TaxTMI 
TaxTMI 
2023 (4) TMI 1341
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....to submit that: 1. That the appellant is carrying on business of whole sale & retail trading of Sugar, Edible Oil & etc. in Sambhar Lake, District Jaipur which is rural or sub- urban area and there are very few counsels undertaking Income tax practice and having in depth knowledge of Income Tax laws. 2. That the original assessment for the relevant year was passed by ITO ward 7(3) on 09.05.2019. Subsequently, the revisionary proceedings u/s 263 was initiated by the worthy Pr. CIT-2, Jaipur and thereafter the revisionary order u/s 263 of the Income Tax Act was passed by worthy Pr. CIT (2)-Jaipur setting aside the original assessment order u/s 143(3) on 29.03.2022 which was duly served upon the appellant on 29.03.2022 through e-mail. 3. That the appeal against impugned order was statutorily required to be filed before worthy tribunal by 28.05.2022 and therefore there is delay of 214 days in filing form 36 which the appellant requests your honour to condone and allow admission of the appeal. 4. That the delay in filing Form 36 is solely due to lack of advice from the local counsel (Sambhar Lake), who was not aware that the revisionary order u/s 263 ....
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....this condonation petition and the appeal should not be entertained as the assessee failed to justify the delay in filling the present appeal. The affidavit filed by the assessee has no support of any evidence to support the contention so raised. 3. We have heard the rival contentions and also persuaded the material available on record made available by both the parties. The bench noted that there is no dispute about the number of days delay by both the parties that this appeal is filed by the assessee after a delay of almost 220 days. To support the reason for the delay the ld. AR of the assessee submitted that they have reasonable reasons for not filing an appeal in time and the assessee live in remote area where the professional tax practitioner may not have much knowledge and based on the advice so received there has been a delay and the assessee should not be deprived from the justice on mere technicalities. 3.1 There is also no dispute that under section 253(5) of the Act, the Tribunal may admit an appeal filed beyond the period of limitation where it is satisfied that there was sufficient cause on the part of the assessee for not presenting the appeal within the prescri....
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....lly delayed filing of the appeal, that he is careless, negligent and his conduct is lacking in bona fides. The Hon'ble High Court thereby condoned the delay of 2984 days in filing the appeals holding that the explanation placed on affidavit was not contested nor we find that from such explanation, can we arrive at the conclusion the assessee was at fault, he intentionally and deliberately delayed the matter and has no bona fide or reasonable explanation for the delay in filing the proceedings and the position is quite otherwise. 3.5 Moreover, in case of Collector, Land Acquisition vs MST Katiji, the Hon'ble Supreme Court has held that the expression 'Sufficient Cause' employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner to sub-serves the ends of justice that being the life-purpose of the existence of the institution of Courts. It was further held by the Hon'ble Supreme Court that such liberal approach is adopted on one of the principles that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when dela....
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....e negligence or malafide on the part of the assessee in delayed filing of the present appeal and he does not stand to benefit by resorting to such delay. Therefore, in the factual matrix of the present case, we find that there exists sufficient and reasonable cause for condoning the delay of 220 days in filing the present appeal and as held by the Hon'ble Supreme Court, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. Therefore, in exercise of powers under section 253(5) of the Act, we hereby condone the delay of 220 days in filing the present appeal as we are satisfied that there was sufficient cause for not presenting the appeal within the prescribed time and the appeal is hereby admitted for adjudication on merits. 4. Now, coming to the merits of the case, the assessee has marched this appeal on the following grounds of appeal: "1. That the ld. Pr. CIT has erred in law as well as in facts of the case in exercising revisionary jurisdiction u/s 263 of the IT Act by making observation which are contrary to assessment records 467945/- 2. That ld. Pr. CIT has erred....
