9911796707
TMI Blog2024 (12) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... een form part of the proceeding before the ld. AO. Based on the discussion so recorded we are of the considered view that the proceeding initiated u/s. 263 is merely based on the audit objection, PCIT is not agreement with the ld. AO and the observation on the stock, in the audit reportal ready filed by the assessee. Thus, there is clear absence of his satisfaction and there is no independent view of the ld. PCIT even on merits thus, the assessee which has been completed there cannot be the second inning to the revenue without justifying the twin condition to the order passed by the AO. We quash the order passed by ld. PCIT u/s 263 of the Act. Appeal of the assessee is allowed. - Dr. S. Seethalakshmi, JM And Shri Rathod Kamlesh Jayantbhai For the Assessee : Sh. R. P. Sharma, CA For the Revenue : Sh. Arvind Kumar, CIT-DR ORDER PER: RATHOD KAMLESH JAYANTBHAI, A.M. Because the assessee aggrieved from the order of Pr. Commissioner of Income Tax (Central), Jaipur [ for short PCIT ] for the assessment year 2019-20 dated 27.03.2024. The ld. PCIT passed that order under challenge as per provisions of section 263 of the Income Tax Act, 1961 (for short Act ) while examining the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40,00,000/- for the AY 2019- 20 which has also been disclosed in return of income as undisclosed income, source of which has not been explained. Hence the said amount was liable to be taxed u/s 69A of the Income Tax Act, 1961 r.w.s. 115BBE. However, in the assessment order u/s 143(3) passed 21.09.2021 the same was not treated accordingly and tax was calculated at normal rate only. Hence, the same has not been examined or considered while making the assessment by the AO. Therefore, it appears that the action of the AO is erroneous which caused prejudice to the interests of Revenue. In this connection a Show Cause Notice dated 07.03.2024 was issued and hearing has been provided to the assessee on 18.03.2024. In response to the assessee submitted reply on 18.03.2024. The submission of the assessee has been perused carefully by ld. PCIT and she noticed that the assessee has in the submission tried to establish that the Assessment order passed by the Assessing Officer is not erroneous, but the action now initiated is just a change of opinion hence cannot be subject to the revision u/s 263 of the Income Tax Act, 1961. She further observed that ld. AO has not applied the proper provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid order has been passed by the AO in a routine and casual manner without applying the applicable sections of the Act. The AO has not verified the details which were required to be verified under the scope of scrutiny. The order of the AO is, therefore, liable to be revised under the explanation (2) clause (b) and clause (a) of section 263 of the Act. The assessment order is set aside to be made afresh in the light of the observation made in this order. The AO is required to make necessary verification in respect of the observations made in this order after allowing reasonable opportunity to the assessee. She further made it clear that; I am not disturbing the assessment that has already been made. I am only passing an order for initiation/addition on undisclosed money u/s 69A of Rs. 40,00,000/- to be charged special tax u/s 115BBE as detailed above based upon independent satisfaction of the assessing officer, who will duly consider the replies of the taxpayer. 6. Feeling aggrieved from the above order of the PCIT passed u/s. 263 of the Act, the present appeal is filed by the assessee challenging the finding recorded thereon. Apropos to the ground so raised the ld. AR appearing on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection. Certified copy of Letter of DCIT (PB-4). As per section 263 of the income tax act . (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, So, the purpose of this law is that the commissioner should call the record and should examine the record of the proceeding of the AO but here it has not been done and no independent decision was taken by ld. PCIT. It has been decided by coordinate bench in the case of Pink city Jwell house pvt. v/s PCIT (ITAT Jaipur) in Appeal no. ITA no. 63/JP/2021 that on an examination of procedural aspects of the case, including the basis of the proceedings initiated under section 263. It can be noted that the action was primarily based on the revenue audit objections which raised question about the independence and validity of the PCIT s decision. That in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould have been chargeable had his total income been reduced by the amount of income referred to in clause (i).] Whereas in our case neither the income includes the income referred to in section 68, 69, 69A, 69B, 69C and 69D reflected in the return furnished u/s 139 of the income tax act NOR AO determined includes any income referred in the above mentioned sections so our humble submission is that AO imposed normal tax slab because there is no ingredients of section 115BBE of the Income Tax Act. In our computation of total income Rs 40 lacs income showed as income declared in survey.