TaxTMI 
TaxTMI 
2022 (6) TMI 188
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....ent year 2011-12, except with variance in figures. 3. In its appeal for assessment year 2010-11, the assessee has raised following grounds:- "The Appellant appeals against the impugned Order dated 16.03.202 1 passed by the Principal Commissioner of Income-tax (Central)-1, Mumbai (the PCIT) under section 263 of the Income-tax Act, 1961 (the Act), in accordance with section 253(1)(c) of the said Act, on the following amongst other grounds each of which is in the alternative and without prejudice to any others: 1. "That the PCIT erred in passing the impugned Order setting aside the assessment order and directing the AO to undertake assessment proceedings denovo. 2. That the PCIT failed to appreciate that the jurisdictional pre-conditions as contained in section 263 of the Act being the assessment order being both erroneous and prejudicial to the interests of the Revenue had not been fulfilled in the present case. 3. That the PCIT failed to appreciate that Explanation 2 to section 263(1) of the Act had no application on the facts of the present case and, hence, the PCIT erred in invoking the same to justify the exercise of jurisdiction under secti....
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....Wing, found that you were beneficiary in transaction with the following persons: 4. M/s Minal Gems (PAN - AHOPJ 4856D) - Rs. 1,25,82,073 M/s Jewel Diam (PAN - ABUPV 3494J) - Rs. 58,05,715 M/s Minal Gems (PAN - AHOPJ 4856D) - Rs. 48,09,162 5. On the basis of that the AO had reasons to believe that above mentioned amount of Rs. 23,196,950 chargeable to tax had been escaped assessment in your case for AY 2010 - 11. Accordingly, the AO was convinced and satisfying that this was a fit case for reopening of assessment proceedings." 7. During the reassessment proceedings, in response to the notices issued under section 143 (2) of the Act, assessee filed documents vide letters dated 18/12/2015, 18/02/2016 and 06/03/2016 in respect of the transactions with Minal Gems and Jewel Diam. The assessee also clarified that that there was only one Ledger account maintained for Minal Gems and thus accepted only one transaction of Rs. 1,25,82,073 with Minal Gems. 8. While the reassessment proceedings were pending, search and seizure action under section 132 and survey action under section 133A of the Act was conducted in the case of Shri....
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....ck assessment proceedings. As per the Bombay High Court decision in the case of CIT vs Continental Warehousing Corporation enquiry and addition can be dpne even on issues not related to the search findings, in the assessment years for which scrutiny assessments have been abated. Thus, your case squarely falls into this scenario. In view of the above, / have reason to believe that an amount of Rs.2,31,96,950 chargeable to tax has escaped assessment for AY 2010-11, by reason of the failure on the part of the assessee to disclose fully and truly all material acts necessary for its assessment for the said assessment year. Thus the order passed by the A. 0. has rendered the assessment erroneous in so far as it is prejudicial to the interest of revenue, for the reasons mentioned above. Therefore, prima facie action under section 263 of the I. T Act, 1961 is considered necessary." 10. In response, assessee filed reply vide letter dated 25/07/2018. The learned PCIT after going through the submission of the assessee issued another notice dated 26/02/2020 for furnishing additional details / documents / evidences. The said notice was replied by the assessee vide letter da....
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....cryptic order. The learned DR further submitted that the issues pointed out by the Investigation Wing were not properly examined by the Assessing Officer vide aforesaid order and general/common notice was issued seeking information from the assessee. Learned DR submitted that there is no indication in the assessment order as to how the Assessing Officer has dealt with submissions filed by the assessee. 14. In a short rebuttal, learned counsel submitted that findings by the Assessing Officer are only necessary in case where Assessing Officer doesn‟t agree the submission of the assessee and make any disallowance/addition. 15. We have considered the rival submissions, decisions referred and perused the material available on record. In the present case, it is evident from the record that the initial proceedings under section 147 and subsequent proceedings under section 263 of the Act are based upon the information received from Investigation Wing, Mumbai, which, as per record, has emanated as a result of search action under section 132 of the Act in the case of Bhawarlal Jain group of cases of Mumbai. It is also evident that in both the notices i.e. issued under section 147....
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....ccounts. The Assessing Officer issued notice dated 30/10/2017 under section 142 (1) of the Act stating as under: "Vide your authorized representative's letter dated 31.05,2017 and 21.09.2017, you had requested this office to provide copy of the documents loose papers, any other material findings and alleged specific information regarding foreign bank accounts. In his regard, it is informed that as requested by your AR, vide letter dated 12.04.2016, the Xerox copies of all the seized /impounded material were handed over to your AR by the Investigation Wing, Mumbai. Further, the Information/documents received from Singapore Tax Authorities about foreign bank accounts cannot be shared, since the same is received under Exchange of Information Article of India-Singapore Double Taxation Avoidance Agreement (DTAA) and its use and disclosure is strictly governed by It and as per the terms prescribed in Manual on Exchange of Information issued by CBDT in May, 2015. 2. Further, there are certain points in connection with the block assessment proceedings u/s 153A r.w.s. 143(3) oil' the Income-tax Act 1961, for AY 2010-11 to 2016-17 on which I would like to some furth....
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....ceived from Investigation Wing, Mumbai. The learned PCIT also did not mention as to how the issue of bogus purchase from aforesaid 2 entities, in respect of which assessee is alleged to be the beneficiary, is proved in the present case vis-à-vis the details filed by the assessee before the Assessing Officer and also produced before the learned PCIT. It is also not the claim of Revenue that the details filed before the Assessing Officer during the reassessment proceedings as well as during proceedings under section 153A of the Act were not sufficient to decide whether the purchases made by the assessee from the aforesaid 2 entities were bogus. Merely by referring to clause (a) and (b) of Explanation - 2 to section 263 of the Act, the learned PCIT alleged that the assessment order is erroneous insofar as it is prejudicial to the interest of revenue. 21. Neither in revision proceedings under section 263 nor during the hearing before us, it has been pointed out as to what enquiry was not conducted by the Assessing Officer with regard to the issue of bogus purchase, which can lead to the conclusion that the assessment order is erroneous and prejudicial to the interest of reven....
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....erything stated in the income tax return. In a way, his role in the scrutiny assessment proceedings is somewhat akin to a conventional statutory auditor in real- life situations. What Justice Lopes said, in the case of Re Kingston Cotton Mills [(1896) 2 Ch 279, 288)], in respect of the role of an auditor, would equally apply in respect of the role of the Assessing Officer as well. His Lordship had said that an auditor (read Assessing Officer in the present context) "is not bound to be a detective, or, as was said, to approach his work with suspicion or with a foregone conclusion that there is something wrong. He is a watch-dog, but not a bloodhound. ". Of course, an Assessing Officer cannot remain passive on the facts which, in his fair opinion, need to be probed further, but then an Assessing Officer, unless he has specific reasons to do so after a look at the details, is not required to prove to the hilt everything coming to his notice in the course of the assessment proceedings. When the facts as emerging out of the scrutiny are apparently in order, and no further inquiry is warranted in his bonafide opinion, he need not conduct further inquiries just because it is lawful to mak....