TaxTMI 
TaxTMI 
2025 (9) TMI 420
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....incipal Commissioner of Income Tax, Jamnagar has erred in passing order u/s 263 of the Act for assessment year 2018-19 without providing sufficient opportunity of being heard. iii. On the facts and circumstances of the case as well as law on the subject, the Principal Commissioner of Income Tax, Jamnagar has erred in passing order u/s 263 of the Act when order passed by Assessing Officer is neither erroneous nor prejudicial to the interest of revenue. iv. It is prayed that order passed by Learned Principal Commissioner may please be quashed. 2. The appeal filed by the assessee, for Assessment Year 2008-09, is barred by limitation by 222 days. The assessee has moved a petition requesting the Bench to condone the delay. The ld Counsel for the assessee, has explained the sufficient cause, for the delay of 222 days, stating that notices u/s 263 of the Act were issued through the income-tax portal and sent to the email address [email protected], which does not belong to Shyam Enterprise (assessee under consideration). However, as the registered email ID of Shyam Enterprise is [email protected], therefore, assessee was unaware of the notices due to ....
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....nvincing and these reasons would constitute reasonable and sufficient cause for the delay in filing this appeal. We note that Hon'ble Supreme Court in the case of Collector, Land Acquisition vs Mst. Katiji and others, reported in 167 ITR 471, (1988 SC 897) (7) observes .... "4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay." When we weigh these two aspects then the side of justice becomes heavier and casts a duty on us to deliver justice. We, therefore, condone the delay and admit the appeal for hearing. 5. The relevant material facts, as culled out from the material on record, are as follows. The assessee has filed return of income for assessment year 2018-19 on 31/10/2018, declaring total income at Rs. 26,88,500/-. The assessee's case was selected for complete scrutiny assessment under CASS. Accordingly, assessment was completed u/s 143(3) of the Income-tax Act, on 20/04/2021, by accepting returned income of the assessee. 6. Later on, Learned Principal Commissi....
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....ces available in the assessment records. In respect of the employees, contribution to PF amounting to Rs. 1,28,26,600/-, the ld. PCIT observed that assessee has not submitted any details / documentary evidences in respect of the impugned issue i.e. contributions towards provident fund from the employees, deposited beyond the prescribed time-limit. As per the definition of "Income" provided under section 2(24)(x) of the Act, any sum received by the assessee from his employees as contribution to any provident fund or superannuation fund or any fund set up under the provisions of Employees State Insurance Act or any other fund for the welfare of such employees is required to be included in the income of the assessee. Further, as per the provisions of section 36(1)(va) of the Act, the assessee shall be entitled to the deduction of such sum received by the assessee from any of its employees to which provision of sub-clause (x) of clause (24) of section 2 apply, if the same is credited by the assessee to the employees account in the relevant fund or funds on or before the due date. Therefore, the amount of Rs. 1,28,26,600/- claimed by the assessee towards the contributions of its employe....
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....t sheet was impounded, vide Annexure-A1, which recorded salary / wages payment amounting to Rs.73,03,480/-, on 15/03/2018. However, the same was found to be reflected as outstanding in books of account of the assessee. Shri Dinesh Chavda, Partner of the firm has admitted in his statement recorded on oath on 27/02/2020, during the course of survey, that the payment of Rs. 72,03,480/-, made towards Salary / Wages out of unaccounted income of the firm and agreed to pay tax u/s 115BBE of the Act and Penalty u/s 271AAC of the Act on unexplained expenditure of Rs. 72,03,480/- u/s 69C of the Act. However, while finalizing the assessment in the case of the assessee, the assessing officer has not taken into consideration, such outcome of the survey though the assessing officer has raised a query as regards the survey action in questionnaire dated 16/02/2021. Since the assessee has made payment of Rs. 72,03,480/-, on 15/03/2018 for Salary / wages out of unaccounted income, as admitted by the Partner in his statement recorded during the course of survey proceedings u/s 133A of the Act on 27/02/2022, the same was required to be offered / disclosed in the return of income filed by the assessee ....