(PB-5) During the course of Assessment proceedings, the Ld. AO was satisfied that looking into the facts and circumstances of the case and provision of the sec. 69A of the act are not applicable on the assessee therefore she did not apply the same. The satisfaction of the learned AO cannot be substituted with the view point of any other authority. The surrender was made on account of money given to different parties, out of accumulated savings of the assessee over the years but since the assessee was not able to substantiate his claim and also on the advice of survey team to buy the peace and avoid litig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PB-4 Certified copy of letter of DCIT 14-16 6) PB-5 Computation of Income 17-18 7) PB-6 Pink City Jwell house Pvt. Vs. PCIT (ITAT Jaipur) 19-66 8) PB-7 Jain Carrying Corporation vs. Principal Commissioner of Income Tax ITAT, Jodhpur Bench 67-79 8. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessment has been completed by the Assessing Officer. He also submitted that the proceedings u/s 263 of the Act has been initiated merely based on internal audit objections issued (APB-14, 15 15). Based on audit objections the provisions of section 263 have been initiated. Since there is no independent application of mind by ld. PCIT the proceedings initiated is bad in law. To drive home to this contention he relied upon the decision of Jodhpur Bench in the case of Jain Carrying Corporation v. PCIT in ITA No. 134/Jodh/2018. As the fact of that case and that of the assessee having similar the proceedings initiated by the ld. PCIT is required to be quashed. The ld. AR of the assessee also submitted that when the assessee has disclosed the income as his income for the year under consideration as promised before the survey team and if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by him, though a proposal sent by the Assessing Officer. The ld. PCIT has invoked the provisions of section 263 of the Act based on that proposal so submitted by the ld. AO. Thus, as is evident that review of an order passed is not permitted and are bad in law. We get support of this view from the decision so cited by the assessee in the case of Jain Carrying Corporation v. PCIT in ITA No. 134/Jodh/2018 wherein author of the bench are the same and in that case the bench has held as under:- 7. We have heard the rival contentions, perused the material placed on record and gone through the judicial precedent cited by both the parties to drive home their respective contentions. The bench noted the ld. PCIT has raised four issues, on four issue the ld. AO has raised the issue, the assessee submitted the reply and the ld. AO has taken a plausible view on the matter. The ld. AO taken a view based on the submission made by the assessee which the ld. PCIT merely based on the audit objection and PCIT s observation that the view taken by the ld. AO on which the ld. PCIT is not in agreement cannot hold the order liable to be sustained. On the first issue that has been flagged by the PCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding of the ld. PCIT wherein he could not point out any mistake / error in order which is prejudicial to the interest of the revenue. The AO while framing the assessment had taken a possible view, and revenue did not demonstrate the error remain on the part of the ld. AO. In fact, when the ld. AO has conducted the required enquiry and not violated any of the conditions mentioned for revision of order as required by Explanation 2 of Section 263 of the Act, the order passed by the Assessing Officer could not be deemed to be erroneous so as to be prejudicial to the interests of the revenue and to support the view we take support on the jurisdictional Hon ble Rajasthan High Court decision in PCIT v. Manna Trust (2022) 1 TMI 693 [Compilation 42-44] wherein it has been held that We are broadly in agreement with the view of the Tribunal. It is well settled through a series of judgments that power under Section 263 of the Act can be exercised only when twin conditions of the order of assessing officer being erroneous and prejudicial to the interest of revenue are satisfied. The Jurisdiction of the Commissioner under Section 263 of the Act is restricted and cannot be equated with the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 14 to 17) 11. In view of the aforesaid elaborate observations and respectfully following the various judicial precedents relied upon hereinabove, we hold that a) Adequate enquiries were indeed carried out by the ld AO in the original assessment proceedings and hence the ld PCIT was not justified in invoking revisionary jurisdiction u/s 263 of the Act ; I.T.A b) A possible view has been taken by the ld AO on the issue of LTCL on the facts of the case and also by placing reliance on the available case laws on the subject and hence the ld PCIT was not justified in invoking revisionary jurisdiction u/s 263 of the Act merely because he is of a completely different view and opinion on the issue of allowability of LTCL to be carried forward to subsequent years; c) The ld AO had defended his original assessment order before the Revenue Audit Party by accepting the contentions of the assessee and by stating that there was no misrepresentation of facts by the assessee. The evidences in this regard are already on record and already reproduced elsewhere in this order. Hence it could be safely concluded that the revision proceedings u/s 263 of the Act had been apparently triggered only based ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
