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TMI Blog2023 (5) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... eal, being invalid for wrongful assumption of jurisdiction u/s.147/148, could not be set-aside by ld. PCIT u/s.263, unless its validity u/s.147/148 was first upheld. 3. That when the assessee's first appeal, disputing the reopening u/s. 147 as also the additions made in order dt.27.12.2018, having close bearing on purchases doubted by PCIT, was pending, the jurisdiction u/s.263 could not be invoked in law. 4. That when all the relevant details and documents were filed in reassessment, and examined by the ld. lTO qua the issues as per 'reasons recorded', the ld. PCIT erred in assuming the purchases of 18 parties as bogus, to hold the order as erroneous and prejudicial u/s.263. 5. That the order under appeal is wholly against law and facts of the case." 2. The ld. Counsel for the assessee (in short AR) argued and submitted a written submission which is kept on record. First, the ld. AR invited our attention in the assessment order, on dated 27.12.2018 u/s 143(3)/147 of the Act. The relevant paragraph of the assessment order is extracted as below: "In view of above position, the purchases are remained unverifiable amounting to Rs. 1,87,26,637/- as mentioned by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the humble assessee, while seeking not to give recourse to any such action, has to advance his case as follows: i) It is admittedly true that M/s Guru Teg Bahadur Rice Mill did not figure in the list of 18 parties, with alleged cancelled TINs. Therefore, the reduction of purchases of the said party, from the amount of purchases made in r/o 18 parties, was not called for. To this extent, the observation made in the SCN is not objected to. But, this act on the part of AO, would not by itself, justify the other view taken that the whole of the purchases made from said 18 parties, being bogus and unverifiable, was required to be added as against the addition of Rs.9,24,491/- made on account of 5% VAT disallowed. ii) Firstly, for reopening of this case, when it had already been assessed u/s.143(3), in which the trading results were verified and accepted after inviting all relevant details of purchases/sales/expenses, the reasons as recorded by the ld.ITO u/s.148, were silent as to the source of information received by him, in respect of the bogus purchases, which, now as per the SCN, is stated to be the report of Investigation Wing. There was no reference made to any information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder with loose ends. His act of reducing the purchases of M/s Guru Teg Bahadur Rice Mill from the impugned purchases, when this party did not even figure in the list of such parties, is ample testimony of his inept working. That each time, the axe is to fall on assessee for the lapses of the incumbent AO, is indeed coercive, more particularly when a good case is made a no case, making room for assessee to suffer the aftermaths repeatedly. v) Nonetheless, it is vehemently denied that the purchases made from the said 18 parties were bogus or for that matter, the VAT paid was faulty. To say the least, the actual purchases made from these parties, rather far exceeded the amount sought to be disallowed, as discerns well from the list now drawn, placed below at Page 14, which bears the value of purchases made as per list at Rs.1,97,93,175/- and as per books of assessee at Rs.3,43,66,084/23. In fact the list received from Inv.Wing, casually made, without stating as to how and wherefrom the figures were drawn, is prima facie not reliable. If it has originated from Sales Tax authorities, then the amount indicated seems to have been adopted from one or the other quarterly returns, filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing results, which are progressive, were disputed, it is well neigh impossible to infer, that the purchases of a huge value of Rs.1.97 crores (actual figure is over Rs.3.43 crores) were bogus. Rather it reflects of the satisfaction of the AO that the purchases as such were not bogus. viii) One more point, important and relevant to part with, is that the assessee in that year, had a fleet of about 25 trucks of his own, besides a tractor trolley, (as evident from the schedule of fixed assets enclosed at Page 82), deployed to lift the stocks of rice husk from various suppliers and deliver the same directly at the premises of respective buyers. This was necessitated as it was not viable to first take delivery of rice husk, a light weight heavy volume by- product obtained from shelling of paddy, at assessee's premises and then to reload and deliver it at the premises of buyers, by incurring heavy labour for its rehandling, besides arranging huge space for storage. For this reason, while outside transport bills were not available, but expenses on fuel and drivers salary etc, were invariably debited in books. ix) In addition to above, the genuineness of the purchases made from 18 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... besides showing all payments of cheques/RTGS. i) Arora Rice Mills, Rayya (S No.16 of list) Their copy of a/c as per our ledger is at page 61 and their parallel a/c is at page 62. Also enclosed is copy of Form No.23, at page 63-64 which shows assessee as their purchaser. j) Malhotra Rice & General Mills, Rayya (S No.18 of list) Their copy of a/c as per our ledger is at pg.66 with their confirming a/c at page 67 showing mode of payment being thru bank. x) Besides the above documents, copies of a few purchase bills received from parties amongst the list of 18, are also enclosed at Page 89-104 which bear the relevant details of goods supplied, value thereof and their TINs . These bills also bear the Truck details, which belong to assessee and prove the point that assessee deployed own trucks to lift the material. xi) To establish the factum of purchases & sales actually made, as declared in audited trading account, also enclosed at page 105-108 is the extract of VAT return in FORM No.24, declaring total purchases of Rs.15,03,48,519/-inclusive of 18 parties in question, and VAT return in FORM No.23 at Page 83-88 declaring total sales at Rs.19,88,61397/-. These two VAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e thought that the best course in the circumstances was to remand the matter to the Income-tax Officer for consideration of the points raised in the assessee's written statement. That certainly was not the proper course to be adopted by him. It was necessary for the Commissioner to state in what manner he considered that the order of the Income-tax Officer was erroneous and prejudicial to the interests of the revenue and what the basis was for such a conclusion. After indicating his reasons for such a conclusion, it would certainly have been open to him to remand the matter to the Income-tax Officer for such other investigation or enquiry as might be necessary. But that was not the course which the Commissioner pursued. The Tribunal was, therefore, justified in setting aside the order of the Income-tax Commissioner. The learned counsel for the revenue urged that, while setting aside the order of the Commissioner, the Tribunal had purported to restore the order passed by the Income-tax Officer and this meant that the Commissioner was precluded from taking up the matter again. We do not want to express any opinion on this question, since our jurisdiction is confined only to answe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The approval was granted by the ld. PCIT during issuance of notice u/s 148. During the proceeding under section 263 the assessee submitted relevant documents in relation to show cause notice issued by the ld. PCIT. The ld. PCIT after receiving the submission from assessee just subsided the entire documents to the lower authority for further verification. Without proper verification of documents of the assessee, only to remand the matter to the ld. AO 'for verification' which is vitiated the order u/s 263. In the assessment order, the issue of purchase is dealt by the ld AO&is reflected in order of assessment. We respectfully consider the orders which are relied by the revenue are factually not similar with the assessee's case. We fully relied on the order of Hon'ble Jurisdictional High Court in the case of R.K. Metal Works (supra). In our considered view when the assessee filed a detailed written submission before him, the ld. PCIT did not deal with any of the points raised in the submission. Without verification of the documents only to remand the matter to the ld. AO for consideration of the points raised in the assessee's written statement. In our considered view the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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