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....proceedings, as evident from the paper book filed by the assessee. The assessing officer examined the outstanding GST of Rs. 86,72,569/-, and also examined the issue pertaining to Non-deduction of TDS from the expenses of Rs. 2,55,77,464/-, and the issue pertaining to survey proceedings u/s 133A of the Act. The ld. Counsel stated that most of the contribution to PF were made within the grace period, under the relevant Act, hence no disallowance is attracted, and the assessing officer framed the assessment order prior to the decision of the Hon'ble Supreme Court in the case of checkmate services Private Limited, in civil appeal No. 2833/2016, dated 12.10.2022. The assessing officer, in the assessee's case under consideration, framed the assessment order on dated 20.04.2021, hence, taken the plausible view as per the position of the law prevailing on that date. Hence assessing officer has applied his mind in respect of all the four issues raised by the ld. PCIT. Therefore, the assessing officer has passed the order, after having examined all the documents and evidences and submission of the assessee and therefore, the assessing officer has taken plausible view, in respect of the four....
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.... Jamnagar is enclosed herewith for your kind ready reference. 1.2 In view of the above fact that notices/ orders were served to the assessee by way of email, registered post and a text message, the delay in filing of this appeal need not be condoned for the reason that there is no sufficient cause or explanation of delay in filing of this appeal. 1.3 Without prejudice, since the notices and orders have been validly served the order u/s.263 passed by the PCIT may kindly be sustained. 2. The AR has raised the ground that since the case was selected for limited scrutiny, the objection raised by the PCIT were out of the scope of limited scrutiny. In this case, it is submitted that since the case of the assessee is a survey case it can only be a complete scrutiny case. Secondly, the Assessing Officer in his notice issued u/s.142(1) has clearly stated that the case was selected for complete scrutiny. This fact has also been confirmed from the ITBA portal by the assessing officer. The reply submitted by the assessing officer along with documentary evidence is enclosed herewith for your kind ready reference. 3. During the course of hearing the undersigne....
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.... 20. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. We have gone through the submission of the Ld. CIT(DR) and relevant evidences produced by him and noted that notices of hearings were served on the assessee during the revision proceedings, hence plea taken by the Ld. Counsel of the assessee that no notices were served on assessee, is hereby rejected. We also find that assessee's case was selected for complete scrutiny, hence plea taken by Ld. Counsel for the assessee that assessee's case was selected for limited scrutiny is rejected. Since, in the present case the Id. PCIT has exercised jurisdiction u/s.263 of the Act, on the ground that the assessing officer while completing the assessment proceeding did not make enquiries which he ought to have made, therefore, it is necessary to look into what enquiries the assessing officer made on the issues raised in the order u/s.263 of the Act. It is clear from the notice issued under section 142(1) of the Act, by the assessing officer, on 21.12.2020, wherein the assessing officer conducted necessary enquiry on the issues rai....
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....lack of enquiry, on the part of the assessing officer, during the assessment proceedings. We find that there is a complete enquiry on the part of the assessing officer, and in fact, the assessing officer has applied his mind, as evident from the above two show cause -notices, issued by the assessing officer, under section 142(1) of the Act, as noted by us in the above para. 27. We find that assessing officer examined the outstanding GST of Rs. 86,72,569/-, and also examined the issue pertaining to Non-deduction of TDS from the expenses of Rs. 2,55,77,464/-, and the issue pertaining to survey proceedings u/s 133A of the Act. The most of the contribution to PF were made within the grace period, under the relevant Act, hence no disallowance is attracted, moreover, the assessing officer framed the assessment order prior to the decision of the Hon'ble Supreme Court in the case of checkmate services Private Limited, in civil appeal No. 2833/2016, dated 12.10.2022 and applied his mind as per the position of the law prevailing on that date. During the course of survey proceedings u/s 133A of the Act, on 27/02/2020, a partner of the firm, in his statement, made a disclosure and paid the ....
