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TMI Blog2018 (11) TMI 1713X X X X Extracts X X X X X X X X Extracts X X X X ..... ng which is in exclusive domain of the Assessing officer, and even if Commissioner does not agree with the results of such enquiries, the resultant order cannot be subjected to revision proceedings. From the above allegation which was the basis for initiating proceeding u/s. 263 of the Act, it is evident that the Ld. C.I.T. himself has not denied enquiry conducted by the A.O., rather he suspected that not much investigation which should have been done by the A.O. Therefore, the requisite enquiries conducted by the Ld. A.O. (details of which have been given in Table above in para No. 18 of this order) would not definitely go to establish the baseless allegation of the C.I.T. that the assessment order has been found to be passed without proper enquiry and in haste, more so as would be evident from the order sheet entries, the scrutiny proceeding continued during in the span of 1.5 years ( one year five months) and there were 13 occasions when the assessee was called for submission of details/documents and hearings were conducted accordingly. Thereafter, after thorough examinations of the details and documents and explanations submitted by the Ld. A.R. of the assessee as per requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... three months, the assessee received a show-cause notice u/s.263 of the Act, issued by the Ld. C.I.T.-14, Kolkata on 09.05.2014, which was handed over to his said A.R. for proceeding with the representation of the case of the Ld. C.I.T. The order u/s. 263 of the Act was finally passed on 30.03.2015 for de novo assessments on the issues as mentioned in the said 263 order and the order was received by the assessee on 31.03.2015. The assessee thereafter handed over the order to his said A.R., Sri Syed M. Azam, for future course of action to be taken in this regard. However, the said A.R. did not opt for filing any appeal against the said 263 order nor intimated anything to the assessee for any future course of action needs to be taken. In the meantime, the assessee received several notices u/s.142(1) of the Act from the A.O. in pursuance of the said order u/s.263 of the Act and assessment order u/s.263/143(3) was passed on 18.03.2016. Experiencing inaction on the part of the A.R., the assessee himself then contacted a senior lawyer, who opined that the order of Ld. C.I.T. u/s. 263 of the Act dated 30.03.2015 was an appealable order before the Hon'ble Tribunal and an appeal should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t delay was because of the wrong advice of the Tax Professional for which assessees cannot be penalized. We also rely on the decision of the Coordinate Bench of this tribunal, in the case of M/s. Garg Bros. Pvt. Ltd. Others vs. DCIT, in ITA Nos.2519 to 2521/Kol/2017, order dated 18.04.2018, wherein under similar set of facts and reasons, the Tribunal was pleased to condone the delay of 211 days. For the ends of justice and having regard to the reasons given in the petition, we condone the delay and admit the appeal for hearing. 5. By way of this appeal, the assessee appellant has challenged correctness of the order dated 30.03.2015, passed by the learned Commissioner of Income Tax (CIT)-14, Kolkata, for the assessment year 2010-11. Grievances raised by the assessee are as follows. (1) That on the facts and in the circumstances of the case, the Ld. CIT erred in initiating and passing the order u/s.263 of the Income Tax Act, 1961. (2) That on the facts and in the circumstances of the case, the Ld. CIT failed to apply his mind in proper perspective of the facts of the case and erred in setting aside the order passed u/s.143(3) of the Income Tax Act, 1961 by the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. During the proceedings, under section 143(3) of the Act, the assessing officer examined the details of various expenses and after doing detailed scrutiny made the disallowance on account of material purchased to the tune of ₹ 1,44,880/-, disallowance on account of freight charges to the tune of ₹ 1,62,680/- and disallowance on account of site camp expenses to the tune of ₹ 17,195/-. 7. Later on, Ld. Commissioner of Income Tax (CIT) has exercised his jurisdiction u/s 263 of the Act. The Ld. Commissioner of Income Tax, on examination of the material on record, assessment order and assessment record, it was noted by him that the assessment order under section 143(3) dated 26.02.2013 is erroneous and prejudicial to the interests of revenue on the following counts, reproduced below: (i) On perusal of the record, it is noticed that assessee had not deducted tax at sources at the bill amount/payment on account of Transport Charges of ₹ 1,62,67,980/-. Labour charges of ₹ 1,49,35,423/- Machinery Hire Charges of ₹ 3,45,650/- credited/paid to various parties on which the propositions of Chapter XVII-B are applicable relating to deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 93776 206137 March 2010 108138 91886 200024 Total 1578782 1356154 2934936 As such employee contribution of ₹ 3,42,109/- claimed as expenses is required to be disallowed. (iii).Further it is noticed that assessee is engaged in civil construction works where construction material is purchased continuously till the month of March, 2010 for running project even though assessee neither made valuation of works under work-in-progress nor reflected in the closing stock at the end of the year. Thus, it has resulted in underassessment of income. The receipts of the payment filed shows that there was closing stock but there is no work-in-progress as per the P L A/c. (iv) On perusal of the record, it is noticed that as per AIR information, assessee deposited cash of ₹ 16,53,000/- in the saving Bank account during the year and the Assessing officer has not examined the issue. (v) On perusal of the assessment records, it is noticed that assessee claimed expenses on account of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hand of driver 8-10 men group leader in the case of labour charges. Apart from that most of the main materials are supplied by the principal employer. 