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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 ..... y one Sri Syed M. Azam, legal advisor and A.R. The assessment order u/s.143(3) of the Act was passed on 26.02.2013. Subsequently after a gap of one year 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, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nior Lawyer advised assessee to file an appeal, the assessee immediately took steps to file the appeal. Therefore, the delay caused. We note that 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rutiny u/s 143(2) of the Act and the Assessing officer completed the assessment u/s 143(3) of the 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 Rs. 1,44,880/-, disallowance on account of freight charges to the tune of Rs. 1,62,680/- and disallowance on account of site camp expenses to the tune of Rs. 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 Rs. 1,62,67,980/-. Labour charges of Rs. 1,49,35,423/- & Machinery Hire Charges of Rs. 3,45,650/- credited/paid to various parties on which the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that assessee claimed expenses on account of purchases of materials of Rs.l,44,87,985/*, Transport Charges of Rs.l,62,67,980/-, Labour Charges of Rs.l,49,35,423/-& Machinery Hire Charges of Rs. 3,45,650/- and consumable store of Rs. 6,54,188/- during the year and you have not provided fully supporting vouchers & bills as well as detail of payment & mode of payment. Hence, genuineness expenses which were claimed in Profit & Loss A/c. seemed doubt full in absence of supporting bills & vouchers and further provision of Section 40A(3) of the Act. Are attracts if any the payment in cash exceeding Rs. 20,000/- by single entries. (vi) Further, assessee neither provided evidences in support of valuation of works under work-in progress nor reflected closing stock at the end of the year even though assessee was engaged in civil construction works where construction materials is purchased continuously till the month of March, 2010 for running project. Thus, it has resulted in underassessment of income in absence of proper valuation of work-in progress & valuation of closing stock of raw materials. 8. Based on the reasons, as narrated in the para No.7 of this order, the ld CIT issued a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n & labour charges. In response, Mr. S. M. Azam, authorized representative of the assessee, appeared and filed payment sheet of wages for the month of July, 2009 and Register of attendance of persons for the Month of November, 2009. 11. However, the ld CIT, rejected the contentions and submissions of the assessee and held that the assessment order u/s. 143(3) of the Income Tax Act dated 26-02-2013 passed by assessing officer, is erroneous in so far as it is prejudicial to the interest of revenue due to inadequate scrutiny of detailed facts and making such assessment in haste, without proper enquiries & verification and without examination of books of accounts & other records, and accordingly the order u/s.143(3) of the Income Tax Act dated 26-02-2013 was set aside with the direction to pass a fresh assessment order. 12. Aggrieved by the order of Ld. CIT u/s 263 of the Act, the assessee is in appeal before us. 13. Shri S.K. Tulsiyan, first of all, drew our attention and explained the Bench that the Assessing officer has made a detailed inquiry by issuing notice under 142(1) of the Act. The inquiry and the documents demanded by the assessing officer, during the scrutiny proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent Assets'. In this regard submit a statement depicting detailed method of valuation of such finished/traded goods explaining input of raw materials vis-a-vis each lot of such finished/traded goods. 6. Details of party-wise cost of contract mentioning (a) Names & mailing address of the party, concerned (b) copy of Work Order (c) cost of raw-materials consumed (c) other expenditures, like cost of wages/labour charges etc. (d) value of contract received. 7. No VAT/Sales Tax is found debited or credited in the P&L A/c. Submit a statement on purchase bill-wise payment of VAT if your proprietorship firm paid any such taxes. If such expenditure is incurred then how the same has been accounted for? If maintained, produce VAT/ Sales Tax assessment record along copy of return (quarterly/ annual) showing assessment and payment -of - tax challans. Originals of all evidence to be produced. 8. Submit details of interest (Rs. 1,24,225/-) paid which appears to have been paid against bank loan. So submit certified copy of the connected bank statement along with Xerox copy of letter of sanction for the loan, containing all the terms & conditions. 9. Submit the list of bills put up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & vouchers, cash memos, Salary & wages registers and other registers etc. if any maintained. Enclo : Notice u/s. 142(1). Yours faithfully, Sd/- [S K SARKAR] DCIT, CIRCLE: MURSHIDABAD. Shri Tulsiyan explained the Bench that whatever, the documents, evidences and explanations demanded by the assessing officer by issuing notice under section 142(1) of the Act, as noted above, have been submitted by the assessee during the scrutiny proceedings under section 143 (3) of the Act. The assessing officer after doing detailed examination of the documents, evidences and explanations, passed the order under section 143(3) of the Act, therefore, the order passed by the assessing officer U/s 143(3) dated 26.02.2013 is neither erroneous nor prejudicial to the interest of the Revenue. The Ld. assessing officer has made every kind of inquiry and detailed examination of each and every aspects of the assessee's case, therefore, it cannot be said that there is a lack of inquiry on the part of the Ld. assessing officer. 14. Shri Tulsiyan also argued that the order sheet of the assessing officer clearly demonstrates that the assessing officer had conducted thirteen hearings with the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without proper enquiries & verification and without examination of books of accounts & other records rendering it erroneous and prejudicial to the interest of revenue. In view of aforesaid errors, inadequacies and omission on part of A.O., the order passed u/s. 143(3) of the Income Tax Act, 1961 dated 26-02-2013 is considered erroneous in so far as it is prejudicial to the interest of revenue and accordingly the order u/s.143(3) of the Income Tax Act dated 26-02-2013 is set aside with the direction to pass a fresh assessment order after examining the evidence and documents and after giving opportunity to the assessee and in accordance with the law" We note that the assessee is a Govt. Licenced Electrical Contractor & General Order Suppliers. For the assessment year under appeal, he filed his return of income accompanied by tax audit report (TAR) under section 44AB of the Act, declaring total income of Rs. 15,07,430/-, which was processed by the Department under section 143(1) of the Act. Thereafter the case was selected for scrutiny under CASS and in response to notices u/s. 143(2) and 142(1) dated 18.10.2011 and another notice u/s. 142(1) dated 5.06.2012, the Authorised Represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examination of books of accounts & other records. 