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....tion 119; or (d) The order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. As per the above Explanation 2 of section 263 of the Act, the order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interest of the revenue if the order is passed without making inquiries or verification of the claim of the assessee. In this case, the information was available with the AO as discussed in the Para 5.1 to 5.4 above. However, the same was not disallowed / added to the total income of the assessee by the AO without making inquiries in this respect and without taking any course of action in the order u/s 143(3) of the Act 20/04/2021". 30. From the above findings of ld. PCIT, it is vivid that ld. PCIT has himself agreed that in the assessee's case "the information was available with the AO as discussed in the Para 5.1 to 5.4 above" therefore, it means all the information and documents were collected by the assessing officer, from the assessee, and examined them, therefore, it ....
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....ce of the record and/or whether a decision which was rendered by the Supreme Court subsequent to the Tribunal's decision of which rectification is sought, could be relevant to come to a conclusion on the ground 3 DECEMBER 2024 Ganesh Lokhande, PA 13TO15-WP-17175-2024+.DOC that there was a mistake apparent on the face of the order, the Tribunal could substitute its original order. 14. In our clear opinion, the question would be required to be answered against the Revenue and in favour of the assessee. The reasons for which we discuss hereunder. In such context, at the outset, we may observe that the petitioner had succeeded before the Tribunal on the basis of the position in law as it prevailed on the day the decision was rendered on the petitioner's appeal on 26 July 2022. Subsequent to the said orders passed by the Tribunal, on 12 October 2022, the Supreme Court rendered its decision in "Checkmate Services Private Limited" (Supra), whereby the Supreme Court held that the deduction of the employees' share can be allowed under Section 36(1)(va) of the IT Act, only if such share was deposited before the time limit under the respective statutes and not before the ....
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....arative reading of sub-Section (2) of Section 254 of the IT Act, and Rule 1 of Order XLVII of CPC, it appears that such jurisdiction conferred on the Tribunal is more restricted. 17. In Beghar Foundation (Supra), the Supreme Court was considering a review petition, filed against the final judgment and order dated 26 September 2018, passed on the main proceedings. In rejecting the review petition, the Supreme Court observed that no case for review of such judgment was made out, and most importantly on the ground that change in law or subsequent decision/judgment of coordinate or larger bench by itself cannot be regarded as a ground for review. Such principles of law are squarely applicable in the facts of the present case. "18. In Sanjay Kumar Agrawal vs. State Tax Officer (1) and Another 5, the Supreme Court following the decision in the Constitution Bench in Beghar Foundation (Supra), made the following observations: "15. It is very pertinent to note that recently the Constitution Bench in Beghar Foundation v. K. S. Puttaswamy (Aadhaar Review - 5 J.), held that even the change in law or subsequent decision/judgment of coordinate Bench or larger Bench by ....
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....itable activity and a petrol pump as incidental activity, since assessee had demonstrated that entire surplus from petrol bunk was utilized for main charitable activities of Trust i.e. education, and separate books of accounts had been maintained in respect of such business, view adopted by Assessing Officer allowing exemption claimed under section 11 to assessee was in accordance with law. 33. In the case of the assessee, there is no denying the fact, as detailed above and acknowledged in the assessment order u/s. 143(3) dated 20.04.2021, that in response to notices u/s. 143(2)/142(1) and further requisitions made during the course of assessment proceeding, the assessee appeared from time to time and produced/ submitted necessary details/documents as per requisitions in relation to the issues raised by the Ld. Pr. C.I.T., which were examined by Assessing Officer. Therefore, it is the appraisal of the same records which are already with the Ld. A.O. and the Ld. Pr. C.I.T. took a different view than adopted by the A.O. on the same set of facts, which is not permissible u/s. 263 of the Act. In the above circumstances, the view taken by the A.O. was one of the possible views and th....
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....at is an opinion formed as a result of these enquiries and verification of the materials is something which is in exclusive domain of the Assessing Officer, and even if Ld. Pr. Commissioner does not agree with the results of such enquiries, the resultant order cannot be subjected to revision proceedings. For that we rely on the decision of the Coordinate Bench of I.T.A.T., Kolkata in the case of Smt. Juthika Kar vs. ITO [I.T.A. No.1128/Kol/ 2009, dated 16.5.2012], wherein it has been held as under (relevant portion) :- "8......However, what is opinion formed as a result of these enquiries is something which is in exclusive domain of the Assessing Officer, and even if Commissioner has such results of enquiries, the resultant order cannot be subjected to revision proceedings. The conclusions arrived at as a result of enquiries cannot be tinkered with in the revision proceedings. The conclusions being drawn up as a result of enquiry is a highly subjective exercise and as to what is appropriate conclusion is something on which perceptions vary from person to persons. These variations in the perceptions of the Assessing Officer vis-a-vis that of the Commissioner, cannot render ....
