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TMI Blog2014 (9) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... gam, CIT (DR) For the Respondent : Shri. S. S. Gupta, C. A. Shri. A. Jaiswal, Advocate ORDER Per Bench:- These appeals are preferred by the Revenue against the respective order of the ld. CIT(A) pertaining to assessment years 2003-04 and 2004-05. 2. These appeals are emanated from the assessment orders passed in the cases of M/s Benara Valves Limited and M/s Benara Automotives Pvt. Ltd. The issues involved in these appeals are almost similar except quantum involved therein. Appeals in I.T.A. Nos.412 to 415/LKW/2009 are emanated from the assessment orders passed by the Assessing Officer under section 143(3) of the Income-tax Act, 1961 (hereinafter called in short the Act ); whereas the other appeals in I.T.A. Nos.68 to 71/LKW/2013 are emanated from the assessment orders passed under section 143(3) read with section 147 of the Act consequent to the order of the ld. CIT(A) passed in appeals filed against the assessment orders framed under section 143(3) of the Act. Therefore, the Tribunal has to adjudicate the appeals filed against the orders of the ld. CIT(A) passed in first round and also in second round. We are, therefore, of the view that the appeals eman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Assessing Officer that the matter is sub judice before the appropriate authorities of the Central Excise Department at New Delhi and the matter is listed for hearing on 10.3.2008. Therefore the assessment may be finalized after finalization of the proceedings by the Excise Authorities at New Delhi. This reply was considered by the Assessing Officer, but he did not accept the contentions of the assessee on the ground that the proceedings before the Excise Authorities may not be finalized till receipt of appeal order from the Central Excise and it is a time barring assessment. Therefore, the request for keeping the assessment proceedings pending cannot be entertained. The relevant observation of the Assessing Officer is also extracted hereunder for the sake of reference:- In response to letter dated 17.3.2006, the assessee company filed detailed reply which was placed on file. On perusal thereof, it is noticed that this reply is copy of reply which was submitted by the assessee company before the Central Excise Authorities against their show cause notices. The reply is dated 12.04 .2005. It was concluded in the reply that no addition may be made because on issue of und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer has made an addition of profit on suppressed sales made outside the books of account. Being convinced with the explanations of the assessee, ld. CIT(A) deleted the additions on the ground that the Assessing Officer ought to have obtained material collected by the Excise Authorities and also ought to have made necessary enquiries before making the additions. The ld. CIT(A) has also observed in his order that the Assessing Officer has not examined the explanations furnished by the assessee. While deleting the addition, ld. CIT(A) has also observed that the Assessing Officer is free to take action under the relevant provisions of the income tax law in respect of any undisclosed income of the appellant during the relevant years as per the judgment of the jurisdictional High Court wherein it was held that no search under section 132 - requisition under section 132A not complete, reassessment under section 148 is valid. The relevant direction of the ld. CIT(A) is extracted hereunder for the sake of reference:- 31. Under the circumstances and after considering substantial lack of material facts for the above and also in view of arbitrary and baseless addition made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , by issue of show cause notice in this regard. 3. That Ld CIT(A) was not justified in deleting the addition of ₹ 10,07,362/- made by the A.O. on account of unexplained investment in stock, without appreciating the fact that the addition was made on the basis of information obtained from Central Excise authorities and the assessee was provided adequate opportunity of being heard, by issue of show cause notice in this regard. 4. That Ld. CIT(A) was not justified in law and on facts in deleting the addition of ₹ 3,00,000/- made by the A.O. on account of disclosed additional income before Hon'ble Settlement Commission, New Delhi, without appreciating the fact that the assessee itself has offered such income as undisclosed income before the Hon'ble Settlement Commission and that the A.O. has passed the assessment order subsequent to the order passed by Hon'ble Settlement Commission u/s 245D(2C) of the Act, holding the assessee's applications as invalid. 5. That the order of the ld. CIT(A) deserves to be vacated and the assessment order passed by the Assessing Officer be restored. 9. During the course of hearing of the appeal, the ld CIT (DR), Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h regard to the suppressed sales detected by the Excise authorities. The ld. CIT(A), while deleting the additions, has not examined this aspect that the Assessing Officer was not allowed to make necessary enquiries while completing the assessment. He was all the time requested by the assessee to keep the proceedings in abeyance, as the matter was pending with the Hon'ble Settlement Commission or before the appropriate authorities of the Excise Department. The ld. CIT(A) in his entire order has reproduced the assessment order as well as the submissions made by the assessee. He has not even called a remand report from the Assessing Officer on the additional evidence filed before him or the explanations furnished before him. He has out rightly deleted the additions and while deleting the same, he has allowed the Assessing Officer to take action under the relevant provisions of the Act by giving an indication that assessment can be reopened under section 147 of the Act, but when the assessment was reopened by the Assessing Officer under section 147 of the Act pursuant to the order of the ld. CIT(A), that re-assessment was also knocked down by the ld. CIT(A) by holding that the reop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to have been filed before the Assessing Officer. Though the assessee has claimed that it has filed the reply filed before the Excise authorities but that reply is also dated 13.4.2005. Moreover, on a careful perusal of this reply also, we do not find any proper explanation or justification with regard to the suppressed sales as noted by the Assessing Officer on the basis of information received from the Excise Department. It is also obvious from the assessment order that during the pendency of the assessment proceedings, the Assessing Officer was also asked to keep the proceedings in abeyance as the matter is sub judice before the Hon'ble Settlement Commission and the Assessing Officer was constrained to keep the assessment proceedings in abeyance. Thereafter, the Hon'ble Settlement Commission has passed an order under section 245D(2C) of the Act vide order dated 20.12.2007. In this order, the Hon'ble Settlement Commission has made a reference that assessee has informed vide letter dated 17.12.2007 that since the assessment proceedings in the above mentioned case has been finalized by the Income-tax Department, hence no tax on additional income in the above case has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of explanations furnished by the assessee, having observed that the Assessing Officer has not made necessary enquiries before making the additions. Since the ld. CIT(A) has not taken into account the complete events and the facts of the case and the circumstances under which assessment was completed, we do not subscribe his views and we accordingly set aside his order. But in any case, we are also of the view that necessary enquiry was not conducted at the level of the Assessing Officer while completing the assessment on account of certain reasons. Therefore, we set aside the orders of the ld. CIT(A) and restore the matter to the file of the Assessing Officer with a direction to make necessary enquiries with regard to the suppressed sales either from the Excise Department or from the assessee. If need be, the relevant evidence may also be obtained from the Excise Department on the basis of which they have concluded that assessee has clandestinely cleared the goods of different values. Needless to mention here that proper opportunity of being heard may be afforded to the assessee. Accordingly, these appeals are disposed of. I.T.A. No.s68 to 71/LKW/2013: 14. These appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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