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TMI Blog2025 (1) TMI 1480X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as on the facts of the case in assuming jurisdiction u/s 263 by wrongly and incorrectly holding that the subjected assessment order passed u/s 147 dated 15.04.2021 is prejudicial to the interests of the revenue. The assumption of jurisdiction u/s 263 being contrary to the provisions of law and facts on record, hence, the proceedings- initiated u/s 263 hence, the impugned order dated 29.02.2024 deserves to be quashed. 3. Rs. 24,14,531/ The Id. PCIT, Udaipur in the impugned order passed u/s 263 of the Act, raised an altogether new issue of the alleged disallowance on account of late payment of PF/ESI contributions of Rs. 24,14,531/- u/s 36(1)(va) of the Act. The impugned order thus, to this extent is a nullity being without jurisdiction and therefore deserves to be quashed. 4. Rs. 63,97,664/-1 The Id. PCIT, Udaipur in the impugned order passed u/s 263, raised an altogether new issue of the alleged disallowance u/s 43B(e) of the Act on account of interest payable to scheduled banks on bank loan of Rs. 63,97,664/-. The impugned order thus, to this extent is nullity being without jurisdiction and therefore deserves to be quashed. 5. Rs. 21,732/-: The Id. PCIT, Udaipur in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about the documents, including the appeal papers. 2.2 Although subsequently, Shri Sushil Mittal resumed his duties in the office sometime in the first week of May, 2024, yet however, it did not occur to his mind that some appeal papers were to be signed, which were still lying pending with him. 2.3 It is only thereafter, in the second week of July, 2024 when CA Dharm Chand Jain, FCA contacted the counsel engaged at Jaipur w.r.t. the status of the appeal (which he believed had already been filed), but then he was informed that the same is yet to be filed and that the appeal papers were received by Shri Sushil Mittal for getting them signed. In absence of any persuasion from the side of the Assessee and M/s DHARM CHAND JAIN & ASSOCIATES, Chartered Accountant, the counsel at Jaipur, already handling a heavy workload, informed the factual position to Shri Dharm Chand Jain. It is only thereafter, the Director, Shri Sandeep Kumar Saboo immediately enquired Shri Sushil Mittal and asked him to hand over him the subjected documents the appeal set, who thereafter, recollected and after making an extensive search could lay his hand on the appeal papers. Upon getting hold of the documents, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble ITAT deems fit and proper, be also passed in favour of applicant assessee." The assessee also supported the contention so raised in the application with an affidavit so executed by Shri Sandeep Saboo director of the company. Based on that contention the ld. AR of the assessee prayed to condone the delay. 3.1 On the other hand, ld. DR objected that the reasons advanced are not sufficient to condone the delay. 3.2 We have heard both the parties and perused the materials available on record. The Bench noted that the reasons advanced by the assessee for condonation of delay of 96 days that the person was engaged in the marriage of daughter and thereafter on being aware the appeal was filed. Looking to the facts stated in the application they are sufficient to condone the delay and it has merit based on the prayer advanced by the assessee. Thus, we concur with the submission of the assessee and condone the delay of 96 days in filing the appeals by the assessee in view of the decision of Hon'ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee was prevented by sufficient cause. 4. The fact as culled out from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sanjay. He further stated in his statement that he never did any business from this proprietorship concern, and he did not have any knowledge about the business activities of the said concern or about the funds credited/debited in the said bank accounts of the concern, M/s Kangna Agro Products. 4.5 Therefore, in Order to verify the actual production of goods and the subsequent sale of the same, assessee was asked to provide the complete set of evidentiary document with respect to its purchase of raw materials and sale of produced goods. In response to question no. 3 & 4 raised to the assessee vide notice u/s 142(1) of the Act dated 05.02.021 assessee responded as below:- "3. The purchases of raw material are made both from traders and APMC's agents. 4. The purchases are made in cash mainly from the farmers as well as through cheques." 