9911796707
TMI Blog2022 (10) TMI 1211X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous by simply observing that the assessment order is erroneous is not justifiable action. It has to be demonstrated as how it is erroneous, which has caused a prejudice to the revenue CIT totally failed in this area. No hesitation to quash the impugned order. We allow the appeal of the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... mmon sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so." 7. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N.Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: "Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition laid down in other decisions. It is suffice to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice oriented approach. 9. In the light of above, if we examine the facts of the present case, then it would reveal that basically the appeal has been filed after 374 days of the ld. CIT's order but almost one year is attributable to COVID period, i.e. 09.03.2021 upto March, 2022. This appeal has been presented before the Tribunal on 24.06.2022. If credit of number of days allowed by the Hon'ble Supreme Court in its order dated September 23, 2021 in Miscellaneous Application No. 665 of 2021 in SMW(C) No. 3 of 2020 regarding cognizance for extension of limitation, then there is no substantial delay at the part of the assessee. Moreover, making the appeal time-barred has not been used by the assessee as a tactics to avoid the litigation with the Revenue because such strategy would not give any benefit to the assessee in this type of litigation. Therefore, we condone the delay and proceed to decide the appeal on merit. 10. The griev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zation period. There was no evidence on record wherefrom it can be presumed that the A.O. had verified the issue properly. In fact it appears that the A.O. had passed the order in a very hepaticand sloppy manner. The assessee's submission in course of assessment was also flimsy. The case would have been barred by limitation on 31.12.2019. As such the A.O. should have been more investigative on the source of abnormal case deposit by the assessee firm during the demonetization period. It emerges from the assessment order that the AO while passing the order had rejected the books of accounts by virtue of section 145(3) of IT Act. Actually, invocation of section 145(3) lies when the A.O. was not satisfied about the correctness or completeness of the account of the assessee. And it was not possible for him to categorize various types of defects which may justify rejection of books of accounts of an assessee on the ground that the account are not complete or correct. Each case had to be considered on its own peculiar facts, having relates to the nature of business. In the assessment order the A.O had doubted on the actual purchase price of paddy in the absence of proper documentar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 263 (1) is attracted in this case. Thereby the order passed by the A.O in the instant case is erroneous so far as prejudicial to the interest of revenue. (6) Hon'ble Delhi High Court in the case of GEE VEE Enterprise vs. Addl.CIT reported in 99 ITR 375, 386 (Del) has held that the CIT may consider the order of the Assessing Officer to be erroneous not only if it contain some apparent error of reasoning or of law or of fact on the for in the circumstances of the case and it is an order which simply accepted what the assessee has stated in his return of income on the said issue. It is not necessary for the CIT to make further enquiries before cancelling the assessment order. The Commissioner can regard the order erroneous on the ground that the Assessing Officer should have made further enquiries. (7) Hon'ble Karnataka High Court in the case of Thalibai F. Jain vs. ITO 101 ITR 1, 6 (Karn) has held that where no enquiries made by the Assessing Officer on the relevant issue, assessment must be held to be prejudicial to the interests of the revenue and what is prejudicial to the interest of the revenue must be held to be erroneous though the converse may not always be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en made and not because there is anything wrong with the crrder if all the facts stated therein are assumed to be correct." 10. Further to this it is noticed that there is no appeal right available to the Revenue from the order of assessment passed by Assessing Officer and i.e. why revisionary powers have been given to the Commissioner and such power were held to be of wide amplitude by the Hon'ble Supreme Court in the case of CIT v. Shree Manjunathesware Packing Products & Camphor Works [1998] 231 ITR 53/96 Taxman 1. Therefore, normally when Assessing Officer has not made any enquiry on a particular issue, then such order in view of the above detailed discussion has to be construed as erroneous and prejudicial to the interest of Revenue and therefore, the impugned assessment order is erroneous and prejudicial to the interest of Revenue as Assessing Officer has failed to make any enquiry. 