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TMI Blog2024 (9) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... ng adequate opportunity of being heard cannot be rested on his shoulder. The argument of the assessee therefore fails. Order was passed beyond available statutory time and without jurisdiction and hence deserves to be quashed - Section 263 of the Act empowers a PCIT to exercise his revisionary powers in respect of orders passed under any proceedings of the Act if he holds the view that the impugned order is erroneous in so far is it is prejudicial to the interest of the Revenue. The only limitation imposed upon is that no order can be passed after the expiry of two years from the end of the Financial Year in which the order sought to be revised was passed. Facts of the case indicate that the assessment order u/s 143(3) was passed by the AO on 21.12.2019. Thus the relevant financial year ended on 31.03.2020. Further material available on record shows that the first revisionary order was passed by the PCIT on 23.03.2022 well before the end of statutory time limit on 31.03.2022. The revisionary order dated 08.03.2024 presently contested by the appellant is on account of directions of this tribunal [ 2022 (7) TMI 1534 - ITAT CHENNAI] . Thus no case of revisionary action taken by the PC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment proceedings and evidently they were not examined qua cash payments of about Rs. 13,99,815/-. Thus once again the order of the Ld. AO becomes erroneous in so far as it is prejudicial to the interest of the Revenue and the PCIT would be rightly assuming its revisionary powers. We are therefore hold the view that the PCIT had lawful revisionary jurisdiction to be exercised in the case. The arguments of the appellant therefore fails. Matter concerning applicability of section 40A(3) was considered by the Ld. AO in original proceedings - DR held view that no such fact is available in the assessment order. Upon hearing the Ld. Counsel for the assessee we hold the view that the impugned assessment order is totally silent that the Ld. AO considered any matter concerning applicability of section 40A(3). The only addition made by the Ld.AO was an account of unsubstantiated purchases - The arguments of the appellant therefore fails on this aspect as well. Examination of applicability of penal provisions in terms of 269SS and 269T could not be subject matter of revisionary proceedings and that in the absence of satisfaction recorded in the original order, the same cannot be substituted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2017-18 on 24.10.2017 declaring a total income of Rs. 1,15,040/-, The case was selected for complete scrutiny under CASS on the issue of cash deposits made into its Bank account during demonetization period and assessment was completed u/s 143(3) of the Act on 21.12.2019 determining the assessed income of Rs. 4,10,765/- by making disallowance of Rs. 2,95,725/- towards unsubstantiated purchases reported during the month of March 2017. Subsequently, the case was taken up for revision u/s. 263 of the Income Tax Act by issuing notice for hearing on 14.03.2022. As the assessee did not respond to the notice issued and also has not filed written submissions called for, an ex-parte order u/s. 263 of the 1.T. Act, 1961 was passed on 23.03.2022 setting aside the assessment order u/s. 143(3) dated 21.12.2019 and directing the Assessing Officer to examine the following aspects:- 2.1. From the copy of ledgers produced it appeared that the assessee had made some payment in cash in excess of Rs. 20,000/-. These were interest of Rs. 6.10.101/-, compensation paid to employees of Rs. 5,92,170/- and repairs and maintenance of Rs. 1.97,544/-. Section 40A(3) of the Income tax Act, 1961 provides tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to Section 40A(3) which specifies the circumstances under which no disallowance can be made for cash transactions and having regard to the nature and extent of banking facilities available. In the instant case, the assessee s place of business i.e. Usman Road, T. Nagar is a commercial hub in a Metro city, Chennai where all Nationalized Banking institutions as well as private sector Banking institutions are operating their branches. As such, the said proviso is not at all applicable to the assessee s case. 5.3 The assessee further claimed that (i) the assessing officer was satisfied with the genuineness of the disputed expenses while passing the assessment order, (ii) where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of revenue unless the view taken by the ITO is unsustainable. 6. In the instant case, the assessment order u/s. 143(3) of the Act, passed by the ITO, Non-Corporate Ward 1(6), Chennai is a single page order with a four line para referring to assessee s inability to substantiate purchases made during March 2017 while disallowing a of Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t providing adequate opportunity, it is seen that in Para-4 of his impugned order the PCIT has clearly mentioned that finally the assessee has filed its return submissions dated 23.02.2024 . The Ld. DR submitted that there is nothing on record to indicate that assessee s right to natural justice of being heard was violated and that it is the assessee which is a habitual defaulter. Thus the PCIT has duly considered the defence offered by the assessee and the blame of passing an ex-parte order without affording adequate opportunity of being heard cannot be rested on his shoulder. The argument of the assessee therefore fails. 5.0 Another issue raised by the assessee is that the impugned order was passed beyond available statutory time and without jurisdiction and hence deserves to be quashed. The Ld. DR argued that no such controversy is existing in this case when compared with the material available on records. After hearing the arguments of the Ld. Counsel for the assessee we are of the view that the impugned order was passed within available statutory time and by an authority having lawful jurisdiction. Section 263 of the Act empowers a PCIT to exercise his revisionary powers in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired into by him during assessment proceedings. The Ld. AO has passed a very cryptic order alluding towards lackadaisical approach. There is nothing in the order to indicate as what was to be examined and how was it examined. There is not even an whimper of evidence to suggest that the cash transactions for which complete scrutiny was ordered was at all examined by the Ld. AO. To the extent the order of the Ld. AO falls within the mischief of an order being erroneous in so far as it is prejudicial to the interest of the Revenue as mandated in section 263. 8.0 The arguments of the Ld. Counsel for the assesses qua existence of element of business expediency have been adequately countered by the PCIT in his revisionary orders. Material available on records indicate that this was a case of complete scrutiny under CASS to examine the issue of cash deposits. Consequently, it was incumbent upon the Ld. AO to have examined assessee s affairs carefully, inter-alia, including inspection and examination of Form-3CD enclosed with the return of income. The Ld. CIT(A) has drawn his conclusions indicating that the same was not enquired into by the Ld. AO. To the extent the order suffers from er ..... X X X X Extracts X X X X X X X X Extracts X X X X
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