4.6 The assessee was also asked to submit the purchase register, sales register and item wise valuation of Opening Stock and Closing Stock along with the quantity of stock and rates. Assessee was also requested to provide necessary proof for rate taken for valuation or calculation done for valuation. However, assessee failed to provide the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder passed by the Assessing Officer (FAU) u/s 147 r.w.s. 144B of the IT Act dated 15.04.2021 is suffering from specific defects, hence, order so passed by the AO is erroneous and also prejudicial to the interest of the revenue. The order of the assessing officer is therefore, liable to revision under clause (a) &(b) of the Explanation (2) of section 263 of the Income Tax Act, 1961. 9. In the light of above discussion, assessment order passed by the AO in the case of the assessee is Set-aside (Partly) for fresh assessment by the AO on the issues of - (A) Disallowance on account of late payment of ESI/PF (Rs.24,14,531/- ). (B) Disallowance u/s 43B(e) of the Act (Rs.63,97,664/-). (C) Disallowance u/s 36 (1)(iii) (Rs.21,732/-); (D) New Loans accepted during the year (Rs. 6.35 Crores) The AO is directed to complete the assessment afresh on the above mentioned issues/points, keeping in view the observations marked herein above. 9.2 Further, it is also made clear that as the assessment order dated 15.04.2021 is PARTLY SET-ASIDE, as categorically mentioned above, the Assessing Officer, while framing the Order u/s 263/142(1)/143(3) of the Act, shall take care of the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of unexplained credits in the grab of bogus sales and thus, the total income was finally assessed at Rs. 16,49,44,849/- (PB 62-69) vide the order u/s 143/147 at 15.04.21. Later on, the ld. CIT acting u/s 263 issued SCN u/s 263 14.02.2023 (PB 122-127). In response thereto the appellant filed submissions time to time on dated 21.02.2023 (PB 128), 16.06.2023 and finally on 13.10.2023 (PB 129-146). The ld. CIT initially raised the following issues: - 1. Late payment of PF/ESI contributions u/s 43B (Rs. 24,14,531) 2. New Loans taken during the year, not examined (6.35 Crore) 3. Disallowance of unpaid sale tax u/s 43B of the Act (Rs, 5,02,000) 4. Disallowance of unpaid interest payable to banks u/s 43B (e) of the Act (Rs. 63,97,664) 5. Disallowance u/s 36(1)(iii) or u/s 37 of the Act (Rs 21,732) 6. Disallowance u/s 35AC (2) of the Act (Rs. 25,00,000) The ld. CIT after considering the submissions of the assessee started her discussion from page 22 para 6 however, not feeling satisfied held the subjected assessment order erroneous and prejudicial to the interest of the revenue on in the following words: "6. Considering the facts and circumstances of the case and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63 is completely beyond the scope of S. 263 of the Act on various grounds, as discussed herein below. 1. Legal Position on Sec.263 - Judicial Guideline: Before proceeding, we may submit as regards the judicial guideline, in the light of which, the facts of this case are to be appreciated. 1.1 The pre-requisites to the exercise of jurisdiction by the Commissioner u/s 263, is that the order of the Assessing Officer is established to be erroneous in so far as it is prejudicial to the interest of the Revenue. The Commissioner has to be satisfied of twin conditions, namely (i) The order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If any one of them is absent i.e. if the assessment order is not erroneous but it is prejudicial to the Revenue, Sec.263 cannot be invoked. This provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous as also prejudicial to revenue's interest, that the provision will be attracted. An incorrect assumption of the fact or an incorrect application of law will satisfy the requirement of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 148 was issued on 17.03.2020 for A.Y. 2017-18 under consideration, and reasons to believe are recorded as communicated to the appellant by the AO vide his letter dt. 01.10.2020. For a ready reference the same are being reproduced hereunder: "The information was received from the office of Income Tax officer, Ward 45(1), Delhi vide his letter no. ITBA/AST/F/17/2019- 20/1021883746(1) dated 07/12/2019 that during the assessment proceedings Sh. Sanjay Prop. Kangna agro Products stated in his statement which was recorded on oath u/s 131 of the IT Act 1961 that he was working as helper / cleaner in the office of Shri Om Prakash and Shri Om Prakash established prop. Concern namely M/s Kangna Agro Products in his name and also opened various banks accounts of this proprietorship concern. It was also informed that Sh. Sanjay stated in his statement that he never did any business from this proprietorship concern and he did not having any knowledge about the business activities of the said concern or about the funds credited / debited in the said bank accounts of the firm. During the enquiry it was also observed that (i) the fund credited through cash deposit / cheque /transfer / RTGS and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scope of 263 and therefore, the proceedings may kindly be dropped. 