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TMI Blog2024 (7) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... op of Sections 68/69A of the Act. We are of the view that as the original assessment order u/s. 143(3) as set-aside with a direction to look into certain specific issues, therefore, the consequential assessment order so passed by the A.O could not have been held to be erroneous for the reason that he had wrongly allowed the assessee's claim for deduction of depreciation i.e. an issue which had not formed a basis for setting aside of the original assessment order. We are of the view that now when the scope of jurisdiction of the A.O in the course of set-aside proceedings was circumscribed by the directions of the Pr. CIT u/s. 263 therefore, he was divested from dealing with any such stray issue which did not flow from the aforementioned directions. CIT had referred to the failure of the A.O to allow the assessee's claim for depreciation while framing the original assessment u/s. 143(3). This order passed u/s. 263 as seeking to revise the original assessment framed u/s. 143(3), then, the same being barred by limitation could not have validly been done by him vide the impugned order passed u/s. 263. We, thus, in terms of our aforesaid observations quash the order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act dated 26.03.2022, observing as under: 4. Considering the facts narrated in the foregoing paras which have emanated from the case record, I am of the considered view that the order passed u/s. 143(3) r.w.s. 144B of the Income Tax Act, 1961 vide order dated 26.03.2022 is erroneous and prejudicial to the interest of revenue and therefore, needs to be revised under the provisions of section u/s. 263 of the Income Tax Act, 1961. 5. Since the issues discussed supra have not been properly verified by the AO while passing the assessment order by conducting proper enquiries and examination of accounts, therefore, the assessment order passed u/s. 143(3) r.w.s. 144B of the Income Tax Act, 1961 is erroneous in so far as it is prejudicial to the interest of the revenue in light of section 263 of the Income Tax Act 1961. 3. In view of the above facts, a show cause e-notice u/s 263 dated 05.03.2024 was issued to the assessee, incorporating the above facts, asking to furnish his reply in support of his claim. A copy of the said notice was also sent through Speed Post to the given address of the assessee. The assessee made his submissions on 12.03.2024 and the gist of his submissions is produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 18.03.2021 the assessee has simultaneously filed an appeal before the Hon'ble ITAT, Raipur. The Assessee got relief from Hon'ble ITAT, Raipur who set aside the above said revision order dated 18.03.2021 and upheld the original Assessment order passed u/s 143(3) dtd. 30.11.2017 with a finding, stated in para 14 of the order dated 10.07.2023 that as the assessee had duly amounted for his income from the business of running a stone crusher as per his regular books of accounts, which is found to be higher than the deemed income worked out as per the presumptive mechanism set out in Section 44AD of the Act, therefore, the order (dtd. 30.11.2017) passed by the AO allowing the assessee s claim for depreciation can't be held as erroneous ..............we are of the considered view that now when the scope of jurisdiction of the AO while framing limited scrutiny was confined to the reason which had formed the basis for selecting the case of the assessee for scrutiny assessment, then Pr. CIT in the garb of revisional proceedings u/s 263 of the Act could not have traversed beyond the issues for which the case was selected for limited assessment. Our aforesaid conviction is suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner: (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board u/s. 119, or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. 5. The assessee being aggrieved with the order passed u/s. 263 of the Act dated 21.03.2024 by the Pr. CIT has carried the matter in appeal before us. 6. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and material available on record. 7. We may herein observe that as stated by the Ld. AR, and rightly so, the order passed by the Pr. CIT u/s. 263 of the Act dated 18.03.2021 had been quashed by the Tribunal vide its order passed in Hukum Singh Vs. Pr. CIT, Raipur-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Raipur in the case of Chhattisgarh State Beverages Corporation Limited Vs. Principal Commissioner of Income Tax, (2023) 221 TTJ 379 (Raipur). 10. Considering the aforesaid position of law, we shall now deal with the contention of the Ld. AR that the Pr. CIT in the garb of revisional proceedings had traversed beyond the scope of his jurisdiction; and in a way had sought to deal with issues which the A.O was divested of his jurisdiction while framing the assessment pursuant to selection of the case of the assessee for limited scrutiny. 11. As observed by us hereinabove, the case of the assessee was selected for limited scrutiny for verifying as to whether or not deduction claimed on account of depreciation was admissible. Ostensibly, the assessee had in his return of income disclosed his income from the business of running a stone crusher as per his regularly maintained books of accounts at Rs. 2,97,965/-, Page 10-12 of APB. On a perusal of the Trading Profit Loss account of the assessee, it transpires that the aforesaid profit disclosed by the assessee on his total turnover/gross receipts worked out at 8.06%. Considering the fact that the net profit of the assessee from his afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same on a presumptive basis u/s. 44AE can by no means be held to be prejudicial to the interest of the revenue. 14. We, thus, in terms of our aforesaid deliberations are of the considered view that as the assessee had duly accounted for his income from the business of running a stone crusher as per his regular books of accounts, which is found to be higher than the deemed income worked out as per the presumptive mechanism set out in Sec. 44AD of the Act, therefore, the order passed by the A.O allowing the assessee s claim for depreciation cannot be held as erroneous. Apart from that, we are also of the view that accounting of the aforesaid income by the assessee as per his regular books of accounts as against that determined on a presumptive basis u/s. 44AE of the Act is also in no way prejudicial to the interest of the revenue. 15. We, thus, in terms of our aforesaid deliberations, are unable to concur with the order passed by the Pr. CIT u/s. 263 of the Act dated 18.03.2021, wherein he had set-aside the order passed by the A.O u/s. 143(3) dated 30.11.2017 holding the same as erroneous in so far it was prejudicial to the interest of the revenue. Accordingly, we herein set-aside t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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