TaxTMI 
TaxTMI 
2024 (3) TMI 30
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....d. In order to explain the delay, the assessee has filed an application. The application reads as under:- BEFORE THE INCOME TAX APPELLATE TRIBUNAL KOLKATA In the matter of: Vrinda Engineers (P) Ltd.... Appellant vs. PCIT, Central -1, Kolkata....Respondent In the matter of: An application for condonation of delay in filing appeal before the Hon'ble Tribunal against the 263 order of the Ld. PCIT, dated 28.03.2022 for A.Y: 2012-13. 1. That an assessment was completed u/s 143(3)/147 vide an order dated 30.09.2019 passed by DCIT, Central Circle-1 (1), Kolkata for A.Y 2012-13 wherein the AO assessed the income as per the returned income. 2. That meanwhile the Ld. PCIT initiated 263 proceedings and passed an order u/s 263 dated 28.03.2022 against the said assessment order 143(3)/147 considering the same as erroneous and prejudicial to the interest of Revenue. 3. That your petitioner approached its regular tax consultant to seek advice on receipt of order passed under section 263. He suggested your petitioner to participate in the subsequent assessment proceedings pursuant to the revision order u/s 263 and to pursue appellate remedy, if....
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.... assessee that after the 263 order, its regular Tax Consultant advised it to contest the assessment order and in case ld. Assessing Officer did not drop the assessment proceeding, then, challenged that order before the higher appellate forum and alongwith that the order of 263 could also be challenged. Due to this misunderstanding, the appeal was not filed. The ld. Counsel for the assessee prayed for condonation of delay and adjudication of the appeal on merit. 4. Ld. CIT(DR), on the other hand, contended that this appeal is time barred by more than 500 days. The assessee should be vigilant about prosecuting its income-tax litigation before appropriate forum and this ignorance of the procedure cannot be a ground to condone the delay. 5. With the assistance of the ld. Representatives, we have gone through the record carefully. 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 the section has also been used identically in sub-s....
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....amage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy 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 finislitium (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 al ways deliberate. This Court has held that the words "sufficient cause" under Section 5 o....
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....ring the course of hearing, ld. Counsel for the assessee has tabulated these details in the list of events and filed before us. 10. A perusal of all these materials would indicate that the assessee was always vigilant and has been prosecuting the income tax litigation. He has participated the scrutiny assessment passed on 13.11.2014 under section 143(3) of the Income Tax Act in this A.Y. Thereafter he participated in the reassessment proceeding, which was framed on 07.12.2018. The assessee thereafter again participated the second reassessment order and thereafter ld. Commissioner exercised the powers under section 263. It could not challenge this impugned order before the Tribunal under an impression that outcome of 263 in the assessment order could be challenged simultaneously. In other words, the assessee was of the view that while challenging assessment passed under section 147 r.w.s. 263, the assessee could take the grounds on order passed u/s 263 could be challenged. We are of the view that it is a bonafide procedural misconception based on its regular Tax Consultant's advice and this parallel proceeding in same assessment year repeatedly may give rise of some confusion. By....
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....electronically on 30.09.2019 declaring total income of Rs. 1,48,03,950/-. The said return was assessed u/s 143(3) of the Income-tax Act, 1961 (in short "the Act") on 13.11.2014 by determining total Income of Rs. 1,89,17,760/-. 2. A credible information has been received from the Deputy Commissioner of Income Tax, Unit, 2(4), Kolkata wherein it was mentioned that Shri Ashutosh Agarwal, Director of Rupali financial consultants Pvt. Ltd. maintained a current account no. G28003300227 with ICICI Dank, Howrah Branch. It was reported that on perusal of bank statement, it was observed that huge amount was deposited in the aforesaid accounts through chuque/RTGS from different companies and immediately transferred to various entitles/companies on the same day or next day. To verify the transactions, summons were issued u/s 131 of the Act, to M/s Rupali financial consultants Pvt. Ltd but the summons was returned back unserved with postal remarks 'not known' & 'Incomplete address'. Reportedly, after analysis of financial statement of M/s Rupali financial consultants Pvt. Ltd., it was found that the company has either low or nil turnover and very meagre profit after tax. In view of the....
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....d the record and formed an opinion that assessment order dated 30.09.2019 is an erroneous order, which has caused a prejudice to the interest of revenue. Therefore, he assumed jurisdiction under section 263 of the Income Tax Act and issued a show-cause notice. The copy of the show-cause notice is placed at pages no. 22 & 23 of the paper book. Such notice reads as under:- OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-1, KOLKATA 3rd Floor, Aatakar Bhawan Poorva, 110, Shanti Pally, E.M. Bt-pass, Kolkata- No. PCIT(C)-1 /263/Vrinda Engineer (P) Ltd./2021-22/ Dated :03.03.2022 To The Principal Officer M/s. Vrinda Engineers (P) Ltd. 181/B, Chittaranjan Avnue, Kolkata-700007 Sir, Sub: Proceedings under section 263 of the Income Tax Act,1961 for the assessment year 2012-13.. .matter regarding. The assessment proceedings for the assessment year 2012-13 in the case of your company was completed under section 147/143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") vide order dated 30.09.2019 determining total income at Rs. 1,59,17,180/-. ....
