TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 806
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....aves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal." 2. The relevant material facts, as culled out from the material on record, are as follows. The assessee before us is a Firm and filed its return of income for assessment year (A.Y.) 2017-18 on 12-10-2017, declaring total income of Rs.30,68,290/-. Thereafter, the case was selected for complete scrutiny for the reason of large cash deposit during demonetization period. The scrutiny assessment under section 143(3) of the Income Tax Act was finalized on 19.12.2019 accepting the returned income. 3. Later on, Ld. PCIT exercised his jurisdiction under section 263 of the Act. On perusal of records, it was noticed by Ld. PCIT that during the year, the assessee firm has made cash deposit of Rs.3,76,00,000/- during the demonetization period in various accounts of the Banks. During the assessment proceeding, the assessee firm contended that source of cash deposited during demonetization period is out of its cash sale made till the Month of October, 2016. Ongoing through the documents submitted by the assessee firm, it was observed by Ld. PCIT that there is inordinate increase in sale in....
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....date is just before passing of the assessment order. Thus, how the assessee firm could have filed two VAT returns with different PANs which should have also been enquired by the Assessing Officer. As discussed above, the Assessing Officer passed the order u/s 143(3) of the Act dated 19.12.2019 without making inquiries which should have been made and without application of mind. This makes the order erroneous in so far as it is prejudicial to the interest of the Revenue. Therefore, Ld. PCIT issued a show cause notice bearing DIN ITBA/REV/F/REV1/2021-22/1038639070(1) dated 11.01.2022. In response to the show-cause notice issued dated 11.01.2022, the assessee submitted his reply electronically as well as through TAPAL to the Ld. PCIT on 03.02.2021. Another reply was filed on 28.02.2022 on the issue of two sets of VAT return. 6. After going through the reply of the assessee, the Ld. PCIT observed that assessment order u/s 143(3) of the Income-Tax Act, 1961 dated 19.12.2019 for A.Y. 2017-18 is erroneous in so far it is prejudicial to the interest of revenue. Therefore, Ld. PCIT directed the A.O. to re-frame the assessment after examining the issue discussed above and after making prope....
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.... the findings of the ld. PCIT and other material brought on record. We note that assessee submitted its reply before Assessing Officer in response to show cause notice dated 27.11.2019, which is placed at paper book page nos.38 to 39. The notice issued under section 142(1) of the Act by the AO is placed at paper book page nos.40-42. The other show cause notice, dated 27.11.2019, issued by the Assessing Officer, to conduct enquiry, during assessment proceedings, is placed at paper book page nos.43 to 45. The assessee furnished its reply before the Assessing Officer dated 27.09.2019, in respect of the issues raised by ld PCIT, vide paper book page nos.46 to 51. The other notice issued under section 142(1) of the Act, by the Assessing Officer dated 18.08.2019 is placed at paper book page nos.52 to 58. The assessee submitted its reply in respect of cash transactions and justification of cash deposited in the bank account. The assessee submitted detail of VAT returns filed during the F.Y.2016-17 which is placed at paper book page nos.70 to 71. The Monthly VAT returns for the Month of July and October, filed by the assessee, is placed at paper book page nos.72 to 79. The annual VAT retur....
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....well-settled that when exercise of statutory power is depended upon the existence of certain objective facts, the authority before exercising such power must have materials on record to satisfy it in that regard. If the action of the authority is challenged before the court it would be open to the court to examine whether the relevant objective factors were available from the records called for and examined by such authority [CIT v. Gabriel India Ltd., (1993) 203 ITR 108, 116 (Bom)]. We note that in assessee`s case under consideration, the assessing officer not only made initial enquiry but also conducted further enquiry and applied his mind and then after took a plausible view. Thus, the various issues raised by ld PCIT in his revision order under section 263 of the Act, have been thoroughly examined by the assessing officer during the assessment stage. Hence, order passed by the assessing officer should not be erroneous. 13. As per the provisions of section 263(1), the Commissioner may call for and examine the record of any proceedings under the Income-tax Act, and if he considers that any order passed therein by the AO is erroneous in so far as it is prejudicial to the interest....
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.... Ltd. [(2007) 295 ITR 282 (SC)], has held that once the issue was considered by the A.O., the remedy of the revenue could not lie in invoking of the jurisdiction u/s. 263 of the Act. Therefore, the order of the Ld. PCIT was definitely outside the purview of section 263 of the Act. As noted above, the exercise aimed at ascertaining the correct income of the assessee has been fulfilled by the Ld. A.O. by exercising his quasi-judicial functions vis-a-vis passing the assessment order u/s.143(3) of the Act. Therefore, certainly it is not a case wherein adequate enquiries at the assessment stage were not carried out or assessment was made in haste. However, what is an opinion formed as a result of these enquiries and verification of the materials is something which is in exclusive domain of the Assessing Officer, and even if Ld. Pr. Commissioner does not agree with the results of such enquiries, the resultant order cannot be subjected to revision proceedings. For that we rely on the decision of the Coordinate Bench of I.T.A.T., Kolkata in the case of Smt. Juthika Kar vs. ITO [I.T.A. No.1128/Kol/ 2009, dated 16.5.2012], wherein it has been held as under (relevant portion): "8......Howev....