TaxTMI 
TaxTMI 
2020 (10) TMI 1015
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....ct and circumstances of the Appellants case. 2. The learned Principal Commissioner of Income Tax (Central) was not justified in law and fact to set aside the assessment order dated 29/12/2016 and direct the Assessing Officer to make redo the assessment de-nova after due consideration of the fact and law with regard to issues mentioned in the show cause notice. 3. The learned Principal Commissioner of Income Tax (Central) has grossly erred in revising the order passed by the Assessing Officer without appreciating that the order was not erroneous, much less prejudice to the interest of the revenue to warrant revision. 4. The learned Principal Commissioner of Income Tax (Central) was not justified in passing the order u/s 263 of the Income Tax Act, 1961 as the order passed u/s 143(3) r.w.s 153A of the Income Tax Act, 1961 was passed after proper enquiry on the facts and circumstances of the case and following the Jurisdictional High Court judgement in case of Lancy Constructions. 5. The learned Principal Commissioner of Income Tax (Central) erred in passing the order u/s 263 of the Income Tax Act, 1961 with the direction to make thorough verificatio....
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....delay by 13 days in filing present appeals before this Tribunal. Before us, Ld.AR submitted that, delay occasioned to file appeal before this Tribunal was not intentional and deliberate and grave injustice would be caused to assessee, if appeals are not admitted. Ld.CIT.DR on the contrary, vehemently argued for the appeals to be dismissed in limne. 3. We have perused submission by assessee in the affidavit. Hon'ble Supreme Court in Collector, Land Acquisition vs. Mst. Katji & Ors reported in (1987) 167 ITR 471 held that, when substantial justice and technical consideration are pitted against each other, cause of substantial justice deserves to be preferred. Hon'ble Court has held that, there is no presumption that delay is occasioned deliberately or on account of culpable negligence or on a malafide, and that litigation does not stand to benefit by resorting to delay, in fact he is on serious risk. 4. In various cases Hon'ble Supreme Court and Hon'ble High Court's time and again laid down principles that, there should be a liberal, pragmatic, justice oriented and non-pedantic approach while considering the application of condonation of delay. The term "sufficient ca....
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....he Act to present case by Ld.Pr.CIT. He submitted that the said Explanation 2 was inserted w.e.f. 01/06/2015, and therefore, not applicable to the years under consideration, being prior to insertion. He placed reliance on decision of Hon'ble Supreme Court in case of NTPC Ltd. vs.CIT, reported in 229 ITR 383. 7. We are convinced that this additional ground of appeal is purely legal ground emanating from facts available on record only. The admission of this ground does not require any further investigation into the facts. This has been fairly conceded by Ld.CIT.DR also. So this ground, being purely legal ground, is entertainable and admissible for hearing as per the provisions of Rule 11 of the ITAT Rules. Accordingly, following decisions of Hon'ble Supreme Court in case of NTPC Ltd. vs.CIT, reported in 229 ITR 383 and decision of Hon'ble Delhi High Court in case of Jute Corporation of India vs. CIT reported in 1991 AIR 241, we are inclined to admit the Additional Ground nos:12-13. Brief facts of the case are as under: 8. Separate assessment orders for all years under consideration have been passed by Ld.AO on 29/12/2016, under section 143(3) read with section 153A of the....
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....Tax Vs Anil Kumar Bhatis 352 ITP 403 (Delhi). c. Commissioner of Income Tax Vs Kabul Chawla 380 ITR 573 (Delhi). d. Principle Commissioner of Income Tax Vs Kurele Paper mills Pvt. Ltd. 380 ITR 761 (Delhi). In this regard, it is seen from the assessment order that no incriminating material has been brought on record in support of the additions which have been made. The Jurisdictional High Court judgment in the case of CIT. vs. Lancy Construction 383 ITR 168 Is the later judgment which is' being followed by the Bangalore Tribunal. Therefore, following judicial discipline, I hereby allow the above grounds of appeal. In the result, the appeal of the appellant is allowed." 12. Be that as it may, Ld.Pr.CIT sought to revise assessment orders for all assessment years under consideration, and issued separate notice u/s.263 on 04/03/2019 to assessee. Ld.AR submitted that, in notice issued, Ld.Pr.CIT, recorded that, Ld.AO did not examine payments made by assessee in cash for purposes of buying lands which was claimed as expenditure for arriving at direct income from sale of land, and whether such expenditure paid in cash attracts provision o....
