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TMI Blog2012 (11) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The order of the Ld. Commissioner be cancelled. 2. On the facts and in the circumstances of the case and in law the Ld. CITIII, Pune has passed order under section 263 as a matter of 'abundant precaution' as according to him the assessment passed by ACIT Circle Satara was without jurisdiction since on the date of completion of the assessment the jurisdiction over the case was transferred from A.O. the A.C.I.T to Addl. Commissioner of Income-Tax, Satara Range, Satara. The action of the Ld. CIT-III is not justified and it be cancelled. Since it is not within the parameters of S.263 of the Act. 3. On the facts and in the circumstances of the case and in law and in view of the order of the Ld. CIT-III, it transpires that though the ACIT, Satara Circle, Satara, did know that on 04-09-2009 he had no jurisdiction to pass the assessment order but he passed the said order on 07-09-2009. The very fact that Assessing Officer passed the assessment order on 07- 09-2009 which was final that too after considering the entire information submitted. The action of the Ld. CIT-III in cancelling the assessment order u/s.263 is without jurisdiction and it be quashed. 4. On the facts and in the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses to the tune of Rs.7,74,95,655/- from sister concern M/s. Talreja Traders (HUF). The assessing officer should have verified whether these purchases were made at market rate or not, particularly, in the light of the fact that there is fall in GP declared by the assessee as compared to the earlier years. It is also observed that the assessee himself is the wholesale dealer of M/ s Krishna SSK Ltd, Karad. However, from a perusal of the assessee's account in the books of Talreja Trade (HUF), it is observed that Talreja Trade (HUF) is debiting Krishna SSK credit account. Assessing officer should have obtained ledger extract of the assessee as appearing in the books of Krishna SSK Ltd, Karad. This would have brought- clarity to the issue. If Krishna SSK Ltd, Karad is supplying directly to the assessee, the payment .of any amount over and above the purchase price to Talreja Trade (HUF) would be hit by the provisions of Section 40A(2)(b). Assessing officer should have examined this issue. . (iii) Interest charged on loans: It is seen that loans were advanced to related persons Le Mrs. Simran Talreja and Sri I.M.Talreja. The issue of interest on these advances including squared up advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e knowledge of the Assessing Officer that he did not have any jurisdiction in view of transfer order dated 4-9-2009." 5. The CIT having considered the same, observed that this case was transferred from ACIT, Satara Circle to the Addl. CIT, Satara Range, w.e.f. 04.09.2009 whereas hearing in this case took place on 04.09.2009 and order was passed on 07.09.2009. According to the CIT, it shows that assessment order passed by the Assessing Officer is without jurisdiction and, therefore, is non-est. Without prejudice to this conclusion, the submissions of the assessee with regard to invoking of section 263 as contained in his reply were considered by the CIT and having considered the material on record and perusal of the written submissions submitted on behalf of the assessee on 24.11.2009, the CIT was of the view that on following aspect which prima facie warranted enquiry for correct determination of income, no enquiry was conducted by the Assessing Officer. i) As per the tax audit report creditors and debtors' balances are subject to confirmation. A perusal of record shows that such confirmations were not obtained during the course' of the assessment proceedings. ii) As rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete assessment before 31.12.2009 after conducting necessary enquiry and giving reasonable opportunity of being heard to the assessee. Same has been opposed before us. 7. The Ld. Authorised Representative before us submitted that the CIT was not justified in invoking action u/s.263 of the Act to cancel the inconclusive assessment which could not be termed as erroneous and prejudicial to the interests of Revenue within the meaning of provisions of section 263 of the Act. The CIT, Pune, has passed order u/s.263 as a matter of abundant precaution. As according to him assessment order passed by ACIT, Satara Circle, was without jurisdiction since on the date of completion of the assessment, jurisdiction over the case was transferred from Assessing Officer, i.e., ACIT, to Addl.CIT of Satara Range, Satara. This action of the CIT is not justified and accordingly order u/s.263 of the Act should be set aside. The Ld. Counsel for the assessee relied on a number of decisions to the proposition that the order passed by CIT u/s.263 has to be quashed. The Ld. Departmental Representative on the other hand supported the order of the CIT. 8. We have considered the rival arguments from both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory reply, the order could not be set aside on any other ground without affording opportunity to assessee. This ratio is also not applicable because subject matter before us is notice u/s.263 of the Act and order u/s.263 is same. 9. In case before us CIT while passing order u/s.263 has categorically observed that assessment order was passed on 07-09-2009 which was heard by the Assessing Officer on 04-09-2007 is non-est because vide office order dated 04-09-09 jurisdiction of this case had been transferred to Additional CIT, Satara Range. According to CIT the order passed by Assessing Officer on 7-09-09 in this case u/s.143(3) is not a legal order in the eyes of law. The CIT also invoked provisions of section 263 of the Act on account of insufficient enquiries by erstwhile Assessing Officer on various aspects of additions. Thus the order of the Assessing Officer dated 07-09-2009 was set aside with direction to new Assessing Officer to pass assessment fresh in accordance to law after providing opportunity of hearing to assessee. The CIT has clearly observed that order of Assessing Officer dated 7-09-09 is non est because jurisdiction of this case was already transferred to Addition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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