TaxTMI 
TaxTMI 
2024 (2) TMI 336
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.... 2. That the order passed by the Principal Commissioner of Income Tax, Bikaner is illegal and against the law. 3. That the order passed by the PCIT is against the judicial decorum and discipline because the order of the Hon'ble Tribunal/Hon'ble High Court is binding upon the PCIT was not followed, referred during the course of hearing, as such, the order passed is illegal. 4. The Principal Commissioner of Income Tax should have considered the judgment of Jurisdictional High Court delivered in the case of Shri Ganpatram Bishnoi wherein after reviewing the case of M/s. Malabar Industries Limited, the Jurisdictional High Court delivered the judgment. 5. That the action of the PCIT in respect of the setting aside is illegal and against the law because the assessment was completed in accordance with law and is neither erroneous nor prejudicial to the interest of revenue and there was no lack of inquire 6. That none of the condition of 263 of Income Tax Act is applicable in the case of the assessee. The Assessing Authority completed the assessment after conducting thorough enquiry, application of mine and took legal possible view. 7....
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....l income of Rs. 58,780/-. Thereafter, the case was reopened u/s 147/148 and notice u/s 148 was issued on 09.11.2016 and the assessment under section 147/143(3) of the Income Tax Act, 1961 was completed by the Assessing Officer, on 14.12.2017 on declared income of the assessee. 5. On culmination of assessment proceeding, ld. PCIT on examination of records noted that the assessment order dated 14.12.2017 having been found to be erroneous in so far as it is prejudicial to the interests of the revenue so, a show cause notice u/s 263 of the IT Act, 1961 was issued to the assessee on 10.10.2019 by the ld. PCIT and served on the assessee. In compliance to the show cause notice u/s 263 of the IT. Act, no reply was filed by the assessee. Another notice fixing the date of hearing was issued on 14.11.2019. Further opportunities to file submissions were provided vide notice dated 06.01.2020 and 31.01.2020. On 11.02.2020 & 05.03.2020 assessee filed a written reply. The reply filed by the and information/details available on the records have been considered carefully and there on the ld. PCIT observed that; Issue/Point 1:- The assessee Shri Gaurav Purohit filed his ITR for the AY 2011-1....
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....of the assessee, accepted the submission of the assessee. The AO should have verified each and every such transaction claimed to be carried out by other parties/companies/persons on PAN of the assessee with the broker of the assessee and from the BSE/NSE. The AO is directed to verify the sales from the ledger account in the books of broker and from the BSE/NSE. As regards claim of the assessee in respect of transactions carried out by other parties by utilizing the PAN of the assessee, the AO is directed to carry out necessary verifications from such other parties and from BSE/NSE. Based on the above observation on the above issue PCIT opined that the order of the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue and considering the Explanation 2 to section 263(1) w.e.f 01.06.2015 and relying on the finding in the case of M/s Gee Vee Enterprises 99 ITR 375 (Delhi High Court)[1995] It was held that the Assessing officer (AO) is not only an adjudicator but also an investigator, and failure of the AO to conduct the required inquiring and accepting the statement of the assessee without due verification renders the order erroneo....
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.... THIS AMOUNT IS TOTAL OF PURCHASE AND SALE. THE TOTAL PURCHASES WAS 96378284/- AND SALES IS 95770045/-, TOTAL COMES TO 192148329/-, THE AMOUNT MENTION IN THE REASON. IF WE ARE ARRIVING AT THE PROFIT OR LOSS THE TOTAL PURCHASES IS 96378284/- AND SALES IS 95770045 IF CALCULATING THE GAIN SAME COMES TO NEGATIVE. IN THE OTHER WORDS THERE IS A LOSS OF Rs. 608239/-, THIS FACT WAS ALSO MENTION IN THE REPLY. THE ASSEE ALSO EXPLAINED IN RESPECT OF INTRA DAY TRANSACTION AS SUCH CAPITAL GAIN IS NOT CALCULATED. It wall be worthwhile to draw your attention towards the provision of 263 of IT Act, All is being reproduce here under: E-Revision by the Principal Commissioner or Commissioner Revision of orders prejudicial to revenue. 263. (1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order t....
