TaxTMI 
TaxTMI 
2022 (10) TMI 819
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....allegedly advanced cash amount of Rs. 50,00,000/- jointly with his cousin Shri Jagpal Singh, the assessee in ITA 202/Chd/2021, to one Shri Satyapaul Jain for purchase of land. During the course of such assessment proceedings, the assessee was asked to furnish Income Tax Return as well as explain the source of the advance payment made. The assessee filed return declaring income at Rs. Nil and Agricultural Income of Rs. 4,50,000/-. It was the assessee's submission before the AO that the assessee was involved in agriculture and the assessee owned approximately 117 acres of land jointly with his family out of which 15 acres of land were in his own name as share in ancestral agricultural land. The assessee also filed cash flow chart, copy of the bank statement, Form 'J' as well as Jamabandi Fard. After perusing the documents, the AO noted that the source of advance payment amounting to Rs. 15,00,000/- was above board and that the returned income of the assessee was accepted. 2.1 Similarly, in the case of the other assessee Shri Jagpal Singh (ITA No. 202/Chd/2021), the assessee's case also was reopened and the AO required the assessee to explain the source of advance money paid to Shri ....
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..../2021 1 BECAUSE the impugned order dated 16.03.2021 is without jurisdiction as the very initiation of re-opening u/s 147/148 of the Act was bad in law and no power of revision could have been exercised u/s 263 of an illegal re-opening. 2. BECAUSE the jurisdiction exercised u/s 263 of the Act was illegal as the twin conditions of s.263 of the Act were not satisfied i.e. neither the order was erroneous nor prejudicial to the interest of the revenue. 3. BECAUSE the Assessing Officer after considering the material produced before it recorded its satisfaction and accepted the returned income and there was no new fact or material before the Pr. CIT to assume jurisdiction u/s 263. The assumption of jurisdiction tantamount to change of opinion which is not permissible under law. Reliance in this regard is placed on the judgment of the Hon'ble Punjab and Haryana High Court in Commissioner of Income Tax, Jalandhar-I Vs. Max India Limited. [2016] 388 ITR81 (P&H). 4. BECAUSE the impugned order passed by the Pr. CIT u/s 263 of the Act is bad in law as the same has been passed without affording proper opportunity of being heard to the Appellant. 5. BECAUSE the objections filed....
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.... in Khushi Commotrade Private Limited Vs. Principal Commissioner of Income Tax-2, Kolkata (ITA No. 462/Kol/2020). the decision of the Hon'ble Supreme Court in Assistant Commissioner of Income Tax & Another Vs. Hotel Blue Moon ((2010) 3 SCC 259) and the decision of the Hon'ble Lucknow Bench of the Income Tax Appellate Tribunal in Shri Ravindra Khemka Vs. DCIT, Central Circle II, Kanpur (IT(SS)A No. 391/LKW/2017). ITA No. 202/Chd/021 1. BECAUSE the impugned order dated 24.03.2021 is without jurisdiction as the very initiation of re-opening u/s 147/148 of the Act was bad in law and no power of revision could have been exercised u/s 263 of an illegal re-opening. 2. BECAUSE the jurisdiction exercised u/s 263 of the Act was illegal as the twin conditions of s.263 of the Act were not satisfied i.e. neither the order was erroneous nor prejudicial to the interest of the revenue. 3. BECAUSE the Assessing Officer after considering the material produced before it recorded its satisfaction and accepted the returned income and there was no new fact or material before the Pr. CIT to assume jurisdiction u/s 263. The assumption of jurisdiction tantamount to change of opinion whi....
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....handigarh Bench of the Income Tax Appellate Tribunal in Parveen Kumar Mittal Vs. The Pr. C.I.T., Panchkula (ITA No. 22/Chd/2021) and the decision of the Hon'ble Delhi Bench of the Income Tax Appellate Tribunal in Supersonic Technologies Private Limited & Others Vs. The Pr. Commissioner of Income Tax-8 (ITA No. 2269/Del/2017 - 2019 (69) ITR(Trib) 585 (Delhi)). 9. BECAUSE no notice u/s 143(2) of the Act was ever issued to the Appellant before framing the assessment u/s 143(3) r.w.s. 147 of the Act and in absence thereof the Assessing Officer does not have the jurisdiction to make the assessment. Thus, the assumption of jurisdiction to frame the assessment was invalid. Reliance in this regard is placed on the decision of the Hon'ble Delhi Bench of the Income Tax Appellate Tribunal in New Okhla Industrial Development Authority Vs. Assistant Commissioner of Income Tax (ITA No. 5879/Del/2014). decision of the Hon'ble Kolkata Bench of the Income Tax Appellate Tribunal in Khushi Commotrade Private Limited Vs. Principal Commissioner of Income Tax-2. Kolkata (ITA No. 462/Kol/2020), the decision of the Hon'ble Supreme Court in Assistant Commissioner of Income Tax & Another ....
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....s well as copies of 'J' Forms, Jamabandi Fard and bank statements to demonstrate that the assessees had sufficient funds to have made the impugned advances. It was further submitted that both the assessees had also filed cash flow statements from which it was clearly discernible that the assessee had sufficient funds with them to give the impugned advances. The Ld. Sr. Advocate drew our attention to the various documents filed by the assessee in this regard, the copies of which were placed in the paper book, and submitted that, thus, the Ld. PCIT had made an incorrect allegation that no worthwhile inquiry had been conducted by the AO. It was submitted that the AO had duly required the assessees to submit documentary evidences with respect to the cash advances made and both the assessees had duly complied with the queries raised by the AO and had submitted various documents in support of sufficiency of funds. The Ld. Sr. Advocate submitted that, therefore, it was very much apparent from the facts on record that the AO had been diligent enough the make the requisite inquires and it was only after due application of mind by the AO that he had proceeded to accept the returned income in....
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..... 9.0 We have heard the rival submissions and have also perused the material on record. We have also perused the various documents filed by the assessees during the course of the assessment proceedings and it remains undisputed that the assessees had submitted these documents with a view to justify their claims of having sufficient cash for the purpose of making the advance. That the assessees had share in Joint Family Land as well as had agricultural lands in their own names is also not under dispute. The assessees have also filed cash flow statements to justify the availability of cash and we have gone through them and we find no reason to take a view di fferent from the view taken by the AO in this regard. Thus, from records, it is evident that the AO had an opportunity to consider these very voluminous documents that which were before him to consider and it was only after having examined these documents, he reached a conclusion that the returned income of both the assessee's was to be accepted. Of course, the AO might not have given an elaborate description of the inquires he had conducted during the course of assessment proceedings, all the same, we do not agree with the view....
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.... of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income-tax off icer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. The phrase "prejudicial to the interests of the Revenue" has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Off icer, cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income-tax Off icer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Off icer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income- tax Off icer is unsustainable in law." 9.2 In our considered view, the AO took one of the possible views that the assesses had sufficient funds to make the impugned advance and the action of the AO cannot be faulted with by the Ld....