TaxTMI 
TaxTMI 
2023 (3) TMI 1372
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....iation of 263 proceeding does not bear Document Identification Number ("DIN"), thus, the revision proceedings deserves to be quashed under the facts and circumstance of the case. 3. The learned PCIT is not justified in law in invoking the jurisdiction under section 263 of the Act and setting aside the order of the learned assessing officer as being "erroneous and prejudicial to the interest of the revenue". 4. The learned PCIT is not justified in law in holding that the order passed by the assessing officer is bad in law, without appreciating that there was no error in the orders passed, much less prejudicial to the interest of revenue, on the facts and circumstances of the case. 5. The learned PCIT failed to appreciate that the provisions of section 263 of the Act shall be attracted only when the order is both erroneous and prejudicial to the interest of revenue and since the order passed under section 143(3) of the Act was not erroneous, much less prejudicial, the invoking of section 263 was not warranted on the facts and circumstances of the case. 6. Grounds on Merits of the Case: The learned PCIT was not justified in appreciating that the ass....
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....llant submits that it received the 263 order by post on 0404.2022 which was acknowledged by its employee and placed it in the file along with correspondences, without bringing it to the knowledge of the managing committee on the premise that there was no demand raised or discernible from the order and that the same would be cross verified by the Chartered accountant during the audit for the year. iii. The appellant was issued a letter dt: 05.12.2022 informing that the assessment would be completed in accordance with the provision of section 144B of the Act. The appellant was under the belief that the proceedings for the assessment year 2017-18 has already been concluded as they have preferred an appeal against the order passed under section 143(3) dt 28.12.2019 of the Act. iv. The appellant approached its Chartered Accountant for clarification, who informed that he was preoccupied with filing of GST annual returns which was time barring on 31.12.2022 and will be available only in second week of January 2023. v. The appellant thereafter received a notice under section 142(1) of the Act on 29.12.2022 wherein it was mentioned "In connection with the on-going....
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....technical considerations. The Court has also explained that a litigant does not stand to benefit by lodging the appeal late. The Court has also explained that every day's delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a rational common sense and pragmatic manner. In the case of Shakuntala Hegde, L/R of R.K. Hegde v. ACIT, ITA No.2785/Bang/2004 for the A.Y. 1993-94, the Tribunal condoned the delay of about 1331 days in filing the appeal wherein the plea of delay in filing appeal due to advice given by a new counsel was accepted as sufficient. The Hon'ble Karnataka High Court in the case of CIT v. ISRO Satellite Centre, ITA No. 532/2008 dated 28.10.2011 has condoned the delay of five years in filing appeal before them which was explained due to delay in getting legal advice from its legal advisors and getting approval from Department of Science and PMO. In the aforesaid decision, the Hon'ble Court found that the very liability of the assessee was non-existent and therefore condoned the delay in filing appeal. In condoning the delay in filing the appeals, the expression 'sufficient cause' should receive liberal construct....
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....verified all the details submitted and applied his mind before concluding the assessment u/s.263. The ld AR accordingly submitted that the PCIT is not correct in setting aside the order of the AO by stating that the AO has not verified the details and that to this extent the order is erroneous. 9. The ld. DR relied on the order of the PCIT. 10. We heard the parties and perused the material on record. We will first look at the relevant observations as extracted below of the PCIT in the order u/s. 263 wherein the reasons for revision are stated:- "2. The assessee has deposited cash of Rs. 1,10,75,500/- in Specified Bank Notes (SBNs) during demonetisation period in its bank accounts and claimed this to be out of closing cash balance as on 08.11.2016 of Rs.1,12,08,975/-. The Assessing Officer has accepted the explanation of cash deposits without verification of the cash book. It is seen that deposits during the month from April 2016 to October 2016 never exceeded Rs. 89,80,041/- for any of the months, however, the society has that the cash in hand position of the society in any of the month end between April to September 2016 stood at maximum of Rs. 4,40,071/- whereas th....
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....f receipts prior to demonetisation. As the assessee has not established this, an adverse inference is naturally drawn that these SBNs were received after demonetisation. The SBNs were not legal tender after demonetisation. The Government guidelines allowed certain bodies like hospitals etc. to receive SBNs even after demonetisation, subject to certain conditions. The assessee was not one of the persons permitted to receive SBNs. When the SBNs were no longer legal tender after demonetisation, receipt of SBNs by the assessee was contrary to public policy and a violation of law." 11. The PCIT has accordingly held the order of the AO to be erroneous and prejudicial to the interests of the revenue. The main contention of the ld AR is that the assessee has submitted all the details called for with regard to the impugned transaction. In this regard we notice that the AO through various notices issued on 25.7.2019, 27.7.2019, 3.10.2019 had called for various details including details with regard to cash deposits deposited during the demonetization period. We further notice that vide notice dated 9.12.2019 and 12.12.2019, the AO had called for details of cash deposited into the bank acco....
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.... 6. That, the details of cash deposits during the demonetarization period separately provided. 7. That, the SBN notes were available only in our closing cash balance as on 08.11.2016 and thereafter we have not accepted any SBN notes. Therefore non SBN notes cash deposits after 08.11.2016 are out of our daily recovery from the loan account and deposits from members as well as interest recovery from the borrowers and our liquid cash capital. 8. That, therefore your honor may observe that, our society is having legal sources of cash which is received during the course of our business of accepting deposits and lending money. 9. That, to support of our above submission, we have also provided Xerox copies of the cash denomination book from the period 08.11.2016 to 31.12.20.16 maintained by the cashier of the society, which has also been provided. The Xerox copies of cash book from 01.11.2016 to 31.12.2016 relating to our head office have also been provided. 10. That, there is full source for the cash deposits into banks and there is not any cash deposits of SBN notes other than out of closing cash balance as on 08.11.2016, we request your honor not to....
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.... rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person." 14. Thus, from close scrutiny of the provisions of section 263, it is evident that twin conditions are required to be satisfied for exercise of revisional jurisdiction under section 263 of the Act i.e., firstly, the order of the Assessing Officer is erroneous; and secondly, it is prejudicial to the interests of the revenue on account of error in the order of assessment. The Bombay High Court in the case of Gabriel India Ltd. (1993) 203 ITR 108 has explained as to when an order can be termed as erroneous as follows:- "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 the 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.....
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....ified bank notes. The assessee has failed to comply with the terms of notices issued by this Office. The Assessee was specifically required to submit the source of cash deposits made during the demonetization period i.e. 09.11.2016 to 30.12.2016 for which the assessee only submitted that it has deposited old currency notes at the time of demonetization in its bank accounts out of deposits received from members from day to day transactions. The closing cash balance of assessee as on 08.11.2016 was at Rs.1,12,08,975/- (excluding branch at Karadga which is opened on 25.11.2016 and operating from 25.11.2016,) as per affidavit filed during hearing, which is placed on record. Out of which SBN notes of Rs.500 and Rs.1000 amounting to Rs.1,10,75,500/- have been deposited into bank on following dates by the assessee. Cash deposits position in bank during F.Y.2015-16 and from 01.04.2016 to 31.12.2016 are as under: S No. Particulars of information sought Response from assessee 1 (a)Total Cash Deposit in Bank Accounts in FY 2015-16 3,59,16,650 (b)Total Cash Deposit in Bank from 1.4.2015 to 8.11.2015 1,73,00,000 (c)Total Cash Depo....