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TMI Blog2013 (6) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... en filed claiming a writ of certiorari quashing the order dated 22.3.2013 and writ in the nature of prohibition has also been claimed prohibiting the respondent no.2 to proceed further for the Assessment Year 2008-2009 consequent of the impugned order dated 22.5.2013. Heard Sri Rakesh Ranjan Agrawal, learned counsel for the petitioner and Sri Ashok Kumar, learned standing counsel for the respondents. The learned counsel for the petitioner primarily submitted that the impugned order passed by the respondent no.1 is incorrect on merits. Elaborating the argument, it was submitted that the approach of the respondent no.1 that proper inquiry before finalizing the assessment proceeding was not done by the Assessing Officer is factually incorrect. Number of queries were raised by the Assessing Officer which were replied by the petitioner. The reply of the petitioner which consists of approximately one thousand pages is indicative of the fact that the Assessing Officer had applied his mind to the reply submitted by the petitioner and it does not matter if the assessment order is brief or it does not contain reasons, if any, accepting the reply of the petitioner, is of little consequence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was selected for scrutiny have not been examined. Even the records are silent about the same. b) Negligible profit has been returned which is merely a part of 'rebate & discount' while assessee has shown income under other heads and huge turnover of over Rs.59.42 crores which suggested gross suppression of profits. A.O. has accepted the same without any enquiry or examination. c) Trade Creditors of Rs.2,41,93,214 and Loan Creditors of Rs.1,14,04,894/- has been accepted by the A.O. without any enquiry or verification. d) Cartage outward of Rs.15,85,102/- and some other expenses have been debited to P & L account and allowed by A.O. without any findings whether this expenditure is allowable as per provisions of section 40(1) (ia). The petitioner filed a reply. In the reply, the petitioner also took the stand that the similar kind of query with regard to the trade creditors and loan creditors was raised by the Assessing Officer which was replied by the petitioner. A look to the assessment order for the relevant Assessment Year 2008-2009 would show that it is a brief document and consists of three paragraphs in all. Paragraph Nos. 1 and 2 are introductory in nature. Its paragraph- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax that the assessment order is erroneous and prejudicial to the interest of revenue is perfectly justified. Similarly, on other points touching the merits of the case were argued by the learned counsel for the petitioner at length and the Court was taken through the questionare raised by the Commissioner of Income Tax and the reply filed by the petitioner but in view of the order we are proposing to pass, it is not necessary to consider them in detail. Much emphasis was laid by the learned counsel for the petitioner that there is difference in between a case where an inquiry has been conducted and a case where inadequate inquiry had been conducted. Reliance has been placed by him on Commissioner of Income Tax Vs. Sunbean Auto Limited (2011) 332 ITR 167 wherein a distinction has been pointed out by Delhi High Court between lack of inquiry and inadequate inquiry. It was pointed out that the aforesaid decisions had been relied upon by Delhi High Court in subsequent decision reported in Income Tax Officer Vs. D.G. Housing Project Ltd., 343 ITR 329. The Commissioner may consider an order to be "erroneous" for the purpose of section 263 even if error of law may not be appar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is incumbent on the Income-tax Officer to further investigate the facts stated in the return when circumstances would make such an inquiry prudent that the word "erroneous" in section 263 includes the failure to make such an inquiry. The order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct. In CIT Vs. Smt. Rambha Devi, (1987) 164 ITR 658, the Patna High Court has laid down that where the necessary facts had not been gone into, a case for exercise of jurisdiction under section 263 of the Act is made out. In this case, the crucial question, what is the source of initial capital, had been explained by the assessee or not, was left unexamined. It was held that it is a case where prejudice is writ large. It is not necessary for us to multiply the precedents for the simple reason that the assessment order does not contain the necessary discussion with regard to the various aspects of the case indicated in the revisional order by the Commissioner of Income Tax. It was incumbent upon the Assessing Officer to have examined the cash credit entries appearing in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal or revision in respect of fiscal statutes in particular. Reference can be made to a Three Judges Bench decision in Titaghur Paper Mills Co. Ltd. v. State of Orissa (1983) 2 SCC 433 : (AIR 1983 SC 603). The aforesaid view has been reiterated recently by the Apex Court in United Bank of India Vs. Satyawati Tandon and others, 2010 SC 3413, The relevant paragraphs 20 and 21 are reproduced below:- 20. In Titaghur Paper Mills Co. Ltd. v. State of Orissa (1983) 2 SCC 433 : (AIR 1983 SC 603), a three-Judge Bench considered the question whether a petition under Article 226 of the Constitution should be entertained in a matter involving challenge to the order of the assessment passed by the competent authority under the Central Sales Tax Act, 1956 and corresponding law enacted by the State Legislature and answered the same in negative by making the following observations: "Under the scheme of the Act, there is a hierarchy of authorities before which the petitioners can get adequate redress against the wrongful acts complained of. The petitioners have the right to prefer an appeal before the Prescribed Authority under subsection (1) of Section 23 of the Act. If the petitioners ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution. But then the Court must have good and sufficient reason to bypass the alternative remedy provided by statute. Surely matters involving the revenue where statutory remedies are available are not such matters. We can also take judicial notice of the fact that the vast majority of the petitions under Article 226 of the Constitution are filed solely for the purpose of obtaining interim orders and thereafter prolong the proceedings by one device or the other. The practice certainly needs to be strongly discouraged." Having regard to what has been said above, we are of the opinion that there is no justifiable reason for the petitioner not to approach the Income Tax Appellate Tribunal by way of statutory remedy of appeal or to invoke the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India. At the present moment, there is no tax liability for the Assessment Year in question. According to the petitioner, it has already submitted the reply to the queries raised by the Assessing Officer which are suf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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