TaxTMI 
TaxTMI 
2023 (3) TMI 1108
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....d in law. 2. That on the facts and circumstances of the case, Learned Pr. Commissioner of Income Tax-1, Jalandhar has grossly erred in law in holding that Assessing Officer had no material on record to accept the explanation that Rs. 20,00,000/- was not unexplained cash credit. 3. That on the facts and circumstances of the case, Learned Pr. Commissioner of Income Tax-1, Jalandhar has grossly erred in law in holding that onus cast upon the assessee u/s 68 of the Act had not been discharged by her. 4. That on the facts and circumstances of the case, Learned Pr. Commissioner of Income Tax-1, Jalandhar has grossly erred in law in holding that income declared by the assessee was to be taxed u/s 115BBE of the Act. 5. That the order of the Learned Pr. Commissioner of Income Tax-1, Jalandhar u/s 263 is arbitrary, unjust, is based on assumptions & presumptions since no error existed or prejudice was caused to revenue, therefore, the order of the Learned Pr. Commissioner of Income Tax-1, Jalandhar passed u/s 263 of the Act deserves to be quashed. 6. That the Appellant requests for leave to add or amend the grounds of appeal before the appeal is he....
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....rovisions of section 263 of the Act is illegal & bad in law. 2. That on the facts and circumstances of the case, Learned Pr. Commissioner of Income Tax-1, Jalandhar has grossly erred in holding that assessment has been framed without carrying out any enquiry at all on the issue of large agriculture income. 3. That Learned Pr. Commissioner of Income Tax-1, Jalandhar has grossly erred in holding that assessment order passed by the Assessing Officer ('AO') was erroneous and prejudicial to the interest of revenue. Action of the Pr. Commissioner of Income Tax-1, Jalandhar in invoking provisions of clause (a) Explanation 2 sub-section (1) of section 263 of the Act is illegal & bad in law. 4. That the order of the Learned Pr. Commissioner of Income Tax, Jalandhar-1 ('Ld. CIT') u/s 263 is arbitrary, unjust, is based on assumptions & presumptions since no error existed or prejudice was caused to revenue, therefore, the order of the Learned Pr. Commissioner of Income Tax, JaIandhar-1 ('Ld. CIT') passed u/s 263 of the Act deserves to be quashed. 5. That on the facts & circumstances of the case, Learned Pr. Commissioner of Income Tax, Jalandhar-1 ('Ld. CIT')....
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....to have been received from any of the sources mentioned in Paras 2 to 6 of the annexure. [Paras 2 to 6 were for Cash out of receipts exempt from tax, Cash withdrawn from bank, Cash received from identifiable persons with PAN, Cash received from identifiable persons without PAN, and Cash received from unidentifiable persons. All these could be accepted after verification of the person/the transaction. The basis for verification could be income earned during past years and its source, filing of ROI and income shown therein, cash withdrawals made from accounts etc.]. (iv) As per the ITR filed for the year under reference, the only source of income of the assessee is Interests from M/s Juneja Iron & Steel Co (Rs. 2,47,449) and Interest from banks. Further, Rs. 2,47,809/- was claimed as interest paid on borrowed capital invested in Self occupied house property. (v) The assessee deposited cash of Rs 20,00,000/- during demonetization period and was thus obliged to explain the nature and source of cash credits of Rs 20,00,000/-. Income of Rs. 17,50,000/- only was declared under the head Misc. income. Rs 2.5 lac is not a standard deduction. As per the above mentioned inter....
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....e interests of revenue in terms of the provisions of clause (a) of Explanation 2 below sub section (1) of section 263 of the I.T. Act, 1961." 8. The Ld. Counsel submitted that the proceedings u/s 263 of the Act have been initiated on the basis of audit objection raised by Income Tax Officer (Audit) vide his audit memo dated 27.08.2021 to which replies were filed by Assessing Officer vide his letter dated 13.12.2021 and 17.12.2021 wherein Assessing Officer explained in detail that objection raised was not acceptable. He contended that it is settled law that proceedings u/s 263 of the Act cannot be initiated on the basis of audit objection. In support of its contention, the Ld. AR has filed a brief synopsis that reads as under: "1. The assessee filed return declaring income of Rs. 16,99,277/- on 07-03- 2018(Page 1-3 of paper book). Notice u/s 143(2) of the Act dated 14.08.2018 was issued for limited scrutiny being cash deposited during demonetization period (Page 4-7 of paper book). Notice u/s 142(1) of the Act dated 04.09.2019 was issued wherein assessee was asked to explain source of Rs. 20,00,000/- deposited in saving bank account with Indian Overseas Bank, Jalandhar d....
