TaxTMI 
TaxTMI 
2025 (11) TMI 216
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....red in taking cognizance u/s 263 of the Income Tax Act and thereby setting aside the assessment order for passing afresh assessment order. In the additional ground of appeal, the additional plea raised by the assessee is that ld. CIT has enhanced the scope of 263 order beyond the Show Cause Notice issued. As far as admission of additional ground of appeal is concerned, we find it is one of the peripheral arguments to the central point for judging the question, whether ld. CIT has rightly taken action u/s 263 or not. Therefore, considering the issues submitted in these grounds, we admit that for consideration on merit, we are fortified by the judgment of Hon'ble Supreme Court in the case of NTPC Ltd. Vs CIT reported in 229 ITR page 383 wherein it has been held that if some jurisdictional issue goes to the root of the cause and affects the ultimate tax liability of an assessee, then such an additional ground could be allowed to be raised. 4. The brief facts of the case are that assessee has filed his return of income on 31.10.2018 declaring income of Rs. 85,52,390/-. The case of the assessee was selected for scrutiny assessment and notice u/s 143(2) was issued and served upon ....
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....terest of the revenue within the meaning of section 263of the I.T.Act, 1961." 5.1. The ld. Commissioner, thereafter, issued one more notice on 10.03.2023 whose copy is available on page No. 3 and 4. In this notice, it has been alleged that it is in continuation of the earlier notice issued on 01.03.2023 but in this notice, ld. CIT has called for additional information on three counts, namely; (a) Brief note on activities of the assessee in the year under consideration, (b) Brief note exhibiting how assessee conducts his profession and flow of activities, (c) A Monthly Chart of cash flow and income recognized during the year. 5.2 All these details were submitted by the assessee, but ld. Commissioner was not convinced and he treated the assessment order as erroneous which has caused prejudice to the interests of the Revenue. The relevant part of the discussion made by the ld. Commissioner reads as under : 5.2.1 Perusal of the record reveals that during the survey on 23.03.2018, the assessee surrendered additional income of Rs. 40,00,000/- which was confirmed in writing by way of letter dated 23.03.2018. On the date of survey i.e. on 23.03.201....
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....ed that single significant fact can make difference in arriving at the conclusion in the given facts and circumstances. This is also true for examining application of case laws, if any, relied upon by the assessee viz-a-viz factual matrix obtaining in a case. 5.2.6 It has been pointed out that the assessee has shown availability of huge cash as per the cash flow statement, a scan copy of which has been captured earlier. The unusual and strange claim of huge cash availability with the assessee does not meet the eyes. 5.2.7 It is also seen from the record that the assessee has got some loans from certain parties. Further, bank interest has been debited to Profit and Loss Account on term loan and CC limit. No prudent man would keep such huge cash on one hand and pay interest on the other. 5.2.8 Since the Assessing Officer has not conducted any enquiries in relation of the aforesaid facts and circumstances having bearing on the assessment, the assessment order passed by the AO suffers from the error as well as prejudice. In this way, twin conditions get satisfied. The Assessing Officer has accepted the assessee's version without application of mind and as....
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...., on account of professional income. Kindly give details of treatment of the surrender in your books of accounts. Also submit the details of tax paid on the surrendered additional income. Kindly show cause that why the surrendered amount should not be taxed as per the provisions of Section 115BBE of the Income Tax Act." 5.4 The assessee has given a detailed reply whose copy is available at page No. 35 to 40 of the Paper Book. The ld. counsel for the assessee drew our attention towards reply to this questionnaire on page No. 39 of the Paper Book. He emphasized that in the Show Cause Notice dated 01.03.2023, the ld. CIT has confronted the assessee as to why a higher rate of taxes be not applied u/s 115BBE on the surrendered income. In the subsequent notice, he has just called for certain additional information demonstrating how assessee is conducting his professional activities. A perusal of paragraph No. 5.2.3 and 5.2.4 of the impugned order would reveal that ld. CIT has drawn undue reference of certain facts which were neither examined by himself nor cross-verified. This is only with a view to draw an adverse inference. These are not conclusive facts determined by the ld. CIT fo....
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....shall be deemed always to have included all records relating to an y proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st d ay of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be re vised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be p assed at any time in the case of an order which has been p assed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Cour t or the Supreme Court. Explanation.- In computing the period of limitation f or the purposes of sub-section (2), the time taken in giving an opportuni....
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....sioner would have jurisdiction on such items, which are not subject matter of appeal in that assessment order. 10. At this stage, before considering the multi-fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the CIT taken u/s 263. The ITAT in the case of Mrs. Khatiza S. Oomerbhoy Vs. ITO, Mumbai, 101 TTJ 1095, analyzed in detail various authoritative pronouncements including the decision of Hon'ble Supreme Court in the case of Malabar Industries 243 ITR 83 and has propounded the following broader principle to judge the action of CIT taken under section 263. (i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (i....
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....n tally by our part-time accountant. As per discussions with the account, the books are incomplete. Q9. Please state current year income liable to advance tax. Ans. My current year income is near about 85 lakh from all the sources on which I am liable to deposit advance tax. Q10. Please state the amount of advance tax instalments paid up to 15.03.2018. Ans. I have paid a sum of Rs: 10,50,000/- on account of advance tax till 15.03.2018. Q11. As per your above statements the books of accounts are incomplete, Please state why the amount of advance tax falling short has not been deposited? Ans. I have filed my return of income of AY 2017-18 at Rs: 45 lakh approximately. For the current year, I hereby surrender a sum of Rs 40 lakh towards my professional income of the current year on which I undertake to deposit advance tax on or before 28.03.218. This surrender is made to purchase peace of mind and to avoid litigation. Q12. I am showing some loose papers bearing Sr. No. 1 to 48 please state the contents of the same. Ans. These loose paper as mentioned above are made of day to day regular expenses income in....