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.... (NAVEEN CHANDRA) Pr. Commissioner of Income Tax.Central-1 .Kolkata 17. The ld. Counsel for the assessee while impugning the order of ld. Commissioner raised three folds submission. In his first fold of submission, it was submitted that second reopening of the assessment is bad in the eyes of law because this notice was issued after expiry of four years from the end of the relevant assessment year. The assessments have already been framed u/s 143(3) and under section 147 read with section 143(3). According to him, the interdiction provided in the 1st proviso would prohibit the ld. Assessing Officer to reopen an assessment, where assessment has been framed under section 143(3) of the Income Tax Act, and four years have expired from end of A.Y. In other words, ld. Assessing Officer will be precluded to take action under section 147 after expiry of four years from the end of A.Y., unless the assessee failed to declare its income fully and truly. The basic condition is that ld. Assessing Officer has to pinpoint the failure of the assessee in disclosing the details of its income fully and truly, which has attributed to escapement of assessment qua those incomes. A perusal of the ....
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....aper book. If the ld. Assessing Officer has not made addition on an issue for which an assessment was reopened, then, any other issue cannot be taken. In other words, if assessment is being reopened on account of escapement of income on Point (A) and during the course of assessment proceeding, it revealed that apart from (A) income on Point (B) has also escaped, then, unless addition on Point (A) is being made, no addition is to be made qua Point (B). In this case, once addition of the sum received from M/s. Rupali Financial Consultants (P) Ltd. was not made by the ld. Assessing Officer in reassessment order that means no other item of loan or any other issue could be further enquired. For buttressing his proposition, he relied upon three decisions, namely - (i) Hon'ble Bombay High Court in the case of CIT -vs.- Jet Airways reported in 331 ITR 236, (ii) Hon'ble Delhi High Court in the case of Ranbuxy Laboratories reported in 336 ITR page 136 and (iii) Hon'ble Gujarat High Court in the case of Md. Juned reported in 353 ITR page 172. All these three Hon'ble High Courts are unanimous on the point that expression in section 147 would be construed in a way that if addition on a point fo....
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....o take note of this section. It reads as under:- "263(1) The 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 Off icer is erroneous in so far as it is prejudicial to the interest 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 thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. [Explanation.- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1^st 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 Off icer 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 Of....
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....oneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The learned Commissioner would issue a show-cause notice pointing out the reasons for the formation of his belief that action u/s 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. He may set aside the order and direct 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 prono....
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....nt order dated 29.12.2022, which was passed on these reasons would reveal that ld. Assessing Officer is making reference qua a search operation, which was conducted under section 132 of the Income Tax Act in the case of Mundra Group. This search was carried out on 03.02.2017. He further observed that in consequence to this search, survey was also carried out on various companies. It is pertinent to note that survey was carried out upon the assessee also on 01.03.2017. The ld. Assessing Officer was of the view that DDIT(Investigation) has transmitted the information showing that in lieu of certain commission, these companies have taken entries of loan from various shell companies. Now the date of this information is not discernable in the reasons recorded by the ld. Assessing Officer on second occasion, whereas the first reassessment order was passed on 07.12.2018. This reassessment order also talks about DDIT (Information) based upon the search upon the Mundra Group. Therefore, the reasons are totally vague about the source of information. What is the exact information and when it was transmitted to the ld. Assessing Officer and if it relates to before the earlier two assessment or....
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....ratories reported in 336 ITR page 136 and (iii) Hon'ble Gujarat High Court in the case of Md. Juned reported in 353 ITR page 172. 26. Now we come to third proposition. A perusal of the show-cause notice issued by the ld. Commissioner would reveal that in paragraph no. 3, he recorded as under:- "it is observed from the record that during the relevant financial year your company had received unsecured loans amounting to Rs. 12,42,00,000/- from various loan creditors including M/s. Rupali Financial Consultants (P) Ltd. and outstanding unsecured loan increased from Rs. 7,14,62,118/- as on 31.03.2011 to Rs. 13,86,26,978/- as on 31.03.2012. The AO having reopened the case on the issue of unsecured loan had the obligation to examine the genuineness of all the unsecured loans shown to have been received by your company during the financial year 2011-12". The above observation of the ld. Commissioner would reflect that he was taking note of the fact only from the accounts of the assessee. Thus such aspect should have been examined at the first step when scrutiny assessment was made. It cannot be put off for waiting reopening of assessment in 2019 so that exercise under sectio....