TMI Blog2002 (11) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, this finding is wrong and not sustainable as previous year's GP rate compares favourably with this year's GP rate. There is no evidence on record to show suppression of sales, as sales and purchases are all vouched." 2. Brief facts of the case are these. The assessee is a partnership-firm and is engaged in the business of running a hotel and two restaurants, on The Mal, Shimla. The assessee, in addition, is also engaged in the business of running a counter for the sale of sweets, bakery and ice cream. Assessments for both the assessment years, viz., 1992-93 and 1993-94 were framed by the AO vide assessment orders dt. 25th Oct., 1993 and 27th Jan., 1994 respectively at total income of Rs. 5,93,770 and Rs. 9,52,620 respectively under s. 143(3). 3. The CIT, examined the records of the assessee and noticed that the AO had failed to conduct enquiries with regard to the cost analysis of the cost of raw materials consumed and sale price of the products sold by the assessee as per menu cards in the restaurants and he was of the opinion that the assessment was completed in haste and without conducting proper enquiries with regard to the cost of raw material and the sale price as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the returns of income were accompanied by audited accounts. Detailed questionnaires were issued by the AO to which replies were furnished by the assessee. The cases for both the assessment years were selected under Selective Scrutiny Scheme of the CBDT and the assessments were framed after examining the books of accounts and other relevant replies to the questionnaires. He submitted that the order under s. 263 was a quasi-judicial order and it was necessary for assuming jurisdiction that there should be a proper and valid reason and the conclusion of the CIT should also be based on facts. It was submitted that in the instant case, the CIT had not come to a definite conclusion as to how the orders passed by the AO were erroneous and prejudicial to the interest of the Revenue. It was vehemently argued that the entire approach of the CIT was faulty and cryptic and on that basis, no order under s. 263 could have been passed. The learned counsel of the assessee submitted that the assessment orders passed by the AO under s. 143(3) were based on records, audited statements and after verification. As such, it cannot be said that the AO has passed the orders in undue haste. 6. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Kewal Ram Chauhan vs. ITO (1997) 91 Taxman 167 (Chd)(Mag); and (iv) Indian Aluminium Co. Ltd. vs. CIT (1994) 50 TTJ (Cal) 281. The counsel vehemently submitted that the setting aside an assessment is not an ordinary matter. In fact, in Tax Laws and in other laws certainty and finality are the pre-requisite of good tax administration and the orders of the subordinate authorities should, therefore, not be cancelled or set aside on mere whims and fancies; there must be very compelling reasons for interference by the CIT under s. 263 and in the instant case, the CIT had without reaching a firm conclusion that the order passed was, in fact, erroneous had left the enquiries to be made by the AO and prayed that in view of the submissions, the order passed dt. 5th Jan., 1996, by the learned CIT should be cancelled. 7. Learned Departmental Representative strongly and very vehemently supported the order of the CIT and filed written submissions which have been placed on record. She submitted that the orders for both the assessment years, i.e., 1992-93 and 1993-94 were completed by the AO prior to the completion of assessment for asst. yr. 1991-92 which resulted in heavy addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 93-94 and even earlier year had accepted the sales, purchases, book results and no addition was made. 9. We have carefully considered the submissions of both the sides and have also gone through the orders by the AO as well as by the CIT. A perusal of the orders passed by the CIT indicates that the assessment orders passed by the AO under s. 143(3) have been cancelled on the ground that the desired enquiries have not been made and the assessments have been framed in undue haste. In our opinion this cannot be a sufficient ground for cancellation of the assessments. The AO, while framing the assessment under s. 143(3) in the case of the assessee, has clearly stated in the preamble of the assessment order that the cases have been selected under the Selective Scrutiny Scheme of the CBDT and the assessment has been framed under s. 143(3) after issue of detailed questionnaire, examining the books of accounts, vouchers, details of opening and closing stocks, comparison of GP rate. While making the assessment order, it is the satisfaction of the AO who made enquiry and it should be the touchstone to base the validity of the assessment order passed by him. The CIT cannot substitute his s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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