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TMI Blog2010 (1) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... tion entered into by assessee were routed through more than 50 bank accounts and each of the transaction was unique and independent, hence, peak cannot be worked out in such a case. (iii) In view of above, the order of Assessing Officer is required to be restored. (2)(i) In the facts and circumstances of the case the ld. CIT(A) has erred in deleting addition of Rs. 4.15 crores on account of low g.p. rate particularly when he was upheld the rejection of books of account. (ii) While deciding this issue, ld. CIT(A) has adopted a g.p. rate of 10 per cent for which he has not given any cogent reasons. (3) The ld. CIT(A) has erred in the facts and circumstances of the case in deleting addition of Rs. 9,71,273 made on account of unverifiable freight expenses by holding that the assessee has disclosed additional income during the year while doing so ld. CIT(A) has ignored the fact that these expenses remained unverified during assessment proceedings. (4) In the facts and circumstances of the case, ld. CIT(A) has erred in deleting the addition of Rs. 10,00,000 made on account of undisclosed rental income particularly when the assessee was not able to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. CIT(A) has erred in restricting the disallowance out of freight expenses and bardana expenses to Rs. 2,75,930 and Rs. 1,31,849 respectively as against those of Rs. 5,51,860 and Rs. 5,27,397 made by the Assessing Officer." 4. The grounds taken in ITA No. 3067 (Delhi) of 2008 are as follows :- "(1) On the facts and circumstances of the case, the order passed by the learned Commissioner of Income-tax (Appeals) [CIT(A)] is bad both in the eye of law and on facts. (2)(i) On the facts and circumstances of the case, the ld. CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the notice issued under section 153 A by the Assessing Officer is bad both on facts and in law and as such, the assessment framed in consequence thereof is liable to be quashed. (ii) On the facts and circumstances of the case, the ld. CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the assessment framed under section 153A/143(3) being against the statutory provision of the Act and the procedure prescribed under the law, is bad and the same is liable to be quashed. (iii) On the facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee and allowable as per provisions of Income-tax Act. (ii) On the facts and circumstances of the case, the ld. CIT(A) has erred, both on facts and in law, in confirming the Action of the Assessing Officer in not recomputing the deduction under section 80HHC of the Act on the basis of assessed income. (8) On the facts and circumstances of the case, the ld. CIT(A) has erred, both on facts and in law, in confirming the order of the Assessing Officer in reassessing the already assessed income without there being any adverse material and evidence found during the course of the search relevant to the period under the assessment and without bringing any other adverse material or document on record. (9) On the facts and circumstances of the case, the ld. CIT(A) has erred both on facts and in law in confirming the order made by the Assessing Officer as the disallowance and additions has been made in the reassessment proceedings merely on change of opinion without there being any adverse material found in search. (10) On the facts and circumstances of the case, the ld. CIT(A) has erred, both on facts and in law, in rejecting the contention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, the order of the assessment was barred by limitation. The said order in Bishan Saroop Ram (supra) was quoted from in extenso, as follows:- "(5) We have considered the facts of the case and the rival submissions. From the submission of both the sides, the questions that come up for consideration are:- (i) does the Assessing Officer have the powers to grant any specified time as the direction of the Assessing Officer for completing special audit under section 142(2A), and (ii) whether the time period under section 142(2A) is controlled by the provisions of section 142(2C)? For a better appreciation of the issue, it would be worthwhile to extract the relevant provisions as under:- The provisions of section 142(2A) is as follows:- '(2A) If, at any stage of the proceedings before him, the Assessing Officer, having regard to the nature and complexity of the accounts of the assessee and the interests of the revenue, is of the opinion that it is necessary so to do, he may, with the previous approval of the Chief Commissioner or Commissioner, direct the assessee to get the accounts audited by an accountant, as defined in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proviso to section 142(2C) reads as follows:- 'Granting of power to the Assessing Officer to extend the time for completion of special audit under sub-section of section 142. Sub-sections (2A) to (2D) of section 142 deal with the power of Assessing Officer to order a special audit. Such power is required to be exercised by the Assessing Officer having regard to the nature and complexity of the accounts of the assessee and the interest of the revenue. Sub-section (2l) of the said section specifies the period within which the audit report is to be furnished. The proviso to said sub-section empowers the