TaxTMI 
TaxTMI 
2023 (6) TMI 613
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....eceipt of notice u/s 142(1) of the Act dated 04.01.2013. Immediately on receipt of the said notice, the assessee sought for an advise from tax consultant who advised to file an appeal along with application for condonation of delay. Hence the appeal against the order u/s 263 was filed before the Tribunal with delay of 286 days. The ld. AR submitted that the delay in filing the appeal was due to reasonable and sufficient cause and prayed for condonation of delay. He relied the judgments of Collector, Land Acquisition vs. Mst. Katiji & Ors. [167 I.T.R. 471 (SC)], G. Ramegowda and Ors. vs. Special Land Acquisition Officer, Bangalore (10.03.1988 - SC) [AIR 1988 SC 897] and Royal Airways Ltd. vs ADIT [2006] 98 ITD 259 (Delhi). 3. After hearing both the parties and following the Hon'ble Supreme Court judgment in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors., we are of the opinion that there was sufficient and reasonable cause for delay in filing the appeal before the Tribunal and condone the delay of 286 days. 4. The assessee has raised the following grounds of appeal:- "1. That the Honourable Principal Commissioner of Income Tax ('PCIT') Hubli has erred b....
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....complete scrutiny under CASS to verify the following issues:- (i) Large Deduction under Chapter VI-A form Total Income (ii) Large Cash Deposit during Demonetization (iii) High Value Cash Receipt of Cash shown from third parties 8. A notice u/s 142(1) dated 08.04.2019 was issued to which the reply was filed manually on different dates. A notice u/s 142(1) dated 04.12.2019 was issued to which the reply was filed electronically providing the details of cash deposited during demonetization. It was also explained that the debtors have deposited the cash directly in the bank account of the assessee during the period of demonetization as per the RBI Guidelines vide reply dated 28.12.2019. The assessment order u/s 143(3) was passed on 30.12.2019 making addition u/s 80P(2)(d) of the Act and 57(iii) of the Act and total income was assessed at Rs. 6,63,56,142/-. No addition made for cash deposits during demonetization. 9. The ld. Pr.CIT, Hubli observed that the assessee society has made cash deposits of Rs.3,67,23,820/- (Rs. 3,67,52,590 - Rs. 28,770) in the Axis Bank, Sirsi Branch and Rs.75,00,000/- in Axis Bank, Hubli Branch during demonetisation period in SB....
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....the third parties to deposit SBNs in their bank account. The bank can accept the deposit of SBNs from such third party in the bank account of assessee provided the specific authorisation obtained from the assessee is presented by the third party to the bank. 13. He further submitted that the AO vide notice u/s 142(1) of the Act dated 08.04.2019 has called for the following details: Questionnaire 11: Details of bank account along with Bank reconciliation statement and Bank statement. Questionnaire 14: Details of debtors in requisite format Questionnaire 19: Details of purchases and sales from parties in excess of Rs.10,00,000/- from the parties who are not covered under sundry debtors and creditors list 14. In response the assessee filed reply on 24.04.2019 & 13.05.2019 (page 12-22 of the PB) and furnished Copy of Bank Statement during the course of assessment proceeding (page 23-74 of PB), copy of Relevant Sundry Debtors and Creditors list (page 75-78 of the PB) and copy of list of parties to whom sales is made in excess of Rs.10,00,000/- (page 79-80 of the PB). Hence it is evident that the AO has duly verified the details of sales, trade debtors and bank tr....
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....roduced as under:- Axis Bank, Sirsi Branch Date Amount of deposit Branch Page of Paper Book Deposited by party Page of paper book 10.11.2016 1,80,000 Junagadh (GJ) 27 Gurunanak Traders 125 11.11.2016 1,90,000 Junagadh (GJ) 27 Gurunanak Traders 125 11.11.2016 31,00,000 Hubli (KT) 28 Jai Maa 128 23.11.2016 1,99,000 Relief Road, Ahmedabad (GJ) 42 Sangam Trading Company 128 12.11.2016 1,85,900 Shahibaug, Ahmedabad (GJ) 29 Vimal Trading 128 01.12.2016 1,90,000 Sion, Mumbai [MH] 53 Yadav Trading Co. 128 17. On perusal of sale details, debtors list, banks statement, reply furnished in relation to demonetisation and reply furnished on 28.12.2019, the ld. AR submitted that it is evident that the AO has duly verified the cash deposit in SBNs during demonetisation from trade debtors formed part of revenue from operation and therefore has not made any further disallowance in this regard. Hence the AO has duly conducted necessary enquiries for verification of cash deposit during demonetisation. As such, it cannot be said that the AO had failed to examine this issue....