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....found during the search. The similar view of taken by the Bombay High Court is case of CIT Vs Gurinder Singh 386 ITR 483. The ITAT Pune in Leelavati Vijaykumar Kotecha Vs ACIT ITA No. 1294 to 1297/PUN/2016, wherein addition u/s 68 was agated, the Pune ITAT in view of the Bombay High Court judgment set aside the order of the Assessing Officer passed u/s 153A of the Income Tax Act, 1961. 2. The Delhi Tribunal in case of Lord Krishna Dwellers (P) Ltd. Vs DCITITA No. 5294/DEL/2013 and 2403/DEL/2014 stated that "the transactions found in the sale deeds are duly recorded in the regular books of account of the assessee. The Assessing Officer has not pointed out any defect in the said transactions and also Assessing Officer has neither doubted the genuineness of the transaction nor he has doubted the identity of the payees. Hence-mechanical invocation of provisions of section 40A(3) could not be mechanically. The intention behind the provision of section 40A(3) of the Income Tax Act, 1961 has to be looked into. Section 40A(3) was inserted by the Finance Act, 1968 with the object of curbing the expenditure in cash and to counter tax evasion. The CBDT Circular No 6....
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.... The powers of the appellate authority are co-extensive and co- terminus with the powers of the assessing authority. It is equally well settled that the CIT could have not exercise revisional jurisdiction qua proceedings before an appellate authority. The order of assessment does not have any independent existence and stands merged with the order of the appellate authority." Since the order of the Assessing Officer is merged with the order of the CIT(A), in all respect and for all issues, then CIT has no jurisdiction to revise the order u/s 263 of the Income Tax Act, 1961. II 5. Section 153D states that 'No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of [sub-section (1) of] section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 1538, except with the prior approval of the Joint Commissioner. [Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the [Pr....
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....day one, which banks were closed, Payments were made to farmers for purchase of their agricultural land and payments were duly supported by various documents in form of conveyance deed, etc. Once the transactions were considered genuine and bona fide, then same were taken out of purview of sect/on 40A(3)./ [The copy of judgment is enclosed herewith]. The Hon'ble Delhi Tribunal by holding as above, relied on the following judgments: 1. Sri Laxmi Satranarayana Oil Mills vs. CIT 367 ITR 200 (T & AP) 2. Marigold Merchandise (P) Ltd. in ITA No.5170/Del/2014 dated 1110912017 3. Harshila Chordia vs. ITO 298 ITR 349 (Raj) And also, the assessee relied on the judgment öf.High Court of Delhi in case of R.C. Goyal Vs. CIT in ITA N6.636 of 2012. The above said judgments are squarely applicable to the facts of the Assessee's case. In view of the above submission Your Honour is requested to drop the proceedings initiated u/s 263." 15. Thereafter, on 26/03/2019, Ld.Pr. CIT passed impugned order by observing as under: "7. I have considered the submissions of the assessee and duly gone rough the records availabl....
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.... reported in 2016tczxrnann.com 264 (K4RNATAKA) was valid since it is the latest judgment. We have considered the said judgment. Therein the Hon'ble High Court held in para 6, as follows: "Para 6 - ........Merely because a search is conducted in the premises of the assessee, would not entitle the Revenue to initiate the process of reassessment, for which there is a separate procedure prescribed in the statute. It is only when. the conditions prescribed for reassessment are fulfilled that a concluded assessment can be reopened. 7. On considering the same, we are of the considered view that the reasons assigned by the Tribunal are erroneous. Firstly, the judgment reported in CANARA HOUSING DEVELOPMENT COMPANY was riot even considered in Lancy Construction's case Seconding, Lancy's case was dismissed at the stage of admission without even a notice to the Assessee. The High Court in the case of LANCY CONSTRUCTIONS, was of the view that no substantial question of law would arise for consideration in the appeal. Therefore, in the absence of any substantial question of raw, the question of admitting the appeal would be inappropriate. A judgement of the court ....
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....ck of enquiry makes the assessment order erroneous and prejudicial to the interest of revenue. It is for the .AO to collect the facts, give an opportunity to the assessee, examine whether any circumstances exist calling for exception to the 0A(3) provisions u/r 6DDJ and to apply the correct position of law thereafter. There is absolute failure on the part of the AO in this regard and it is such failure which calls for revision of the assessment order u/s 263 of the Act. 11. In view of the above facts and circumstances of the case, I am satisfied that the Explanation (2) of Section 263 is clearly attracted in this case as the order is passed without making inquiries or verification which should have been made and hence it has made the assessment order passed not only erroneous but also prejudicial to the interests of revenue. Accordingly, the impugned assessment order is set aside with a direction to the Assessing Officer to make requisite inquiries and proper verification with regard to the issues mentioned above and redo the assessment de-novo after due consideration of the facts and law in this regard. The assessee is at liberty to adduce the facts as deemed relevant bef....
