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2020 (3) TMI 223 - AT - Income TaxRevision u/s 263 - Assessment order passed u/s 147 - suppression of gross receipts on the basis of reasons recorded for reopening of assessment, which is further supported by evidences found during the course of survey in form of second set of financial statements prepared by the assessee for the impugned assessment year - HELD THAT:- In this case, on perusal of facts, we find that the Ld.PCIT has questioned the issue of suppression of turnover, which is also a matter of deliberation by the Ld. AO during the reassessment proceedings and hence, we are of the considered view that the Ld. PCIT was completely erred in invoking jurisdiction to revise the assessment order passed by the Ld. AO u/s 143(3) r.w.s. 147 of the I.T.Act, 1961, in respect of very same issue of suppression of turnover, which was very much deliberated by the Ld. AO during the assessment proceedings. Other part of proceedings taken up by the Ld.PCIT as directed the Ld. AO to examine the expenses and determine the net profit after considering the profit declared by the assessee for the year under consideration, after taking note of the fact that there is large number of difference in certain expenses claimed in two set of financial statements. We find that first and foremost the PCIT has exceeded his jurisdiction conferred upon by him u/s 263 because the show cause notice is very clearly stated that the assessment order is erroneous, insofar as, it is prejudicial to the interest of the revenue, in respect of the issue of suppression of turnover. Once the Ld.PCIT having found that the issue of suppression of turnover was considered by the Ld. AO, at the time of assessment proceedings, he should have confined its scope of revisional powers to the issue of suppression of turnover instead of going to the issue of expenses claimed by the assessee and profit declared for the year under consideration. Because, the issue of various expenses claimed in two set of financial statements was neither, subject matter of reassessment proceedings u/s 147 of the Act, nor find place in show cause notice issued by the Ld.PCIT u/s 263 of the Act, 1961. PCIT having accepted the fact that the Ld.AO has examined the issue of suppression of turnover should have confined the scope of his revisional powers to the issue, which he had questioned in his show cause notice, rather than going to the issue of various expenditure, which is not at all a subject matter of proceedings u/s 147 of the I.T.Act, 1961. AO himself is precluded from making any other additions in reassessment proceedings, when he failed to make additions on the issues on which reasons for reopening of assessment was recorded, then certainly in our consider view the Ld.PCIT is also precluded from taking those issues in revisional proceedings u/s 263 of - issue of various expenses questioned by the Ld.PCIT was explained by the assessee during the assessment proceedings with reference to two set of financial statements and the Ld. AO has accepted the claim of the assessee and completed assessment without making any additions on the issues. It is also a matter of fact that the two set of financial statement have been prepared for two different periods and the difference of income and expenditure recorded in said financial statements has been explained before the Ld. AO, during reassessment proceedings. PCIT was incorrect in coming to the conclusion that the Ld. AO ought to have carried out necessary enquiries with regard to various expenditure claimed in two set of financial statements and also, the profit declared by the assessee for the year under consideration in comparison with average profitability of certain comparables furnished by the assessee. We, therefore are of the opinion that the Ld.PCIT has gone beyond the scope of his revisional powers conferred on him by the provision of section 263 - Decided in favour of assessee.
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