TMI Blog2010 (1) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of 2009 and 3029 (Delhi) of 2008:- 1. These are Department's appeals for assessment years 2004-05, 2005-06 and 2000-01. The grounds taken in ITA No. 1031 (Delhi) of 2009 are as follows:- "(1)(i) The ld. CIT(A) has erred in facts and circumstances of the case in holding that addition of Rs. 10,33,77,612 made on account of undisclosed investment should be restricted to Rs. 5,18,57,706 being the peak amount of Rs. 4,78,11,050 as calculated by him from the entries found in the ledger account of Sh. Sanjay Kumar Garg, the entry operator and the profit of Rs. 40,46,656 thereon at the rate of g.p. of 10 per cent. (ii) While deciding this issue ld. CIT(A) has overlooked the fact that the transaction 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the said investment was duly reflected in the books of account. (ii) That the decision of the ld. CIT(A) is based on the facts which are not corroborated from the assessment records of the assessee." 3. Grounds taken by the Department in ITA No. 3029 (Delhi) of 2008 are as follows:- "(1) On the facts and in the circumstances of the case, the ld. CIT(A) has erred in restricting the addition on account of unexplained investment in property to Rs. 1,37,500 as against that of Rs. 11,01,600 made by the Assessing Officer on the basis of report of the Valuation Officer. (2) On the facts and in the circumstances of the case, the 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case, the ld. CIT(A) has erred, both on facts and in law, in sustaining a disallowance of Rs. 1,31,849 on account of Bardana expenses. (ii) That the abovesaid addition is untenable in an assessment under section 153A as no adverse material or documents doubting the results/expenses incurred by the assessee were found during the course of search. (7)(i) 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 allowing deduction under section 80HHC amounting to Rs. 31,901 claimed 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 rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's appeals in ITA Nos. 149 and 150 for assessment year 2005-06 have been allowed along with assessee's appeal in ITA No. 148 (Delhi) 2009, for assessment year 2001-02. Therein, the Tribunal followed the Tribunal decision dated 18-9-2009 in IT Appeal Nos. 3413 to 3415, 3459 (Delhi) of 2008, 76 to 78, 359 (Delhi) of 2009 and 3039, 3588 and 3589 (Delhi) of 2008 for assessment years 1999-2000 to 2005-06, in the case of Bishan Saroop Ram v. Dy. CIT [2010] 35 SOT 240 decided by 'A' Bench of Delhi Tribunal, wherein it was held that in the absence of suo motu powers of the Assessing Officer to extend the period for audit under section 142(2A) of 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( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reads as follows:- Provided that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in clause (a) or clause (b) of this sub-section available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly.' A perusal of the memorandum Explanation of the provisions in the Finance Bill, 2008 regarding the amendment to 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 Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such extension. 27.3 With a view to rationalize the said proviso so as to also allow the Assessing Officer to extend this period of furnishing of audit report suo motu, the said proviso has been amended. Hence, while the Assessing Officer shall continue to have power to grant extension on an application made in this behalf by the assessee and there are good and sufficient reasons for such extension, he can also grant such extension on his own. 27.4 Applicability has been made applicable with effect 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 008 which explains the amendment to the proviso to section 142(2C) shows that the term "suo motu, or" had been inserted with effect from 1-4-2008. In these circumstances, it would have to be held that the power to suo motu extend the period for completion of the special audit was available to the Assessing Officer only with effect from 1-4-2008 and before such date, the extension can be made only at the request of the assessee on an application made in this behalf by the assessee. If it is to be read 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 17-5-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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