TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 1443
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....on of the case records of the assessee, found that there was cash deposit in the bank account of the assessee during the demonetization period amounting to Rs. 6,58,76,500.00 only. According to the learned PCIT, the amount of cash deposits was not verified during the assessment proceedings by the AO. Accordingly, the PCIT initiated the proceedings under section 263 of the Act vide show cause notice dated 27 July 2021. 3.1 The assessee in response to such show cause notice submitted that it has deposited cash in the bank account which was withdrawn earlier from the bank and cash received against the sales on or before 8th of November 2016 which was utilized for making the deposits in the bank. According to the assessee, the facts of deposit of cash in the bank account was duly verified and enquired by the AO and the ADIT. Furthermore, the assessment was framed under section 143(3) of the Act after taking the approval from the ld. JCIT. Likewise, there was no doubt raised in respect to the cash sales made by it which was duly recorded in the books of accounts and the same was accepted in the assessment framed under section 143(3) of the Act. As such, the cash was generated as a resu....
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.... be ruled out. But all these facts have not been verified by the AO during the assessment proceedings. In view of the above, the principal CIT concluded that the assessment has been framed without necessary verification therefore the same is erroneous insofar pre-judicial to the interest of revenue by observing as under: 11. It is the bounden duty of the Assessing Officer to collect and appreciate the facts collected and proper application of law is to be made while making the assessment. There is incorrect application of law by allowing deduction contrary to the provisions of Income tax Act. In the interest of justice and since the twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous and (ii) it is prejudicial to the interests of the Revenue, are satisfied, the assessment order passed u/s. 143(3) needs to be set aside for the discussion made above. 12. It may be mentioned that with effect from 01/06/2015. Explanation 2 to the section 263(1) has been inserted which reads as under: "Explanation 2.-For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in ....
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....us, the learned AR contended that the Ld. AO after verification of all these necessary documents had framed the assessment order under section 143(3) of the Act. Therefore, it cannot be said that the AO has not verified the documents and applied his mind at the time of assessment proceedings. 5.1 The learned AR further contended that the assessment was framed by the AO after considering the necessary details and verification and application of mind. The learned AR in support of his contention drew our attention on pages 26 to 34, page Nos. 170 to 171, page Nos. 210 to 213 and page Nos. 217 to 218 where the copy of the notice under section 142(1) of the Act dated 22-08-2019, dated 24-102019, dated 05-11-2019 and 14-11-2019 were placed where the assessee was asked about the details of cash sales/cash deposits in bank. Likewise, the learned AR also drew our attention on pages 35 to 169, page Nos. 172 to 209, page Nos. 214 to 216 and page Nos. 219 to 249 of the paper book where the reply of the assessee in response to the notice issued under section 142(1) of the Act as mentioned above was placed. Thus, the learned AR contended that there cannot be said that the assessment order is er....
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.... the Commissioner to pass orders under section 263 of the Act, merely because he has different opinion in the matter. It is only in cases of "lack of inquiry", that such a course of action would be open. --- From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised 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. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissione....
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.... under Explanation 2(a) to section 263 in the following words:- "20. Further clause (a) of Explanation states that an order shall be deemed to be erroneous, if it has been passed without making enquiries or verification, which should have been made. In our considered view, this provison shall apply, if the order has been passed without making enquiries or verification which a reasonable and prudent officer shall have carried out in such cases, which means that the opinion formed by Ld Pr. CIT cannot be taken as final one, without scrutinising the nature of enquiry or verification carried out by the AO visà-vis its reasonableness in the facts and circumstances of the case. Hence, in our considered view, what is relevant for clause (a) of Explanation 2 to sec. 263 is whether the AO has passed the order after carrying our enquiries or verification, which a reasonable and prudent officer would have carried out or not. It does not authorise or give unfettered powers to the Ld Pr. CIT to revise each and every order, if in his opinion, the same has been passed without making enquiries or verification which should have been made. In our view, it is the responsibility of the ....
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....SC), dismissed the Revenue's SLP holding that 263 proceedings are invalid when AO had made enquiries and taken a plausible view in law, with the following observations: "Having heard learned counsel for the parties and having perused the documents on record, we see no reason to interfere with the view of the Tribunal. The question whether the income should be taxed as business income or as arising from the other source was a debatable issue. The Assessing Officer has taken a plausible view. More importantly, if the Commissioner was of the opinion that on the available facts from record it could be conclusively held that income arose from other sources, he could and ought to have so held in the order of revision. There was simply no necessity to remand the proceedings to the Assessing Officer when no further inquiries were called for or directed" 7.7 From an analysis of the above judicial precedents, the principle which emerges is that 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 Officer cannot be treated as....
