TMI Blog2017 (3) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that A.O. had invoked provisions of section 44AD and section 44AF which is a totally wrong fact. The Ld. CIT-A has observed that assessee has not been granted opportunity to rebut the confirmations received from the parties. This also Ld. CIT-A has found to be a reason to set aside the order’s of the A.O. We find that the powers of the Ld. CIT-A are coterminous with that of the A.O. further, more as held in the case of Kapoorchand Shrimal [1981 (8) TMI 2 - SUPREME Court ] it is the duty of the appellate authority to correct the errors in the order’s of the authorities below and remit the matter to them if needed with necessary directions. Hence Ld. CIT-A’s action in this regard is not correct. The issues raised in this appeal need t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side and that of the AO be restored. iv) The appellant craves leave to amend or later any ground or add a new ground which may be necessary. 3. In this case the A.O. noted that assessee has not supplied proper details as called for. He noted that assessee has failed to furnish account confirmation of sundry debtors and creditors. The A.O. also noted that earlier assessment order was also passed u/s. 144 of the Act. The A.O. issued letters u/s. 133(6), to 12 parties. But response was received only from 4 parties. In these confirmations A.O. noted a lot of discrepancies. The A.O. proceeded to reject the books accounts. The A.O. concluded as under: In view of the above findings it transpires as under: i) The assessee has not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er which comes to ₹ 91,00,915- (i.e. 2% of ₹ 45,50,45,762/-). Accordingly, ₹ 91,00,915/- is treated as business income. penalty proceedings u/s. 271 (1) (c) of the I.T. Act 1961 is initiated for concealment of income and furnishing inaccurate particulars of income. Penalty proceedings u/s. 271 (1)(b) of the I.T. Act, 1961 is hereby initiated for non-compliance to Notice u/s. 142(1) 143 (2) of the I.T. Act, 1961. The assessee during the course of assessment proceedings has not produced the books of accounts for verification; hence it is apparent that the assessee is not maintaining any books of accounts as required u/s. 44AA of the I.T. Act, 1961. Therefore, penalty proceedings u/s. 271A of the I.T Act, 1961 is here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the AO had found some discrepancies and mismatch between the sales/purchases reported by the appellant and the confirmations received in response to notices issued u/s 133(6). However, it is also true that the appellant was not granted sufficient opportunity in this regard. Or else, it can be said that the opportunity granted by the AO could not be availed by the appellant due to certain bona fide reasons (this is evident from the appellate proceedings in the case at the appellant in the preceding year i.e. AY 2007-08. In this regard, as extracted above, the appellant states that We request Your Honour to please note that no opportunity was accorded to Your Appellant to reconcile the alleged differences. In-fact, Your Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition is not justified. Hence, the addition of ₹ 91,00,915/- is deleted. 5. Against above order revenue is in appeal before us. We have heard both the counsel and perused the records. 6. We find that A.O. has mentioned several factors including non-compliances by the assessee. He has issued letters to 12 parties. Out of that only four have responded, wherein a lot of discrepancies have been noted. No where in the assessment order the A.O. has mentioned the provisions of section 44AD or section 44AF. In these circumstances in our considered opinion Ld. CIT-A s is order reflects a lack of applications of mind on the issue involved. He has proceeded to mention that A.O. had invoked provisions of section 44AD and section 44AF ..... X X X X Extracts X X X X X X X X Extracts X X X X
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