3. Supporting Case Laws: 3.1 In case of CIT vs. Alagendran Finance Ltd, (2007) 211 CTR (SC) 69, the Hon'ble Supreme Court, while dealing with more or less an identical issue of revisionary power exercised under s. 263 of the Act in respect of an assessment order passed under s. 143(3) r/w s. 147 of the Act, has held in the following manner: "15. We, therefore, are clearly of the opinion that keeping in view the facts and circumstances of this case and, in particular, having regard to the fact that the CIT exercising its revisional jurisdiction reopened the order of assessment only in relation to lease equalization fund which being not the subject of the reassessment proceedings, the period of limitation provided for under sub-s. (2) of s. 263 of the Act would begin to run from the date of the order of assessment and not from the order of reassessment. The revisional jurisdiction having, thus, been invoked by the CIT beyond the period of limitation, it was wholly without jurisdiction rendering the entire proceeding a nullity." 3.2 CIT v. Bharti Airtel Ltd. [2013] 37 taxmann.com 218/218 Taxman 112 (Mag.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to the provisions of section 72A was disallowed. On 30-4-2009, the Commissioner issued the impugned notice under section 263 on the ground that the assessment order passed on 27-12-2007 was erroneous and prejudicial to the interests of the revenue. The assessee challenged said notice contending that though, in form, the Commissioner had sought to revise the order dated 27-12-2007 which was passed on a reassessment made under section 143(3) read with section 147, in substance and in essence, what was sought to be revised was the original order of assessment dated 27-12-2006 and since in respect of that order, the period of limitation for exercising the revisional powers had expired on 31-3-2009 having regard to the provisions of section 263(2), the notice issued on 30-4-2009 was barred by limitation." 3.4 Chhabra Syncotex (P) Ltd. Vs. Assistant Commissioner 0f Income Tax ITA No. 239/Jp/2018 (DC) "If the exercise of revision jurisdiction under s. 263 in respect of issues which formed subject-matter of reassessment after the original assessment was reopened, the commencement of the limitation would be with reference to the order of reassessment, but if the CIT has exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p-16 3. September,2016 Rs. 2,98,842/- 15-Oct-18 19-Oct-16 4. October, 2016 Rs. 2,98,842/- 15-Nov-18 21-Nov-16 5. November, 2016 Rs. 2,95,941/- 15-Dec-18 06-Feb-17 6. December, 2016 Rs. 3,21,421/- 15-Jan-19 03-Feb-17 7. January, 2017 Rs. 3,22,118/- 15-Feb-19 21-Feb-17 8. February, 2017 Rs. 3,13,371/- 15-Mar-19 24-Mar-17 4.2 Settled legal position in favor of the assessee - covered issue: It is pertinent to note that at the relevant point of time that is on 15.04.2021, when the re-assessment order (subjected to revision) was passed, the law was well settled by the various decisions of Hon'ble Rajasthan High Court, Hon'ble Supreme Court and various other tribunals including the Hon'ble Jaipur bench jurisdictional ITAT as under: 4.2.1 In CIT vs. Manglam Arts (2017) 398 ITR 594 (Raj HC) it was held that "Mr. Mathur has also contended that regarding second issue with regard to ESI and PF, however, the same is covered by the decision of this Court in the case of CIT vs. State Bank of Bikaner & Jaipur D.B. IT Appeal No. 177 of 2011 decided on 6th Jan., 2014, wherein it has been held as under "Thus, we are of the view that where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is well settled law that if decisions of non-Jurisdictional High Courts are in conflict with each other than decision favorable to assessee must be followed. Kindly refer CIT v. Vegetable Products Ltd. [1972] 88 ITR 192 (SC) Hon'ble Supreme Court has laid down a principle that "if two reasonable constructions of a taxing provision are possible, that construction which favour the assessee must be adopted. This principle has been consistently followed by the various authorities as also by the Hon'ble Supreme Court itself. Accordingly, therefore, the AO committed no error in following on of the possible views. 