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....tender available with you on 08.11.2016. 20. Provide day wise stock register. 21. Furnish the following information in respect of cash deposits: Total cash deposit in bank F.Y. 2015-16 Total cash deposit in bank from 01.04.2015 to 08.11.2015 Total cash deposit in bank from 09.11.2015 to 31.12.2015 Total dash deposit in bank in FY 2016-17 Total cash deposit in bank from 01.04.2016 to 08.11.2016 Total cash deposit in bank from 09.11.2016 to 31.12.2016 22. Furnish the following information in respect of cash sales: Total cash sales in bank in FY 2015-16 Total cash Sales in bank from 01.04.2015 to 08.11.2015 Total cash Sales in bank in FY 2016-17 Total cash Sales in bank from 01.04.2016 to 08.11.2016 23. Furnish the following information in respect of month-wise cash sales and cash deposits: Month wise Op. cash in hand Cash Sales Cash deposited bank Cash withdrawal from bank Closing cash on hand April 2015 May 2015 June 2015 July 2015 August 2015 Sep....
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.... VAT Report for the year 2016-16 in Form 205 is enclosed herewith. We have not revised return file after 08.11.2016. 26 Day wise cash book: Day wise cash book attached herewith 15 Closing Stock and Opening Stock:- Please find enclosed copy of audit report showing the same 16 Item wise Purchase and Sales:- Month wise details of Purchases and Sales as is enclosed 17 Sec.43B Copy of Chart for audit report Annexure for Section 43B and Amount paid during the year Challan enclosed. 18 Cash Deposited: Details of Cash Deposited during the year in given format 19 Explanation regarding source of cash deposited during the demonetization period with corroborative evidences: The explanation retgarding the source of cash deposited during the demonetization period with corroborative evidence is enclosed 20 Day wise Stock Register Details of Stock register enclosed 21 Information in respect of cash sales; Details of Cash receipts in given format is/are enclosed. 22 Information in respect of cash sales: Details of Cash Sales in given format is /are enclosed 23 Month wise cash sales and cash....
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....s not provided), 15 with respect to cash sales and advances received on 08.11.2019 provide following details 1, Orginal bills and vourcher 2.PAN as mandated by section 285BA of the Act, Rule 114B) and address of purchases 3. Also provide monthly VAT returns from April to December, asked in statutory notice. The reply made by the assessee dated 05-11-2019 Sub: Notice U/s 142(1) of Income Tax Act, 1961 1. Please refer to your above notice dated 24.10.2019. Please find enclosed the following details 6 Copies of bank statement and reconciliation where necessary 7 Copies of accounts of all loans 15 Details of cash sales and advances received on 8.11.2016 a copy of the invoice raised are enclosed. Copy of VAT return from April to December are enclosed. Relevant queries raised in the notice dated 5-11-2019: 12. In respect to source of cash deposited during demonetization, you have stated that the deposits were made out of cash sales and advances received. In this Cash sales Name of purchaser Address of purchaser Amount of cash bill Item Sold Weight Cash Advances received Name of person Address of person Amount of advance received Date of advance 13. Produc....
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....gain re-uploaded. 3. Copies of 10 Cash bills issued in the month of Oct. 16 are submitted as required by you. 4. Details of Staff their roles/duties assigned as on 08.11.2016 along with staff register submitted as required by you. The same was also submitted before the Investigation wing of the department. 5. We have already submitted the bills of cash sales as on 08.11.2016 along with the names of the customers. In the bills the signatures of the customers is taken on the left side. This practice is being following since the years and per conditions prevailing in the market. 6. Copies of VAT Return for the period from Jan-2017 to March-2017 as required by you and called for The reply made by the assessee dated 20-11-2019 In continuation to out earlier submission dated 18.11.2019 in response to your notice U/s 142(1) vide No.ITBA/AST/F/142(1) /2019-20/1020416785(1) dated 14/11/2019 and as per the instructions from you please find enclosed the required details/information as called for as under: 1. Sales invoices from TRS/1111 to TRS/1137 and TRS/1027 issued for cash sales made on 07/08.11.2016 re-uploaded serially. 2. Chart showing names, detailed address of the pe....
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....[as shown by you] is very less and is not coterminous with the general behaviour of the customers vis a vis transaction is gold. It is common knowledge the customers take quite lot of time to select precious items like god. Even if we consider the rush it is unacceptable that someone would just give money and pick up any item without due selection. Also customer have to be shown the purity, weight and other details of the item. As per sales shown by you this entire process took just 6.44 minutes. In view of the above facts and circumstances you are requested to explain the possibility of events taking them together and also show causes as to why the sales shown by you should not be not treated as bogus and the proceeds be added back to total income. The reply made by the assessee dated 25-12-2019 Sub: SHOW CAUSE NOTICE DATED 24.12.2019 1. It has been stated that by making a mathematical calculation we took 6.44 minutes per sale. We submit that assumption on such mathematical calculation 2. We have been asked to show cause why the entire sale shown by us be not considered as bogus and the sale proceeds be not added back to income. 3. We submit that the proposed ac....