TaxTMI 
TaxTMI 
2022 (10) TMI 1211
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....are about the pending income-tax litigation. More particularly, there was a confusion between the partners, who will keep a track about the income tax litigation and contact with the Tax Consultant. Due to certain communication gap between the two-three new inducted partners, vis-a-vis existing two partners, this remained out of sight and could not be filed well in time. When a Demand Notice came up, only then it was realised that appeal ought to have been filed. 4. On the other hand, ld. D.R. contended that the assessee should be vigilant about all the issues relating to income-tax proceedings. 5. We have duly considered the rival contentions and gone through the record carefully. 6. Sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross-objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This expression "sufficient cause" employed in this Section has also been used identically in sub-Section 3 of Section 249 of the Act, which provides power to the Id. Commissioner to condone the delay in filing of the appeal before the Co....
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....y for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial....
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....IT has erred in taking cognizance under section 263 of the Income Tax Act and thereby setting aside the assessment order for passing a fresh assessment order. 11. Brief facts of the case are that the assessee has filed its return of income on 01.11.2017 declaring total income at Rs.1,39,246/-. The case of the assessee was selected for scrutiny assessment and a notice under section 143(2) was issued and served upon it. The ld. Assessing Officer thereafter issued show-cause notice inviting explanation of the assessee on number of issues. In other words, a questionnaire under section 142(1) was issued, whose copy is available on pages number 7 to 9 of the paper book. The ld. Assessing Officer has passed the assessment order on 01.02.2019 under section 143(3) of the Income Tax Act. 12. The ld. CIT has gone through the record and formed an opinion that during demonetisation period, there was abnormal increase in cash deposit as compared to average rate of cash deposit during predemonetisation period. Hence, ld. CIT was of the view that the ld. Assessing Officer should have investigated this issue more vigorously. Copy of the show-cause notice is available on pages no. 1 & 2 of the....
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....f proper documentary evidence and assessed the assessment order by accepting average G.P. rate at 3.5%. But there are several instances in the bank accounts where the assessee had received, payments & paid to parties through bank accounts. Name of the parties are also evident from the bank statement. Detailed investigation from the A.O. had escaped. In view of the above, it appeals that the AO has passed the impugned assessment order without any application of mind nor examined the issue which should have been made in this case. 2. Having regard to the facts and circumstances of the case and in law and accordance with the provisions of section 263(1) of the I.T Act, 1961. You are hereby given an opportunity of being heard to show cause as to why the impugned assessment order passed u/s 143(3) on 01.02.2019 for AY: 2017-18 should not be held as erroneous in so far as it is prejudicial to the interest of revenue. You may accordingly furnish your written submissions u/s 263(1) of the I.T Act, 1961 by 19.02.2021 in this regard elaborating and/ or evidencing your contentions/ submissions. Considering in the pandemic situations arising due to COVID 19, physical attendan....
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.... be held to be erroneous though the converse may not always be true. (8) Hon'ble Supreme Court in the case of Malabar Industrial Co. Pvt. Ltd vs. CIT reported in (2000) 243 ITR 83, 87-88(SC) affirming the Hon'ble Kerala High Court decision (198 ITR 611) has held that the phrase "Prejudicial to the Interests of the Revenue" is of wide import and is not confined to only loss of taxes. If the A.O. has accepted the claim of the assessee without any enquiries then such assessment order passed by the A.O. was held to be erroneous. (9) In this regard it is mentioned that mere non enquiry would also render a particular order passed by lower authority as erroneous and prejudicial to the interests of Revenue. This position has been clearly confirmed by Hon'ble Supreme Court in the case of Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 & Smt. Tara Devi Aggarwai v. CIT [1973] 88 ITR 323 (SC). The reasoning for this proposition has been explained by Hon'ble Delhi High Court in the case of Gee Vee Enterprise v. Addl. CIT [1975] 99 ITR 375 in the following para :- "It is not necessary for the Commissioner to make further inquiries before cancelling the assessment order o....