11. Having regard to the facts and circumstances of the case and in the light of the aforesaid decisions of Hon'ble Supreme Court and Hon'ble High Court, and in accordance with the amendment made in Section-263 of the Act with effect from 01.06.2015, I hold that the impugned assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ld. CIT. 17. We have heard the ld. Representatives and with their assistance gone through the record carefully. Before we embark upon an enquiry on the facts and issues agitated before us to find out whether the action u/s 263 of the Act, deserves to be taken against the assessee or not, it is pertinent to take note of this section. It reads as under:- "263(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll judge an order passed by an Assessing Officer on culmination of any proceedings or during the pendency of those proceedings. On an analysis of the record and of the order passed by the Assessing Officer, he formed an opinion that such an order is erroneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The learned Commissioner would issue a show cause notice pointing out the reasons for the formation of his belief that action u/s 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the AO cannot be held to be erroneous simply because in his order he does not make an elaborate discussion in that regard. 19. In the light of above, let us examine the facts of the present case. A perusal of paper book pages no. 1 to 9 would reveal that the assessee has submitted the complete details during the assessment proceedings. The ld. Assessing Officer has raised specific query about the cash deposit during demonetisation and assessee has explained it. The query raised by the ld. Assessing Officer as well as explanation of the assessee read as under:- "7. Cash deposit for demonetization period (9t h November to 30t h December) is reported as per STF reporting-whether the cash deposit has been made from disclosed sources. Please furnish the details of cash deposited during the FY 2016-17 in each of the bank account in following manners: (a) Please provide the bank statement along with the ledger copy for the period 01.04.2015 to 08.11.2015, 09.11.2015 to 31.12.2015 and 01.01.2016 to 31.03.2016 and give a short synopsis of the account in following format: A/c No. & Bank details (IFS Code) Cash deposit from 01.04.2015 to 08.11.2015 Cash deposit - 09.11.2015 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 50,000 25.10.2016 5,50,000 From CA(Suri) 01.12.2016 1.15,000 26.10.2016 4,00,000 From CA (Suri) 01.12.2016 2,000 27.10.2016 3,10,000 From CA(Suri) 05.12.2016 20,000 03.11.2016 50,000 From CA (Suri) Total 1,35,10,000 97,36,000 Rice mill crop year started from October. In that context we withdraw aforesaid amount by cash from our cash credit and current account for the payment of cultivators against paddy purchase. But on 08/11/2016 demonization was affected. So your goodself we are bound to deposit above withdrawal cash in our bank account. It is not related with any sale…….". As seen from the above, in course of the scrutiny assessment proceeding it was explained before the Ld.AO in details that the source of cash deposit aggregating to Rs.97,36,000/- during the demonetization period i.e. between 08/11/2016 and 30/12/2016, is out of cash withdrawal aggregating to Rs. 1,35,10,000/- during predemonetization period i.e. during the month of October, 2016, as detailed above.. It was further explained that in view of the fact the District Controller of Food and Supply starts purchasing of rice from the Mills from October, the assessee [being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the A.O in the instant case is erroneous so far as prejudicial to the interest of revenue". The allegation of the ld. Commissioner is that there was abnormal increase in cash deposit during demonetisation period as compared to average rate of cash deposit during other period. He further recorded that there is no evidence on record, where from it can be presumed that ld. Assessing Officer had verified the issue properly. This finding is factually incorrect. He himself did not analysis the details, which extracted by him in paragraph 4 of the impugned order. It suggests that there is no logical analysis of the record. The case of the assessee is that it has made sufficient withdrawals starting from 19.10.2016 out of its C.C. facility. The withdrawal before the demonetisation was declared was about Rs.1,35,00,000/-. If it was not used in purchases, then it has to be re-deposited. The abnormal circumstance of high deposit is the reason that such currency could not be retained at home, it has to be sent to the Bank during the given period of time. This fact has not been properly taken note by the ld. CIT while exercising the power under section 263 of the Income Tax Act. The ld. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