7.1 Further, there is no mistake apparent in the subjected Order u/s 147 dated 15.04.2021 in as much as the Hon'ble Supreme Court had passed the subjected Order on 12.10.2022 in the case of Checkmate (2022) 329 CTR (SC) 1 i.e. much later to the subjected order u/s 147. Thus, the aforesaid decision was not available on the day when Ld. AO passed the subjected Order on 15.04.2021. Therefore, the Ld. AO has committed no mistake because the Apex Court decision was not available before him. It is not the case that the adjudication of the assessment is still open, before Ld.AO after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of PF/ESI. X X X (ii) This amount of Rs. 24,14,531/- was legally disallowable in terms of section 36(1)(va) r.w.s 2(24)(x) of the Income Tax Act, 1961. (iii) However, while finalizing the assessment on 15/04/2021, no such disallowance is made by the FAO. In this regard, the recent judgement of Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd [2022] 143 Taxman.com178 is important to be referred to and relied upon, according to which the above is disallowable. (iv) It has resulted into under assessment/computation of income by Rs. 24,14,531/-, which is found to be erroneous in so far as it is prejudicial to the interest of revenue." 4.1.3 Our Submissions before CIT: A bare reading of the relevant part of the impugned order shows that the Ld. CIT very purportedly ignored our legal objections raised in the Para 7.1 and 7.2 hereinabove, wherein, it was specifically pointed out that the subject reassessment order subjected to revision passed on 15.04.2021 whereas the Checkmate (Supra) decision came one and a half year later thereto i.e. 12.10.2022. Therefore, the CIT could not have found any fault in the assessment order or could neither held as the subject re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to concerned account within due date and completed assessment on said basis, assessment could not be held to be prejudicial to interest of revenue. (IV) In Shri Keshoraipatan Sahkari Sugar Mills Ltd. Vs. Principal Commissioner Of Income Tax (2023) 223 TTJ (Jp) 922 "Revision-Erroneous and prejudicial order-Lack of proper enquiry- AO allowed deduction under s. 80P(2)(d) on the interest income received by the assessee from co-operative bank-He has examined the issue which is evident from the finding recorded in the assessment order-AO has taken a plausible view-There is no lack of enquiry on the part of the AO and he has applied his mind and allowed the claim to the assessee-Principal CIT did not place on record any apparent error on the part of the AO to substantiate that the order passed by the AO is prejudicial to the interest of Revenue-She has not pinpointed any enquiry which was required to be made but not made by the AO-When the AO has conducted the required enquiry, the order passed by the AO could not be said to be erroneous and prejudicial to the interests of the Revenue-So long as the action of the AO cannot be said to be lacking bona fides, his action in accepting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of filing of ITR u/s 139(1) of the Act, was disallowable. (ii) Further, In clause 26(i)(B)(a) of audit form 3CD, there was no mention of the amount of Interest of Rs. 63,97,664/- incurred and payable during the year and which has been paid before the due date of filing of ITR u/s 139(1). (iii) In absence of any details of payment of this amount, it could only be inferred that it was not paid before the due date u/s 139(1) of the Act and the same should have been disallowed u/s 43B(e) of the Act. (iv) In this regard, the assessee replied that the ledger account of the interest together with the bank statement of CC A/c no. 61171287200, clearly reveals that every month bank itself makes the deduction of interest from the CC A/c which is debited in the Books of accounts. Therefore, it is completely incorrect to say that the interest expenditure though claimed but was not paid. Reference to note 23 to financial statements are also relevant. Since the assessee has been making payments in this manner that the bank itself making the deduction of interest from the CC account, it was not a case of any amount remaining outstanding as on 31.03.2017. Hence, it was not a case of making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 37 of the Act. Hence, the same should have been disallowed but during the assessment proceedings FAO has not been disallowed. (ii) The reply of the assessee is not acceptable as the Interest on account of late payment of TDS was not an allowable expenditure u/s 36(1)(iii) of the Act. (iii) Since no such addition on account of disallowance u/s 36(1)(iii) of the Act had been made by the AO, while completing the assessment on 15/04/2021, the income has been found to be under computed/assessed by this amount of Rs. 21,732/-, which was erroneous and prejudicial to the interest of Revenue." 