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....jurisdictional High Court or Supreme Court in the case of the assessee or any other person. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation. In computing the period of limitation for the purposes of sub- section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. From the perusal of above you will observe that for acquiring jurisdiction us 263 of the IT Act there must be fulfillment of twin conditions. Order must be erroneous as well as should be prejudicial to interest of revenue. Further in case....
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....AFTER APPLICATION OF MIND ACCEPTED THE EXPLANATION OF THE ASSESSEE. THE ACT OF THE ASSESSING OFFICER IS IN ACCORDANCE WITH THE LAW AND THAT TOO IS AFTER VERIFICATION OF FACT. The copy of notice issued by the income tax officer is marked as Annexure-B and reply of said notice is enclosed as marked-C. In these circumstances the assessment is nighters erroneous or prejudicial to interest of revenue. It is therefore humbly prayed that the proceeding initiated may kindly be drop. As regards the notice issued by your good self dated 10.10.2019. It is submitted as under parawise. As regard para 1 of your Notice mentioned in respect of the fact that the survey was conducted and in the course of survey, Shri Jai Kishan Poddar in the statement recorded u/s. 131 of I.T. Act, admitted that the Companies are bogus companies and the entries in question are accommodating entries. The DDI investigated and pointed out the list of the bogus companies as per the record. During the year under consideration, the Assessing Officer received the intimation regarding bogus transaction amounting to Rs. 9.57,83,040/- as sale and received Rs. 9,63,56,782/- as bogus purchase....
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....igated the source of investment. In this respect, it is also submitted here that the assessee appeared before the Assessing Officer and came forward with suitable explanation in this regard. Therefore, the fact mentioned at para 2 is not relevant or cannot be a basis for taking the action u/s. 263 of I.T. Act. The procedure adopted by the assessing officer is in accordance with the law as well as per the judicial pronouncement. As regard para 3 of your Notice, it is submitted that your good self has alleged that the assessee in part 'A' of Profit & Loss Account, receipt of Rs. 1,25,28,01,832/- represent the transaction not related to himself but the other share transactions were not related to him. This explanation was accepted without any investigation. Your good self observed that THIS IS THE OPINION OF YOUR GOOD SELF AND BASES OF TAKING THE ACTION U/S 263 OF IT ACT. In this connection I want to draw your attention that in the reply submitted by the assessee dated nil in response to reply of notice 142(1) of IT Act dated 05.12.2017 reply of query no 5 it has been categorically express and explain that this amount was mention by the then authorize representa....
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....ded were verified from the record of the assessee and only after considering the explanation, the Assessing Officer accepted the explanation of the assessee. As far as the observation is concern same seems to be hypothetically. In this respect it will be worthwhile to mention here that I have already made it clear in my earlier submission Para that if two views are possible and out of two views, one view has been taken by the Income-tax Officer, in that case the order cannot be called as erroneous and prejudicial to the revenue. In this respect your kind attention is invited towards the following in case of Commissioner of Income Tax Vs. DLF Power Ltd. (Del) Reported in 229 CTR Page No. 27 the relevant portion is being reproduced here under: 229 CTR Page No. 27 "If two views are possible and the view taken by the AO was plausible one that would not provide sufficient ground for the CIT to assume jurisdiction under section 263 merely because, he had a different view." Further I want to invite you kind attention in case of Grasim Industries Ltd. Vs. Commissioner of Income Tax (Bombay) reported in 321 ITR Page No. 92 the relevant portion is being re....
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.... the Appeal before the Hon'ble Rajasthan High Court and Hon'ble Rajasthan High Court confirmed the order of the ITAT. For your ready reference your kind attention is invited towards the order of the Hon'ble High Court. Relevant portion is being reproduced here under:- "when enquiry in fact has been conducted and the Assessing Officer has reached a particular conclusion, though reference to such enquiries has not been made in the order of the assessment, but the same is apparent from the record of the proceedings, in the present case, without anything to say how and why the enquiry conducted by the Assessing Officer was not in accordance with law, the invocation of jurisdiction by the CIT was unsustainable. As the exercise of jurisdiction by the CIT is founded on no material, it was liable to be set aside. Jurisdiction under section 263 cannot be invoked for making short enquiries or to go into the process of assessment again and again merely on the basis that more enquiry ought to have been conducted to find something." The judgment of Hon'ble Rajasthan High Court is based on the basis judgment given by the Hon'ble Supreme Court in case of Mala....
