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2020 (12) TMI 1024 - AT - Income TaxRevision u/s 263 - amount of HUF was deposited not in the account of the HUF but into the account of the individual - as per assessee there is no demand against the assessee as the assessed income and returned income are same - HELD THAT - CIT has rightly directed the AO to frame the assessment afresh as he found that the office note recorded by the then ITO Ward-5(3), Amritsar is factually incorrect. CIT also found that the amount of ₹ 29,69,855/- belonged statedly to the HUF was deposited not in the account of the HUF but into the account of the individual. During the course of hearing the AR was also unable to substantiate that this issue was examined by the AO and there is any conclusive findings by the AO as per law. From the order of Pr. CIT, it is clear that this issue was not examined by the AO. It was expected from the AO that he has assessed the taxable income as per law. Firstly, the Assessing Officer is investigating officer thereafter he is an adjudicating officer. If the AO failed to carry out adequate enquiry about the alleged transactions in the name of the assessee, which are present in this case, therefore, the Pr. CIT has rightly invoked the provisions of Section 263 of the I.T. Act to reopen the completed assessment. In the revised grounds of appeal the assessee has challenged only one issue for invoking the revisionary proceedings by the Pr. CIT u/s. 263 without application of mind by the Pr. CIT. It is clear from the order of the Pr. CIT at page 2 that the Pr. CIT before invoking the revisionary power u/s. 263 of the Act has asked for the report of the AO and receipt of the report from the AO the same has been confronted to the counsel of the assessee. CIT has enquired before invoking the provisions of Section 263 of the I.T. Act. Accordingly, the revised grounds of appeal raised by the assessee have no merit and the same are dismissed. We, therefore, of the opinion that the Pr. CIT has taken a right view in quashing the assessment framed by the AO and directing the AO to make fresh assessment. Accordingly, we uphold the findings recorded by the Pr. CIT and dismiss the appeal of the assessee.
Issues Involved:
1. Jurisdiction of Pr. CIT-II, Amritsar under Section 263 of the Income Tax Act. 2. Validity of the assessment order passed by AO under Section 143(3). 3. Adequacy of enquiry conducted by AO. 4. Procedural compliance for pronouncement of orders. Issue-Wise Detailed Analysis: 1. Jurisdiction of Pr. CIT-II, Amritsar under Section 263 of the Income Tax Act: The assessee challenged the jurisdiction of the Pr. CIT-II, Amritsar, arguing that the order passed under Section 263 was beyond jurisdiction and hence void ab initio. The assessee contended that the Pr. CIT acted under pressure from the Audit Wing without independent application of mind. However, the Tribunal found that the Pr. CIT had rightly invoked Section 263 after considering the AO's report and confronting the assessee's counsel with it. The Tribunal upheld the Pr. CIT's jurisdiction to quash the assessment order and direct a fresh assessment. 2. Validity of the assessment order passed by AO under Section 143(3): The Pr. CIT quashed the AO's order under Section 143(3), holding it erroneous and prejudicial to the interest of the Revenue. The AO had assessed the total income of the assessee at ?7,61,950/-, which matched the returned income, resulting in no additional demand. The Tribunal agreed with the Pr. CIT, noting that the AO's assessment order failed to address significant issues, such as the deposit of ?29,69,855/- belonging to the HUF into the individual's account, which was not adequately examined by the AO. 3. Adequacy of enquiry conducted by AO: The Tribunal found that the AO did not conduct a thorough enquiry into the transactions and failed to provide conclusive findings as required by law. The office note recorded by the then ITO was found factually incorrect by the Pr. CIT. The Tribunal emphasized that the AO, as an investigating and adjudicating officer, must carry out adequate enquiries to assess taxable income properly. The failure to do so justified the Pr. CIT's invocation of Section 263 to reopen the completed assessment. 4. Procedural compliance for pronouncement of orders: The Tribunal addressed a procedural issue regarding the delay in pronouncing the order beyond the 90-day period from the conclusion of the hearing. Citing Rule 34(5) of the Income Tax Appellate Tribunal Rules, 1962, and considering the exceptional circumstances due to the COVID-19 lockdown, the Tribunal extended the time limit for pronouncement. The Tribunal referenced judicial decisions, including those of the Hon'ble Supreme Court and Bombay High Court, which extended limitation periods due to the lockdown, recognizing it as an extraordinary period. Conclusion: The Tribunal dismissed the appeal of the assessee, upholding the Pr. CIT's order to quash the AO's assessment and directing a fresh assessment. The Tribunal confirmed that the Pr. CIT had acted within jurisdiction and that the AO's failure to conduct adequate enquiries justified the invocation of Section 263. The procedural delay in pronouncement was deemed justified due to the COVID-19 lockdown.
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