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TMI Blog2025 (2) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... ce was successfully assailed by the Assessee and ld. PCIT erred in passing the impugned order u/s 263 of the Act. We conquer with the contention canvassed by the Ld. AR and we hold that it is now fairly settled that orders cannot travails beyond the scope of Show Cause Notice. We, therefore, hold order to be illegal and not proper on this score. It is passed in violation of principle of natural justice too. PCIT has erred in law by holding that queries raised during Revision proceedings u/s 263 remained unverified and the order was passed by the AOwithout making enquiries or verification which should have been made and has resulted in claim being allowed without enquiring into it. We hold that said findings is erroneous and not proper as Assessee had furnished all documents before AO in support of his case and that the same were examined and verified. PCIT had failed and omitted to state that which documents produced before ld. A.O. went unverified and was not examined. The very foundation of impugned order was Show Cause Notice and absence of two documents on record of ld. A.O. i.e., FARD and Agreement to sell which successfully has been established before us was on record of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex-parte assessment will be completed u/s 144 of the Act on basis of information and material on record on or before 23.10.2018[ paper book page 101]. 2.4 That on 25.10.2018 a notice u/s 142(1) was issued to the Assessee to furnish told A.O. certain accounts and documents specified therein on or before 29.10.2018 [ paper book page 102]. A show cause notice dated 25.10.2018 [page 101 of paper book ] was also issued to Assessee. 2.5 That the Assessee vide reply which is at page 104 of paper book brought to the notice of the Assessing Officer following facts which can be summed up as under:- 1. That father is residing at Fatehpur UP. It is not possible to call him at such a short notice. Distance is 1400KM. Train tickets are not possible due to long queue of waiting list. Age is against father. Further all person connected with Agreement to sell are residing at or around same place. Hence request was made to ld. Assessing Officer to grant leave for exempting their personal appearances and instead he be allowed to furnish affidavit in this regard which would be duly attested by first class Magistrate. All the relevant documents shall be furnished along with the affidavit of father ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he source of cash deposits of Rs. 32,88,320/- in your saving Bank accounts maintained with ICICI, Bank Ltd., Chandigarh during the F.Y. 2015-16. Please show cause as to why an addition of 1,13,23,000/- may not be made to your total income for the asstt. Year 2016-17. If still you have any explanation to offer, you may file the same on or before 6.12.2018. In case of failure on your part, it will be presumed that you have no objection to the proposed addition and assessment will be completed accordingly. The Assessee by reply on page 26 of paper book brought to the notice of the ld. Assessing Officer following facts:- 1. That Assessee is an employee in Darshaw & Company Pvt. Ltd. copy of Form No16 of Income Tax Return for the year under consideration was enclosed. - Annexure I. 2. That during the year under consideration father of the Assessee had entered into agreement to sell of his agriculture land at village Barola, Tehsil Manjhanpur, Distt. Koshambi and that he had received cash of Rs. 40 lakh on 30.4.2015. The Assessee had deposited the same on different dates in his saving account. The copy of agreement to sell was enclosed - Annexure II 3. The copy of Bank Statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was enclosed - Annexure A [ page ITO - 177 paper book) against which the father of the Assessee had entered into agreement to sell. Note: This document called FARD was also submitted on 14.12.2018 in response to notice dated 12.12.2012. [page 5 to 14 of paper book]. 2.11 The ld. Assessing Officer by an assessment order bearing No. ITBA/AST/S/143(3) 2018-19/ 1019524940(1) dated 24.12.2018 passed u/s 143(3) computed the income of the Assessee as per return of income at Rs. 8,41,690/-. It was held by him that information filed by the Assessee was examined. It was also held by him that verification of documents submitted during the assessment proceedings was done and was accepted. 2.12 It being by assessment order (supra) the income of the Assessee was accepted without any additions. 2.13 That after the aforesaid assessment order dated 24.12.2018 was passed, a notice dated 6.3.2021 u/s 263 of the Act was issued to the Assessee by PCIT Chandigarh-1 which reads as under: - "Your attention is invited 10 the assessment order u/s 143(3) of Income tax Act, 1961 dated 24.12.2018 framed in your case for the A.Y. 2016- 17. 2. From perusal of the assessment record, it has been obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er u/s 263 of the Income Tax Act, 1961 shall be passed on the basis of the facts as are presently available on record." 