TaxTMI 
TaxTMI 
2022 (10) TMI 1042
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....sessing Officer. 3. That the Ld. PCIT has erred in law as well as on facts by invoking clause (a) of explanation 2 to section 263 of the Act despite the fact that proper enquiry of the matter has been conducted by Assessing Officer and have been duly stated in the assessment order. 4. That the Ld. PCIT has erred in law as well as on facts for not accepting the submissions filed by the assessee as well as not following the higher courts orders being taken as reference by the assessee in support of its claim. 5. That the appellate reserves the right to add , modify, alter, amend or delete any of the ground." 3. The brief facts of the case are that the original assessment in this case was completed on 30/03/2014 u/s 143(3) of the 1961 Act , on total income at Rs.5,59,390/-. The assessee is a partnership firm , engaged in manufacturing and trading of Bread and other food items. Thereafter , the case of the assessee was reopened by Revenue by invoking provisions of section 147 of the Act on the ground that the assessee has made aggregate payments in cash to a person in a day, otherwise than by an account payee cheque or account payee draft, exceeding Rs.20,000/- , and such total ....
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..../s 263 of the Act and show cause notice was issued by learned PCIT dated 4th November, 2021 on the ground that the Assessing Officer has not properly examined the issue of the payments exceeding Rs.20,000/- made by the assessee in cash in a day to the creditors. The learned PCIT observed that the cash payments exceeding Rs. 20,000/- in a day were made by different salesmen/agents to a particular creditor as claimed by the assessee, but the total payment made to a particular creditor/party by all the salesman on behalf of the assessee has exceeded Rs.20,000/- in a day in cash , and which aggregated to the tune of Rs.28,57,810/- during the impugned assessment year, which is in contravention of Section 40A(3). The assessee submissions before learned PCIT were rejected by ld. PCIT vide revisionary order dated 24.03.2021 passed u/s 263 , by holding as under: "I have considered the facts of the case. In this case cash payments above Rs.20,000/- is made to different parties in a day. Section 40A(3) is attracted when the aggregate payment above certain limit is paid in a day to a person in cash. It is a undisputed fact in this case that section 40A(3) is attracted as aggregate payment ex....
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....D.R. 6. Further, it is observed that the Registry has marked that this appeal is filed belatedly by the assessee beyond the time prescribed u/s 253(3) and is time barred by 333 days for which the assessee has filed an application for condonation of delay. We have observed that learned PCIT has passed revisionary order u/s 263 dated 24/03/2021 and this appeal is filed by assessee with tribunal on 21/04/2022. We have observed that due to COVID-19 pandemic, Hon'ble Supreme Court had suspended limitation , for the period from 15/03/2020 until 28/02/2022. The assessee in its application praying for condonation of delay has rightly relied upon directions issued by Hon'ble Supreme Court vide Misc. Application No. 21 of 2022 dated 10/01/2022 in SMW(c)3 of 2020 "Cognizance for Extension of Limitation" , the relevant extract of the assessee's condonation application reproduced as hereunder: "Taking into consideration & arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions." i. The ord....
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....m the revisionary order dated 24.03.2021 passed by ld. PCIT u/s 263 of the Act and the issue involved is concerning cash payment exceeding Rs.20,000/- paid by assessee to particular creditor/party in a day, and hence there is infringement of section 40A(3). It was submitted that assessment of the assessee was reopened by Revenue in this case by invoking provisions of Section 147 , on the ground that in original assessment, the Assessing Officer has not looked into cash payments in excess of Rs.20,000/- in a day made by the assessee to the same creditor/party , and all such cash payments exceeding Rs. 20,000/- in a day were to the tune of Rs. Rs.28,57,810/- during the year under consideration . It was submitted that in reassessment proceedings , the Assessing Officer did not looked into this issue in proper perspective and no additions were made , as the AO simply accepted the submissions made by the assessee. The Learned CIT-D.R. drew our attention to para 5 & 6 of the reassessment order passed by the Assessing Officer , and also drew our attention to page 16 of learned PCIT order passed u/s 263. She relied upon the revisionary order passed by learned PCIT. 8. We have considered t....
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....assessee. All such payments exceeding Rs. 20,000/- in a day by assessee were required to be made by account payee cheque or account payee draft. The exceptions are provided under Rule 6DD of Income-tax Act, 1961. The Assessing Officer did not passed a reasoned and speaking order as to how these cash payments are covered by exceptions as are provided u/r 6DD or also did not looked into the genuinity of the said claim. It is an admitted position that the assessee , may be through its sales persons( who possibly are assessee's employees) or its agents , has made cash payments exceeding Rs. 20,000/- in a day to same party/creditor.The aggregate of these cash payments were Rs. 28,57,810/-, during the impugned assessment year. The AO did not gave its reasoning before allowing relief to the assessee, and erroneously accepted that since a single voucher cash payment in a day was below Rs. 20000/- and hence Section 40A(3) is not attracted, but failed to appreciate that if all such vouchers reflecting cash payment to a single party/creditor in a day are aggregated , then the total cash payment in a day to a particular party/creditor is exceeding Rs. 20,000/- which clearly is in violation of ....