ld. CIT, himself in his order, that the assessee had filed written submissions before him with various information and evidences which, inter alia, included the following: (a) Transporters from local source and many parts of Murshidabad District supplied vehicles, JCP etc. to supply stone chips, sand, ....
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....oper verification to ascertain genuineness as well as applicability of section 40(a)(ia) and 40A(3) of the Act. The allegations made in the 263 show-cause notice and the A.O.'s conducting enquiry by issuing 142(1) notice as well as requisition through order sheet during the course of the assessment proceeding are summarized below to reveal that the A.O. got enquired the issues raised in the impugned show-cause notice before framing 143(3) assessment for the assessment year under consideration. It is pertinent to mention here that even if the so-called short-falls pointed out in 263 notice, may not match in verbatim with the requisitions vide 142(1) notice, but the facts remain that during the course of the assessment proceedings and hearings taken place before the Ld. A.O., the assessee submitted all such information and documents, which were considered before passing the impugned assessment order. The table below summarizes the issues as per notice U/s 263 issued by ld CIT, the same issues were covered by the notices issued under section 142(1) of the Act by assessing officer and on each issue the observation was made by the assessing officer while passing order under section ....
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....ges Rs. 1,62,67,980/-, Labour charges Rs. 1,49,35,423/-, Machinery Hire Charges Rs. 3,45,650/- & consumable store Rs. 6,54,188/-. 1)Points-7, 12, 13, 14 of notice Dated I8.10.2011; 2)Points- 5, 11, 12 of notice dated 10.07.2012. 3) O/S dt. 07.11.12 mentioning discussion on authenticity of labour payment details. 3) O/S dt. 19.12.12 acknowledging filing of more purchase details. 01 to 03 04 & 05 06 to 10 We note that it is abundantly clear from the above noted table that entire details and evidences in relation to queries raised in notice U/s 142(1) of the Act, and additional evidences submitted during the course of the assessment proceedings were before the assessing officer. After examining and verifying the above evidences vis-a-vis the queries made in notice U/s 142(1) of the Act, and after hearing the assessee on various dates as per order sheet entries, the Ld. A.O. as an adjudicator passed the assessment order u/s. 143(3) of the Act, assessing the total income under normal provision and thereby disallowed sum of Rs. 3,24,755/- under three heads as noted in para 16 of this order. Therefore, at this juncture, it is pertinent to mention here ....
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.....R. of the assessee appeared, submitted required details/evidences and explained the same. After hearing and discussing the matters with the A.R. on several dates and receiving requisite information/evidences in response to notices u/s.142( 1) of the Act, on as many as 18 issues, the Ld. A.O. was satisfied on his own perceptions about the correctness or otherwise of the return of income filed by the assessee. The issues on which he was dissatisfied, additions were made on those accounts. Therefore, the exercise aimed at ascertaining the correct income of the assessee has been fulfilled by the Ld. A.O. by exercising his quasi-judicial functions vis-a-vis passing the assessment order u/s. 143(3) of the Act. Therefore, certainly it is not a case wherein adequate enquiries at the assessment stage were not carried out or assessment was made in haste. However, what is an opinion formed as a result of these enquiries and verification of the materials is something which is in exclusive domain of the Assessing officer, and even if Commissioner does not agree with the results of such enquiries, the resultant order cannot be subjected to revision proceedings. For this, we rely on the decision....
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.... position gets further strength from the decision of Hon'ble jurisdictional High Court in the case of CIT vs. J.L. Morrison (India) Ltd. (2014) 366 ITR 593 (Cal), the relevant finding of which is applicable to the facts of the present assessee are given below: "85. Whether the assessment order dated March 28, 2008, was passed without application of mind is basically a question of fact. The learned Tribunal has held that the assessment order was not passed without application of mind. The records of the assessment including the ordersheets go to show that appropriate enquiry was made and the Assessee was heard from time to time. In deciding the question, the court has to bear in mind the presumption in law laid down in section 114 clause (e) of the Evidence Act: "that judicial and official acts have been regularly performed." 86. Therefore, the court has to start with the presumption that the assessment order dated March 28, 2008, was regularly passed. There is evidence to show that the Assessing officer had required the Assessee to answer 17 questions and to file documents in regard thereto. If the A.O. cannot be shown to have violated any form prescribed for ....
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....this Tribunal in the case of Chroma Business Ltd. vs. DCIT (2004) 82 TTJ 540 (Cal). Further our view is fortified by the decision of the Hon'ble Delhi High Court in the case of CIT vs. Vikas Polymers (2012) 341 ITR 537 (Del). Relevant part of the observation in this regard reads as under: "This is for the reason that if a query is raised during the course of scrutiny by the Assessing officer which was answered to the satisfaction of the Assessing officer but neither the query nor the answer was reflected in the assessment order that would not by itself lead to the conclusion that the order of the Assessing officer called for interference and revision." We are of the view that it is a settled position in law that provisions of section 263 of the Act do not permit substituting one opinion by another opinion. Therefore, the order of the Ld. C.I.T. cannot be sustained on the principle of 'erroneous' nature of the order of the A.O., as it is not erroneous. Further, in the instant case, to reiterate, there was no allegation by the Ld. revenue authorities that the evidences produced were fictitious or invented, thus accepted the authenticity of the same. Such an or....