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....ne of the Journal is being reproduced be-re-under:- "1. Whether the section 263 can be invoked, for re- examination in the matter? - Held No Whether the provisions of section 263 can be invoked and Tribunal corrective or has reviewed the subordinate's order in exercise of supervisory powers? - Held No." The case decided by the Hon'ble Tribunal having almost identical facts, therefore, the judgment of the Jurisdictional Tribunal is binding too also. You will therefore, observed that the order passed by the Income Tax Officer is not prejudicial in the interest of revenue. Your Kind attention is further invited towards the judgment of the jurisdictional High Court reported in 198 CTR pages 546 Commissioner of Income Tax Vis Ganpat Ram Bishnoi. In this case the Hon'ble Jurisdictional High Court observed which are being reproduced as under:- "A.O. had not applied hi mind to the various aspect of the matter Once enquiry in fact has been conducted and the A.D. has reached a particular conclusion, Though the reference to such enquiry has not been made in the order of assessment, the invocation of jurisdiction by the CIT is not sustainable Same liable ....
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....ng judgment. Laxmi Narayan v. CIT (2018) 402 ITR 117/(2019) 306 CTR 361 (Raj) (HC) Shravan lal Meena L/H of Late Bhagwanta Meena v. ITO (2018) 402 ITR 117 /(2019) 306 CTR 361 (Raj) Mahadev Balaji v. ITO (2018) 402 ITR 117/(2019) 306 CTR 361 (Raj) (HC (HC) In view of above mentioned facts and circumstances you will observe that the order passed by the Income-tax Officer is neither erroneous nor prejudicial to the interest of revenue. The order passed is perfectly in order which has been passed by the Assessing Officer by taking his own correct legal view. With due respect the condition as laid down in the provisions as well as judicial pronouncement is very clear that the case of the assessee is not covered under u/s 263 of IT. Act as alleged. It is therefore requested that the proceeding initiated may kindly be drop. It will be worthwhile to submit here that the above judgment referred in support of contention is having the nature of binding judgment/order. You are therefore humbly requested that following the binding nature judgment proceeding may kindly be drop. It is therefore humbly prayed that proceedings initiated may kindly be dro....
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....opened assessment proceedings, the assessee participated. The bench noted that the ld. AO has vide his notice dated 05.12.2017 raised question no. 5 & 6 to the assessee. The contention of the questions raised reads as under: 8.2 The assessee vide his reply to the said notice explained on the issue and also explained as to why the audit is also not required to be carried out. He has supported his contention by submitting the details which the ld. AO has verified and passed assessment order on 14.12.2017 considering the explanation of the assessee wherein the ld. AO has recorded his satisfaction and the same is reiterated herein below: The fact that the assessee has on being asked clearly explained the nature and details of the transaction by submitting the necessary evidence and the content of the reply is also filed in the assessee's paper book page 22-23 and the revenue did not contradict the figure which the assessee has replied, and the figures referred in the notice of the PCIT. Thus, it is clear that the ld. AO raised the issue, asked for the details and applied his mind while passing the assessment order. Even in the proceeding u/s. 263 the ld. PCIT did not bring anythi....
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....g fact that needs to be addressed in the instant case is that the Id. PCIT herein is only seeking to revise the order passed by the Id. AO u/s.143(3) r.w.s. 147 of the Act dated 12/12/2018. In the said re-assessment proceedings, the Id. AO had not even made any addition despite the fact that he had reason to believe that income of Rs. 11,55,330/- had escaped assessment in the hands of the assessee which was sought to be taxed u/s.56 of the Act as per the reasons recorded. Hence, when the very basis of reasons recorded by the Id. AO was ultimately not added by the Id. AO in the re-assessment proceedings, then the primary reason to believe that income of the assessee had escaped assessment fails and such re-assessment cannot be treated as a valid order in the eyes of law. The same is to be declared as void ab initio. Reliance in this regard was rightly placed on the decision of the Hon'ble Jurisdictional High Court in the case of Jet Airways reported in 331 ITR 236. When an assessment framed by the Id. AO is unsustainable in the eyes of law, the said invalid and illegal order cannot be subject matter of section 263 proceedings. On this count also, the revision order passed by the....