17. We note that the Ld. CIT issued show-cause notice u/s. 263 of the Act dated 0701-2016 on his alleged supposition that the A.O. passed assessment order in haste by making inadequate scrutiny of details facts and without examining the books of accounts and other records. We note that during the course of 263 proceeding, as recorded by the Ld. CIT, himself in his order, that the assessee had filed written submissions before him with various information and evidences which, inter alia, included the following: (a) Transporters from local source and many parts of Murshidabad District supplied vehicles, JCP etc. to supply stone chips, sand, cement etc. and cutting as well as lifting soils. They were not from any fixed agencies of supply labours. They took payment on daily basis and, therefore, there was no scope to deduct tax. Identical situation was in respect of machinery hire charges. (b) Employer's part of contribution is debited in Profit and Loss Account. It includes contribution, administration charges, EDLI etc. Late fine and interest of Rs. 3,42,109/- was paid by the employer. (c) In works contract business, gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here that even if the so-called short-falls pointed out in 263 notice, may not match in verbatim with the requisitions vide 142(1) notice, but the facts remain that during the course of the assessment proceedings and hearings taken place before the Ld. A.O., the assessee submitted all such information and documents, which were considered before passing the impugned assessment order. The table below summarizes the issues as per notice U/s 263 issued by ld CIT, the same issues were covered by the notices issued under section 142(1) of the Act by assessing officer and on each issue the observation was made by the assessing officer while passing order under section 143 (3) of the Act: Sr.No. Issues as per Notice u/s 263 issued by Ld.C.I.T. Issues covered by Notices u/s. 142(1) dated 18.10.2011, 10.07.2012 & Order sheet Entries: Observation of A.O. in 143(3) order P/B pages. A TDS u/s.194C of the Act has not been made on payment of Transport Charges Rs. 1,62,67,980/-, Labour charges Rs. 1,49,35,423/- and Machinery Hire Charges of Rs. 3,45,650/- credited to various parties. 1) Point-2 of notice dated 18.10.2011; 2) Point-12 of notice dated 18, 10.2011; 3) Point-I of notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and additional evidences submitted during the course of the assessment proceedings were before the assessing officer. After examining and verifying the above evidences vis-a-vis the queries made in notice U/s 142(1) of the Act, and after hearing the assessee on various dates as per order sheet entries, the Ld. A.O. as an adjudicator passed the assessment order u/s. 143(3) of the Act, assessing the total income under normal provision and thereby disallowed sum of Rs. 3,24,755/- under three heads as noted in para 16 of this order. Therefore, at this juncture, it is pertinent to mention here that the way in which assessment should be finalized falls in the exclusive domain of the Assessing officer. Section 142(1) speaks of inquiry before assessment and gives immense power to the A.O. for conducting enquiry. Therefore, the A.O. u/s 142(1)(ii) & (iii) can ask the assessee almost any information which he things necessary for passing assessment order and information can be asked in a proforma, which is given in para 13 of this order. The assessing officer has conducted a detailed scrutiny and thorough enquiry in respect of each and every item of expenses. After going through the inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A.O. by exercising his quasi-judicial functions vis-a-vis passing the assessment order u/s. 143(3) of the Act. Therefore, certainly it is not a case wherein adequate enquiries at the assessment stage were not carried out or assessment was made in haste. However, what is an opinion formed as a result of these enquiries and verification of the materials is something 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. For this, we rely on the decision of Coordinate Bench of this Tribunal in the case of Smt. Juthika Kar vs. ITO [I.T.A. No.1128/Kol/2009, dated 16.5.2012 ], wherein it has been held as under :- "8. With the leave and consent of my learned brother, however, I may add a few words to my learned brother's analysis of Hon'ble Delhi High Court's judgment in the case of Gee Vee Enterprises (supra). Undoubtedly, as noted by their Lordships in that case, an Assessing officer cannot remain passive in the face of a return which is apparently in order but calls for further enquiry. In such a case, revision proceedings can ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as heard from time to time. In deciding the question, the court has to bear in mind the presumption in law laid down in section 114 clause (e) of the Evidence Act: "that judicial and official acts have been regularly performed." 86. Therefore, the court has to start with the presumption that the assessment order dated March 28, 2008, was regularly passed. There is evidence to show that the Assessing officer had required the Assessee to answer 17 questions and to file documents in regard thereto. If the A.O. cannot be shown to have violated any form prescribed for writing an assessment order, it would not be correct to hold that he acted illegally or without applying his mind". We note that in the assessee`s case under consideration the Ld. C.I.T. invoked jurisdiction u/s. 263 of the Act on the expectation of a fishing and roving enquiry and solely on the presumption in his own term that "the assessment order u/s. 143(3) of the Income Tax Act dated 26-02-2013 passed by erstwhile ACIT, Murshidabad amounts to inadequate scrutiny of details facts and making such assessment in haste, without proper enquiries & verification and without examination of books of accounts & other record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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