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TMI Blog2016 (12) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... e on record. Accordingly, we uphold the CIT order u/s 263 of the Act and dismiss the appeal filed by the assessee. Appeal against the assessment completed as per the directions of the CIT u/s 263 - Held that:- On perusal of the assessment records, we find that the CIT has given an open direction to the A.O. u/s 263 of the Act to re-do the assessment de-novo after duly examining the issues pointed out by the CIT. Therefore, in our considered view, the directions given by the CIT is an open direction and it is open to the assessing officer to examine the issues on merits as per the provisions of the Act. The A.O. has passed fresh assessment order u/s 144 r.w.s. 263 of the Act and accordingly, assessment order passed u/s 143(3) or 144 of the Act, is an appealable order u/s 246A of the Act. Therefore, we are of the view that the CIT(A) was erred in not adjudicating the appeal filed by the assessee on merits. Hence, we set aside the order passed by the CIT(A) and restore the appeal to the file of CIT(A) for fresh adjudication of the issues on merits. - I.T.A.No.702/Vizag/2013, I.T.A.Nos.552&553/Vizag/2014 - - - Dated:- 30-9-2016 - Shri V. Durga Rao, Judicial Member And Shri G. Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed u/s 143(3) of the Act, shall not be revised under the provisions of section 263 of the Act. 4. In response to show cause notice, the authorized representative of the assessee appeared on behalf of the assessee on 28.6.2010 and requested for adjournment up to 12.7.2010. Subsequently, several notices have been issued on various dates i.e. 15.10.2010, 12.11.2010, 4.8.2011, 24.8.2011 and finally on 10.10.2011. Though adequate opportunities were given to the assessee to furnish the explanations on the issues mentioned in the show cause notice, no explanation has been furnished. Since, the assessee failed to comply with the show cause notices, the CIT completed the proceedings u/s 263 of the Act based on the materials available on record. 5. In the proceedings before the Commissioner, the CIT observed that during the year under consideration, the capital account balance of the assessee has suddenly raised to ₹ 38,66,917/- for which the assessee produced a will dated 24.7.2001 executed by Smt. K. Ramakoteswaramma w/o late K. Ragavaiah, in which certain immovable properties have been gifted. The assessee neither produced details of capital account nor explained how c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are rejected under the provisions of section 145(3) of the Act, no need to go into the same books of accounts to look into other issues. The A.O. left with two options to compute the true and correct income of the assessee, i.e. (1) based on books of accounts regularly maintained by the assessee (2) rejection of such books of accounts and estimation of income at best judgement. The A.O., considering the facts and circumstances of the case, has chosen one of the method, which the CIT cannot find fault with the A.O. that the A.O. has adopted incorrect method. The A.R. further submitted that as regards other issues pointed out by the CIT, the A.O., during the course of assessment proceedings, rejected books of accounts and resorted to estimation of net profit. Since, books of accounts are rejected, the A.O. did not gone into any of the issues, therefore, the CIT was totally incorrect in holding that the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue. 7. On the other hand, the Ld. D.R. submitted that the CIT recorded categorical finding that the A.O. has failed to examine all the issues pointed out by the CIT in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. has not examined the issues pointed out by the CIT in the revision proceedings before rejection of books of accounts and estimation of net profit. We further noticed that the A.O. has simply rejected books of accounts and estimated net profit of 5% without any comparable cases of similar nature to justify the net profit applied by the A.O. The CIT, on the other hand has brought out number of issues wherein he has recorded his categorical finding to the effect that the A.O. has not verified any of the issues which is the reason for revision of assessment order. The CIT questioned number of issues right from additions to capital account to estimation of net profit. The assessee neither appeared before the CIT nor furnished any details to justify his case. Since, the assessee failed to appear before the CIT, we are of the opinion that the CIT cannot presume things which are in the mind of the assessee, as such opined that the CIT has rightly assumed his jurisdiction to revise assessment order on the information available on record. Accordingly, we uphold the CIT order u/s 263 of the Act and dismiss the appeal filed by the assessee. 10. In the result, the appeal filed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is directed to make his assessment de-novo after duly examining the details thoroughly and to his satisfaction as per the provisions of the Act. The directions given by the CIT u/s 263 of the Act is an open direction and there is no specific direction to the A.O. to complete the assessment. Therefore, any assessment order passed consequent to direction of the CIT u/s 263 of the Act, the first appeal is always lies with the CIT(A). The CIT(A) without appreciating the facts, simply dismissed the appeal filed by the assessee without discussing the issues on merits and hence, order of the CIT(A) should be set aside. On the other hand, the Ld. D.R. supported the order of the CIT(A). 15. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The CIT(A) dismissed the appeal filed by the assessee against the order passed by the A.O. u/s 144 r.w.s. 263 of the Act, for the reason that the A.O. has passed consequential order as per the directions of the CIT u/s 263 of the Act. Since, the CIT and the CIT(A) are equal rank authorities, any order passed by the A.O. as per the directions of CIT u/s 263 of the Act, the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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