Assessing Officer to extend this period of furnishing of audit report. Further, it is also provided that the aggregate of the originally fixed period and the period(s) so extended shall not exceed 180 days from the date of issuance of direction of special audit. Further, such extension can be made only when an application is made in this behalf by the assessee and there are good and sufficient reason for such extension. It is proposed to amend the said proviso so as to also allow the Assessing Officer to extend this period of furnishing of audit repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct from 1st April, 2008. Hence, from this date and onwards, the Assessing Officer shall also power to extend the period of furnishing of audit report suo motu' 5.1 The dates as mentioned are not disputed. A perusal of the provisions of section 142(2A) shows that at any stage of the proceedings before the Assessing Officer if the Assessing Officer is of the view that there is complexity in the accounts of the assessee, then, in the interest of justice, he may with the prior approval of the Chief Commissioner or the Commissioner, direct that the assessee's accounts are to be audited by an accountant as specified under the Act. The direction for conducting special audit is subject to the assessee having been given reasonable opportunity of being heard. The reading of the provisions of section 142(2A) categorically shows that no time-limit is specified for the completion of the special audit. A reading of the provisions of section 142(2C) shows that the report under section 142(2A) is to be furnished within the specified period, which is to be determined by the Assessing Officer. Thus, it is noticed that section 142(2C) specifies the time-limit and such time-limit is given at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead otherwise, there was no reason for such amendment. The fact that the term "suo motu" has been inserted with effect from 1-4-2008 shows that before 1-4-2008, the Assessing Officer did not have the inherent powers to extend the time-limit without an application from the assessee. Further, even such extension would be controlled in view of the term "for any good and sufficient reason". Here as the period in the present case is before 1-4-2008 and as it is noticed that the assessee has not made any application for the extension of the period given vide order for special order dated 12-12-2006, the extensions made by the Assessing Officer vide his order dated 7-3-2007, 17-4-2007 and 17-5-2007 are without jurisdiction and, consequently, such extensions as made vide those letters/orders cannot be said to extend the limitation. The exclusion as provided in the Explanation (ii) to section 153B would have to be read to be 90 days being a period between 12-12-2006 to 12-3-2007. Consequently, it would have to be held that the time period under section 142(2A) is controlled by the provisions of section 142(2C) and the exclusion provided in Explanation (ii) to section 158B was for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed. (iii) On the facts and circumstances of the case, the ld. CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the assessment order passed by the Assessing Officer is beyond the limitation period prescribed under the law and as such is liable to be quashed. 3. On the facts and circumstances of the case, the ld. CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the order passed under section 142(2A) is bad in law and in consequence the assessment framed is vitiated and bad and also barred by limitation and liable to be quashed. 4(i) On the facts and circumstances of the case, the ld. CIT(A) has erred, both on facts and in law, in sustaining an addition of Rs. 1,37,500 as undisclosed investment under section 69 in the purchase of the property. (ii) On the facts and circumstances of the case, the ld. CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that reference to Valuation Officer and addition made on the basis of valuation report is bad both in the eye of law and on facts. (iii) That the above addition has been made withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cting the contention of the assessee that the Assessing Officer has erred in computing income not considering telescoping of income and ignoring the real income principle applicable to the facts of the case. 11. On the facts and circumstances of the case, the ld. CIT(A) has erred, both on facts and law in confirming the Action of the Assessing Officer in levying interest under various sections of the Act. 12. The appellant craves leave to add, amend or alter any of the grounds of appeal." 10. Herein also, as agreed by the parties, the issue of limitation, it is seen, is squarely covered by the Tribunal order dated 18-9-2009 in the case of Bishan Saroop Ram (supra), wherein it has been held that in the absence of suo motu powers of the Assessing Officer to extend the period of audit under section 142(2A) of the Income-tax Act, the assessment order was barred by limitation. 11. Therefore, following the aforesaid Tribunal order dated 18-9-2009 in Bishan Saroop Ram's case (supra), we hold the assessment order herein to be barred by limitation and the same is, as such, cancelled. 12. In the result, the appeals filed by the department in ITA Nos. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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