TaxTMI 
TaxTMI 
2021 (12) TMI 979
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....r.w.s. 147 of the Act is bad and illegal, hence the Ld. PCIT cannot assume valid jurisdiction u/s 263 of the Act for such illegal assessment order." 3. We note that by way of additional grounds, assessee has challenged the validity of reassessment proceedings under section 147/148 of the Act. This is not the issue before us. We note that proceedings under section 147/148 and consequent assessment under section 143(3) r.w.s. 147 are separate proceedings which have got concluded long back. Whether the same was challenged or not by the assessee is a matter of his choice and his right, at that point of time. Before us, the assessee has challenged the correctness of the order passed by the ld PCIT under section 263 of the Act. Therefore, we have to adjudicate whether ld PCIT has rightly exercised his jurisdiction under section 263 of the Act or not. Thus, as of now, the validity or otherwise of proceedings under section 148 have no bearing on present proceedings before us, therefore, certain judgments referred by the ld Counsel are distinguishable on facts, hence we dismiss the additional grounds raised by the assessee. 4. The main grievance raised by the assessee in this appeal, ....
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....iage and has made an addition of Rs. 18,989/- by applying provisions of section 44AE. While going so, he has completely ignored the fact that when the account itself was not disclosed, how can the deposits in the said bank account be part of the business turnover (disclosed) of the assessee. Further, when the information with the AO was about an undisclosed bank account of the assessee, he should have asked for the complete bank statement of the said bank account for the entire duration of life of the said bank account i.e. from the date of opening of the account to the date of the closure of the account or to the date of opening of the account the date of the closure of the account or to the date when the notice calling for the bank statement was issued. By not doing so, the AO has ignored the very minimum basic requirements of requisite inquiries which were required to be made before completing the assessment by way of accepting the claim made by the assessee without bothering to examine the veracity of the claim so made. Therefore, the order of the AO is erroneous as well as prejudicial to the interest of revenue. 5. You are, therefore, required to show-cause as to why ....
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....osing the initiation of proceedings u/s 263 and questioning the initiation of the re-assessment proceedings by the AO and consequent order u/s 147 r.w.s. 143(3) to complete U-turn and finally accepting that the entire deposit in the form of cash as well as cheque in the said bank account are completely undisclosed and unaccounted for. This reflects the true conduct an intention of the assessee which has come out during the current proceedings. From the tabulation of quantum of deposits in various year, it can be seen that the assessee has been not disclosing the deposits in the said account over the long period of time beginning 2001. In facts, the account itself is undisclosed one therefore, the entire deposits in whatever form remain unaccounted for as far as the taxation of the income is concerned. The copy of entire bank statement from 2001 to 31.03.2015, the date up to which the bank statement is made available with the bank should have been obtained by the AO and the amounts of deposits in all other assessment years should be brought to tax with all attending penal consequences. The bank statement, in respect of two bank accounts maintained with HDFC, Bank, Vapi as mentioned ....
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....return when the circumstances of the case are such as to provoke an inquiry. It is because it is incumbent on the Income-tax Officer to further investigate the facts stated in the return when circumstances would make such an inquiry prudent that the word "erroneous" in section 263 includes the failure to make such an enquiry. The order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct. We derive support for the proposition as stated above from the decision of the Hon'ble Delhi High Court in the case of Gee Vee Enterprises 99 ITR 375 (Del). 13. Taking into account the principle laid down by the Hon'ble Delhi High Court in the case of Gee Vee Enterprises (supra), we note that order passed by the assessing officer is based on incorrect assumption of facts and moreover he did not make further enquiry. For better appreciation of facts, it would be relevant to quote question no.9 and its reply of the assessee, during the revision proceedings: Q.9:- In continuation of question No.8 as a part of the statement recorded on 17.03.2017, you are requested to exp....
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....it of Rs. 11,65,300/- has been reflected in return of income, which is not sustainable in law, hence order passed by the assessing officer is erroneous. 16. In addition to this, assessing officer has made addition of Rs. 18,989/-, (vide para 6 of assessment order) being opening balance in bank account no.36612082001, instead of making addition to the tune of Rs. 11,65,300/- being cash deposited by the assessee during the assessment year under consideration, thus, assessing officer framed the assessment order with incorrect assumption of facts and without application of mind, therefore, order passed by the assessing officer is prejudicial to the interest of revenue. Just to discuss the issue in the assessment order is not enough, it is to be seen whether assessing officer has applied his mind or not. At the cost of repitation we state that the AO is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. The meaning to be given to the word....