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.... Ld.Pr.CIT has no jurisdiction to revise the orders in present case for A.Y 2011-12 to 2014-15 Ld.AR thus prayed for annuling orders of Ld.Pr.CIT, passed u/s 263 of Income Tax Act, 1961 dated 26/03/2019 for all years under consideration. 20. He placed reliance on following decisions in support of his claim: * CIT Vs Lancy Constructions 383 ITR 168 Karnataka High Court * CIT Vs Continental Ware Housing Corporation 374 ITR 645 Bombay High Court * CIT Vs Gurinder Singh 386 ITR 483 Bombay High Court * CIT Vs Kabul Chawla 380 ITR 573 Delhi High Court * Raju 3 Soomaney Vs ACIT in ITA No.347114um/2014 Mumbai ITAT * Kolkata ITAT 'C' Bench in case of Krishna Kumar Singhania Vs Dy. CIT LT(SS) Appeal No. 104 to 112 (Kol) of 2017 author of judgment Sri. N.V. Vasudevan 3M & M. * Indore ITAT in case of Omprakash Gupta Vs ACIT IT(SS)A.No.277 to 2811Ind/2017, 283 to 2871Ind/2017 * Delhi Bench ITAT in case of ACIT Vs SMC Power Generation Ltd in ITA No.33951Del/2015 CO No.4361DeI/2015 * Mumbai ITAT 'E' Bench in case of Dy.CIT Vs Sopariwala Exports in ITA No.3037, 3038, 3040 and 3077/Mum/2014 ....
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....sides in light of records placed before us. 24. Decisions relied by Ld.AR is not in the context of applicability of Explanation 2. Explanation 2 was inserted by the Finance Act, 2015, w.e.f 01/06/2015. Explanation 2 sets out, what orders passed by Assessing Officer constitute orders, which are erroneous, in so far as they are prejudicial to the interest of Revenue. We have perused Explanatory notes to Memorandum of Objects to the Finance Bill, 2015, reported in (2015) 371 ITR 233 (St). It has been mentioned that, issue of what constitutes assessment orders, "erroneous and prejudicial to the revenue", is a contentious one and Explanation 2 was introduced to clarify, what constitutes an erroneous order that is prejudicial to the revenue. At this juncture, we agree with argument advanced by Ld.Standing Counsel that if interpretation advanced by Ld.AR is accepted, all decisions passed by Hon'ble High Courts across the country and Hon'ble Supreme Courts, upholding orders passed under section 263 for no enquiry, will have to be considered redundant. This cannot be the intention of legislature. In our opinion, Eplanation 2 is clarificatory in nature, as it expressly specifies cir....
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....td Vs ITO in ITA No.7144/Del/2017 dated 27-06-2018 l. Sri Laxmi Satranarayana Oil Mills vs. CIT 367 ITR 200 (T & AP) m. Marigold Merchandise (P) Ltd. in ITA No.5170/Del/2014 dated 11/09/2017 n. Harshila Chordia vs. ITO 298 ITR 349 (Raj) 26. Ld.AR has also relied on decisions reproduced in para 20 hereinabove in while discussing the legal issue. 27. On the contrary, Ld.Standing Counsel for revenue submitted that all these decisions relied upon by Ld.AR are in context of 153A/153C proceedings, wherein additions were made by assessing officer in a concluded assessment without there being seized materials to support. He submitted that, ratio laid down by Hon'ble High Court and various coordinate benches of this Tribunal in above referred decisions does not have any bearing on the facts of present case. Ld.Standing Counsel submitted that reliance is placed by Ld.AR on CIT vs Lancy construction (supra) passed by Hon'ble Karnataka High Court. He further submitted that, Hon'ble Karnataka High Court in (GMR Energy Ltd.,) in ITA No. 358-360 of 2018 by order dated 08/01/2019 held that, view taken by coordinate bench of Karnataka High Court in Lancy constructio....
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....iscerned by him from assessment records. 32. In decision relied on by Ld.AR of Hon'ble Bombay High Court in case of CIT vs Slum Rehabilitation Authority (supra), Hon'ble Court considered the issue in case of trust, wherein, facts were that, assessee therein challenged revision order before Mumbai Tribunal and Mumbai Tribunal allowed appeal on the ground of merger, as well as on the ground that the order of assessment could not be stated to be prejudicial to the interest of the revenue since assessing officer rejected assessee's claim of exemption under section 11 of the Act, may not be with reference to section 2 (15) of the Act. 33. In the present facts of the case, applicability of principle of merger do not arise since Ld.AO had not considered the issue of expenditure made in cash by assessee and applicability of section 40A (3) of the Act u/s 143(3) r.w.s 153A. On an appeal by assessee before Ld.CIT (A), we note that assessee challenged only disallowances made by Ld.AO, under the head capital gains. 34. Hon'ble Supreme Court in Malabar Industrial Co. Ltd. v. CIT (supra) held that: "There can be no doubt that the provision cannot be invoked to correct each ....