9911796707
TMI Blog2012 (11) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... GH, AM The present appeal filed by the assessee is directed against the order dated 24.01.2011 passed by the ld. CIT u/s 263 of the Income-tax Act,1961 (in short 'the Act'). 2. In this appeal , the assessee has raised the following Grounds of Appeal: "1. That the Worthy Commissioner of income Tax, Patiala has erred in assuming the jurisdiction u/s 263 of the I.T. Act and holding that the order as passed by the .Assessing Officer u/s 143 (3) vide order, dated 27.10.2008 is erroneous and prejudicial to the interest of revenue. 2. That the CIT has failed to appreciate the fact that the earlier assessment has been completed after due application of mind by the concerned Assessing Officer and, therefore, the assumption of jurisdiction u/s 263 was not warranted. 3. Notwithstanding the above said ground of appeal, the CIT has also erred in giving finding in para-4 of the order that the depreciation was required to be debited to the profit and loss account and he has also failed to appreciate that all the conditions of writing off of bad debts had adequately been complied with and the amount have been advanced to M/s Hari Dev & Brothers and M/s Shah Soap Mills in the ordina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced reliance on the decision, in the case of Arthi Nursing Home V Ito 119 TTJ 415. 5. We have carefully perused the rival submissions, facts of the case and the judicial precedents cited by the parties. A bare perusal of the questionnaire, issued by the AO, and the reply filed by the assessee reveals that appellant has filed explanation in respect of issue of bad debt raised by the CIT in his impugned notice u/s 263 of the Act. 5(i) In this context, it is pertinent to reproduce the assessment order dated 27.10.2008, for the assessment year 2006-07, passed by the Assessing Officer u/s 143(3) of the Act : "Return in this case was filed on 24.10.2006 declaring an income of ₹ 1,69,360/-, which was processed under Section 143(1). The case was selected for scrutiny as per CBDT guidelines. Notice U/s 143(2) was issued on 25.10.2007. Subsequently, detailed questionnaire along with notice u/s 142(1) was issued, in response to which Shri Yogesh Aggarwal, Advocate, attended assessment proceedings from time to time and the case was discussed with information/documents as called for were filed, which were examined and placed on record. Books of accounts along with vouchers were exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d specific question has been raised by the AO in respect of the issues raised by the CIT in the impugned order passed u/s 263 of the Act. Therefore, question of submission of reply by the assessee does not arise. Similarly, on perusal and consideration of the fact situation of the case and relevant records, we are of the considered opinion that the AO has failed to conceive the specific issues which were the subject matter of the impugned order passed u/s 263 of the Act by CIT. The AO was not aware of such issues. Needless to say that there is no presumption about consideration of any issue, in the absence of conception of such issues by the AO. It is a case, where the AO has failed to conceive the issue raised by the CIT under the impugned order passed u/s 263 of the Act. The issues raised by the CIT has never been the concern of the AO. Ld. CIT has raised three issues in the order u/s 263, dated 24.01.2011, viz depreciation not debited to Profit & Loss Account, bad debts and interest free advances. 7. The ld. CIT found that assessee had not debited the depreciation in the Profit & Loss Account, but had claimed the same directly in the computation of income annexed to the return. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Tara Devi Aggarwal V CIT (1973) 88 ITR 323 (S.C) set aside the order of assessment passed by the AO on 27.10.1988 u/s 143(3) . The CIT has also listed 7 cases in para 4 of his assessment order u/s 263 of the Act to support this view. 10. The AO, is an Adjudicator as well as an Investigator, while exercising quasi-judicial power, for the purpose of framing assessment under the scheme of Income-tax Act. It is his statutory duty and right to ascertain the truth of the facts, as stated in the return of income by the assessee and to make necessary enquiry, as warranted on the facts and circumstances of the case. Passing of a cryptic and dumb order by AO does not and cannot mean that he has exercised quasi-judicial power, as an investigator and adjudicator. In the present case, AO has failed to make enquiry on the issue raised above by the CIT. This view is strengthened by a number of decisions, particularly by decision of Hon'ble Delhi High Court in the case of GEE VEE Enterprises V Addl . CIT (Delhi) (1975) 99 ITR 375 (Del). The relevant part of the ratio of the decision is reproduced hereunder : "it is not necessary for the Commissioner to make further inquirie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson, it will certainly be prejudicial to the interest of revenue. In the present case, AO has failed to make any enquiry as prompted by the facts of the case in respect of the issues raised by the CIT in the order passed u/s 263 of the Act. The AO, as indicated earlier, has not perceived the issue raised by the CIT u/s 263 of the Act, the question of application of mind, making of enquiry as Investigator and passing the speaking order, does not arise. 13. We have carefully perused the rival submissions, facts of the case and the questionnaire issued by the AO, on the issue in question and reply thereto, filed by the assessee along with the assessment order, in the light of the factual matrix of the case and the judicial precedents cited by both the parties. The AO, has made an adhoc addition of ₹ 20,000/-, while framing assessment, in respect of forwarding expenses not properly vouched. The AO, in a single sentence of one - and a half para assessment order, consisting of only ten lines, mentioned mechanically and cryptically that detailed information of the documents, as called for, were filed which were explained and placed on record. The veracity of such assertion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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