9911796707
TMI Blog2022 (8) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... d out on the premises of the assessee under section 132 of the Income Tax Act on 08.01.2015. In order to give logical end to the search proceedings under section 132, a notice under section 153A dated 29.06.2015 was issued and served upon the assessee. In response to this notice, return was filed on 27.07.2012 and copy of the return has been placed on page no. 2 of the paper book. Thereafter notice under section 143(2) was issued and served upon the assessee. The ld. Assessing Officer has passed the assessment order under section 153A read with section 143(3) on 28.12.2016, copy of the assessment order is placed on page no. 21 of the paper book. This assessment order was reopened by recording the reasons and the copy of the reason is available on page no. 35 of the paper book, which reads as under:- "Government of India Office of the Assistant Commissioner of Income Tax, Central Circle-1, 6 Floor, C.R.(Annexe) Building, B.C., Patel Path, Patna F. No. ACIT/CC-l/Pat/Notice u.s. 147/2019-20/ Dated : 10.05.2019 To Smt. Pushpa Singh, r - W/o Shri Binay Kumar Singh, Panchwati, Nepali Kothi, Boring Road, Patna. PAN-ANLPS6672A Sir, Sub:- Issue of reason recorded for reo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied copy of reasons recorded may be issued along with the copy of satisfaction. A letter was issued to the assessee along with reason recorded for reopening u/s 148 of the Income Tax Act, 1961 for A.Y. 2012-13 with copy of the satisfaction on 10/05/2019. Notice u/s 143(2) of the Income-tax Act, 1961 was issued on 10/05/2019 requesting for compliance on 04/06/2019. The assessee raised an objection vide their letter dated 10/06/2019 claiming that they have no transaction with the above mentioned parties. During the course of hearing, the Authorised representative (A/R) of the assessee Shri Subodh Kumar Goel F.C.A appeared and produce books of account, bank statement in original. The same was verified and no transaction with M/s Chitraksh Vintrade Pvt. Ltd., Sukalyan Infratowers Pvt. Ltd. and Peacock Vintrade Pvt. Ltd. was found. Documents produced by the A/R of the assessee during assessment proceedings, reply and other documents filed by the A/R of the assessee were perused and examined. Hence, assessed u/s 143(3)/147 of the Income-tax Act, 1961 on the total income of Rs.2,36,130/- (as per earlier order passed on 28/12/2016). Charge interest as per provision of chapter-XVII of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which involved accommodation entries by different entry operators through shell/paper companies like Chitraksh Vintrade Pvt. Ltd., Sukalyan Infratowers Pvt. Ltd., Peacock Vintrade Pvt. Ltd. etc. Subsequently, the case of Puspa Singh (PAN- ANLPS6672A) for the A.Y. 2012-13 was submitted to the Pr. CIT(Central), Patna for obtaining approval for issuance notice u/s 148 of the Income Tax Act, 1961. After obtaining approval of the Pr. CIT(Central), Patna, Notice u/s 148 of the Income Tax Act, 1961 was issued to the assessee. During the re-assessment proceedings, reason for re-opening of assessment was sought and communicated to the assessee. Thereafter, the assessee e-filed return of income u/s 148 on 23.04.2019 showing return of income of Rs. 2,36,130/-. Earlier the assessee had e-filed return of income u/s 139(1) on 27.07.2012 showing return of income of Rs. 2,36,130/-. During the assessment proceedings, the assessee raised an objection and claimedthat they do not find any credit entry in their bank account in the name of M/s DLS Exports Pvt. Ltd. and related parties like ChitrakshVintrade Pvt. Ltd., Sukalyanlnfratowers Pvt. Ltd., Peacock Vintrade Pvt. Ltd. for Rs. 67,60,941/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ChitrakshVintrade Pvt. Ltd., Sukalyan lnfratowers Pvt. Ltd., Peacock Vintrade Pvt. Ltd. (b) The working of Long Term Capital Gain amounting to Rs. 67,50,080/- showing purchase, sale of scrips and related financial transactions. This is also to show-cause as to why the action u/s 263 of I.T. Act should not be initiated in your case for enhancement or modification of the assessment, or cancellation of the assessment, and direction to the Assessing Officer for a fresh assessment in your case for the assessment year 2012-13. You may alternatively file your written submission through speed post or email, by the date mentioned above, which will be treated as compliance to the show cause. It may please be noted that your non-compliance in any manner shall lead the undersigned to decide your case on merit with regard to the proposed action u/s 263 of the Income Tax Act, 1961 without any further reference to you. Sd/- SANJEEV SHARMA , PCIT (Central), Patna" The ld. Principal CIT thereafter conducted an enquiry and passed the impugned order whereby he has set aside the re-assessment order dated 26.12.2019 and directed the ld. Assessing Officer to pass a fresh assessment order consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ausing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. [Explanation.- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income Tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) "record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. He may set aside the order and direct the Assessing Officer to pass a fresh order. At this stage, before considering the multi-fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the CIT taken u/s 263. The ITAT in the case of Mrs. Khatiza S. Oomerbhoy Vs. ITO, Mumbai, 101 TTJ 1095, analyzed in detail various authoritative pronouncements including the decision of Hon'ble Supreme Court in the case of Malabar Industries 243 ITR 83 and has propounded the following broader principle to judge the action of CIT taken under section 263. (i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the Commissioner of Income-tax under section 263 of the Income-tax Act. As noted above, the submission of learned counsel for the revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iciary of credit entry amounting to Rs.67,60,941/- from M/s. DLS Export Pvt. Limited and related parties like Chitraksh Vintrade Pvt. Limited, Sukalyan Infratowers Pvt. Limited, Peacock Vintrade Pvt. Limited. In response to the notice for reopening of assessment issued under section 148, the assessee has contended that she did not receive any amount from these concerns during the financial year 2011-12 and the assessee annexed the copy of the Bank statement. Ld. Assessing Officer has gone through the record and thereafter accepted the stand of the assessee. He did not make any addition to the income of the assessee and accepted the assessed income as per earlier assessment order dated 28.12.2016. 12. Ld. Principal CIT sought to find an error in the reassessment order for the purpose of exercising the power under section 263. In his opinion, the ld. Assessing Officer should have examined the issue taken up in 263 proceedings, i.e. whether the assessee's claim of long-term capital gain amounting to Rs.65,50,080/- is admissible to her or not. It is pertinent to observe that ld. counsel for the assessee at the time of hearing on the strength of the following decisions- (i) CIT -vs.- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) bad and doubtful debts; (iii) excess depreciation on gas cylinders and goods containers. 16. Ld. Commissioner thereafter sought to revise the assessment order. The stand of the assessee was that this action under section 263 is timebarred because the action sought to be taken is from the time limit of the re-assessment order. The revisionary order under section 263 of the Act was passed on 29.03.2004. This was passed on an issue of lease equalisation fund. The stand of the assessee was that this issue attained finality in the original assessment order, which attained finality upto 30.03.1998 and any action under section 263 on 29.03.2004 is barred by limitation. In this factual background, Hon'ble Supreme Court has examined this issue and the observations made in paragraphs no. 7, 10 and 15 of the judgment are worth to note, which read as under:- "7. A bare perusal of the order passed by the Commissioner of income Tax would clearly demonstrate that only that part of order of assessment which related to lease equalisation fund was found to be prejudicial to the interest of the Revenue. The proceedings for reassessment have nothing to do with the said head of income. Doctr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession "and also" implied in section 147 to mean that any other income could be added if addition is being made on the item for which assessment was reopened. Therefore, an error under section 263 could be pointed out in the reassessment order on the issue on which it was reopened. If ld. Commissioner was of the view that once the assessment order was reopened then ld. Assessing Officer was required, not only to examine the item for which it was reopened, but any item which exhibits escapement of income and since ld. Assessing Officer failed to examine the other item which in the opinion of ld. Commissioner as escaped income and, therefore, he termed the reassessment order as erroneous is patently contrary to the decision of the Hon'ble three High Courts. Thus the reassessment order cannot be termed erroneous for not examination of other issues than the one it was reopened. As far as original assessment order is concerned, i.e. the order dated 28.12.2016 passed under section 153A/143(3), the action under section 263 is time barred in view of the Hon'ble Supreme Court decision in the case of CIT - vs.- Alagendra Finance Limited reported in 293 ITR page 1. 19. In view of the above, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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