9911796707
TMI Blog2012 (12) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... peal filed by the assessee against order of the learned Commissioner of Income-tax-III, Kolkata in appeal no. CIT-XII/Tech/09-10/1124-27 dated 27-10-09 for the assessment year 2005-96.. 2. In the assessee s appeal, the assessee has raised following grounds of appeal:- 1) That in the facts circumstances of the case, the Learned Commissioner of Income Tax erred in holding that the order was erroneous prejudicial to the interest of revenue the order has to he set aside. 2) That in the facts circumstance of the case when two views are possible on the issue, holding the order erroneous prejudicial to the interest of revenue u/s. 263 is illegal has to be set aside. 3) That in the facts circumstances of the case, the passing of the order beyond the terms of the original notice u/s.263 is illegal order has to be set aside. 4) That in the facts circumstances of the case, the Learned Commissioner of Income Tax made a fishing roving enquiries which is beyond the scope of section 263 the order passed b Commissioner of Income Tax has to be set aside. 5) That in the facts circumstances of the case, the Learned Commissioner of Income Tax erred in assuming juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Commissioner of Income Tax erred in holding that the order is erroneous and prejudicial to there as the accounting for TDS and rent contradicts the assesses accepted system of accounting disregarding the findings in the special audit conducted by the Revenue in the immediately preceding year which found that the assesses follows mercantile/accrual system of accounting vii) That in the facts circumstances of the case, the Learned Commissioner of Income Tax erred in holding the order erroneous prejudicial to the interest of revenue on the ground that in assessment year 2004-05 Special audit u/s. 142(2A) was made against the assessee. viii) That in the facts circumstances of the case, the learned Commissioner of Income Tax erred in holding the order erroneous prejudicial to the interest of the revenue on the ground that property sold for Rs.34,50,000/- was not shown in opening / closing stock, which is not based on facts. ix) That in the facts circumstances of the case, the Learned Commissioner of Income Tax erred in holding the order erroneous and prejudicial to the interest of revenue on the ground that Rule 8D of the Income Tax Rules 1962, was not invoked though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the 263 notice. 4. Para- 12 at Page- 5 (3rd Para of the said page) deals with disallowances of expenses ukl4A in respect of income not forming part of total income on estimate - which was neither part of the reasons in 263 notice and had otherwise been subject matter of appeal also against the original Asst. 5. Para 13 at page 6 (1st Para of the said page) The provisions of section 40A(2)(a) of the Act have not been invoked in respect of various payments to the persons or the firms or AOP, the partner or members thereof. 6. It was the submission that the primary issue on which the show-cause notice was issued was that the assessee was following the cash system of accounting and the assessee had not disclosed the advance of rent received to the extent of Rs.80,00,000/-, though TDS has been deducted on the same. The learned AR drew our attention to the reply given, which is found at page 317 of the assessee s paper book, wherein it was submitted that all the figures, which had been considered by the learned Commissioner of Income-tax in his show-cause notice had been disclosed by the assessee in the computation of rental income and the difference was of an amount of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than 3 years. This act of the assessee itself showed malafide conduct. It was the submission that the learned Commissioner of Income-tax invoked the power u/s. 263 of the Act and it was open to the learned Commissioner of Incometax to enter into fresh issues beyond the scope of show-cause notice and give directions thereon u/s. 263 of the Act. It was submitted by the learned Sr.DR that the order of the learned Commissioner of Income-tax was liable to be upheld. 9. We have considered the rival submissions. At the outset a perusal of the show-cause notice u/s. 263 as extracted above, clearly shows that when compared the issues raised by the learned Commissioner of Income-tax in his order u/s. 263, only the issue at paras 1-6 at pages 1-3 as also paras 7-10 at pages 3-5 of learned Commissioner of Income-tax s order u/s. 263 have any connection with the show-cause notice. The other issues as raised in paras 11-13 at pages 5-6 of the order of the learned Commissioner of Income-tax do not find any reference in the show-cause notice. Admittedly, the assessee can be put to question only on the issues, which are raised in the show-cause notice u/s.263. The jurisdiction of the learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is accepted that the assessee is following the mercantile system of accounting, then the advance of rent received by the assessee cannot be treated as rent receipt during the year. This is also because the assessee has offered the advance rent as his income during the relevant assessment year to which it relates and the same has also been accepted. In the circumstances, we are of the view that the finding of the learned Commissioner of Income-tax in paras 7-10 of his order u/s. 263 is also erroneous and unsustainable in law. 11. In the circumstances, we are of the view that the order of the learned Commissioner of Income-tax u/s,. 263 is liable to be quashed on account of fact that the issues raised by the learned Commissioner of Income-tax in paras 7-10 of his order are unsustainable on the facts as are emanating from the records and in respect of paras 11-13, the issues do not arise out of the show cause notice and consequently, the order passed by the learned Commissioner of Income-tax u/s. 263 on the said issues is without jurisdiction provided by the show-cause notice. In the circumstances, the order of the learned Commissioner of Income-tax u/s. 263 is quashed. 12. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
