TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 235
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....r section 143(1). Thereafter it was reopened by issuance of a notice under section 148 of the Income Tax Act. The ld. Assessing Officer has passed the assessment order on 29.08.2017. He determined the taxable income of the assessee at Rs. 9,61,638/-. 4. The ld. Commissioner gone through the assessment record and formed an opinion that assessment order is erroneous as much as it is prejudicial to the interest of Revenue. Therefore, he issued a show-cause notice of 05.07.2018. A copy of the show-cause notice is available at page no. 15 of the paper book. Ld. Commissioner after making reference to the history of assessment confined his reason, which reads as under:- Show-Cause Notice under Section 263 (Relevant Part) "On verification of records and the assessment order the following issues are observed:- On perusal of records as well as the assessment order, it is seen that the WDV of block of fixed assets of the assessee as on 31.03.2012 was Rs. 65,33,297/-. It is also seen from the sale deed, registered on 17.03.2012, and available in the records that the entire block of fixed assets was sold at full value of consideration of Rs. 2,04,48,979/-. Therefore, there arises short t....
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....untants as per law. Every persons who was at the time of discontinuation or dissolution of a firm shall be jointly and severally liable for the amount of tax, penalty or other sum payable, and all the provisions of this Act, so far as may be, shall apply to any such assessment or imposition of penalty or other sum. 4.2. The assessee firm was assessed u/s. 147/143(3) of the Act on 29/08/2017. The assessment proceedings was duly represented and no objection was raised during the assessment proceedings. Proceedings u/s. 263 of the Act is only an extended proceedings of the assessment proceedings of M/s. Ganapati Agro Product on the issues which is considered to be erroneous and prejudicial to the interest of revenue. Therefore, proposed proceedings u/s. 263 of the Act was rightly initiated on M/s. Ganapati Agro Product within the parameter of the Act. 4.3. It is evident from the sale deed dated 17th March 2012 that M/s. Ganapati Agro Product is the Vendor and M/s. M.P.S. Greenery Developers Ltd. is the Purchaser. M/s. Ganapati Agro Product was represented by its partners Piru Dutta, Mousumi Dutta, Sk. Nazrul Islam, Sk Saukat Ali and Montajara Begum. The agreed sales consideration ....
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.... above. 6. The AO should afford reasonable opportunity of being heard to the assessee before assessment is reframed by him. 7. Order is passed u/s. 263 of the Income Tax Act, 1961". 6. We have heard the ld. Representatives and with their assistance gone through the record carefully. Before we embark upon an enquiry on the facts and issues agitated before us to find out whether the action u/s. 263 of the Act, deserves to be taken against the assessee or not, it is pertinent to take note of this section. It reads as under:- "263(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. [Explanation.- For the removal of doubts, it is hereby declared that, for the purposes of t....
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....was not required to show any reason. It is a part of his administrative control to call for the records and examine them. The second feature would come when he will judge an order passed by an Assessing Officer on culmination of any proceedings or during the pendency of those proceedings. On an analysis of the record and of the order passed by the Assessing Officer, he formed an opinion that such an order is erroneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The learned Commissioner would issue a show-cause notice pointing out the reasons for the formation of his belief that action u/s. 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. He may set aside the order and d....
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....sessee has given detailed explanation by a letter in writing and the AO allows the claim on being satisfied with the explanation of the assessee, the decision of the AO cannot be held to be erroneous simply because in his order he does not make an elaborate discussion in that regard. 8. In the light of above, let's examine the facts of the present case. A perusal of the impugned order would suggest that the ld. CIT is of the view that the assessee including its partners are jointly and severally liable for the amount of tax penalty and other sum payable by them. He further construed that in this transaction of sale of Rice Mill, a short-term capital gain has arisen to the assessee, which has not been examined by the ld. Assessing Officer. 9. It is pertinent to observe that ld. Commissioner failed to appreciate the transaction in right perspective. As far as the proposition is concerned, that any short-term capital gain arose to a partnership firm, then it is taxable either in the hands of the firm or in the hands of the partner on its dissolution/discontinuation. The moot question is whether any gain is available or not. The assessee has specifically pointed out that purchase....