10. During the proceedings under section 263 of the Act, the assessee was asked to produce any other details regarding Labour charges, Transport charges etc. and explanation to show cause notice u/s.263. In response, the AR of the assessee appeared before the ld CIT and filed a written submission, relevant portion of which is reproduced as under: As regards work-in progress and closing stock, I have submitted details before the assessing officer which is clearly reflected in my Profit Loss Account Balance Sheet as on 31 03 2010 As regards savings bank a/c, it is jointly with my family member, so, I think it was not examined by the Assessing officer. The assessee has also filed party wise details of purchase for ₹ 60,34,719/-, party wise details of Transport Hire charges for ₹ 38,00,000/-, details of Closing stock work-in-progress and copies of Profit Loss Account and Balance Sheet. The assessee was asked to furnish details of PAN of the person to whom payment was made in relation to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d date of hearing :- 1. Hard copy of the return of income for the A.Y.20I0-l1 along with accounts and supporting enclosures/annexure. In case, the account is tax audited, the report of audit to be submitted with each every schedule to the accounts detailing respective heads of accounts. 2. From the return of income submitted online for the A. Y. 2010-11 it appears that the nature of business is 'Contractor'. If this is true, please submit copy of each every TDS/TCS certificates, payment certificates of respective contractees containing every information regarding individual bills. Submit a report narrating the nature of job done by your firm. 3. Details of Sundry Creditors (₹ 11,50,755/-) mentioning (a) Name mailing address PAN of the parties (b) Opening Balance, if any (c) Bill No. date of the fresh purchase during the year (d) Description of the item/ materials bill-wise (e)Value/amount of bill (d) Amount paid mentioning cheques no. and names addresses of the drawee banks (e) Closing Balance, if any. 4. Self-certified copy of all bank accounts statements along with original ones. 5. ₹ 18,99,579/- has been shown in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng labour labour sardar (ii) Person-wise date amount of salary/wages due/ accrued (iii) person-wise amount paid during the current year (iv) Mode of payment (v) outstanding closing balance personwise (vi) TDS if any made. Produce evidence of receipt of salary/wages by the respective employee/labour. 13. Purchase made by your firm during year under scrutiny is Rs.l,44,87,985/-. Produce details of party-wise purchase with statement incorporating (i) name address , PAN of the party (ii) Opening Balance if any (iii) Bill No. Date (iv)Bill-wise description Quantity of goods purchased (iv)Value/amount of the purchase bills (v) amount paid during the year mentioning cheques no. name and address of the drawee bank/s (vi) Closing balance. 14. Furnish computation of 'Balance with Revenue Authorities ( ₹ 6,44,300/-). 15. Submit a statement of account regarding personal income expenditure etc. and cash flow statement 17.Furnish details of 'Other current assets' (₹ 9,22,989/-). 18. You have claimed deduction of 'contribution to recognized provident Fund' (₹ 19,20,891/-). Produce the challans depositing such contribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons and heads of expenses for which ld CIT has exercised his jurisdiction under section 263 of the Act, had been examined by the assessing officer in detail during the assessment proceedings under section 143 (3) of the Act, therefore, there should not be any lack of inquiry or improper inquiry on the part of the assessing officer, hence the order passed by the assessing officer is neither erroneous nor pre-judicial to the interests of the Revenue. 15. On other hand, Ld. DR for the Revenue primarily reiterated the stand taken by Ld. Commissioner of Income Tax, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 16. We have given a careful consideration to the rival submissions, and perused the material available on record. We note that main grievance of the ld CIT to exercise the jurisdiction under section 263 of the Act is that order under section 143 (3) of the Act was passed by the assessing officer in haste, without proper enquiries and verification and without examination of books of accounts other records. The concluding remark of ld CIT, under section 263 is given below for ready reference: 11. It is obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, order under section 143(3) of the Act was passed by the assessing officer after conducting thirteen hearings and after doing detailed scrutiny of books of accounts and evidences. During the assessment proceedings U/s 143(3), the assessee submitted a plethora of documents, evidences, books of accounts and explanations as required by ld AO by issuing notice under section 142(1) of the Act, ( the entire notice U/s 142 (1) is reproduced in para No. 13 of this order). These entire documents, evidences, books of accounts and explanations were carefully examined by the assessing officer. The assessing officer conducted thirteen (13) hearings, with the assessee, as mentioned in the order sheet entry. The entire order sheet ( in brief O/S) is reproduced in para 14 of this order for ready reference. The thirteen hearings were conducted by the assessing officer as per his convenience. The assessee has been actively cooperated with the assessing officer during these thirteen (13) hearings. These thirteen hearings were conducted by the assessing officer within a period of one year and five Months. Therefore, it