TaxTMI 
TaxTMI 
2023 (3) TMI 1231
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....tificate from Karan Singla Surgical & General Hospital, Jagraon has been filed, certifying that the father of the partner of the Assessee-firm was admitted in the said hospital from 17.5.2019 to 31.5.2019, prior to his admission in the PGI, Chandigarh. A copy of the discharge summary of Shri Gian Chand Gupta, father of Shri Kumar Gaurav, partner of the Assessee-firm, from PGI, Chandigarh has also been filed. 3. From the above, evidently, the delay of 16 days in filing the appeal occurred due to circumstances beyond the control of the Assessee-firm. The assessee, was, therefore, prevented by sufficient cause from filing the appeal in time. In view of these facts, the delay of 16 days in filing the appeal is condoned. 4. The relevant facts of the case are that as per the impugned order, on perusal of the assessment record, the Ld. PCIT found that the assessee had received unsecured loans to the tune of Rs. 2 crores during the year under consideration. The Ld. PCIT opined that the Assessing Officer was required to investigate the creditworthiness and genuineness of these unsecured loans; that however, the Assessing Officer had failed to conduct any enquiry in this regard; that t....
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....the transactions and the Assessing Officer did not make even very basic enquiry on it. The Ld. PCIT, as such, set aside the assessment order to the file of the Assessing Officer for passing a fresh order in accordance with law, in respect of the issue discussed, after giving sufficient opportunity of hearing to the assessee. 5. It has been contended on behalf of the assessee that the case of the assessee was selected for limited scrutiny vide notice issued under section 143(2) of the Act; that further, a notice under section 142(1) of the Act was issued, in response to which, the assessee filed reply dated 28.3.2017; that in the said reply, in respect of unsecured loans accepted by the assessee during the year, amounting to Rs. 3,22,89,000/-, the details of all the unsecured loans were annexed; and that these details are: (i) Detailed chart of unsecured loans. (ii) Copy of ledger account of the unsecured loan creditors, duly confirmed by the creditors with PAN mentioned in the same, reflecting receipts of the amount or any payment made in the account and also interest paid on the unsecured loans with TDS made on the same. (iii) Copy of income tax retur....
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....t this notice was, again, based on the internal audit objection; that in para 3 of the said notice, the Ld. PCIT has again referred to the unsecured loans of Rs. 2 crores, without making reference to any loan creditors; that this, once again, is an ad-hoc figure; that in its reply to the show cause notice issued under section 263 of the Act, the assessee stated [APB:192, para 2] that the version given therein is factually incorrect, since an amount of Rs. 4.78 crores has wrongly been considered as unsecured cash credits accepted by the assessee, as against the actual figure of Rs. 3,22,89,000/-, the details of which were filed before the Assessing Officer in the assessment proceedings and which details were considered by the Assessing Officer to his satisfaction, while framing the assessment order; that the matter was once again explained to the Ld. PCIT in the assessee's reply, giving all the details of the fresh cash credits accepted by the assessee; that the attention of the Ld. PCIT was specifically drawn towards all the evidences filed by the assessee before the Assessing Officer at the time of assessment; that the Ld. PCIT however, completely ignored the reply of the asse....
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.... under section 142(1) of the Act, called for only calculation of net profit, trading account, computation chart and audit report, etc., without raising any query on the unsecured loans; that vide notice dated 10.2.2017, the only evidence regarding the genuineness of the unsecured loans was called for; that no question was asked with regard to the creditworthiness of the unsecured loan creditors; that it was only on 28.3.2017, after seeking various adjournments, that the assessee finally submitted the details before the Assessing Officer, stretching the case to the time barring date, so as to prevent the Assessing Officer from conducting any meaningful enquiry, so that the assessment order was passed on the very day on which the assessee placed the details before the Assessing Officer, i.e., on 28.3.2017; that therefore, evidently, there was a complete lack of enquiry by the Assessing Officer inasmuch as not even a single query was raised by the Assessing Officer with regard to the creditworthiness of the assessee's loans; that it is this issue which has been, and rightly so, highlighted by the Ld. PCIT in the order under appeal; that as such, it is clear that there was no appli....
