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TMI Blog2023 (4) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... to support the any specific error on the part of the assessee. As perused the assessment order and the relevant submission on the issue that the assessee has given details in the assessment proceeding at four instance so as to support the fact that inquiry in relation to the generation of the cash by the assessee is verified by the ld. AO. It is also not disputed by the PCIT or ld. Sr. DR for the balance amount deposited in the demonetized period which is that out of 51.60 lacs but disputed only for an amount Rs. 16.80 lac being the demonetized currency. There is no evidence or material that has been observed by the PCIT from the details so placed on record by the assessee in the assessment proceeding to disbelieve the averments about the source of the said demonetized currency. Merely the PCIT said that in his opinion the ld. AO has not properly addressed the issue. The observation so made is very general and routine without pinpointing any specific defect the action of the PCIT u/s. 263 is nothing but a review of the order of the ld. AO. Merely, the ld. AO has not specifically written that he has verified the cash of demonetized currency will not hold the assessment erroneous or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal against impugned order was statutorily required to be filed before worthy tribunal by 28.05.2022 and therefore there is delay of 214 days in filing form 36 which the appellant requests your honour to condone and allow admission of the appeal. 4. That the delay in filing Form 36 is solely due to lack of advice from the local counsel (Sambhar Lake), who was not aware that the revisionary order u/s 263 is appealable order before worthy ITAT 5. That the factum of impugned revisionary order was appealable before worthy ITAT came to the knowledge of the appellant only when the notice u/s 142(1) was issued from the NFAC, New-Delhi Dated 16.12.2022 for making fresh assessment for relevant year and thereafter appellant contacted new counsel at Jaipur, who updated the appellant regarding the same. 6. That the delay in filing the form 36 is bona fide unintentional and backed by reasonable cause. It is therefore, humbly prayed to kindly condone the delay of 214 days in filing Form 36 and allow admission of appeal and oblige. 2.1 In addition to the petition for condonation of delay is also supported by an affidavit duly swooned and executed wherein it has been contended that; 2.2 Based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been a delay and the assessee should not be deprived from the justice on mere technicalities. 3.1 There is also no dispute that under section 253(5) of the Act, the Tribunal may admit an appeal filed beyond the period of limitation where it is satisfied that there was sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. Section 253(5) deals the power of the tribunal and the same is reiterated here in below: Section 253 (5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period. 3.2 Thus, based on that provision tribunal may admit an appeal filed beyond the period of limitation where it is satisfied that there exists a sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. The explanation of the assessee therefore, becomes relevant to determine whether the same reflects sufficient and reasonable case on its part in not presenting the present appeal within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of the existence of the institution of Courts. It was further held by the Hon'ble Supreme Court that such liberal approach is adopted on one of the principles that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. Another principle laid down by the Hon'ble Supreme Court is that when substantial justice and technical considerations are pitted against each other, the 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. It was also held by the Hon'ble Supreme Court that there is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of male fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. In the instant case, applying the same principles, we find that the assessee has all along acted diligently in safeguarding his legal rights and avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee has marched this appeal on the following grounds of appeal: 1. That the ld. Pr. CIT has erred in law as well as in facts of the case in exercising revisionary jurisdiction u/s 263 of the IT Act by making observation which are contrary to assessment records 467945/- 2. That ld. Pr. CIT has erred in law as well as in facts of case is not appreciating that alleged order u/s 143(3) dated 09.05.2019 was passed by AO after due verification of books of Accounts information supplied by appellant during course of assessment proceedings. 