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....query is raised during the course of scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer was reflected in the assessment order, that would not by itself lead to the conclusion that the order of the Assessing Officer called for interference and revision." [Emphasis supplied] 37. Therefore, considering the assessee's facts, as well as on various precedents applicable to assessee's facts, we are of the view that revisionary jurisdiction exercised by the Ld. Pr. C.I.T. u/s. 263 of the Act was not in tune with the facts and evidences on record duly explained to the Ld. A.O. and verified by him and that being so the order passed u/s. 263 of the Act on such erroneous stand is liable to be quashed. Accordingly, we quash the order of ld. PCIT u/s 263 of the Act. 38. In the result, the appeal of the assessee is allowed. Order is pronounced in the open court on 13/01/2025. ============= Document 1 GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT National e-Assessment Centre Delhi To. SHYAM ENTERPRISE 114 K AHERSIHAN HARIJAN, SADHUFALIYU JAMKHAMBHALIYA JAMNAGAR 361305,....
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....ll bank accounts with narration of as debits & credit entries .: Name of the Ä°Bark Branch Address of the Aic. No. Banks Type of Account Closing balance as on 31/3/2018 4. Please furnish details of your Income-tax assessments for last 3 A.Y's in the given format: A.Y. Amount of addition Result of 11 appeal Result of Arrears du 208 appeal Income Returned Income assessed u's. 143(3) Nature of addition 5. Please reconcile 26AS details with Profit and Loss Accounts. Please also furnish justification along with supporting documents for any mismatch in reconciliation. 6. Complete addresses of all the business premises occupied viz. office/factory/godown/warehousing/Branch offices etc. If the premises are on rent, submit Document 3 rent for each rented premises & TDS deducted thereon. 7. Please justify and explain with supporting the query (Complete issue query) - 1) Low net profit shown by construction contractors and claim of large refund, 2) High ratio of refund to TDS 8. With respect to the claim of large refund during the year under consideration, kindly provide the following details: 1. Furnish the details of deductions, ex....
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....s Amount credited amount as per TDS lunder which TDSin Trading Certificate and amount) deducted / P & Licredited in P&L account. account give explanations. No. Address payment amount lof the received as party per TDS certificate 13. Explain whether TDS has been deducted on all the payments where the TDS is deductible under Chapter XVII-B of the Income Tax Act, 1961. Kindly also give the details of TDS deducted in the following format. Also submit the date of filing of TDS returns and a copy of such TDS return filed. Furnish certificate of lower deduction of tax where TDS have been made at a lower rate or at a NIL rate. S Name & Nature of Section Amount paid Amount of TDS Due date of Date with remittance Address payment TOS rate NO. funder which|credited TDS made to the Govt A/c of the ITIsdias party 14. With respect to TDS/TCS claimed during the year, kindly provide the following details: (a) Detail of TDS/TCS claimed in original return (b) Justification for mismatch in TDS/TGS claim in the 26AS compared to the original return 15. Submit the complete details of al the transactions entered into with the persons ....
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...., the date of digital signature may be takan as dale ef document. - DIN- Document identification Na. Document 6 ANNEXURE Particulars of accounts and /or documents required. 6 This is in continuation of earlier notice issued u/s 143[2] of the Act for selection of your case for Scrutiny assessment for complete scrutiny- In this regard, the following information is required to be submitted by you: 1. BASIC INFORMATION 1. Copy of acknowledgement of o-filed return duly signed and verified by the Assessee. 1. Computation of income and notes thereto. 2. Copy of audit report in form 3CD along with balance sheet/Statement of Affair and Trading, profit and loss account. 3. Any other reports /certificates/documents etc. required in support of any claim of expenses, exemptions or deduction (e.g .- chapter VIA) under the | T Act, 1961. 4. Details of any tax-free income earned/any income not included in computation of income, if any. Documentary evidence in support of the income along with details of expenditure incurred in relation with such income claimed as deduction. 5. The complete postal addresses of all the business premises including shop/s, off....