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.... and verifications. Reply to the show cause notice was filed (Page 47-59 of paper book). Pr. CIT, Jalandhar has set aside the assessment framed to the file of the Assessing Officer to pass fresh order. Our Submissions Additional ground of appeal no. 1 1. That Income Tax Officer Audit, Jalandhar vide his orders dated 27.08.2021 concluded that Rs. 20,00,000/- cash deposited during demonetization period should have been brought to tax u/s 115BBE of the Act as against Rs. 17,50,000/- offered to tax by assessee at normal rate (Page 36-39 of paper book). Assessing Officer vide his letter dated 13.12.2021 offered his comments on the audit objection and concluded that audit objection raised by Income Tax Officer (Audit) is not acceptable (Page 40-42 of paper book). Further Assessing Officer vide his letter dated 17.12.2021 again submitted that audit objection raised by Income Tax Officer (Audit) is not acceptable (Page 43-46 of paper book). 2. That proceedings u/s 263 of the Act have been initiated on the basis of audit objection raised by Income Tax Officer (Audit) vide his audit memo dated 27.08.2021 to which replies were filed by Assessing Officer vid....
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....nature of the order has been taken by Ld. Principal Commissioner of Income Tax-1, Jalandhar which is not permitted under the law. Once Commissioner of Income Tax concludes that order passed by the Assessing Officer is erroneous he has to give a categorical finding with regard to error in the order of the Assessing Officer while passing order u/s 263 of the Act. CIT cannot remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous. Reliance is being placed on a) COMMISSIONER OF INCOME TAX vs. KANDA RICE MILLS HIGH COURT OF PUNJAB AND HARYANA (1989) 178 ITR 0446 (Page 77-79 of case laws index) b) ITO VS DG HOUSING PROJECT LTD 343 ITR 0329(DELHI (Page 80-88 of case laws index) c) COMMISSIONER OF INCOME TAX vs. MAITHAN INTERNATIONAL HIGH COURT OF CALCUTTA (2015) 375 ITR 0123 (Cal) (Page 89-107 of case laws index) d) DIRECTOR OF INCOME TAX vs. JYOTI FOUNDATION HIGH COURT OF DELHI (2013) 357 ITR 0388 (Delhi) (Page 108-114 of case laws index) e) VARDHMAN INDUSTRIES LTD. vs. DEPUTY COMMISSIONER OF INCOME TAX IN THE ITAT CHANDIGARH (2016) 181 TTJ 0017 (Chd) ((UO) (Page 115-121 of case laws index) ....
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....e Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimates himself. On perusal of the records one may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a high figurer than the one determined by the Income himself at the higher figures. Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be termed to be erroneous. It may be said in such a case that the order in question is prejudicial to the interest of the revenue. Reliance is being placed on a) COMMISSIONER OF INCOME-TAX VS. GHABRIAL INDIA LTD. 203 ITR 108 (BOM.) (Page 138-145 of case laws index) b) MALABAR INDUSTRIAL CO. LTD, VS. COMMISSIONER OF INCOMETAX 243 ITR 83 (SUPREME COURT) 2. That order passed by the Assessing Officer after enquiring on all the matters cannot be held to be erroneous because every loss of revenue....
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....s the primary onus cast upon the assessee u/s 68 of the Act had not been discharged by her. Ld. Pr. CIT-1, Jalandhar while passing order u/s 263 of the Act is of the opinion that onus cast on the assessee u/s 68 of the Act has not been discharged by her. It is submitted that provisions of section 68 of the Act are not attracted on cash deposits in saving bank account with banks. These observations of Ld. Pr. CIT- 1, Jalandharitself makes the order passed u/s 263 of the Act illegal and bad in law since provisions of section 68 of the Act are not attracted on cash deposits in saving bank account with banks. Reliance is being placed on a) COMMISSIONER OF INCOME TAX vs. BHAICHAND H. GANDHI HIGH COURT OF BOMBAY SOURCE : (1983) 141 ITR 67 (BOM) : (1982) 11 TAXMAN 59 b) SUNDAR LAL JAIN vs. COMMISSIONER OF INCOME TAX HIGH COURT OF ALLAHABADSOURCE : (1979) 117ITR316 (ALL) c) ANAND RAM RAITANI vs. COMMISSIONER OF INCOME TAX HIGH COURT OF GAUHAT (1997) 139 CTR (Gau) 235 : (1997) 223 ITR 544 (Gau) d) SHERATON APPARELS vs.ASSISTANT COMMISSIONER OF INCOME TAX* HIGH COURT OF BOMBAY (2002) 175 CTR 0651,(2002) 256 ITR 0020,(2002) 123 TAXMAN 0238....
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....e raised queries towards large value cash deposited during demonetization period. The appellant assesse file replies to queries raised and The AO being satisfied with the replies of the assesse passed the assessment at returned income. It is settled law that the AO was not authorized to travel beyond issues in the limited scrutiny and Accordingly, the proceedings u/s 263 of the Act, cannot be initiated by the PCIT, in the case of limited scrutiny under CASS when the issue has been examined in detail by the AO and where the AO cannot be asked to go beyond issues for which case was selected under limited scrutiny. In support, he placed reliance on various decisions of Tribunal, the latest one is that in the case of M/S SU-RAJ DIAMOND DEALERS PVT. LTD vs. PRINCIPAL COMMISSIONER OF INCOME-TAX IN THE ITAT MUMBAI BENCH 'G' (2020) 203 TTJ 0137 (Mumbai). 12. In the present case, it is noted that that the assessment order was passed by the Assessing Officer after making enquiries on all the issues of selection of case under limited scrutiny and even in the case of full scrutiny, the assessment order cannot be held to be erroneous, if the assessment order is passed by the A.O., after cond....