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....n-263 of the Act with effect from 01.06.2015, I hold that the impugned assessment order for the A.Y. 2017-18 passed by the A.O. is erroneous in so far as it is prejudicial to the interests of the revenue. I further hold, after giving the assessee an opportunity of being heard, that the impugned assessment order for the A.Y. 2017-18 is liable to be set-aside. Therefore, I set aside the said assessment order directing the A.O. to frame the assessment afresh after considering the aforesaid observations, Hon'ble Supreme Court and Hon'ble High Court decisions and as per law. 12. In the result, the assessment order u/s 143(3) for A.Y. 2017-18 is set-aside to the file of the Assessing Officer with a direction to pass a fresh assessment order after considering the aforesaid observations, as per law and after giving an opportunity of being* heard to the assessee". 14. The ld. Counsel for the assessee while impugning the order of ld. CIT filed written submission running into 11 pages. He pointed out that during the course of assessment proceedings, the ld. Assessing Officer has issued a specific questionnaire and collected specific details on the point for which ld. Commissioner ....
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.... after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income Tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) "record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. ....
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....t the Assessing Officer to pass a fresh order. At this stage, before considering the multi-fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the CIT taken u/s 263. The ITAT in the case of Mrs. Khatiza S. Oomerbhoy Vs. ITO, Mumbai, 101 TTJ 1095, analyzed in detail various authoritative pronouncements including the decision of Hon'ble Supreme Court in the case of Malabar Industries 243 ITR 83 and has propounded the following broader principle to judge the action of CIT taken under section 263. (i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will ....
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....11.2015, 09.11.2015 to 31.12.2015 and 01.01.2016 to 31.03.2016 and give a short synopsis of the account in following format: A/c No. & Bank details (IFS Code) Cash deposit from 01.04.2015 to 08.11.2015 Cash deposit - 09.11.2015 to 31.12.2015 Cash deposit from 01.01.2016 to 31.03.2016 Other than cash deposit01.04.2015 to 31.03.2016 Total deposits (b) Please provide the bank statement along with the ledger copy for the period 01.04.2016 to 08.11.2016, 09.11.2016 to 31.12.2016 and 01.01.2017 to 31.03.2017 and give a short synopsis of the Account in following format: A/c No. & Bank details (IFS Code) Cash deposit from 01.04.2016 to 08.11.2016 Cash deposit - 09.11.2016 to 31.12.2016 Cash deposit from 01.01.2017 to 31.03.2017 Other than cash deposit 01.04.2016 to 31.03.2017 Total deposits Old currency New Currency Old currency New Currency Old currency New Currency (c) Please explain the sources of such cash deposit relevant to the FY 2016-17 and give the details of source thereof. In this connection, you are requested to furnish your cash book or cash trail from 01.04.2015 to 07.11.2016 an....
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....ultivators against paddy purchase. But on 08/11/2016 demonization was affected. So your goodself we are bound to deposit above withdrawal cash in our bank account. It is not related with any sale.......". As seen from the above, in course of the scrutiny assessment proceeding it was explained before the Ld.AO in details that the source of cash deposit aggregating to Rs.97,36,000/- during the demonetization period i.e. between 08/11/2016 and 30/12/2016, is out of cash withdrawal aggregating to Rs. 1,35,10,000/- during predemonetization period i.e. during the month of October, 2016, as detailed above.. It was further explained that in view of the fact the District Controller of Food and Supply starts purchasing of rice from the Mills from October, the assessee [being a rice mill], with the intention to purchase paddy from the farmers/cultivators, withdrew cash from bank during the month of October, 2016, for making cash payments to the farmers/cultivators. It is for this reason that cash aggregating to Rs. 1,35,10,000/- was withdrawn from its cash credit [A/c no. 0541008700004281] and current account [A/c no. 6070002100000448] during October, 2016. However, with the sudden d....
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....ified the issue properly. This finding is factually incorrect. He himself did not analysis the details, which extracted by him in paragraph 4 of the impugned order. It suggests that there is no logical analysis of the record. The case of the assessee is that it has made sufficient withdrawals starting from 19.10.2016 out of its C.C. facility. The withdrawal before the demonetisation was declared was about Rs.1,35,00,000/-. If it was not used in purchases, then it has to be re-deposited. The abnormal circumstance of high deposit is the reason that such currency could not be retained at home, it has to be sent to the Bank during the given period of time. This fact has not been properly taken note by the ld. CIT while exercising the power under section 263 of the Income Tax Act. The ld. Assessing Officer has made a due enquiry on this issue during the assessment proceedings. The ld. Commissioner failed to give any plausible reason as to why he did not agree with the opinion of the ld. Assessing Officer and as to how the assessment order is erroneous by simply observing that the assessment order is erroneous is not justifiable action. It has to be demonstrated as how it is erroneous, w....