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TMI Blog2022 (11) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... tetrials before us on the basis of which we reasonable believe that the observations of the Ld. PCIT that the AO has not examined the issues and no notices u/s 133(6) were issued to the lenders is wrong and against the facts on record. We also note that the PCIT has failed to demonstrate as to how the assessment order was erroneous and prejudicial to the interest of the revenue as no relevant findings has not recorded by the PCIT showing that the assessment framed is erroneous as well as prejudicial to the interest of the revenue. As decided in M/s Bengal United Credit Belani Housing Ltd [ 2022 (4) TMI 1465 - CALCUTTA HIGH COURT] and J.K. Tyre Industries Ltd [ 2022 (11) TMI 486 - CALCUTTA HIGH COURT] PCIT has to record reasons justifying th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment proceedings. 4. Facts in brief are that the case of the assessee was selected for scrutiny under CASS for limited scrutiny on three issues as under: i) Large Agricultural Income ii) Unsecured loan from persons who have not filed their Return of Income (Form 3CD) iii) Mismatch in amount paid to related persons u/s 40A(2)(b) reported in Audit Report & ITR. Final assessment was framed by the AO accepting the contentions of the assessee on all the three issues and consequently no addition was made. The Ld. PCIT upon perusal of the assessment record came to the conclusion that the AO has failed to carry out any enquiry in respect of first two issues as stated above and after taking into account the reply of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled at page no. 3 of PB wherein he has specifically called for the details from the assesseeparticularly in para no. 12,13 and 14. The assessee submitted all these details and the assessee the reply to the said notice on 14.09.2017 is filed at page 8 to 23 of the PB dated 22.02.2017 submitting the detailed reply on all the issues and AO only after taking into account the submissions of the assessee accepted the contentions of the assessee on all these issues. The Ld. A.R submitted that on the issue no. 1 which relates to large income ,the assessee's contention was accepted by the AO after taking into account the explanation of the assessee. Similarly on the increase in the amounts of unsecured loans from various parties, which was the seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Bengal United Credit Belani Housing Ltd. in ITAT/188/2018 (IA No.: GA/1/2018 (Old No. GA/1412/2018) ITAT/188/2018 (IA No.: GA/1/2018 (Old No. GA/1414/2018) dated 6.4.2022 and in the case of PCIT-1, Kolkata vs. J.K. Tyre & Industries Ltd. in ITAT/62/2022 (IA No. GA/1/2022) dated 14.09.2022. The Ld. A.R. finally submitted that in view of the aforesaid facts and the judicial pronouncements the appeal of the assessee may kindly be allowed. 6. The Ld. D.R on the other hand relied heavily on the order of Ld. PCIT. 7. We have heard the rival submissions and after perusing the material on record, we note that the ld. PCIT invoked the jurisdiction u/s 263 by issuing show cause notice u/s 263 of the Act dated 06.03.2020 in respect of two issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue is squarely covered by the said decisions of Hon'ble Jurisdictional High Court cited supra. The Hon'ble High Court in both the above decisions has held that the Ld. PCIT has to record reasons justifying the invoking of jurisdiction u/s 263 of the Act as to how the assessment order is erroneous and prejudicial to the interest of the revenue. In absence of which the assumption of jurisdiction u/s 263 is not sustainable under the Act. We therefore respectfully following the said decisions of Hon'ble Jurisdictional High Court set aside the order passed u/s 263 of the Act by ld. PCIT on the ground of invalid jurisdiction. 8. In the result, the appeal of the assessee is allowed. Order is pronounced in the open court on 9th November, 202 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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