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.... of cash with the assessee. No cash book has been filed during the assessment proceedings where from the cash deposited in the bank could be verified. Therefore, he is of the view that the ld. AO has not properly addressed the issue while completing the assessment. Based on these propositions the ld. PCIT hold a view that the order passed by the assessing officer is erroneous in so far as it is prejudicial to the interest of the revenue and thereby issued a show cause notice dated 08.03.2022. The assessee filed its reply dated 23.03.2022. The ld. PCIT after considering the reply passed the i.e. order u/s. 263 of the Act and the relevant observation of the ld. PCIT is reiterated here in below: "9. From the above facts and circumstances of the case and having regard to the material available on record, the Assessing Officer failed to consider/apply his mind to the information available on record with regard to the cash deposited in the bank in old SBN of Rs. 16,80,000. This is turn has resulted in passing of an erroneous order by the Assessing Officer in the case due to non-application of mind to relevant material, reflecting non appreciation of facts and an incorrect a....
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....the appellant, the detailed & judicious assessment order was passed on 09.05.2019. Subsequently, The ld. PCIT-II, Jaipur by making finding that the ld. AO failed to make any verification relating to source of cash deposit made during demonetization period & also holding non application of mind to the issue, assumed reversionary jurisdiction u/s 263 of the Act and thereafter passed the order setting aside the original assessment u/s 143(3) dated 29.03.2022 by holding the original order to be erroneous & pre judicial to the interest of the revenue, Aggrieved by the same, appellant is in appeal before your honour. With this background, the grounds of appeal & brief submission covering both the grounds (as both are interconnected) of the appellant is encapsulated as under:- GOA 1 :- That the ld. Pr. CIT has erred in law as well in facts of the case in exercising revisionary jurisdiction u/s 263 of the IT Act by making observation which are contrary to assessment records. GOA 2:- That the ld. Pr. CIT has erred in law as well in facts of the case in not appreciating that alleged order u/s 143(3) was passed by the AO after due verification of the books ....
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....f the information and examination of books of accounts and therefore even if same could be hold to be prejudicial to Interest of revenue but in any stretch of imagination cannot come under the ambit of erroneous order.The assumption of Jurisdiction is erroneous & unwarranted, for want of the following submitted point wise as under :- 1. That there was no occasion for the ld. PCIT to assume revisionary jurisdiction by holding order to be erroneous by making finding as to absence of inquiry & no application of mind what so ever, in as much, the assessment order was passed after due verification & examination of cash deposit made during course of demonetization period. 1.1 That from the bare perusal of the order of PCIT, it is evident that it is not the ld. case of the PCIT that the AO has not made enquiries or verification which should have been made in respect of verification of cash deposit during demonetization but it is the case where in PCIT made specific finding that there is no verification at all of the issue involved by the AO & hence non application of mind by the AO in any manner what so ever. Thus, the assumption of the jurisdiction by the PCIT is built ....
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....s verification of submission & examination of books of accounts including but not limited to cash book, bank book, sales book, purchase book, sales & purchase bills, stock register was undertaken by the AO before arriving at the satisfaction that cash deposit was explained, which echoes that there was due application of mind by the AO & thus foundation for exercise of jurisdiction u/s 263 by the PCIT is apparently missing. 2. The Invoking of Explanation 2 to S. 263 is without jurisdiction for the reasons submitted pointwise as under :- 2.1 The Pr.CIT had observed that order of AO is erroneous with in the purview of Explanation 2 of section 263(1) and therefore liable to revision under clause (a) & (b) of explanation (2) to section 263(1) of the Income Tax Act, however there is no whisper in the show-cause notice issued under section 263 dated 08.03.2022, that she is going to invoke the Explanation 2 to 263, therefore invocation of Explanation in the order without confronting the assessee is not appropriate and unsustainable in law. (Refer Pg 24 of PB) 2.2 The law is well settled that any proposed action which do not find place in the SCN u/s 263 or withou....
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.... Further no queries to the cash deposited in SBNs have been raised by the A.O. or any reply has been filed by the assessee " does not hold water & is non existent, in as much, same is contrary to the document & information on assessment record. The appellant was well aware of the issue that triggered the proceedings by issue of notice u/s 143(2) and therefore immediately on receipt of notice filed detailed & elaborated reply covering each & every aspect of source of cash deposit vide letter efiled dated 09.10.2018. (Kindly refer Pg No. 11-13 of PB). The bare perusal of the submission dated, will convey to your honour that the appellant left no stone unturned in explaining the source of cash deposit to have been emanated out of trading operations of the business and therefore the alleged observation is bereft of any merit & contrary to assessment records.It is mysterious how PCIT reached to the conclusion that there was no reply of the assessee on issue of cash deposit. 4. The factual matrix of the case manifest that revisionary proceeding has been initiated based upon proposal made by the AO thereby making proceedings to be null & void. The contention of the appellant....