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....uments may be conducted manually, if required in the following situations: E Where manual books of accounts or original documents have to be examined. (B) Where Assessing Officer invokes provisions of section 131 of the Income Tax Act, 1961. (iii) Where examination of witnesses required to be made by the concerned assessee or the Department. (iv) Where show cause notice contemplating any adverse view is issued and assessee requests for personal hearing to explain the matter. PRADEEP VERMA DCIT/ACIT CENT-2, RKT (In case the document is eighely signed please refer Digital Signatur at the bottom of the page) This document is diglaly signed Sioner PRADEEP VE" Date: 17 February 2_6:40 PM Location: DIRECTRE ATE, India Page 4 of 4 Document 9 Chetan £. "Agarwal (FCA, DISA, 3. Com) Dipak C. Dama (FCA, 'B. Com) Chetan Agarwal & Co. Chartered Accountants CA Friday, 29 January, 2021 To, The Assessing Officer, National e-Assessment Centre, New Delhi Honorable Sir, Ref : 1) Shyam Enterprise 2) PAN : ACCFS 7334 K 3) Assessment Year 2018-19 4) Notice u/s. 142(1) act of dated 21.12.2020 Sub : Submission With reference to above, we w....
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....a no 10(b) as per notice no ITBA/AST/F/142(1)/2020-21/1029110788(1) 11. Your honour may kindly appreciate that Assesse had not taken any of the deductions in the FY 2017-18. - 12 & 14(a)(b) | profit and loss account along with justification as required |Please may find enclose herewith 26 AS reconciliation with your honour. 93 13 We had not incurred any expenditure on which we are not liable to deduct tax at source. - 15. We have not made any payments to persons specified u/s. 40A(2)(b) of the Act except interest and remuneration to partners as per section 40b. 13 15. Head Office: 601/602, Swagat Complex, Opp. Hotel Regency, P.N. Marg, Jamnagar Branch: 60, 6th Floor, Shree Krishna Complex , Nr Michakhali Six Roads, Navrangrena, Ahmedabad (M) +91 9099038121 - 30 (0) 2540052 (E) [email protected] , [email protected] Document 12 Chetan £. Agarwal (FCA, IMISA. B. Com) Dipak C. Dama (FCA. B. Com) Chetan Agarwal & Co. Chartered Accountants CA Please find enclose herewith details of all banks accounts 30-86 1(7) along with bank ledgers and bank statements. Name of Bank A/c No. Type of Account Closing bal. As on 31/03/18 Pag....
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....garwal & Co. Chartered Accountants CA Rs.72,03,480 from wages and salaries outstanding of Rs. 2,32,45,856 as on 31.03.2018 as paid from undisclosed source and also admitted to pay tax on same as per section 115BBE along with penalty. The assesse has paid the said tax on 29.02.2020 Rs. 10,00,000, 16.03.2020 Rs. 5,00,000, 18.03.2020 Rs.8,00,0000, 30.03.2020 Rs. 20,00,000 and 15.06.2020 Rs. 31,89,210 1(6) 4 No material was impounded during the course of survey except indicated above, which was duly honoured. 2 At the time of survey, income tax return was filed along with audited accounts, hence entry for the same were not passed in books of accounts. 3/ During the course of Survey Proceedings, cash in hand as per cash book was Rs. 9,04,435/- but physical cash found was found Rs.8,95,400/ -. There was minor shortage of Rs. 9,035, the same may be expended and entries were remains to pass in books of accounts at the time of servey. 3/ Head Office: 601/602, Swagat Complex, Opp. Hotel Regency, P:N. Marg. Javaapar Branch: 60, 6th Ficer, Shree Krishina Complex Nr Muthekholi Six Reads, Navrangpura , Rimedabad (M) +91 9099038121 - 30 (0) 2540052 (E) chetanagarwalandco@g....