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....e revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. 21. An incorrect assumption of facts, an incorrect application of law will satisfy the requirement of the order being erroneous. 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 or is to be calculated in a different manner. This section does not visualize a case of substitution of the judgment of the Commissioner for that of the Income Tax Officer, to pass the order, unless the decision is held to be erroneous. The said provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer. It is only when the assessment order is both erroneous and prejudicial to the interest of the revenue, rigors of section 263 of the Act can be invoked. 22. In the present case, even if the order is prejudicial to the interest of the revenue, the same cannot be said to be erroneous since proper enquiries were conducted by the learned AO during the course of assessment proceedings. Hence, the twin....
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....e duly furnished before the AO. Thereafter, after examining the entire details and documents, the AO was satisfied that the receipts in bank account are out of sales already recorded as income of the assessee and receipts by the bank from such trade debtors in the bank account of the assessee are only from such trade debtors as per the RBI Guidelines. Hence the AO has taken plausible view to not to add it u/s 68 of the Act as it would lead to double taxation of the same amount, one under the head Revenue from Operations already offered to tax by the assessee and another one under section 68 of the Act. 26. Further, the provision of section 68 has been invoked alleging that the acceptance of SBNs during demonetised period is in violation of law. In this regard it is submitted that the acceptance of SBNs [Rs. 500 and Rs.1000 denomination] by the assessee was not permissible as per law. However, the acceptance of cash deposit in the bank account of the assessee by third parties was permitted to the banks by GOI and RBI. Hence the contention of the ld. Pr. CIT is not correct and so the initiating of proceedings u/s 263 of the Act for invoking proviso of section 68 of the Act is bad ....
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....r passed by the ld. Pr.CIT setting aside the original assessment order for fresh assessment is clearly not as per law and liable to be quashed. 31. On the other hand, the ld. DR relied on the order of the ld. Pr.CIT and submitted that the assessment order is rightly set aside. The AO is an investigating office and thereafter he is an adjudicating officer. But from the assessment order it does not come out whether the AO has conducted any enquiry on the issues pointed out by the ld. Pr.CIT. 32. After hearing both the sides, perusing the entire material on record and the orders of the lower authorities, we note that the assessee's case was selected for scrutiny under CASS on the above noted points. The AO issued notice u/s. 142(1) on different dates and the assessee has filed the reply. The assessment order was passed by the AO on 30.12.2019. The ld. Pr.CIT has set aside the assessment order as erroneous and prejudicial to the interests of the revenue because the AO did not conduct necessary enquiries as per CBDT guidelines. On going through the questionnaire issued u/s. 142(1) by the AO and reply submitted by the assessee which are placed at pg. 1 to 198 of the Paper Book (PB)....
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....letion of assessment. In view of the above, the order passed by the AO is not erroneous & prejudicial to the interests of the revenue. On going through the notice issued by the AO u/s 142(1) and reply submitted by the assessee there is no lack of enquiry. On perusal of the show cause notice issued by the ld. Pr.CIT, notice u/s 142(1) dated 04.12.2019 and paper book filed by the assessee, we find that all the issues questioned by the ld. Pr.CIT in the revision proceedings, were already examined by the A.O. at the time of assessment proceedings. Therefore, the ld. Pr. CIT is not correct in observing that the A.O. did not conduct proper enquiry on the issues before completion of assessment.. A similar view has been expressed by the co-ordinate bench of the Tribunal in the case of Vegesina Kamala v. Income Tax Officer, Ward-1, Palakad reported in [2016] 66 taxmann.com 280 (Visakhapatnam - Trib.) in ITA NO. 268 (VIZAG.) OF 2014 [AY 2009-10] order dated January 22, 2016. The decisions cited by the ld. AR in the written synopsis as well as case laws in the paperbook which is placed on record supports the case of the assessee. Considering the entire submissions, we set aside the impugned o....