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TMI Blog2023 (11) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... along with work in progress - From the above judgment of Amitabh Bachchan [ 2016 (5) TMI 493 - SUPREME COURT] it is vivid that what is contemplated by Section 263, is an opportunity of hearing to be afforded to the assessee. Failure to give such an opportunity would render the revisional order legally fragile not on the ground of lack of jurisdiction but on the ground of violation of principles of natural justice. We note that to examine the new issue, namely, the additions to the fixed assets, the ld PCIT has issued notice to the assessee, u/s 263 - In compliance to the said notice, the assessee has replied, however, PCIT did not consider the reply of the assessee at all, and ignored the reply of the assessee. Therefore, without giving an opportunity of hearing to the assessee, ( in respect of said new issue) the CIT has passed the order, hence order passed by the ld PCIT is not in accordance with the mandatory provisions of section 263 of the Act, therefore we quash the order of ld PCIT. Appeal filed by the Assessee is allowed. - Shri Pawan Singh, JM And Dr. A. L. Saini, AM For the Appellant : Shri Sujesh C. Suratwala, CA For the Respondent : Shri S. M. Keshka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 5. On the facts and in the circumstances of the case as well as law on the subject, the learned Pr.CIT, Valsad has erred in passing the order u/s 263 on the issue of Huge difference between the addition to stock in Annual Report viz-a-viz Return of Income filed by assessee company without providing opportunity of being heard and without observing principle of natural justice which is illegal and required to be deleted. 6. The above Grounds of Appeal are without prejudice to and are independent of each other. 7. The Appellant craved leave to add, alter, delete, amend or rescind any of the above grounds of appeal as and when necessary with the permission of Honorable ITAT, Surat. 3. The facts of the case which can be stated quite shortly are as follows: The assessee before us is a Private Limited Company and filed revised return of income on dated 23/01/2019. Subsequently, the assessee`s return of income was selected for scrutiny and assessment was completed under section 143(3) read with section 143(3A) and 143(3B) of the Income Tax Act, on 12/01/2021 without any additions. 4. Later on, Learned Principal Commissioner of Income Tax (in brief ld PCIT ) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has not even gone through the financials of the assessee-company in a proper manner. In the annual report filed by the assessee company, additions to the assets during the financial year amounting Rs. 1,51,82,414/- have been shown along with work in progress valuing Rs. 17,58,838/-, however in the ITR additions to the fixed assets have been shown at Rs. 23,67,914/-. This discrepancy has neither been explained by the assessee nor asked for by the Assessing Officer through it has a direct bearing on the profit and loss account of the assessee- company and final income and which was the basis for selection of the case for scrutiny. Therefore, ld PCIT was of the view that Assessing Officer has passed the assessment order without making inquiries or verification on this issue which ought to have been made in this case. During on-going proceedings, no clarification regarding the issue was made and therefore, ld PCIT held that the assessment order u/s 143(3) of the I.T. Act, 1961 in the case of M/s Hi-Shine Inks Private Limited for AY. 2018-19 passed on 12.01.2021 by the Assessing Officer is erroneous in so far it is prejudicial to the interest of revenue. Therefore, ld PCIT direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue, Provision for bad debts/ Bad-debts, we note that during the assessment proceedings, the Assessing Officer has issued notice to the assessee and in response to notice of AO, the assessee submitted reply, hence assessing officer has examined the issue raised by the ld. PCIT. Apart from this, we note that as per CBDT Circular No.12 of 2016, dated 30.05.2016, the deduction on account of bad debts are allowable to the assessee, the contents of the Circular is reproduced below: 14. From the above circular, it is vivid that Hon`ble Supreme Court in the case of TRF Ltd in CA Nos. 5292 to 5294 of 2003, vide judgement dated 9th February 2010, has stated that the position of law is well settled After 1 April 1989, for allowing deduction for the amount of any bad debt or part thereof under section 36(1)(vii) of the Act, it is not necessary for assessee to establish that the debt in fact has become irrecoverable, it is enough if bad debt is written off as irrecoverable in the books of accounts of assessee . Therefore, we note that assessing officer has taken a possible view to allow this claim, therefore order passed by the assessing officer is neither erroneous nor prejudicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which includes Section 263 that confer suo motu power of revision in the learned C.I.T. The different shades of power conferred on different authorities under the Act has to be exercised within the areas specifically delineated by the Act and the exercise of power under one provision cannot trench upon the powers available under another provision of the Act. In this regard, it must be specifically noticed that against an order of assessment, so far as the Revenue is concerned, the power conferred under the Act is to reopen the concluded assessment under Section 147 and/or to revise the assessment order under Section 263 of the Act. The scope of the power/jurisdiction under the different provisions of the Act would naturally be different. The power and jurisdiction of the Revenue to deal with a concluded assessment, therefore, must be understood in the context of the provisions of the relevant Sections noticed above. While doing so it must also be borne in mind that the legislature had not vested in the Revenue any specific power to question an order of assessment by means of an appeal. 10. Reverting to the specific provisions of Section 263 of the Act what has to be seen is t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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