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....placed on 'Mannesmann Demag A.G. vs. DCIT', 53 ITD 533 (Del.). Apropos the assessee's contention that the assessment order was neither erroneous, nor prejudicial to the interests of the Revenue, it has been contended by the Department that as was the case herein, the Assessing Officer's action of just raising a query and just receiving information filed by the assessee does not amount to enquiry, rendering the assessment order both erroneous as well as prejudicial to the interests of the Revenue. Reliance was placed on 'Shri Ashwani Marwah vs. Pr. CIT, Shimla', order dated 23.2.2022, passed by the Chandigarh Bench of the ITAT, in ITA No. 307/CHD/2020, for assessment year 2015-16, 'Anil Kumar vs. ACIT', 147 Taxman 5 (Delhi), 'Ambika Agro Suppliers vs. ITO, W-2(6), Jalgaon', 95 ITD 326 (Pune), 'CIT vs. Active Traders (P) Ltd.', 214 ITR 583 (Cal.), 'Denial Merchants Pvt. Ltd. vs. ITO', order dated 10.4.2017, passed by the Hon'ble Calcutta High Court, in G.A. No. 599 of 2016 with ITA No. 118 of 2016, 'Denial Merchants Pvt. Ltd. vs. ITO', order of the Hon'ble Supreme Court, passed in Appeal No. 23976/2017, dismissin....
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.... of the Act clearly raised the following query: "furnish necessary evidence regarding the genuineness of the unsecured loans received during the year by giving their complete address, PAN, whether assessed to income tax or not, and their confirmed copies of accounts. Also explain the reason for much (sic) huge increase of unsecured loans during the year". 12. It was contended that the assessee made full compliance of the aforesaid query, by furnishing complete address, PAN, copies of income tax returns and confirmed copies of accounts of the creditors; that even the bank accounts of the creditors, wherein the source stood reflected, was furnished; that the Ld. PCIT had no power to substitute his own opinion for that of the Assessing Officer, the view taken by the Assessing Officer being a plausible view; that the contention of the Department that it was humanly impossible for the Assessing Officer to analyse the data furnished by the assessee, and to pass the assessment order on the same day as on which such data was furnished by the assessee, is unsustainable; that the Assessing Officer has specifically mentioned that he has considered all the documents placed on recor....
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....e details consist of: (i) Detailed chart of unsecured loans. Pages 1-2 of paper book. (ii) Copy of ledger account of the unsecured Loan creditors duly confirmed by the creditors with the PAN mentioned in the same. The said copy of accounts reflects the receipts of the amount or any payment made in account and also the interest paid on unsecured loans with TDS deducted on the same. (iii) Copy of Income Tax return along with computation of income of the loan creditors wherein the interest received from the creditors also have reflected. (iv) Copy of the Bank account of the creditors wherein the cheque issued to the assessee/RTGS has been reflected and also the source of source has been depicted. This information is given in respect of all the unsecured loan creditors details of which are available on pages 1-139 of the paper book. 15. In this regard, in the assessment order, the Assessing Officer has specifically noted that the requisite information/documents, as called for vide questionnaire and order sheet, were produced, which were gone through; and that after going through all the facts and documents available on file, the case was discussed....
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....he details which the PCIT feels should have been included. Their Lordships found support form 'CIT vs. Gabriel India Ltd.', 203 ITR 108 (Bombay), wherein it was held that the power of suo motu revision under sub-section (1) of section 263 of the Act is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist; that if the Income Tax Officer, acting in accordance with law, makes a certain assessment, the same cannot be branded as erroneous by the CIT simply because according to him, the order should have been written more elaborately; that this section does not visualize a case of substitution of the judgment of the CIT for that of the Assessing Officer who passed the order, unless the decision is held to be erroneous; that cases may be visualized where the 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 estimate himself; that the CIT, on perusal of the records, may be of the opinion that the estimate made by the Officer concerned was on....