5. The fact as culled out from the records is that the assessee is carrying on business of whole sale retail of technicities cotton seed, cotton seed cake, edible oil tin sugar bag and wheat bag and other food products in Sambhar Lake area, District Jaipur which is rural or sub-urban area. The assessee has filed its e- return u/s 139(1) of the Income-tax Act 1961 on 28.10.2017 declaring total income of Rs 4,89,340/- On selection of the case for scrutiny through Manual, notice u/s 143(2) of the income-tax Act, 1961 was issued on-line on 29.09.2018 on ITBA Portal which was served upon the assessee through E- Mail or Regd. Post. Notice u/s 142(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th regard to the cash deposited in the bank in old SBN of Rs. 16,80,000. This is turn has resulted in passing of an erroneous order by the Assessing Officer in the case due to non-application of mind to relevant material, reflecting non appreciation of facts and an incorrect application of mind to law which is prejudiced to the interest of the revenue. 10. Accordingly, by virtue of powers conferred on the undersigned under the provisions of section 263 of the Income Tax Act 1961, I hold that the order under Section 143(3) of the IT Act dated 09.05.2019 for AY 2017-18 passed by the Assessing Officer is erroneous in so far as it prejudicial to the interest of revenue as the said order has been passed by the Assessing Officer in a routine and perfunctory manner without considering/applying his mind to the information available on record. The order of the Assessing Officer is therefore liable to revision under the clause (a) (b) of Explanation (2) to section 263 of the Income Tax Act. Hence, the assessment order is set aside as discussed above. 7. Aggrieved from the order the ld. PCIT the assessee has marched this appeal. To support the contentions so raised the ld. AR of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT has erred in law as well in facts of the case in not appreciating that alleged order u/s 143(3) was passed by the AO after due verification of the books of accounts information supplied by the appellant during course of assessment proceedings. Contention of the PCIT The ld. PCIT assumed the revisionary jurisdiction u/s 263 by making following finding, reproduced (in verbatim from impugned order) as below :- 1. It is seen that the A.O. while framing the assessment have not verified the cash deposited by the assessee of Rs. 16,80,000 which were old SBNs. ( Para 1 Pg 4 of Impugned order) 2. Further no queries to the cash deposited in SBNs have been raised by the A.O. or any reply has been filed by the assessee. However, as the A.O. failed to make any enquiries on the cash deposited in the bank, the assessment order passed on 09.05.2019 is erroneous within the purview of Explanation-2 of section 263(1) of the I.T. Act. Thus, it is evident that the AO has not applied his mind to the issue in any manner ( Para 1 Pg 4 of Impugned order). 3. However, as the AO failed to make any enquiries on the cash deposited in the bank, the assessment order passed on 09.05.2019 is erroneous with in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the jurisdiction by the PCIT is built upon finding that there is complete absence of enquiry by the AO. In this regard, It is submitted that whole edifice over which foundation of the case is being built complete absence of enquiry by the AO is altogether absent contrary to information document on assessment record, the finding is controverted point wise as under:- 1.1.1 The AO has made proper enquiries verification and only thereafter accepted the documents filed during the course of assessment and passed the order after due application of mind. 1.1.2 The sequence of events which took place before passing of assessment order is narrated as under, for fortifying the contention that there was enquiry and that too proper adequate :- The Notice u/s 143(2) was issued on 29.09.2018. The AO on receipt of detailed reply of the assessee on 10.10.2018 to notice u/s 143(2) in connection with source of cash deposit during demonetization, did not accepted the issue of cash deposit summarily but shown appetite for further inquiry verification, which is palpable from notice dated 18.11.2018 where in he seek copy of bank statements so as to verify the trend of cash deposit through out the year vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall vitiate the entire proceeding and therefore, the resultant order u/s 263 has to be quashed. 2.2.1 This aspect is directly covered by recent decision of Hon ble Supreme Court in the case of Principal Commissioner of Income-tax, Surat2 Vs. Shreeji Prints (P.) Ltd. [2021] 130 taxmann.com 294 (DPB 43-48) wherein vide the Hon ble Supreme Court held as under - Section 69, read with section 263, of the Income-tax Act, 1961 Unexplained investments (Unsecured loans)- Assessment year 2013-14 Assessee-company had. received unsecured loans from two different companies Commissioner noting that said loans were shown as investment in assessee s name in balance sheet of respective companies exercised his revisionary powers and passed an order without giving an opportunity to assessee of being heard, invoking Explanation 2 to section 263 High court by impugned order held that since Assessing Officer has made inquiries in details and accepted genuineness of loans received by assessee, such view of Assessing Officer was a plausible view and same cannot to be considered erroneous or prejudicial to interest of revenue Whether SLP against said impugned order was to be dismissed-Held, yes (Para 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing demonetization.