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TMI Blog2023 (11) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and on which no final order has been passed by Ld. CIT(Appeals), they can be revised by recourse to proceedings under 263 of the Act. Whether Principal CIT erred in not invoking Explanation 2 of section 263(1) of the Act in the notice issued to the assessee and such Explanation was invoked only in the body of the order? - In the instant case, it is not the contention of the assessee that there was evident lack of opportunity having been provided to the assessee in the 263 proceedings. The assessee was given due opportunity of hearing and the reasons for initiating revisionary proceedings under 263 of the Act were made available to the assessee. The objections of the assessee were taken on record and after due consideration of the same, the Principal CIT passed order in accordance with law. Accordingly, in our considered view an order passed by Principal CIT under 263 of the Act cannot be set aside merely by taking recourse to decisions without analysing whether the facts in such decision are applicable to the assessee s in set of facts. Whether the issues on the basis of which proceedings u/s 263 have been initiated against assessee had already been examined by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, 1961 ('the Act') setting aside the assessment framed u/s 143(3) r.w.s 147 of the Act as erroneous and prejudicial to the interest of the revenue is without jurisdiction, bad in law and void ab-initio. 1.1 That on the facts and circumstances of the case and in law, the order passed u/s 263 of the Act by the Principal Commissioner of Income-tax (PCIT) Rajkot-1 is void ab-initio and without jurisdiction because the same issue as raised in assessment framed u/s 143(3) r.w.s 147 of the Act is pending with the CIT(Appeals). 2.0 That on the facts and circumstances of the case and in law, the Principal Commissioner of Income-tax (PCIT) Rajkot-1 erred in exercising jurisdiction u/s 263 by setting aside the issue of transactions of Rs. 2,82,08,000/- with M/s National Shroff even though the same had been discussed and scrutinized by the Assessing Officer in detail while framing the assessment u/s 143(3) r.w.s. 147 of the Act. 2.1 That on the facts and circumstances of the case and in law, the Principal Commissioner of Income-tax (PCIT) Rajkot-1 erred in setting aside the order by stating that the assessing officer has not conducted any i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction and the non-application of provisions of sub section 44AD is a relevant factor and therefore it cannot be said that the issue has been re-agitated which is the subject matter of appeal before Ld. CIT(Appeals), in 263 proceedings. On the one hand the AO has made the addition of the GP rate / NP rate treating the transactions with Anagadiaas commodity transactions without any basis and on the other side no evidences from assessee or AO have brought on record to show the transactions with Angadiaas commodity transactions. Further, Principal CIT observed that the AO has made the addition @ 8% of the total financial transactions of Rs. 2,82,08,000/-. Since these transactions have been made with M/s. National Shroff who is an Angadia therefore there was no scope to treat the said transactions as trading turnover but were required to be treated as cash transactions only. So there was no question of applying any GP or NP rate on above financial transactions. Neither the assessee has proved that those were not the financial transactions but some commodity trade transactions nor AO has examined the nature of transaction and simply accepted the commodity trade turnover when there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, the assessment order was neither erroneous not prejudicial to the interests of Revenue. Finally, it was submitted that Principal CIT has erred in holding that the assessing officer erred in passing the order under the provisions of section 44AD of the Act, but the assessing officer had only made reference to the provisions of section 44AD of the Act for computing the taxable income of the assessee. Accordingly, in light of the above observations, it was submitted that the order passed under section 263 of the Act was neither erroneous nor prejudicial to the interest of Revenue. 5. In response, the Ld. DR placed reliance on the observations made by Principal CIT in the 263 order. 6. We have heard the rival contentions and perused the material on record. 6.1 Firstly, we shall deal with the contention that the assessee has filed appeal against the assessment order before Ld. CIT(Appeals), which is pending adjudication and therefore, the said assessment order cannot be subject matter of 263 proceedings. In the case of Amritlal Bhogilal Co.34 ITR 130 (SC) , the Hon'ble Supreme Court held that it would be open to the Commissioner to revise an assessment while an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision are applicable to the assessee s in set of facts. In the aforesaid decision rendered by the Honourable Supreme Court in the case of Shreeji Prints supra , it was held that order passed under 263 of the Act by invocation of Explanation in the order without confronting the assessee and giving an opportunity of being heard to the assessee is not appropriate and sustainable in law. Therefore, in our considered view, the aforesaid decision cannot be applied in cases where due opportunity of being heard was granted to the assessee during the course of 263 proceedings. Accordingly, we are unable to agree with the contention/argument put forth by the assessee on this point. 6.3 The third argument by the assessee before us was that the issues on the basis of which proceedings under section 263 of the Act have been initiated against assessee had already been examined by the assessing officer during the course of assessment proceedings. However, what also has to be seen is whether after due enquiry, the conclusion drawn by the assessing officer is in accordance with law and would not cause any evident prejudice to the interests of the Revenue. If, on the basis of conclusions d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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