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....¥‡ 05.12.2017 अधिकृतपà¥à¤°à¤¤à¤¿à¤¨à¤¿ धिशà¥à¤°à¥€à¤µà¤¾à¤ˆ. पी. मदान, अधिवकà¥à¤¤à¤¾à¤‰à¤ªà¤¸à¥à¤¥à¤¿à¤¤à¤¹à¥à¤à¤¤à¤¥à¤¾à¤®à¤¾à¤®à¤²à¥‡à¤¸à¥‡à¤¸à¤‚बंधितवांछितदसà¥à¤¤à¤¾à¤µà¥‡à¤œ । सूचनाà¤à¤‚पà¥à¤°à¤¸à¥à¤¤à¥à¤¤à¤•à¥€à¤œà¤¿à¤¨à¤•à¥€à¤¸à¤‚दिकà¥à¤·à¤¾à¤ªà¥à¤°à¤£à¤¾à¤²à¥€à¤•à¥‡ आधारवआवशà¥à¤¯à¤•à¤œà¤¾à¤‚चकीगयी।" Document 2 As regard para 3 of your Notice, it is submitted that your good self has alleged that the assessee in part 'A' of Profit & Loss Account, receipt of Rs. 1,25,28,01,832/- represent the transaction not related to himself but the other share transactions were not related to him. ....
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....having two folds. First is that the Assessing Officer accepted the reply by keeping his eyes close and second is that the reason recorded was provided without following the legal position and there is a loss of revenue. Document 4 these facts and these आà¤à¤–बनà¥à¤¦à¤•à¤°à¤•à¥‡à¤¸à¥à¤µà¥€à¤•à¤¾à¤°à¤•à¤°à¤¨à¤¾.. with the assessment proceeding. Therefore in circumstances, the word used by you is not justified. The Assessing Officer is quasi judicial Officer and having powers so provided in the Act. He is an Assessing Officer empowered to accept or reject the explanation as per his wisdom. Therefore, it will be worthwhile to submit that supervisory authority is not supposed to commit or act in such a manner. The Assessing Officer took one view out of possible two views. I will submit the legal pronouncement(s) subsequently in the submission. It is, therefore submitted that the Assessing Officer rightly and in accordance with law, accepted the explanation of the assessee. Document 5 As far as the second observation is concerned, I want to submit that yo....
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.... The assessing officer completed the assessment after considering all reason, fact as well as reply and document available in the record. Hence with due respect same is not correct. Document 7 ANNEXURE TO NOTICE U/S 142(1) DATED 05.12.2017 IN THE CASE OF SH. GOURAV PUROHIT FOR THE A.Y. 2011-12. 1. कृपया अपनी आय का सà¥à¤¤à¥à¤°à¥‹à¤¤ बतायें à¤à¤µà¤‚ विचारणीय निरà¥à¤§à¤¾à¤°à¤£ वरà¥à¤· 2011-12 हेतॠआय संगणना पà¥à¤°à¤ªà¤¤à¥à¤° तथा फॉरà¥à¤® 26à¤à¤à¤¸ पà¥à¤°à¤¸à¥à¤¤à¥à¤¤ करें 2. आपकी बैंक सà¥à¤Ÿà¥‡à¤Ÿà¤®à¥‡à¤‚ट पà¥à¤°à¤¸à¥à¤¤à¥à¤¤ करें | 3. आप दà¥à¤µà¤¾à¤°à¤¾ संधारà....
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....¸à¥à¤¥à¤¿à¤¤à¤¿ सà¥à¤ªà¤·à¥à¤Ÿ करें । 6. आप दà¥à¤µà¤¾à¤°à¤¾ वरà¥à¤· के दौरान मैसरà¥à¤¸ सीसीà¤à¤² सà¥à¤•à¥à¤°à¤¿à¤ª कोड 531900 के शेयरों से रूपये 19,21,39,822 / का दीरà¥à¤˜à¤•à¤¾à¤²à¥€à¤¨ पूंजीलाठहà¥à¤† है परनà¥à¤¤à¥ आप दà¥à¤µà¤¾à¤°à¤¾ यह आय अपनी विवरणी में पà¥à¤°à¤¸à¥à¤¤à¥à¤¤ नहीं की गयी है। कृपया कारण सà¥à¤ªà¤·à¥à¤Ÿ करें। (2) a {Khemraj Khardia Income-tax Officer, Ward-2(2), Bik....