(Kindly refer Pg 27), In this reliance is placed upon recent judgment in PCIT vs Reeta Lakhmani [2022] 145 taxmann.com 590 (Calcutta), where in on exercise of jurisdiction by PCIT at instance of AO was hold to be against law by observing as under (refer Pg 60-2 of PB) :- 9. In more or less identical circumstances in the case of Pr. CIT v. Sinforte (P.) Ltd. [ITAT No. 104 of 2019, dated 7-1-2022] the court had dismissed the appeal filed by the revenue on the ground that the PCIT in order to exercise jurisdiction under section 263 of the Act exercised jurisdiction at the instance of the assessing officer which is against the provisions of the law. This decision supports the case of the respondent assessee. Hence, for the above reasons, we are of the view that the order passed by the learned tribunal on the first ground, namely with regard to the correctness of the exercise of power under section 263 of the Act has to be affirmed and, accordingly, the appeal filed by the revenue is dismissed and the substantial questions of law suggested by the revenue are not required to be decided in the instant case. 5. That the ld PCIT while exercising assuming jurisdiction u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of accounts on 02.05.2019 (Kindly refer Pg 22 of PB) and even reference of same is contained in body of order. 7.4 That contention of the appellant that PCIT acted in haste and arbitrary manner without understanding the geography of the case, also gets cemented from the fact that PCIT failed to appreciate that appellant s book of account were maintained manually and were in regional language (hindi) and therefore neither it was possible to upload voluminous cash book on portal nor without linking the same with sales other ledger would have served any purpose. The ld AO was well acquainted with the fact and therefore specific notice for production of the books of accounts for examination verification was made and same was thoroughly vigilantly verified examined on 02.05.2019 7.5 That the ld PCIT failed to appreciate the assessment records in true spirt gets fortified from the fact that appellant deposited Non SBN currency of Rs. 34,80,000/- during demonetization, which standalone was sufficient evidence by itself, to adduce that there was perennial receipt of cash in the form of cash sales realization for debtors in the business carried on by the assessee. 8. That there are ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of business that the assessee carries there is persistent deposit of cash and the same is not disputed even by the PCIT and objected only for an amount of the demonetized currency. The ld. AO vide notice issued on 30.04.2019 (APB-page,22-23) specifically called for the cash book, bank book, sales and purchase and sales bills ledger account bank statement and other related records. The same has been produced and verified is recorded in the part of the assessment order and the same is not disputed. The ld. AO at the four instances verified the issue including source of the money so deposited into the bank account by calling the relevant circumstantial related evidence. Thus, there is no lack of inquiry or inadequate inquiry by the ld. AO. Based on these the ld. AR submitted that the PCIT has not find any mistake and thereby intend to review the order of the ld. AO and the same is not permitted in law and thus, the order passed is bad in law. 8. The ld. DR is heard who has relied on the detailed finding and observation made in the order passed under section 263 of the Act. The ld. Sr. DR further submitted that the focus of the ld. AO was on turnover and GP and not only the demo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case the ld. AO has made enquiry at four instance and recorded his satisfaction after examined the books of account, bank statement and purchase and sales records of the assessee. Here in this case even there is no specific observation of the PCIT pinpointing any specific defect in the records that has been placed on record instead he has simply stated that AO has not addressed the issue this observation is very much in general and without specifying any faults in the assessment records, details submitted and verified by the ld. AO. In fact on perusal of the assessment order we have noted the following observation of the ld. AO. I have considered the reply of the assessee. Further, the assessee furnished the source of cash deposited during demonetization period 10. Merely, the ld. AO has not specifically written that he has verified the cash of demonetized currency will not hold the assessment erroneous or prejudicial to the interest of the assessee. Even we find that the assessee has submitted all the details to substantiate the deposit of the cash be it may the demonetized currency. When the source of total cash deposited during the demonetization period to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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