4.3.3 Our Submissions: As evident from the impugned part of the Ld. CIT that that did not have applied the mind that the interest was not of the penal nature nor she attempted to counter such filing. Therefore, it was a mere suspicion and/or non-application of mind and thus Section 263 was wrongly invoked. 4.4 D) New Loans taken during the year (Rs. 6.35 Crores): 4.4.1 "8. No enquiries w.r.t. fresh loan of Rs. 6.35 Crores: It is alleged in para 4(a) that the AO did not examine the issue of fresh loan of Rs. 6.35 crores which remained unexplained and in particular the account received fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made through banking channels. Interests were also paid through Cheque and TDS, applicable was also deducted. Confirmations of ledger account duly signed by the said creditor bearing complete name, address and PAN. Further, it was noticed that some of the other creditors are old and are coming from preceding years as their opening balances are available in their respective ledger accounts. In most of the cases, closing balances are there which means that the account was carried forward in next AY (i.e. AY 2018-19). (c) The reply of the assessee is not fully acceptable and requires further verification, particularly the third part verification etc. so as to examine the Identity, Genuineness of transaction and also the Creditworthiness of respective Creditors. The AO, while finalizing the fresh assessment shall take note to this point/issue as per direction marked at Para No.9 below. 4.4.3 Our Submissions: Here also the Ld. CIT was completely failed to point out any mistake or error except that the issue needs verification and all the relevant details were made available to her. 5. Suspicion is not a good basis for revision: The CIT cannot invoke section 263 merely based on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, in computation sheet of assessed income and tax payable, issued by the FAO, with the assessment order, the tax had been charged by the FAO at normal rates in place of charging the same at special rates of tax as per Section 115BBE of the Act. As such the computation of total income as well as charging of tax on this issue is observed to be incorrect and erroneous and require to be suitably modified/rectified." However, the fact of aforementioned SCN is not mentioned in the Section 263 order. Thereafter, in the Impugned Order, the Ld. CIT also directed the AO to apply special tax rate as under: "(c) The tax shall have to be charged as per Section 115BBE of the Act for the addition already made u/s 68 of the Act, supra." At the outset, it is submitted that the Ld. CIT was not justified in directing AO to apply S. 115BBE for more than one reasons, submitted hereunder, which shows that the CIT acted beyond jurisdiction hence, this part of the Order deserves to be quashed. 5. Submissions w.r.t Application of S. 115BBE: 5.1 At the outset, it is submitted that S.115BBE specifically refers to the income which are of the nature as referred in S. 68, 69, 69A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not provide any guidance in the matter. Of course, lot of judicial precedents are available to a taxpayer to arrive at a conclusion about determination of appropriate head of income. 5.4 The scheme of sections 68, 69, 69A, 69B and 69C provides that in cases where the nature and source of investments or acquisition of money, bullion or expenditure incurred are not explained at all, or not satisfactorily explained, then, the value of such investments and money, or value of articles not recorded in the books of accounts or the unexplained expenditure may be deemed to be the income. In view of the above, it can be said that for triggering section 115BBE what is relevant is whether income remains disclosed or undisclosed or explained or unexplained. If the income is disclosed or explained as mandated by the law, then same would be taxable in the ordinary manner. On the other hand, if the income is undisclosed or unexplained then the provisions of section 115BBE may be triggered depending upon the facts involved in each of the cases. The moment a satisfactory explanation is provided about nature and source then the source would stand explained and therefore, the income would be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Therefore, the allegation and finding of the Ld. CIT is factually incorrect that the FAO has charged the tax at normal rates only. The AO has invoked the Section 115BBE of the Act but committed a clerical error in not computing the special tax in accordance therewith. At the best it could be a case of