2.14 The Assessee by response on page 3 of paper book brought to the notice of PCIT following- (i) that the case was selected for cash deposit in the bank account and that the ld. A.O. has made addition detailed inquiry for source of deposit in bank. (ii) As per para 3 of Your honour notice your goodself has informed us that the assessee has failed to submit details of land holding. In this regards we submit that the copy of fard from Revenue record showing the land holding of assessee's father has been uploaded on 14/12/2018 as annexure A along with reply no 4 in response to notice dt. 12-12-2018. The copy of reply, copy of Fard & acknowledgment are again uploaded for kind consideration, please refer Annexure-I attached. We submit the assessee has filed fard in support of land holding of his father and same is public document and self-explanatory. (iii) We also submit that your honour has also observed that the assessee has failed to submit the copy of agreement to sell whereas the assessee has uploaded agreement to sell on 06/12/2018 as Annexure no 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in so far as it is prejudicial to the interest of revenue for the reasons as discussed above in view of the provisions of section 263, inter alia including Explanation 2(a) inserted w.e.f. 01.06.2015. Accordingly, the assessment order u/s 143(3) dated 24.12.2018 for the assessment year 2016-17 is cancelled with a direction to the Assessing Officer to pass an order afresh in accordance with law, after allowing opportunity of being heard to the assessee." 2.17 The Assessee being aggrieved by the impugned order has filed the present appeal before us against the impugned order and inter alia has raised following Grounds of appeal before us - 1. That the Pr. Commissioner of Income Tax- Chandigarh-1 wrongly passed order under section 263 of Income Tax Act as he did not consider the reply and information furnished filed by appellant and she has passed order without making any enquiry during revisionary proceeding & she has simply cancelled the assessment with a direction to pass order afresh without rebuttal to reply filed in response to show cause notice. 2. That the assessment order having been passed by the Assessing Officer after making due enquiry & due application of mind and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessee at the time of assessment proceedings. In fact, sometime requisitioned documents were already uploaded on portal and still the quarries were made by ld. A.O. by issuing notice (s) not realizing the fact that queries are already answered and relevant document uploaded on portal. 3.3 The ld. AR next contended that before by passing the impugned order the ld. PCIT while exercising power u/s 263 should have at least conducted some inquiry if not detailed but a bare minimum in order to ascertain whether the impugned assessment order which is subject matter of Revision u/s 263 is indeed erroneous and so also prejudicial to the interest of Revenue. No such inquiry / or bare minimum inquiry seems to have been conducted by the ld. PCIT before passing the impugned order which shows non-application of mind and arbitrary exercise of power an approach wholly untenable in law. 3.4 It was also contended that reply to the show cause notice issued u/s 263 of the Act was not effectively rebutted by the ld. PCIT in the impugned order and that she has simply cancelled the assessment order in a vary simplicit manner which approach is uncalled for. In brief, ld. AR contended that before can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee further claimed that his father had received Rs. 40,00,000/- in cash as advance for sale of land. The IKRARNAMA dated 30.04.2015 was not a registered document. Further the sale was not finally effected and in lieu of Rs. 40,00,000/- the buyers agreed to cultivate the land for three years. The Assessing Officer accepted this version of the assessee without any third party verification. No inquiries were made by the Assessing Officer regarding the genuineness of transaction leading to availability of cash in the hands of the assessee. Further, for purchase of flat investments by the sister has been shown as per details filed by the assessee. The gift deeds given by the sister do not match with the total investment in the flat made by the sister. However, no queries in this regard have been raised by the A.O." The Ld. AR in respect of above contended that above were not part of the Show Cause Notice and complained of breach of principles of natural justice on the part of ld. PCIT in the impugned order. 3.8 Finally ld. AR placed reliance on Co-ordinate decision of this Tribunal in the case of Shri Ram Lal vs. PCIT-1, Chandigarh in ITA No. 370/Chd/2022 dated 24.5.2024 in supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents i.e. FARD in respect of land holdings and agreement to sell were duly furnished before the ld. A.O. and that both the document's besides others were examined and verified by the ld. A.O. in manner known to law and that assessment order was passed u/s 143(3) accepting the return of income without making any addition. Thus, we hold that very basis and foundation of Show Cause Notice was successfully assailed by the Assessee and ld. PCIT erred in passing the impugned order u/s 263 of the Act. 4.3 We also hold that impugned order has travelled beyond the scope of Show Cause Notice in as much as finding has come to be delivered in the impugned order to the following effect: "Further, for purchase of flat investments by the sister has been shown as per details filed by the assessee. The gift deeds given by the sister do not match with the total investment in the flat made by the sister. However, no queries in this regard have been raised by the A.O.", The ld. AR in respect of above findings has raised a genuine grievance that above details of sister conspicuously silent in the Show Cause Notice and no explanation on it was ever sought in this regard by PCIT hence impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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