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....O has acted judiciously and conducted enquiries in the course of assessment proceedings. (Reliance placed upon Plastic Concern vs ACIT [61 (TTJ) 87(Cal)] 7. That one of the alleged observation of the PCIT in justifying his arbitrary assumption of jurisdiction is the "failure of the AO in calling deposit receipts from the bank including the counterfoils and has not verified the cash deposited in the bank account vis-a-vis cash book "Further No cash book has been filed during the assessment proceedings. The alleged observation has no legs to stand and is hereby controverted point wise as under :- 7.1 That with due respect to the contention of the PCIT & as per our understanding of IT law there is no provision in the law which mandates filing of cash book through ITBA portal only, as a condition precedent for explaining the source of cash deposit. (Emphasis Supplied) 7.2 The cash book was produced before AO and same was examined & verified by him, before arriving at satisfaction regarding cash deposits during demonetization. That it is mysterious & not understandable how the bank counterfoils /deposit receipts can decipher about source of cash deposit and mo....
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....ITR 108 Bom "The AO has made enquiries. The assessee has given a detailed explanation in writing. Evidently, the claim as allowed by the AO on being satisfied with the explanation of the assessee. The decision of the AO cannot be held to be erroneous simply because in his order he did not made an elaborate discussion in this regard." In concluding part of our submission, It is reiterated that there was no occasion on the part of the PCIT to assume reversionary jurisdiction in light of the factual matrix of the case and looking to the factum of specific reply of the appellant on assessment file, calling & verification of books of accounts, dealing with the aspect of the issue in the body of order." 7.1 The ld. AR of the assessee in addition to the written submitted that the ld. PCIT has not appreciated the line of business where in the assessee is engaged. The receipt of the cash is the nature phenomenal in the business of the assessee and the same is verified by the ld. AO. The relevant observation is made at page 3 of the his order. The ld. AR of the assessee filed a letter dated 09.10.2018 where in the details of the money so deposited into the bank account w....
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..... Even the ld. DR did not place anything further to support the any specific error on the part of the assessee. We have perused the assessment order and the relevant submission on the issue that the assessee has given details in the assessment proceeding at four instance so as to support the fact that inquiry in relation to the generation of the cash by the assessee is verified by the ld. AO. It is also not disputed by the PCIT or ld. Sr. DR for the balance amount deposited in the demonetized period which is that out of 51.60 lacs but disputed only for an amount Rs. 16.80 lac being the demonetized currency. There is no evidence or material that has been observed by the PCIT from the details so placed on record by the assessee in the assessment proceeding to disbelieve the averments about the source of the said demonetized currency. Merely the PCIT said that in his opinion the ld. AO has not properly addressed the issue. The observation so made is very general and routine without pinpointing any specific defect the action of the PCIT u/s. 263 is nothing but a review of the order of the ld. AO. It has been held in so many cases by the various High Courts and Tribunal that the am....
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....ITR 282 (SC) wherein it was held that: "The phrase 'prejudicial to the interests of the Revenue' in s. 263 of the IT Act, 1961, has to be read in conjunction with the expression 'erroneous' order passed by the AO. Every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interests of the Revenue. For example, when the AO adopts one of two courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the Revenue, unless the view taken by the AO is unsustainable in law." 11. In view of foregoing discussion, we are of the considered view that when the ld. PCIT has not disputed the source of other cash deposited from the same set of books of accounts and record maintained by the assessee was not justified in invoking the provision of section 263 to the present matter of the assessee for the balance amount of Rs. 16.80 lac. Being so, we quash the order passed by Ld. PCIT passed u/s 263 for the year under consideration. In the result, appeal of the asse....