TaxTMI 
TaxTMI 
2025 (6) TMI 1448
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....enue, as regards transactions of Rs. 11 lakhs, cash credit stated to have remained unexplained, and Rs. 50 lakhs stated to be the sum which remained unaccounted. 2 Feeling dissatisfied with the order passed by ld.PCIT, the assessee is before this Appellate Tribunal. 3. Arguments heard. File perused. 4. Record reveals that while declaring that the assessment order dated 11-03- 2022 is erroneous in so far as it is stated to be prejudicial to the interest of the Revenue, Ld. PCIT has observed that the AO passed the said order in routine and in casual manner, without applying the relevant provisions of the Act and also without verifying the details, which were required to be verified by way of scrutiny. Accordingly, ld. PCIT has set aside the assessment order with the direction to the AO to make necessary verification to determine and finalise the assessment in accordance with the law, after allowing the reasonable opportunity to the assessee. Proceedings under section 147 of the Act 5. In order to appreciate legality or illegality of the impugned order, it may be mentioned here that the assessment proceedings u/s 147 r.w.s. 144B of the Act were commenced after receiv....
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....IT takes up the matter 7 When the matter was taken by ld. PCIT, he issued a show cause notice dated 12-02-2024 to the assessee seeking explanation as to why the said assessment order may not be revised u/s 263 of the Act. The assessee submitted his reply to the said notice on 4-03-2024 by pleading in the manner as under: ''1. The AO has not at all verified and made proper enquiry of the source and genuineness of the transactions and unaccounted money of Rs. 50,00,000/- in view of the receipt of money duly signed by Shri Thakur Raghunath Singh.'' 8. Ld. PCIT considered the reply of the assessee and also heard its authorized representative . 9. While dealing with the version put forth by the assessee, Ld. PCIT held that genuineness and sources of the transactions were required to be verified and investigated from the party, but the entries in the cash book were not verified even though in the ITR filed earlier the balance was shown much more in the entries in comparison to the one shown in the ITR. The observations made by ld. PCIT read as under:- ''8. The reply of the assessee company has been considered carefully and it is observed that:- 1. T....
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....ineness, identity and creditworthiness of the transactions has been left out to be examined in view of the disclosure of cash in hand in the elTRs. With respect to the above, it is pertinent to note that the assessee company M/s Shree Shyam Build structure Pvt Ltd was incorporated by the two Directors i.e. Shri Vinod Kumar Jalan (ABAPJ0579Q) & Shri Arvind kumar Jalan (AFWPJ7145L) and registered with the ROC on 28/04/2011 The assessee company filed its first elTR u/s 139(4) declaring total income of Rs. Nil on 29/03/2013 for AY 2012-13 and subsequently, it filed eITR declaring total income of Rs. Nil on 28/12/2017 in response to the notice u/s 148 for AY 2012-13. Similarly, it filed its eITR declaring total income of Rs. Nil on 31/03/2014 for AY 2013- 14 and subsequently, it filed eITR declaring total income of Rs. Nil on 29/11/2021 in response to the notice u/s 148 for AY 2013-14. Further, the assessee company filed its eITR declaring total income of Rs. Nil on 31.03.2015 for AY 2014-15 and subsequently, filed eITR on 16.12.2021 in response to the notice u/s 148 declaring total income of Rs. Nil for AY 2014-15 The details/data as given in the above eITRs are summarized .......
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.... Therefore, I hold that, order passed by the AO was erroneous in so far as it is prejudicial to the interests of the revenue. While holding so I place reliance on the following judicial pronouncements:- 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 inquiries and accepting the statement of the assessee without due verification renders the order erroneous as well as prejudicial to the interests of the revenue. Absence of proper inquiries by the AO would render the assessment order erroneous as well as prejudicial to the interest of the revenue as held in following cases 1 Jagdish Kumar Gulati vs CIT 269 ITR 71 (Allahabad) 2. Duggal & Co. 220 ITR 456 (Delhi) 3. K.A. Rama Swami Chettiar 9. Considering all the facts and circumstances of the case and for the reasons discussed above, the assessment order u/s 147 r.w. Section 144B by the FAO vide order dated 13/03/2022 for A.Y 2013-14 is held erroneous in so far as it is prejudicial to the interests of the revenue ....
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....d that he stands by the impugned order passed by the ld. PCIT for the reasons recorded therein. Ld. DR also relied upon the decision of Hon'ble Allahabad High Court in the case of Jagdish Kumar Gulati vs CIT, 269 ITR 71 (All.); decision in Gee Vee Enterprise v. ACIT, decided on 7th of October, 1974, reported as ILR 1975 DELHI 53; and decision in Commissioner of Income Tax, Mumbai v. Amitabh Bachhan, CA No.5009 of 2016, by Hon'ble Apex Court. Discussion 12. As noticed above, the matter pertains to the assessment year 2013-14. The assessee company is a private limited company which filed its ITR for the said assessment year on 31-03-2014 declaring its total income as 'Nil'. 13. Record reveals that the AO considered the reply and information/documents submitted by the assessee company, in reply to the notice u/s 148 of the Act and the subsequent notices, and ultimately, he accepted the returned income. 14. In Shri Ram Singh's case (supra), the substantial question of law that arose before the Hon'ble High Court of Judicature for Rajasthan at Jodhpur was whether it was justifiable for the AO to initiate proceedings u/s 147/148 of the Act, and make other additions, when t....
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.... Officer to conduct a thorough investigation. 17. As is available from a perusal of provisions of section 147, the essential requirement to exercise jurisdiction for initiating proceedings thereunder is that the Assessing Officer should have "reason to believe" that "any income chargeable to tax has escaped assessment for any assessment year". Since, as per settled law, the AO cannot be said to have any jurisdiction as regards any other income which is alleged to have subsequently come to his notice, in the course of proceedings under section 147, and that too without resorting to the procedure prescribed under the Act, ld. PCIT also cannot be said to have any jurisdiction to issue direction to the AO to make assessment afresh in respect of such other income. 18. It is true that in Shri Ram Singh's case (supra), Hon'ble High Court observed that it is a different story that for such other income, the Assessing Officer may have recourse to such other remedies, as may be available to him under the law. While referring to this observation, Learned DR for the department has submitted that when the department has no remedy to file appeal against the assessment order passed by As....
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...., while observing that the AO had not at all verified the first mentioned transaction of unexplained cash credit and also not conducted enquiry as regards the second mentioned amount. As noticed above, transaction pertaining to Rs. 50.00 lacs, referred to by ld. PCIT in the impugned order, was not part of proceedings which were initiated by the AO on receipt of aforesaid information only as regards the transaction of Rs. 11.00 lacs deposited by the assessee in his account maintained with Axis Bank. 21. One of the submissions by Learned AR for the appellant is that as regards transaction of Rs. 50 lakhs, assessment relating to the Assessment Year 2014-15, was re-opened and thoroughly considered by the Assessing Officer, and as such the PCIT fell in error in passing the impugned order regarding said transaction relating to the other Assessment Year i.e. 2014-15. In the course of arguments, Learned DR has admitted that said transaction of Rs. 50 lacs related to the Assessment Year 2014-15 and that even that assessment was re-opened and thoroughly considered by the Assessing Officer. 22. Learned PCIT was seized of matters pertaining to the assessment year 2013- 14, 2014-15 ....