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TMI Blog2022 (11) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee. AO has not given any basis or reasoning for assessing the net profits of the assessee @5% of the gross receipts on pure estimation basis. There was absolutely no effort to collect information or data by the Assessing Officer for estimating the net profits/income of the assessee. No enquiry was made by the AO in this respect. PCIT, however, observed that the data was available to show that in the earlier years, the assessee has returned net profit @15% and 18% in assessment year 2015-16 and assessment year 2016-17 respectively. The ld. PCIT also considered that even in the case of no accounts and presumptive income on ad hoc basis, the minimum net profit should have been determined @8% on gross receipts u/s 44AD of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountant Member Shri U. Dasgupta , Advocate , appeared on behalf of the appellant. Shri D. K. Sonawa l, CIT - DR , appeared on behalf of the Respondent ORDER Per Sanjay Garg, Judicial Member : The present appeal has been preferred by the assessee against the order dated 26.03.2022 of the Principal Commissioner of Income Tax (hereinafter referred to as the PCIT ) passed u/s 263 of the Income Tax Act (hereinafter referred to as the Act ) exercising his revision jurisdiction. 2. The present appeal is time-barred by 5 days, a separate application for condonation of delay has been filed by the appellant. Considering the said application, the aforesaid delay in filing the present appeal is hereby condoned. 3. The b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee failed to comply the said notice also and failed to furnish further required information. Thereafter, the Assessing Officer proceeded to frame the assessment on the basis of material available to him. The Assessing Officer collected the details of bank account, cash deposits etc. from the banker of the assessee and after perusal of the said details, the Assessing Officer treated the total amount of Rs.2,46,31,471/- as assessee s gross receipts and estimated net profit @5% of the gross receipt at Rs.12,31,574/- and added the said amount into the income of the assessee as unexplained u/s 69 of the Act. Thereafter, the ld. PCIT exercising his revision jurisdiction u/s 263 of the Act on examination of assessment records observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assumption of jurisdiction u/s 263 of the Act 61, by the Ld. PCIT, is legally not valid because the assessment order is neither erroneous nor prejudicial to the interest of the revenue, and the 263 order may please be quashed. 3) For that the assumption of jurisdiction u/s 263 of the Act 61, on the issue of estimation of profits, is legally invalid, for the same issue is in challenge before first appellate authority, pending hearing. 4) For that on the facts of the case, the Ld. PCIT, is legally not justified , in substituting his opinion in place of the AO, more so, when the AO has adopted a possible view accepted by law, and the substitution of the same by the opinion of the Ld. PCIT, is bad in law, and the order may plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and correct income of the assessee. Further, we find that the Assessing Officer estimated the net profit @5% on gross receipts without any basis and without consulting any records either of the assessee s income in the earlier years or income returned by the other persons having same type of business as that of assessee. The Assessing Officer has not given any basis or reasoning for assessing the net profits of the assessee @5% of the gross receipts on pure estimation basis. There was absolutely no effort to collect information or data by the Assessing Officer for estimating the net profits/income of the assessee. No enquiry was made by the Assessing Officer in this respect. 8. The ld. PCIT, however, observed that the data was availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has not furnished any details, information/account before the Assessing Officer. The assessee, therefore, cannot be allowed to take benefit of his own wrong. The ld. PCIT, in this case, has rightly exercised his revision jurisdiction as per Explanation 2 to section 263(1) which reads as under: Explanation 2 for the purpose of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interest of the revenue, if, in the opinion of the Chief Commissioner or Principal Commissioner or Commissioner , - a) The order is passed without making enquiries or verification which should have been made 10. Since it was a case of no en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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