TaxTMI 
TaxTMI 
2024 (3) TMI 1553
X X X X Extracts X X X X
X X X X Extracts X X X X
....sioner of Income Tax (Appeals), Patna-3 dated 22nd May, 2023. These orders have been emerged out from the proceedings of assessment orders in pursuance to 263 orders of the ld. Commissioner. Therefore, we first take first group of appeals, i.e. ITA Nos. 120, 121 & 122/PAT/2017 for A.Ys. 2008-09 to 2010-11. 2. Before adverting to the facts emerging out from the record, we deem it appropriate to take note the details submitted by the ld. D.R. during the course of hearing. These details are complied in a tabular form, which exhibits the events taken place for the assessment of these three assessment years. Such details read as under :- Chronology of events in the case of Kerns Services Pvt Ltd in appeals filed against the order of PCIT u/sec 263 for A/Ys 2008-09,2009-10,2010-11 in ITA120-122 /PAT/2017 A/Y 2008-09 and 2009-10 EVENT DATE REMARKS Search in Modi group and consequent Survey on assessee 20-03-2009 Issue of order u/sec 127 transferring the case from Patna to Ranchi as part of Centralisation of Modi Group 11-10-2010 Notice u/sec 153C by assessing officer of Ranchi 20-10-2010 &nbs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder u/sec 263 29-06-2018 Appeal filed before CIT(A) by assessee against give effect order _ 29-08-2018 EVENT DATE REMARKS Order passed u/sec 143(3) 13-03-2013 Addition made after rejection of books and estimating NP @6% for a sum of Rs 46,42,699/- Second survey at the premises of the assessee 25-07-2013 Director Sri Mohan Kumar Khandelwal admitted of bogus entries to inflate expenses and generated black money to have been routed back in the form of share capital/ premium in A/Y 2010-11 and as unsecured loan in A/Y 2011-12. Amount determined at Rs 3,56,50,000/- Proposal for reopening approved by Range Head 02 03-2015 Notice u/sec 148 issued 02-03-2015 First application before Settlement Commission 09-03-2015 f Settlement Application rejected as withdrawn by assessee being defective 18-03 2015 PCIT received order on 06-04- 2015, however,, no copy is kept in AO's folder Writ dismissed as withdrawn by assessee 23-03-2015 Court authorized to continue proceedings as was left in Ranchi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d. CIT was that ld. Assessing Officer has submitted before him that the assessee has not submitted copy of settlement of income filed before the Settlement Commission nor details of head-wise disclosure of income to the ld. Assessing Officer. In other words, ld. Commissioner was of the view that there is a variation from the returned income, vis-a-vis additional income disclosed before the Settlement Commissioner and assessee should have submitted the details of additional income filed before the ld. STC. The ld. Assessing Officer should have taken cognizance of such income and should have made the additions. He submitted that as per section 245C, sub-section (4), an assessee is required to intimate the Assessing Officer in the prescribed manner of having made such application to the Commission. The ld. Counsel for the assessee took us through this clause and submitted that details were submitted in Form No. 34BA, which is meant for this purpose. Therefore, it is incorrect at the end of the ld. CIT to rely upon the information of ld. Assessing Officer /ACIT, Central Circle-2 for forming the belief that intimation was not given. It is mandatory for the assessee to give such intimati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....el for the assessee further appraised us the scope of section 263 and as to how such powers are to be exercised. He drew our attention towards following case laws :- (i) Commissioner of Income Tax -vs .- Mukul Kumar (2009) 4 PLIR Page 417; (ii) Commissioner of Income Tax -vs .- Shantilal Agarwalla (1983) 142 ITR 778 (Patna); (iii) Commissioner of Income Tax -vs .- Gabriel India Limited (203 ITR 108 (Bom.). 7. The ld. Counsel for the assessee in his next proposition submitted that assessments in these assessment years for A.Ys. 2008-09 and 2009-2010 have been framed under section 153C. This section contemplates that if during the course of search, some incriminating material was found pertaining to other person than the searched person, the ld. Assessing Officer of the searched person would record his satisfaction that material exhibiting escapement of income qua person other than the searched person was found. Hence, action against such person is required to be taken. The ld. Assessing Officer of the searched person would transmit that material to the ld. Assessing Officer of the other person. The ld. Assessing Officer of such other person would again ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oneous in so far as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. [Explanation .- 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 Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d issue a show-cause notice pointing out the reasons for the formation of his belief that action u/s 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. He may set aside the order and direct the Assessing Officer to pass a fresh order. 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n which he makes an application under sub-section (1) to the Settlement Commission, also intimate the Assessing Officer in the prescribed manner of having made such application to the said Commission". According to the ld. Counsel for the assessee, this information was given to the ld. Assessing Officer in Form No. 34BA on 25.03.2015. 12. We have taken cognizance of such submission, which also contains a Certificate. The settlement petition was also filed on the same date. Thus, it is incorrect at the end of the ld. CIT to assume that information was not given to the ld. Assessing Officer. A perusal of the order of ld. CIT would indicate that he simply put reliance on the fact that information in Form 34BA was not given. The ld. Commissioner further observed that this factum has been brought to his notice by the ld. AO/ACIT. It is not discernible whether he himself has examined the record or not before issuing the notice under section 263. 13. It is further observed that the assessment years are 2008-09 and 2009-10 (we will deal with A.Y. 2010-11 separately). The original returns in these years were filed on 30.11.2008 and 20.09.2009 under section 139(1) of the Income Tax ....