TaxTMI 
TaxTMI 
2020 (12) TMI 560
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....ad issued a show cause notice dated 12.01.2018 which is placed at page 1 of PB wherein he had raised only one issue i.e. in respect of salary of one of its employees namely Shri Angad Singh which question is discernible on perusal of the show cause notice (SCN) which is reproduced as under for ready reference: 3. According to ld. A.R in response to the show cause notice, the assessee filed written submission on 24.01.2018 (page 2 of paper book) wherein the assessee denied understatement of investment of Rs. 12 lakhs as alleged by the Ld. Pr. CIT in SCN in respect of its employee Shri Angad Singh and attributed the confusion caused on the person who prepared the Balance Sheet of Shri Angad Singh for AY 2013-14 wherein according to assesse....
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....According to Ld. AR, these additional issues were never a subject matter of Show Cause Notice issued by Ld. Pr. CIT. So, this observation followed by direction of Ld. Pr. CIT at para 5 while setting aside the assessment order for fresh assessment on the additional issues discussed at para 4.2 also, according to Ld. AR, was bad in law, since according to him, neither these additional issues were subject matter of the show cause notice nor the assessee was given any opportunity of hearing on these additional issues. This omission on the part of Ld. Pr. CIT i.e., not providing an opportunity of hearing on these additional issues was bad in law for violation of Natural Justice as held by the Hon'ble Supreme Court in the case of CIT vs. Amit....
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....while issuing SCN which is about understatement of value of Investment/Asset of Rs. 12 lakh (Rs. 6 lakh + Rs. 6 lakh) can only be looked into by AO while giving effect to the impugned order of Ld. Pr. CIT. For that he relied on the decision of this Tribunal in M/s. Tirupati Construction vs. CIT in ITA No. 1186/Kol/2014 for AY 2009-10 dated 03.02.2016 wherein the Tribunal in that case was pleased to modify the order of Ld. Pr. CIT in respect of understatement of receipt to the tune of Rs. 1.20 crores because it was neither the subject matter of the show cause notice nor opportunity was given to the assessee on that issue during the revisional proceedings by that Ld. Pr. CIT. According to Ld. A.R, this order in M/s. Tirupati passed by the Tri....
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....ccount was sought from assessee (4) and why there was any occasion for further verification u/s. 37(1) of the Act was necessary or not. And in addition, whether the assessee was put to notice on the additional issues by the Ld. Pr. CIT during the revisional jurisdiction on 12.01.2018 or afterwards before he passed the impugned order on 20/23/03/2018. However, after perusal of the order sheet and the case records, the Ld. CIT D.R fairly conceded that there was no mention about any such query being raised by the Ld. Pr CIT on these additional issues during the revisional proceedings before him. Thus, we find that there was no opportunity of hearing was provided to assessee on the additional issues as contemplated in section 263 of the Act bef....
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....uineness and reasonableness of the payments made to Shri Angad Singh is required to be verified from the angles of Section 37(1) and Section 40(b) r.w. Section 40A(2) of the Act. Likewise, it is seen that various expenses claimed as per the P & L A/c also remained to be verified by the A.O. He is now required to verify them as per the provisions of Section 37(1) and related Sections of the Act." 7. From a perusal of the aforesaid issues, we note that these additional issues for which also Ld. Pr. CIT has given direction to AO for fresh assessment was neither a subject matter of the SCN nor an opportunity was given by the Ld. Pr. CIT before passing the impugned order. We note that the Ld. CIT, DR after perusal of the order sheet of Ld. Pr....
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....ers to the above. 2. On examination of your assessment records for the above mentioned assessment year, it appears prima facie that there was failure on the part of the A.O. to assess the income correctly and as such, the instant order u/s 143(3) is erroneous in so far as it is prejudicial to the Interest of the Revenue within the ambit of sec. 263 of the Income Tax (IT) Act, 1961. 3. In this regard the following discrepancy has been observed: During scrutiny of your assessment folder, it was noticed that in response to department's notice u/s 133 (6) dated 02.02.2016, it was informed by one of your employee, namely, Sri Angee Singh vide latter dated 09.02.2016 that total salary receivable from you, during the ....