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....in the assessment order about the inquiries made by the Assessing Officer regarding the discrepancy in stock. It was held that this was not the correct approach, as was evident from the provisions of section 263(1) of the Act; that in the absence of any suggestion by the CIT as to how the enquiry was not proper, the action taken by him under section 263 of the Act could not be sustained; and that thus, the findings of the Tribunal were liable to be reversed and the order of the CIT was liable to be set aside. 17. In 'Smt. Nagina Kochar vs. The PCIT-1, Chandigarh', order dated 6.12.2022, passed by the Chandigarh Bench of the Tribunal, co-authored by one of us - the Ld. Accountant Member, in ITA No. 24/CHD/2021, for assessment year 2016-17, it has been held that since as per record, the assessment order is passed after making full and proper enquiries on the issues and after examining the facts, and the view taken is legally sustainable, the assessment order is a valid order in the eyes of law; that merely because there is no discussion on the issues in the assessment order, this fact by itself also cannot lead to the conclusion that the order is an order passed without lo....
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....t of Rs. 5.84 crores, unsecured loans of Rs. 2 crores were required to be treated as unexplained. As explained by the assessee before the Assessing Officer by virtue of reply dated 23.4.2018 (APB:187-188), in fact, the assessee had accepted fresh unsecured loans to the tune of Rs. 3,22,89,000/- only, and not of Rs. 5.84 crores. Further, no unsecured loans of Rs. 2 crores were there. Therefore, the Ld. PCIT erred in raising the issue of alleged unsecured loans of Rs. 2 crores to have been accepted by the assessee, whereas as to from whom such amount of unsecured loans had been accepted by the assessee, stood nowhere mentioned in the notice. Even the order under appeal does not make mention of any such loan creditor. 20. In its reply dated 23.8.2018 (APB:192 - 202), the assessee also pointed out to the Ld. PCIT that the figure of Rs. 4.78 crores, as taken by the Assessing Officer in his notice dated 6.4.2018, was incorrect, in as much as the actual figure of unsecured loans was Rs. 3,22,89,000/- and that the Assessing Officer had erroneously clubbed the figures of unsecured loans taken during the year and unsecured loans repaid during the year; and that the difference of the loans....
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....in 660000/- 660000/ - 30. Shivani Singla 268000/- 268000/- 31. Jatinder Kumar 500000/- 500000/- 32. Jatinder Kumar HUF 1200000/- 1200000/ - 33. Rajesh Kumar HUF 10000/- 10000/- 34. Shivani Singla 5000/ - 5000/- 35. Shri Bhagwati Agro Mills 2000000/- 2000000/- 36. Surjiv Kumar 1440000/- 1440000/- 37. Surjiv Kumar HUF 10000/- 10000/- 38. Ram Kanwar HUF 55000/- 55000/- 39. Rohini 20000/- 20000 /- 40. Rajneesh Jain HUF 202416/- 202416/- 41. Parminder Singh & Co. 1000000/- 1000000/- 42. Abhishek Jain 353797/- 353797/- 43. Ashish Jain 1000000/- 1000000/- 44. Gian Chand HUF 1500/- 1500/- 45. Gupta & Co. 500000/- 500000/- 46. Harpal Singh 1500000/- 1000000/- 47. Kamla Rani 1500000/- 1500000/- 48. Madan Mohan Bansal 506150/- 506150/- Total 4,35,92,8....