rectification but not at all a case of revision. Therefore, the proper course should have been a rectification u/s 154 of the Act (though not conceding) instead of invoking Section 263. In this regard kindly refer to the case of CIT vs. Amitabh Bachchan [2016] 286 CTR (SC) 113, wherein it is held that: "9. Under the Act different shades of power have been conferred on different authorities to deal with orders of assessment passed by the primary authority. While Section 147 confers power on the Assessing Authority itself to proceed against income escaping assessment, Section 154 of the Act empowers such authority to correct a mistake apparent on the face of the record. The power of appeal and revision is contained in Chapter XX of the Act which includes Section 263 that confer suo motu power of revision in the learned C.I.T. The different shades of power conferred on dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock which is found during survey is stock of rice then, it can be said that investment in procurement of such stock of rice is clearly identifiable and related to the regular business stock of the assessee. Therefore, the investment in the excess stock is to be brought to tax under head "business income" and not under the head income from other sources. 6.3 In case of Shri Lovish Singhal vs ITO (ITA No 142 to 146/Jodh/2018 for AY 2014- 15 dated 25 May 2018), the Jodhpur Tribunal applying the proposition of law laid down by the Hon'ble Rajasthan High Court in the Bajargan Traders (supra), held that the "lower authorities were not justified in taxing the surrender made on account of excess stock and excess cash found U/s 69 of the Act and accordingly held that there is no justification for taxing such income U/s 115BBE of the Act. In view of the facts & circumstances, judicial guidelines and the statutory provisions, the additional income declared during survey of Rs. 76,00,000/- cannot be subjected to S. 115BBE of the Act". 7.1 In the ROI itself, as stated in the SCN u/s 263, the subjected additional income of Rs 76 Lakh was declared as income from business and profession. With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 263 says about "if the order is passed allowing any relief without inquiring into the claim". It reads as under:- (Amendment of section 263 w.e.f 01.06.2015). X X X 7.2 In reaching such conclusion, I rely on the following judicial rulings: X X X" 9.2 Submissions: 9.3.1Even the amendment (Expl. 2(a)) does not confer blind powers: It is held that despite there being an amendment, enlarging the scope of the revisionary power of the ld. PCIT u/s 263 to some extent, it cannot justify the invoking of the Expl. 2(a) in the facts of the present case. Before referring to that Explanation, one has to understand what was the true meaning of the Explanation in the context of application of mind by a quasi-judicial authority. In the case of PCIT vs. Shreeji Prints (P.) Ltd.[2021] 130 taxmann.com 294 (SC), decision of Gujarat High Court is affirmed the ITAT Order as under: "17 We thus find merit in the plea of the assessee that the Revisional Commissioner is expected show that the view taken by the AO is wholly unsustainable in law before embarking upon exercise of revisionary powers. The revisional powers cannot be exercised for directing a fuller inquiry to merely find out if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rane v. ITO, (2013) 7 NYPTTJ 1493 (Mum), it was held that newly inserted. Explanation 2(a) to S. 263 does not authorize or give unfettered powers to Commissioner to revise each and every order, if in his (subjective) opinion, same has been passed without making enquiries or verification which should have been made. As submitted above here also the AO having already applied its mind (directly or indirectly), the assessment order was not erroneous. 9.4 Other Supporting Case Laws on S. 263: 9.4.1 Kindly refer to CIT v/s Rajasthan Financial Corporation (1996) 134 CTR 145 (Raj). held that: "Once AO has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation by a letter in writing and the Assessing Offer allowed the claim being satisfied with the explanation of assessee, the decision of the AO cannot be held to be erroneous simply because in his order not make an elaborate discussion in that regard." 