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TMI Blog2023 (9) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee are as under:- "1. The order u/s. 263 of the Act is bad in law. 2. The learned Pr. CIT has erred in law as well as on facts in not considering the submissions of the appellant on the strength of which the assessment order was neither erroneous nor prejudicial to the interest of revenue and therefore, the provisions of Section 263 of the Act were not applicable to the case of the appellant. 3. The learned Pr. CIT has erred in law as well as on facts in setting aside the assessment order passed by the ld. A.O. u/s. 147 r.w.s. 144 of the Act and directing de-novo assessment regarding the verification of issue of treating the alleged unexplained sundry creditors of Rs. 3,49,306/- as cash credits u/s. 68 of the Act and ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses. The above disallowances/additions were required to be made under section 68 being unexplained sundry creditors and 69C being unexplained/bogus expenditure respectively. Therefore, the provisions of section 115BBE on the above addition/disallowance were applicable with the effective tax @ 77.25% (Income Tax @ 60% plus Surcharge @ 25% plus Cess @ 3%). However, the AO had calculated the same at normal tax rate i.e. (Income Tax @ 30% plus Surcharge @ 15% plus Cess @ 3%). The AO has not verified this issue and properly not applied the correct provisions of law while finalizing the assessment u/s 144 r.w.s. 147 of the I. T. Act on 10-12-2019. This has rendered the order erroneous as well as prejudicial to the interest of the revenue." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer could not have been made u/s. 68 or section 69C of the Act respectively as contended before the Ld. PCIT and therefore the provisions of section 115BBE of the Act were not attracted. (ii) Even otherwise, the case of the ld. PCIT was only with respect to the aspect of tax being levied on the additions/disallowances made, which ought to have been as per the rates prescribed under section 115BBE of the Act. That this aspect therefore is limited only to the computation of income and computation of income not being part of the order passed by the Assessing Officer, there could not be said to be any error in the order of Assessing Officer for non-invocation of section 115BBE of the Act to the additions/disallowances made. (iii) That th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon and copy of the order was placed before us. 7.3 We have considered the contention made by the Ld. Counsel for the assessee. However we do not find any merit in the same.Hon'ble apex court in the case of CIT vs. Amritlal Bogilal 34 ITR 130 (SC), the Hon'ble Supreme Court has categorically held that it would be open to the Commissioner to revise an assessment order while an appeal against it is till pending before the CIT(A).In the facts of the said case, rendered in the backdrop of the Income Tax Act of 1922, the assessee had been granted registration as a firm u/s 26A of the 1922 Act by the AO and thereafter assessment was framed making additions to its income. The assessee challenged the additions before the first appellate author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a point u/s 263 of the Act which was directly in appeal before the first appellate authority, the Hon'ble Court referred to its earlier decision in Amritlal Bhogilal (supra) and answered in the affirmative. 7.5 The law therefore is settled in this regard and therefore the contention of the ld. counsel for the assessee that pending appeal before the Ld. CIT(A) revisionary powers u/s 263 of the Act cannot be exercised, is dismissed. 8. Now taking up the aspect of the additions/disallowances in the present case not being eligible u/s. 68/69C of the Act and therefore not liable to tax at the rate prescribed u/s 115BBE of the Act, taking up first the addition of unexplained sundry creditors made by the AO, a perusal of the order of the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sheet of computation of tax has been held by the Hon'ble apex court in the case of Kalyan Kumar Ray vs CIT 191 ITR 634(SC) as being part of the assessment order in terms of section 143(3) of the Act. Any error in the same, we hold, would undoubtedly constitute an error in the assessment order. 8.3 In view of the same, we confirm the order of the Ld. PCIT holding the non-invocation of section 115BBE of the Act on the addition made on account of unexplained sundry creditors u/s. 68 of the Act as an error in the order of the Assessing Officer causing prejudice to the Revenue. 8.4 As for the disallowance of bogus expenses made, we are in agreement with the ld. counsel for the assessee that bogus expenditure could have been disallowed only u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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