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....s. PCIT, New Delhi', 88 taxmann.com 831 (Del) (Trib.), it was held that where the assessee brought on record the audited profit & loss account, balance sheet, statement of affairs and capital account, which were duly examined and the Assessing Officer had also verified the books of account, vouchers, etc., there was no question of lack of enquiry on the part of the Assessing Officer; and that where the assessee submitted complete details of unsecured loans along with the confirmation of each of the transactions, bank accounts of each of the persons and I.T. acknowledgement of return of each lender, from whom unsecured loans were availed, and the Assessing Officer had duly examined the same during the assessment, it could not be a case of lack of enquiry. 27. In 'Annu Agrotech (P) Ltd. vs. PCIT', 220 TTJ 657 (Pune), it has been held that for invoking the jurisdiction under section 263 of the Act, it is essential to first ingrain that the point in question could have been decided against the assessee, which the Assessing Officer either did not examine, or decided wrongly after examination; that but if the point is of such a nature that it cannot go against the assessee....
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....13 Yerram Venkata Subba Ready Vs. ACIT- 208 TTJ (Hyd) 885 14 CIT Vs Hindustan Marketing & Advertising Co. Ltd.- 341 ITR (Del) 180 15 Infosys Technologies Ltd. Vs JCIT Asstt)-103 ITD (Bang) 399 30. In the following cases, amongst others, it has been held that insufficient enquiry by the Assessing Officer does not entitle invocation of revisional powers: 1. Kamal Kumar Gupta vs. cit, 142 TTJ Jaipur (UO) 9. 2. Nalco Company vs. cit, 210 TTJ (Pune) 369. 31. In 'CIT vs. Anil Kumar Sharma', 335 ITR 83 (Delhi), the Tribunal found that complete details were filed before the Assessing Officer and that he had applied his mind to the relevant material and facts, although such application of mind was not discernible from the assessment order; that in the proceedings under section 263 of the Act, the CIT also had all these details and material available before him, but had not been able to point out the defects conclusively in the material, for arriving at a conclusion that a particular income had escaped assessment on account of non-application of mind by the Assessing Officer. The Hon'ble High Court held....
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....long with PAN, whereas in the assessee's case, the Assessing Officer, after enquiry, had accepted the documents filed by the assessee in support of the credits. The Hon'ble Supreme Court dismissed the SLP on the ground that issuing of Rs. 7.93 lakhs shares of Rs. 10 each at a premium of Rs. 390/- could be a case of money laundering by issuing shares on a high premium of Rs. 32 crores. These are not the facts of the case before us, as discussed. 38. In 'Radiant Life Care Mumbai Pvt. Ltd., Mumbai vs. PCIT, Mumbai-3' (supra), once again, it was a case of share capital raised at high premium, for which, the Assessing Officer did not make any enquiry and accepted the list of shareholders filed without analyzing it. The assessee's case, as noted, is entirely different. 39. In 'Puja Synthetics Pvt. Ltd. vs. PCIT (Central), Rajasthan' (supra), it was a case of accepting share capital at a high premium of Rs. 30/-, without proper enquiries having been made. It is not so in the case herein. 40. We summarise our conclusions as follows: 1) As available from the record, during the assessment proceedings, the Assessing Officer had asked the Assessee ....
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....ocumentary evidence meant that the AO had passed the assessment order after making necessary enquiries, in keeping with 'Chandan Magraj Parmar' (supra), to which, no contrary decision has been cited. 8) It does not stand made out that the exercise of his quasi-judicial power by the AO was in violation or infringement of law. 9) Just because the PCIT did not feel satisfied with the conclusion arrived at by the AO, the assessment order could not be held to be erroneous. 10) This being so, even if the assessment order, in the opinion of the PCIT, is prejudicial to the interests of the Revenue, invocation of revisionary power is invalid, in the absence of concurrent existence of both the requirements of section 263. 11) There is no material whatsoever on record that legally leviable tax has remained form being imposed. 12) The Assessee has wrongly been subjected to the rigour of revisionary proceedings just because the assessment order has not been passed in an elaborate manner. Pithiness or wordiness of an assessment order cannot be determined by the revisionary authority, much less does it lie in the hands of the Assessee. ....