9.4.2 In CIT v/s Ganpat Ram Bishnoi (2005) 198 CTR (Raj) 546 held that from the record of the proceedings, in the present case, no presumption can be drawn that the AO had not applied its mind to the various as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy himself about the genuineness of the transaction. Therefore, on the basis of the record available before him, the AO accepted the claim of the assessee. The Commissioner has not found any fault with the details and records filed by the assessee in support of the claim but has cited the reasons that the AO has not conducted the proper enquiry. When the entire record was available with the Commissioner then he ought to have given a concluding finding that the view taken by the AO is contrary to the law as well as facts emerging from the records. However, the Commissioner has not given any such finding and restored the matter to the record of the AO which is not permissible as per the provisions of section 263 when the AO has conducted the enquiry and allowed the claim of the assessee on the basis of the examination of the record as well as the parties in person. We further note that the assessee has also filed the bank statements of these companies showing the transaction of payment of share premium as well as loans to the assessee. The transactions were also reflected in the return of income filed by these companies, therefore, in any case if the Department has any doubt about th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,00,000/- by Sh. Maha Chand Jain) and disallowance of legal & professional, office, consultancy, garden development expenses. Since these new issue/aspects arose in the very first assessment / intimation order u/s 143(1) dated 16.10.2018 only, wherein no such addition was made, thus any error, assuming if any (though not conceding but alternatively only), could have been found in that assessment order itself and limitation has to be reckoned only with reference to the such first assessment / intimation order dated 16.10.2018 and not w.r.t the re-assessment order dated 15.04.2021 passed u/s 143(3)/148 of the Act wrongly subjected to revisionary proceedings. The very first assessment / intimation order dated 16.10.2018, still hold water and could not be said to have merged with the re-assessment order dated 15.01.2024. Accordingly, reckoning the limitation from the end of the financial year i.e. on 30.03.2019, the period of two years has already expired on 31.03.2021, hence the impugned order u/s 263 clearly stands barred by limitation. 10.4. Otherwise also, the AO/CPC was supposed to have passed the intimation within 9 months from the end of the financial year in which RO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s case (supra) as well as our court in the matter of Ashoka Buildcon Ltd.'s case (supra) the jurisdiction under section 263 of the Act cannot be exercised on issues which were not subject matter of consideration while passing the order of reassessment under section 143(3)/147 of the Act but a part of an assessment done earlier under the Act." 10.5.3 In CIT vs Anderson Marine & Sons (P.) Ltd. 266 [ITR 694] 139 Taxman 16 (Bombay) (DC) : "Section 263, read with section 143, of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interests of revenue -Assessment year 1999-2000 - Whether acceptance or acknowledgement of return filed by assessee and intimation sent for purpose of section 143(1) is an assessment and, therefore, in nature of an order - Held, yes - Whether sending intimation being a decision of acceptance of self-assessment is in nature of order passed by Assessing Officer for purpose of section 263 - Held, yes - Whether, therefore, Commissioner can exercise jurisdiction under section 263 in respect of assessment under section143(1) as applicable after 1-4-1989 - Held, yes" 10.5.4 In CIT vs. Rajkumar Deepchand Phade [249 ITR 520] 116 Taxman 783 (Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Maharashtra Government was treated as capital receipt and no addition was made therefore, the limitation u/s 263(2) of the Act was to be reckoned with reference to the original assessment order passed on 31.10.2011 and not w.r.t. the reassessment order passed dated 26.03.2015, relying upon certain decisions. 10.5.6CIT v. Bharti Airtel Ltd (Supra Para 3.3) (DC ) 10.5.7 In Ashok Buildcon Ltd. Vs. ACIT (Supra Para 3.4) (DC ) 10.5.8 In CIT vs. ICICI Bank Ltd. (2012) 343 ITR 74/252 CTR 85 (Mum), held that (DC ): "Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue - Assessment year 1996-97 - Whether where jurisdiction under section 263 is sought to be exercised with reference to an issue which is covered by original order of assessment under section 143(3) and which does not form subject-matter of reassessment, period of limitation of two years under section 263(2) must necessarily begin to run from order under section 143(3) - Held, yes [In favour of assessee]" 10.5.9 In CIT vs. Alagendran Finance Ltd. (Supra Para 3.1) (DC 1-7) 10.5.10 In Indira Industries Vs. Pr. CIT. 305 CTR (Mad) 314: 169 DTR (Mad) 171 (2018) (DC), held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order"), Accordingly, the