TMI Blog2018 (5) TMI 1698X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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. - Special Civil Application No. 22960 of 2017 - - - Dated:- 14-3-2018 - MR. AKIL KURESHI AND MR. B. N. KARIA, JJ. For The Petitioner : Mrs Mauna M Bhatt(174) For The Respondent : Mr.S.N.Soparkar, ld. Senior Counsel With MR.B.S. SOPARKAR (6851) ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. This petition arises in somewhat peculiar facts which may be noted at the outset. 2. Petitioner is the Income Tax Officer, Ward No.1, Gandhinagar and happens to be the Assessing Officer of the respondent no.1. Respondent no.1 is an individual and assessed to tax as such. For the assessment year 2013-14, he had filed the return of income declaring total income of ₹ 4.89 lakhs (rounded off). The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a special audit under section 142(2A) of the Act. The Commissioner therefore while disposing of the revision petition, remanded the proceedings back to the Assessing Officer and to frame a fresh assessment after carrying out special audit of the accounts of the assessee. 5. On 29.09.2016, the Commissioner (Appeals), wrote to the assessee that rule 45 of the the Income Tax Rules, 1962 has been amended making mandatory to file appeals before the Commissioner of Income Tax (Appeals) electronically. The assessee had filed appeal manually which is not in consonance with amended rule. The assessee should therefore furnish the appeal in the prescribed format electronically within seven days of the receipt of the letter so that the appeal can be proceeded further for disposal. He further conveyed that in case no such Eappeal is received, it will be presumed that the assessee has not complied with the notification of the Board and the manual appeal will be treated as defective and the same would be treated as nonest. Resultantly, it would be considered that the assessee had filed no appeal. 6. On 06.10.2016, the assessee acknowledged the said letter dated 29.09.2016 received from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of assessment, should not have interfered in exercise of revisional powers, that too on the spacious ground that the assessee had at long last himself agreed for a special audit. 11. Shri S.N.Soparkar for the respondent no.1 opposed the petition raising following contentions: I. The petition is filed by the Assessing Officer who is subordinate to the Commissioner of Income Tax, who is the revisional authority. On his own, he could not have decided to challenge the revisional order. There is nothing on record to suggest that the decision to file the petition was taken by the competent authority of the department. II. The assessee had filed the manual appeal whereas the amended rule which was already brought into effect by then, required the appeal to be compulsorily filed electronically. The assessee had taken a conscious decision not to pursue the appeal and therefore, not presented appeal electronically. Even the Commissioner (Appeals) had conveyed to the assessee under the communication dated 29.09.2016 that if no electronically filed appeal is received within seven days, appeal filed by the assessee manually will be treated as nonest. On 06.10.2016, the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee as he thinks fit. Subsection (4) of section 264 however limits the jurisdiction of the Commissioner to revise an order in certain situations. Subsection (4) reads as under: (4) The [Principal Commissioner or] Commissioner shall not revise any order under this section in the following cases- ( a ) where an appeal against the order lies to the [Deputy Commissioner (Appeals)] [or to the Commissioner (Appeals)] or to the Appellate Tribunal but has not been made and the time within which such appeal may be made has not expired, or, in the case of an appeal [to the Commissioner (Appeals) or] to the Appellate Tribunal, the assessee has not waived his right of appeal; or ( b ) where the order is pending on an appeal before the [Deputy Commissioner (Appeals)]; or (c) where the order has been made the subject of an appeal [to the Commissioner (Appeals) or] to the Appellate Tribunal. Under clause( a) of subsection (4) of section 264 where appeal lies to the Appellate Authority and the time for filing such appeal has not expired or the assessee has not waived his right of appeal, the Commissioner would not exercise his revisional powers. Under clause( b) of subsecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act, it was the Commissioner (Appeals) who was clearly in error in dealing with the assessee's appeal having once taken a stand that if no electronic appeal is presented, the manually filed appeal would be treated as nonest and as if no appeal was ever filed. The assessee had also pointed out to him that he had filed the Revision Petition which was already disposed of. Once the Revision Petition was filed and decided, it was not open to the Commissioner (Appeals) to decide the appeal on the same ground. In fact once the Revision Petition was allowed and assessment order set aside, no order survived for him to confirm in the appeal. His approach gave rise to two conflicting situations, one setting aside the order of assessment and another confirming the same. 16. This brings us to the merits of the order passed by the Commissioner of Income Tax. In such order, he recorded the following opportunities granted by the Assessing Officer to the assessee during the course of assessment which were not availed. Section under which Notice Issued D te of issue of Notice Due d te for compli nce N ture of compli nce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 142(2A) of the Act. This was on two grounds. Firstly, according to him, whatever the assessee's defaults, addition of nearly ₹ 20 crores is a serious matter. He noted that the assessee's accounts were not even audited. The second ground was that the assessee himself had 'thankfully requested' that the accounts should be audited under section 142(2A) of the Act. 19. In our opinion, the Commissioner has committed a serious error in coming to such conclusions. Firstly, the Commissioner noted that the assessee failed to respond to series of notices issued by the Assessing Officer during the assessment proceedings. Even when at long last, the Chartered Accountant of the assessee appeared before the Assessing Officer, in the opinion of the Commissioner himself several issues remained totally unexplained. These issues pertained to opening cash balance of ₹ 1.81 crores (rounded off). Unsecured loans of ₹ 2.42 crores (rounded off) with respect to which, the assessee had not satisfactorily discharged the onus of establishing identity, capacity of the creditors or the genuineness of the transactions, as also clarification regarding ₹ 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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