9911796707
TMI Blog2019 (11) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... s of sundry creditors and the AO has made enquiries in respect of the sundry creditors then in such a scenario, the ld Pr CIT in order to find that there is any fault/deficiency in the enquiry conducted by the AO while framing assessment order, then it was incumbent upon the Ld. Pr. CIT to have conducted an enquiry by himself on the issue and record his finding of fact that could show that AO order is un-sustainable in law, which he did not do. So, the AO s action/enquiry in respect of the sundry creditors cannot be held to be erroneous as well as prejudicial to the interest of the revenue. For that we rely on the order of the Hon ble Delhi High Court in the case of Pr. CIT Vs. Delhi Airport Metro Pvt. Ltd. [ 2017 (9) TMI 529 - DELHI HIGH COURT] and, therefore, respectfully following the ratio of the Hon ble Delhi High Court and in view of the enquiry made by the AO the order passed by the Ld. Pr. CIT u/s. 263 of the Act cannot be sustained and quashed for want of jurisdiction. Appeal of the assessee is allowed. - I.T.A. No. 1142/Kol/2019 - - - Dated:- 22-11-2019 - Shri A. T. Varkey, JM And Dr. A. L. Saini, AM For the Appellant : Shri Anil Kochar, Adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r examination. Consequent upon examination of assessment record it was found that the Assessing Office had completed the assessment without making inquiries and verifications in respect of sundry creditors although one of the criteria for selection was verification of sundry creditors amounting to ₹ 2,11,05,222.38 as per the balance sheet. It is apt to add here that failure to conduct inquiries and investigations renders an assessment order erroneous as well as prejudicial to the interest of revenue. {emphasis given by us] 5. Thereafter, the Ld. Pr. CIT issued show cause to the assessee and after going through the reply of the assessee, the Ld. Pr. CIT concludes as under: 5. The assertions made by the assessee were gone through and meticulously examined. The assessee rebutted the allegations stating that: a) The assessee had complied with notices u/s. 142(1) and 143(2) of the Act; b) In course of proceedings books of accounts had been produced; c) Complete list of sundry creditors involving amount of ₹ 2,11,05,222/- had been recorded by the AO and had been examined by making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case. We note that the Ld. Pr. CIT has found fault with the action of the AO to have completed the assessment without making enquiries and verification in respect of sundry creditors although one of the criterion of selection (for scrutiny by CASS) was verification of sundry creditors amounting to ₹ 2,11,05,222/- as per the Balance Sheet. Thus according to Ld. Pr. CIT, failure of AO to conduct enquiries and investigations in respect of ₹ 96,46,987/- rendered the assessment order erroneous as well as prejudicial to the interest of revenue. We note that the assessee has pointed out to the Ld. Pr. CIT that his assertion that AO has not conducted enquiry in respect of sundry creditors is misplaced and not borne out of records. During the revisional proceedings the assessee had asserted the following facts to assert that AO in fact had conducted investigation in respect of sundry creditors: i) The assessee had complied with notices issued by AO u/s. 142(1) and 143(2) of the Act; ii) In course of proceedings (assessment) books of account had been produced by the assessee; iii) Complete list of sundry creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 7. Kindly file complete party-wise details of all sundry debtors and creditors mentioning complete postal addresses and PAN of the parties involved. 11. We note that the Ld. Pr. CIT has called for entire assessment record which fact the Ld. Pr. CIT acknowledges at page 7 of his order that after the assessment order was passed, the assessment record of the assessee was picked up for examination. Thereafter, the Ld. Pr. CIT himself records in the impugned order the rebuttal of the assessee that i) The assessee had complied with notices issued by AO u/s. 142(1) and 14392) of the Act; ii) In course of proceedings (assessment) books of account had been produced by the assessee; iii) Complete list of sundry creditors involving amount of ₹ 2,11,05,222/- had been recorded by the AO and had been examined by making enquiries u/s. 133(6) of the Act on test check basis and that this fact is evident from the assessment order and the records; 12. The aforesaid assertion of the assessee has been recorded by the Ld. Pr. CIT in the impugned order. However, he has not recorded any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the AO has made enquiries regarding the issue for which the revision has been made by the Ld. CIT, the assessment order cannot be termed as erroneous (since enquiry has been done by AO) unless it is not in accordance with the law. It was further held that the Ld. CIT has not made any enquiry himself on that issue on which the AO has already enquired during assessment proceedings, which exercise is necessary for him to establish and show the error or mistake made by the AO. So, when the AO discharges his duty as that of the investigator on an issue and make enquiries and thereafter as an adjudicator accepts the claim of the assessee, then the Ld. CIT cannot hold the action of AO as erroneous, unless he himself enquires and records a finding that AO s satisfaction/finding is unsustainable in law and such finding of Ld. CIT must be clear, unambiguous and not debatable. We note that in the present case in hand, the AO had issued notice u/s. 142(1) dated 12.11.2015 wherein he has called for complete party-wise details of all purchases and sales above ₹ 1 lac and the complete postal address and PAN of the parties involved as well as complete party-wise details involving sund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the details which assessee furnished and AO has enquired on a test check basis the veracity of sundry creditor. So, if Ld. Pr. CIT was not satisfied with the enquiry conducted by the AO, then it was duty bound upon him to have enquired himself about the veracity of the sundry creditors when the entire list as well as the complete address as well as the PAN of the sundry creditors were before him. Moreover, it was brought to our notice that the ld. Pr. CIT has never confronted the assessee during the revisional proceedings to produce any proof regarding sundry creditors to the tune of ₹ 96,46,987/-. At the cost of repetition we note that since the assessee had complied with the queries on the issue and filed details of sundry creditors and the AO has made enquiries in respect of the sundry creditors then in such a scenario, the ld Pr CIT in order to find that there is any fault/deficiency in the enquiry conducted by the AO while framing assessment order, then it was incumbent upon the Ld. Pr. CIT to have conducted an enquiry by himself on the issue and record his finding of fact that could show that AO order is un-sustainable in law, which he did not do. So, the AO s act ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