appeal was to be filed on/before dt. 28.04.2024 however, the same has been filed on dated 29.07.2024. Thus, the appeal was filed with a delay of 92days. 2.1 Reasonable Cause Existed: With regard to the delay, it is humbly submitted that there did exist a reasonable cause and the delay so caused was completely unintended and bonafide in as much as Shri Sushil Mittal, employed in the office of the Company and permanent employee of the appellant company namely, M/s SHIV VEGPRO PRIVATE LIMITED, Kota, was assigned the task to collect the appeal prepared from the counsel at Jaipur, to get it signed and to ensure filing of the same in time. Shri Sushil Mittal was fully conversant with the affairs of the above assessee in the office of M/s SHIV VEGPRO PRIVATE LIMITED, Kota. Shri Sushil Mittal collected the documents prepared from the counsel at Jaipur, which were received only a week before the last date of filing of the appeal. In the meanwhile, because of the marriage of his daughter in the month of April, he proceeded on leave. Therefore, he could neither handoverhis responsibilities to his colleague nor could inform Shri Sandeep Kumar Saboo, Director of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 987) 167 ITR 471 (SC) has advocated for a very liberal approach while considering a case for condonation of delay. The following observations of the Hon'ble Court are notable: "The legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on 'merits'. The expression 'sufficient cause' employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which sub serves the ends of justice-that being the life-purpose of the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But the message does not appear to have percolated down to all the other Courts in the hierarchy." The said judgment is a leading case on the subject and has a binding force on all the officers subordinate thereto." 6.2 The ld. AR of the assessee also filed a detailed paper book in support of the contention so raised in the written submission on 14.10.2024 and the index of the document submitted are as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 314(Mad) 69-74 7. The ld. AR of the assessee in addition to what has been stated in the written submission vehemently argued that the action of the ld. PCIT exercising the jurisdiction beyond two year is not permitted, as the ITR was filed 06.09.2017, intimation u/s. 143(1) was issued on 16.10.2018 and notice us/. 148 was issued on 17.03.2020 and that assessment order was passed on 15.04.2021. The issues on which the PCIT is seeking to exercise the jurisdiction u/s. 263 of the Act were concluded by virtue of an intimation dated 16.10.2018 issued u/s. 143(1) of the Act which admittedly was done beyond a period of two years prior to the notice dated 14.02.2023 issued u/s. 263 of the Act. To drive home to this contention the ld. AR of the assessee relied upon the decision of the CIT vs. Larc Chemical Limited [368 ITR 655 (Bombay)]. The ld. PCIT raising the issue which was not part of the notice u/s. 148 and the reasons recorded there under. The ld. AO has already applied the mind on the issue that was raised and the assessment to that has already been completed. In the notice issued u/s. 148 the reason to believe was alleged bogus sales and the ld. AO examined that aspect and final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued u/s. 263 of the Act. The bench noted that the issue raised by the assessee in this appeal has already been decided by the our own Hon'ble Jurisdiction High Court in the case of Chambal Fertilisers and Chemicals Ltd. Vs. PCIT [170 taxmann.com 543 (Rajasthan) wherein the Hon'ble Court held as under; 2. The question which arise for consideration in the present case is whether the period of limitation for passing under Section 263 of the Income Tax Act, 1961 has to be reckoned from the date of original assessment order or from the date of reassessment order. 3. The Supreme Court in the aforesaid decision in the case of Commissioner of Income Tax(supra) has held as follows:- "3. At the outset, it is required to be noted and it is not in dispute that, as such, the Commissioner exercised powers under Section 263 of the Act with respect to the issues which were not covered in the re-assessment proceedings. Therefore, the issues before the Commissioner while exercising the powers under Section 263 of the Act relate back to the original Assessment Order and, therefore, the limitation would start from the original Assessment Order and not from the Reassessment Order. We are fort ..... X X X X Extracts X X X X X X X X Extracts X X X X
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