2025 (8) TMI 297

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.... of his judgment u/s 144 of the Act. 3. While scrutinising the return of income, the AO noticed that the assessee has received corpus donation of Rs. 38,42,558/- against which corpus expenditure of Rs. 10,97,699/- has been claimed to have been incurred. Since the assessee was not registered u/s 12A of the Act, the receipts were treated as revenue receipts in the absence of any documentary evidence the balance corpus donation to the tune of Rs. 27,44,859/- was treated as income of the assessee and the returned income of the assessee was assessed at Rs. 36,10,696/-. 4. Assuming power confirmed upon him by the provisions of section 263 of the Act, the ld. CIT(E) issued a show cause notice to the assessee, which reads as under:- "On verification and careful examination of the assessment records for the A.Y. 2012-13 in your case, wherein assessment was completed under section 147 r.w.s. 144 r.w.s. 144B of the I.T. Act, 1961 dated 31.03.2022, I am of the prima facie view that the order passed by NFAC, Delhi (hereinafter 'the Assessing Officer' or 'the AO') is erroneous in so far as it is prejudicial to the interest of revenue, in view of the following: As per assess....

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....esh assessment. Explanation 1.-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 1st 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 Officer 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 Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General or Principal Commissioner or Commissioner authorised by the Board in this behalf under section 120; (b) "record" shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Principal Commissioner or Commissioner; (c) where any order referred to, in this sub-section and passed by the Assessing Officer had been the subject matter of an....

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....rtunity to attend in person or through an Authorized Representative before the undersigned on 04.01.2024 at 11.30 A.M. at my office. Personal appearance is not necessary, and you may alternatively file a written or online response to this show cause notice. You may further note that if nothing is heard from you at the appointed date, it will be presumed that you have no submissions to make. Necessary action on the matter will be taken without any further reference to you." 4.1. The assessee replied to the notice as under:- The assessee submitted that he had filed a writ petition before Hon'ble Bombay High Court on 22.11.2019 (W.P 3187 of 2019) and the notice u/s 148 was stayed Subsequently, the appeal was withdrawn and stay was vacated. The assessee further raised following grounds. 1. From the date of High Court order the AO had 60 days from the date of High Court order to complete the assessment. 2. The assessee was never served any notice of hearing during proceeding u/s 147. 3. The impugned order dtd 31.03.2022 is time barred. 4. The assessment order is passed by NFAC therefore you have no jurisdiction to invoke 263 of the Act. 5. There is no error in the order....

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....Officer ought to have estimated the profit at a different rate. This would amount to tinkering with the rights given by the statute under section 144 to the Assessing Officer which cannot be permitted under law. If this is permitted then each and every case where income is estimated by the Assessing Officer exercising the powers under section 144 of the Act would be amenable to the provisions of section 263 of the Act and which would make the powers conferred under section 144 of the Act to the Assessing Officer dependent and take away independence of the AO to exercise his best possible judgement in section 144 of the Act. 10. We further find force in the arguments of the learned counsel for the Assessee that when a power has have been exercised under section 144 of the Act, this cannot be held to be a case of lack of enquiry as held by the learned PCIT so as to invoke the powers conferred under section 263 of the Act as the Assessing Officer was compelled to exercise his powers under section 144 of the Act considering that there was inadequate reply by the assessee to the queries raised by him during the course of assessment proceedings and which compelled the Assessing Officer....