9911796707
TMI Blog2018 (5) TMI 1698X X X X Extracts X X X X X X X X Extracts X X X X ..... sit of Rs. 2.18 crores (rounded off) in HDFC bank, unsecured loan of Rs. 4.42 crores (rounded off) treated as unexplained cash credit and a further sum of Rs. 13.66 crores (rounded off) found credited in the suspense account of the assessee which was also treated as his unexplained cash credit. 3. We would refer to statutory provisions later, however, as is wellknown, against such order of assessment, the assessee could either file appeal or a revision petition but could not pursue both. The assessee initially chose the appeal route. With effect from 01.03.2016, rule 45 of the Income Tax Rules, 1962, was amended, making it compulsory to file an appeal before the Appellate Commissioner electronically. The assessee however, manually filed appeal against the order of assessment on 15.04.2016 before the Commissioner of Income Tax (Appeals) taking up various grounds. 4. After filing this appeal, the assessee filed a revision petition before the Commissioner of Income Tax on 10.06.2016 challenging the very same order of assessment. On 07.07.2016, the Commissioner of Income Tax disposed of such revision petition. In such order, he noted that it was confirmed from the office of Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quested that the manual appeal be treated as no appeal having been filed. 7. On 21.09.2017, the Commissioner (Appeals) ignored such pleas of the assessee and proceeded to dispose of the manual appeal of the assessee and dismissed the same. 8. The department through the Assessing Officer has therefore filed this petition challenging the revisional order dated 07.07.2016 passed by the Commissioner of Income Tax principally on two grounds. Firstly, that when the appeal filed by the assessee was pending before the Commissioner of Income Tax (Appeals), the revisional jurisdiction could not have been exercised. The second ground concerns the merits of the revisional order. 9. In this petition, the petitioner had initially joined only the assessee as the sole respondent. However subsequently, the Commissioner of Income Tax was joined as a respondent no.2. Notice was issued to him which was duly served. He has through the department, sent his response in form of a communication dated 13.03.2018, in which, his stand is that by virtue of the CBDT notification no.11 of 2016 dated 01.03.2016, all appeals before the Commissioner (Appeals) were to be compulsorily filed electronically. This da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department after much delay. In the meantime, special audit was also carried out. Order of the Commissioner requires no interference. 12. We may first examine the assessee's contentions of maintainability of the petition. With respect to maintainability of the petition, the department has made following averments: "3.8 It is submitted that in the present case, AO being an affected party is required to give effect to two contradictory orders passed u/s 264 and u/s 251. The order under Section 264 being contrary to the provision of law, the present petition is filed after taking administrative approval of the Principal Chief Commissioner2 before filing of this petition." Counsel for the Revenue had also tendered a copy of a letter dated 19.12.2017 issued by the Chief Commissioner of Income Tax written by the Principal Commissioner of Income Tax, Gandhinagar, stating that the said authority had approved filing of the writ petition in the High Court. Thus, the Assessing Officer was only carrying out such decision of the department and this petition is not his own volition and therefore cannot be seen as his action of challenging the order of the superior authority. 13. We wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pursue the remedies of appeal and revision simultaneously. If therefore, the appeal of the assessee was pending on the date when the Commissioner passed the revisional order on 07.07.2016, he was clearly in error but not otherwise. 14. We may therefore revisit the facts in this context. The facts on record would show that by the time the assessee filed the appeal before the Appellate Commissioner on 15.04.2016, the relevant rule was already amended with effect from 01.03.2016 requiring such appeals to be compulsorily filed electronically. In view of certain difficulties faced by the assessees in filing such Eappeals, this time was extended upto 15.06.2016. Assessees who had filed manual appeals, had to file Eappeals by such date. There was no further extension thereafter. On 07.07.2016, therefore, Commissioner after recording his verification that no such electronically filed appeal was received by the Commissioner of Income Tax, Gandhinagar, was perfectly justified in proceeding further with the revision petition. As the events unfolded, later on, even the department treated the manually presented appeal of the assessee as defective. On 29.09.2016, the Appellate Commissioner conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ire & show c use notice for pen lty u/s. 271(1) (b) 11/01/2016 19/01/2016 Not complied 17. He noted that; "At long last the assessee wakes from its hibernation and one Shri R.C. Dave, C.A., attended on 01.03.2016 to furnish cash book, bank book and statements. This opens up further skeletons from the assessee's cupboards as follows: (i) The assessee is unable to satisfactorily explain the opening cash balance of Rs. 1,81,49,026/. (ii) There is also an opening balance of Rs. 1,35,03,737/in the capital a/c. (iii) Further there are unsecured loans totalling Rs. 4,42,10,000/. On this, too, the assessee has not satisfactorily discharged the onus of establishing the identity, capacity of the creditors as well as the genuineness of the transaction. (iv) Lastly, there is no satisfactory clarification regarding Rs. 13,66,95,703/in the suspense a/c. I am in full agreement with the A.O. She has given ample opportunity to the assessee, but for some reason or the other, assessee's hospitalisation or the accountant running away, the assessee has played a cat and mouse game with the A.O." 18. Having thus noted the callous approach on the part of the assessee and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the previous approval of the concerned authority. The powers to be exercised by the Assessing Officer under the said provision thus are meant for specific purposes. Such special audit can be called for only with the prior approval of the concerned authority. It is certainly not an option or a choice which an assessee can exercise or insist upon. The Commissioner of Income Tax therefore gave undue importance to the assessee requesting for such special audit. In fact, he referred to such offer of the assessee as having 'thankfully requested'. We wonder what would the Commissioner have done had the assessee not made such request. 20. Be that as it may, both the grounds for interfering with the order of assessment and to remand the proceedings for fresh assessment before the assessing authority after obtaining special audit report are unsustainable. 21. In view of serious illegality committed by the Commissioner of Income Tax in passing the revisional order, mere fact that some time had passed before the department took a formal decision to challenge the same, and to file the petition and the fact that in the meantime partially the directions were carried out, would not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
