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2022 (4) TMI 97 - AT - Income TaxValidity of Revision u/s 263 - contravention of CBDT Circular No. 19 of 2019 - HELD THAT:- We find that Circular no. 19/2019 issued on 14th August, 2019 provided that to maintain proper audit trail of communication the Central Board Of Direct Tax (CBDT) in exercise of its power under section 119 of the Act has directed that no communication have been issued by income tax authorities relating to assessment, appeals, orders, statutory or otherwise, exemptions, inquiry, investigation, verification of information, penalty, prosecution, rectification and approval etc. to the assessee or to other person on or after the 1st October, 2019 shall have a computer generated document identification number allotted and is duly quoted in the body of such communication Learned PCIT-8, Mumbai passed the order under section 263 of the Act on 10th March, 2021 - It does not contain any DIN and further any of the six paragraphs in her order shows that this communication is issued manually without having DIN as it falls in any of the exceptions, and any permission has been taken from the respective authorities. CBDT also issued press release explaining the above mechanism on PRESS RELEASE, DATED 14-8-2019. On 11 March, the ld PCIT sent a communication stating intimation letter for order under section 263 dated 11 March 2021 stating, “this is to inform you that order under section 263 of the Act dated 11th March, 2021 is having document No. (DIN) ITBA/REB/M/REB5/ 2020- 2021/ 1031404838(1).) This communication states that DIN for order passed under section 263 of the Act dated 11th March 2021 has some DIN. Surprisingly, no order was passed under section 263 of the Act in case of the assessee on 11th March 2021. Impugned order was as passed on 10th March 2021. Therefore, it is apparently clear that the order passed by the learned PCIT on 10/03/2021 was in clear violation of the instructions of Central Board Of Direct Taxes vide circular no. 19/2019 dated 14th August, 2019. For this reason, the order passed by the learned PCIT deserves to be quashed. Unsecured loans - In absence of any independent bank account of M/s Sri Gopikrishna Trust no information is available about whether loan given by sources from sources of the corporate trustee or by the trust. Thus, sources of funds belonging to Gopikrishna Trust were also not clear. Thus, it is clearly demonstrated by the ld PCIT That the learned Assessing Officer has not made any inquiry worth its name about above loan. Mere disclosure in tax audit report does not show creditworthiness and genuineness of the loans. Further in factual matrix of assessee’s meager share capital, loan not commensurating with the financial of assessee, clearly needs proper examination of loans by ld AO . In view of this issue, we find that the learned Assessing Officer has failed to make any inquiry and therefore, the Ld PCIT after making due inquiries has correctly assumed the jurisdiction under section 263 of the Act. Ld PCIT carried out her own inquiry and set aside the matter back to the file of the learned Assessing Officer. Outstanding ‘other payables’ as well as loans and advances - The assessee tried to explain before the Assessing Officer with respect to the schedules in the balance sheet along with names of the parties on 5th October, 2017. The letters dated 26th October 2017 submitted by the learned Authorized Representative vide page No. 26 of the paper book. The assessee vide letter dated 8th November, 2017 [ page 68 of paper book] stated details about serial No. 39 schedule details of payment made to ICRA and further vide serial No.42 submitted the copy of the Term sheet and agreement for loans and advances to Piramal Estate Pvt. Ltd. and Shri Hari trust. It also submitted agreement dated 2nd June 2014 before the Assessing Office . Thus the finding of the ld PCIT that assessee did not submit necessary details before the ld AO. is devoid of any merit. The learned Assessing Officer carried out due inquiries on this issue and therefore order of the learned Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue on this aspect. As we have already held that order of learned PCIT on the issue of ‘other payables’ and ‘loans and advances’ is not sustainable in law. Therefore, There is no requirement of adjudicating about proper opportunity of hearing granted to the assessee by the learned PCIT. Appeal of assessee allowed.
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