can not be said that assessment under section 143(3) was comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Ld. C.I.T. (g) It is pertinent to mention here that in respect of cash deposit of ₹ 16,53,000/- made on the basis of AIR information, no such material was provided to the assessee to verify the contents of such information. However, after receipt of the order u/s.263 of the Act, the assessee wrote letter to the Ld. C.I.T. filed on 09.05.2018 and reminder on 16.09.2018 (P/B pages 31 to 34) intimated him that on going through the Saving Bank Pass Book, no such huge cash deposits could be found. Hence request was made to him to provide the assessee the name of the bank branch, S.B. A/c. No. and certified copy of order sheet of proceedings u/s.263 of the Act to enable the assessee to verify the genuineness of such AIR information and also for the purpose of appeal pending before the Hon'ble Tribunal against the said 263 order, but as per assessee, till date, nothing is received from the ld CIT. 18. We note that according to the Ld. C.I.T., the assessing officer, during 143(3) proceeding, did not make proper verification to ascertain genuineness as well as applicability of section 40(a)(ia) and 40A(3) of the Act. The allegations made in the 263 show-cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 05 06 to 10 B Employees' contribution towards EPF was accounted for less by ₹ 3,42,109/- and required to be disallowed. I)Points-13 18 of notice dated 18.10.2011; 2)Points-13 18 of notice dated 10.07.2012 3) O/S dt. 06.08.12 stating submission of P.F. details 01 to 03 04 05 06 to 10 C Valuation of construction material purchased in civil construction works was not made under WIP nor the same was reflected in the closing stock at the end of the year, which has resulted in underassessment of income. 1)Points-6, 7, 9 14 of notice dated 18.10.20 11 2)Points-6, 8 11 notice dt. 10.07.12 3) O/S dt. 19.12.12 stating submission of more purchase details 01 to 03 04 05 06 to 10 D As per AIR information, assessee deposited cash of ₹ 16,53,000/- in his S.B. Account which remained unverified by the A.O. 1) Point-4 of notice d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld CIT in his order U/s 263 of the Act. 19. We note that it is within the province of the Assessing officer to decide that which points he wants to take up for enquiry and to what extent and, as such, the Ld. C.I.T. cannot interfere with the same and even if Ld. Commissioner has such results of enquiries, the resultant order cannot be subjected to revision proceeding. On the facts of the case it would not be out of the context to state that the impugned scrutiny assessment was not for reason of any information, search result and directions from higher authorities, inasmuch as nothing has been recorded to that effect in the assessment order. As a matter of normal procedure, the assessee s case was selected for scrutiny assessment. The objective of scrutiny assessment u/s. 143(3) is to confirm that the taxpayer has not understated the income or has not computed excessive loss or had not underpaid the tax in any manner. To confirm the above, the Assessing officer carried out a detailed scrutiny of the return of income, as deemed fit, and satisfied himself regarding various claims, deductions etc. made by an assessee in the return of income. The Ld. C.I.T. has subjected the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, however, one must bear in mind is the distinction between adequate enquiries not having been conducted and the result of such enquiries not having been dealt with by way of a speaking order or not having resulted in the conclusion that could be, in the wisdom of a person other than the Assessing officer, more appropriate. Here is a case in which sufficient enquiries were conducted. As learned brother has rightly noted, the Assessing officer called for specific details, confirmations and even copies of bills. It could not, therefore, be said that sufficient enquiries were not conducted. However, what is opinion formed as a result of these enquiries is something which is in exclusive domain of the Assessing officer, and even if Commissioner has such results of enquiries, the resultant order cannot be subjected to revision proceedings. The conclusions arrived at as a result of enquiries cannot be tinkered with in the revision proceedings. The conclusions being drawn up as a result of enquiry is a highly subjective exercise and as to what is appropriate conclusion is something on which perceptions vary from person to persons. These variations in the perceptions of the Assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 263 of the Act, it is evident that the Ld. C.I.T. himself has not denied enquiry conducted by the A.O., rather he suspected that not much investigation which should have been done by the A.O. Therefore, the requisite enquiries conducted by the Ld. A.O. (details of which have been given in Table above in para No. 18 of this order) would not definitely go to establish the baseless allegation of the Ld. C.I.T. that the assessment order has been found to be passed without proper enquiry and in haste, more so as would be evident from the order sheet entries, the scrutiny proceeding continued during in the span of 1.5 years ( one year five months) and there were 13 occasions when the assessee was called for submission of details/documents and hearings were conducted accordingly. Thereafter, after thorough examinations of the details and documents and explanations submitted by the Ld. A.R. of the assessee as per requisitions sought by the A.O. and as deemed fit for computing the true taxable income, the assessment was completed u/s. 143(3) of the Act on 26.02.2013. Therefore, it is not a case on inadequate scrutiny, for that we rely on the judgment of Hon'ble Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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