TaxTMI 
TaxTMI 
2023 (4) TMI 1341
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....g 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 is appealable order before worthy ITAT 5. That the factum of impugned revisi....
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....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 prescribed time. Section 253(5) deals the power of the tribunal and the same is reiterated here in below: Section ....
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....ourt 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 delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. Another principle ....
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....rting 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 in law as well as in facts of case is not appreciating that alleged order u/s 143(3) dated 09.05.2019 was passed by AO after due verification of boo....
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....erefore, 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 application of mind to law which is prejudiced to the interest of the revenue. 10. Accordingly, by virtue of powers conferred on the undersigned under the prov....
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....elating 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 of accounts & information supplied by the appellant during course of assessment proceedings. Contention of the PCIT The ld. PCIT assumed the revisionary jurisdiction u/s 263 by making following finding, reproduced....
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....r 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 upon finding that there is "complete absence of enquiry " by the AO. In this regard, It is submitted that whole edifice over which foundation of the case is being built "complete absence of enquiry by the AO " is altogether absent & contrary to information & document on assessment record, the....
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....y 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 without specifically confronting the assessee of such proposed action before invoking S. 263, shall vitiate the entire proceeding and therefore, the resultant order u/s 263 has to be quashed. 2.2.1 This aspect is directly covered by recent decision of Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax, Surat2 Vs. Shreeji Prints ....
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....ipt 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 is fortified from the fact that notice u/s 133(6) was issued & served upon the appellant by the AO (ITO ward 7(1) dated 23.02.2022 for re-verification of cash deposit during demonetization.(Kindly refer Pg 27), In this reliance is placed upon recent judgment in PCIT vs Reeta Lakhmani [2022] 145 taxmann.com 590 (Calcutta), where in on exercise of jurisdiction by PCIT at instance of AO....
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....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 more interestingly how can they weight over the cash book, sales voucher & sales book, which were duly verified & examined for reaching to the satisfaction about source of cash deposit. 7.3 That the ld AO vide letter dated 30.04.2019 directed for production of books of accounts on 02.05.2019 (Kindly refer Pg 22 of PB) and even reference of same is contained in body of order. 7.4 That contention of the appellant that....
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....onary 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 was mentioned (APB-page 11 para 1) where in details of the money so for an Amount of Rs. 51.60 out of that Rs. 16.80 was demonetized currency. The reply is considered and thereafter vide notice dated 18.11.2018. Assessee submitted reply on 02.12.2018 in e-proceeding module and related acknowledgement was placed on record at page 18 of the paper book. Considering the nature of business that the assessee carries there is persistent deposit of cash and the same is not....
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....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 amendment made in section 263 does not confer blind and uncontrolled power to the PCIT, despite there being an amendment, enlarging the scope of the revisionary power of the ld. PCIT. The newly inserted explanation 2(a) to section 263 does not authorize or give unfettered powers to Commissioner to revise each and every order, if in his opinion same has been passed without making enquiry or verification. Here in this case the ld. AO has made enquiry at four instance and recorded h....