2021 (4) TMI 711
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.... held that the assessee's cash deposits in his savings bank account in Punjab National Bank was Rs. 1,76,93,489/- and cash deposits in his savings bank account at Union Bank of India was Rs. 7,35,000/-, out of which, he has declared Rs. 6,20,870/- as total turnover in statement income and the balance being Rs. 1,14,130/-. Thus, he estimated the total cash deposits in both the savings bank account at Rs. 1,78,07,619/-. The assessee had filed return of income u/s 44AD and 44AE of the Act. The Assessing Officer estimated 8% of the cash deposits in the savings bank account as undisclosed income of the assessee. He initiated penalty proceedings u/s 271A of the Act. He further records in his order that the assessment was completed u/s 144 of the Act. 2.1. Aggrieved, the assessee carried the matter in appeal. The ld. CIT(A), Burdwan, vide his order dt. 28/04/2017, passed u/s 250 of the Act, after considering the submissions of the assessee held as follows:- ".........I find, at the same time, that I cannot completely agree-with the appellant's contention that all the deposits of Rs. 1,76,93,489/- would have emanated from the plying of trucks because this would amount to receipts fr....
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....that the Assessing Officer had no powers to travel beyond the reasons for selection of the case for limited scrutiny. He submitted that the reason was to examine the cash deposits in a savings bank account which are more than turnover. The Assessing Officer had considered this cash turnover and brought the same to tax. 4.1. For the proposition that the ld. Pr. CIT cannot invoke his powers u/s 263 of the Act to revise an assessment order passed u/s 143(3) of the Act, on issues which were not covered by the reasons for picking up a case for limited scrutiny and hence were not examined by the Assessing Officer for the reason that they were beyond the scope of limited scrutiny, he relied on a number of other decisions of the Tribunal. We would be referring to them in due course. The ld. Counsel for the assessee further submitted that the order of the Assessing Officer merged with the order of the ld. CIT(A) on this issue specified in the limited scrutiny and under those circumstances, the ld. Pr. CIT, could not invoke his powers u/s 263 of the Act. 5. The ld. D/R, on the other hand, submitted that it is true that the case was selected for limited scrutiny to examine the cash deposits....
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....The Assessing Officer stuck to these reasons and completed the assessment u/s 143(3) of the Act. Aggrieved with this order, the assessee carried the matter in appeal before the ld. First Appellate Authority. The ld. CIT(A) considered this order and granted part relief. On these facts, the question is whether the ld. Pr. CIT is empowered to invoke his powers u/s 263 of the Act for revising the order passed u/s 143(3) of the Act dt. 25/08/2016 and direct verification, examination and determination of income as per the order of the ld. CIT(A) on the issue which is admittedly not the reason scrutiny selection through CASS. The ld. D/R admits that the issue on which the ld. Pr. CIT has invoked his powers u/s 263 of the Act is beyond the scope of reason based on which the case was selected for limited scrutiny. The Assessing Officer could not have travelled beyond these reasons without obtaining the permission of the ld. Pr. CIT as per para 4 of the CBDT Instruction No. 7/2014. The question is whether it can be said that there is error in the order of the Assessing Officer passed u/s 143(3) of the Act, for the reason that the Assessing Officer did not seek the approval of the ld. Pr. CIT....
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....eyond the points of AIR is invalid in law and so the same is with the order passed u/s 263 of the Act. It is the further contention of the assessee that in the items which are not subject matter of AIR cannot subject matter of scrutiny. Such matters include salary of the assessee, loans & interest on loans, payment of LIC, Commission & brokerage income etc. It is the case of the assessee that in the assessment order passed u/s 143(3) of the Act, the AO has travelled beyond the points of the AIR on the basis of which the case of scrutiny was selected under CASS module. It is the plea of the assessee that when no addition/disallowance can be made beyond the points mentioned in AIR in the assessment proceedings then same is the case with proceedings initiated u/s 263 of the Act. 4.1 The first aspect which needs to be examined is as to whether the assessee is entitled to challenge the validity of initiation expanded in the proceedings u/s 143(3) of the Act in the present appeals in which he has challenged the validity of expanded order passed u/s 263 of the Act covering the points which are not part of the AIR. The ld. Counsel for the assessee submitted before us that it is open to a....
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....ion is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the Court to pass any decree and such a defect cannot be cured even by consent of parties." Now coming to the facts of the instant case, we find that the instant case was selected on the basis of AIR Information as evident from the order of AO under section 143(3) of the Act. There is also no whisper in the order of the AO for expanding the scope of limited scrutiny after obtaining the permission from the Administrative CIT. The ld. DR has also failed to bring anything contrary to the argument of the ld. AR. Therefore in our considered view the scrutiny should have been limited only to the information emanating from the AIR. Admittedly, the assessee has claimed to have filed an appeal before Ld. CIT(A) challenging the jurisdiction exceeded by the AO while framing the assessment order u/s 143(3) of the Act. We find that the impugned....
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....ssessment proceedings. In view of above, the Ld. CIT found the order of AO is erroneous in so far as prejudicial to the interest of Revenue and therefore show-cause notice was issued u/s. 263 of the Act vide dated 13.10.2015 for the clarification of the above transactions. In compliance thereto, the assessee submitted as under : i) The deposit in HDFC bank account No. 03151930000609 was duly reflected in his IT return. Therefore, no cause has happened to the Revenue which is prejudicial to the interest of Revenue. ii) The deposit of Rs.19,73,750/- was duly reflected in the IT return and therefore there was no error which is prejudicial to the interest of Revenue. iii) Regarding the credit card payment, the addition on account of undisclosed cash deposit has already been added by the AO and therefore there is no error causing prejudice to the interest of Revenue. iv) There was no sale of the property and therefore no exemption u/s10(38) of the Act was claimed. However the Ld. CIT after considering the submission of assessee has held the order of AO is error and prejudicial to the interest of Revenue by observing as under:- "I have carefully considered the issues with....
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....ose of directing the AO to hold another investigation when the order passed by the AO was neither erroneous nor prejudicial to the interest of revenue. (2) For that the L'd Pr.CIT erred and exceeded jurisdiction by giving direction in respect of the matters which are subject matters of appeal before the CIT(A), therefore order passed by Pr. CIT-15 is unlawful, beyond provision of law and therefore liable to be quashed. (3) For that the L'd Pr. CIT had alleged arbitrarily irrelevant matters, factual and untrue position in the show cause notice u/s. 263 and therefore order passed by Pr. CIT-15 Kolkata u/s. 263 is nullity and liable to be quashed. (4) For that L'd Pr. CIT has wrongly assumed the jurisdiction u/s. 263 by wrongly mentioning that deposits in HDFC Goa A/c & HDFC Porvorim Goa A/c were under-assessed by the AO despite these two a/cs were disclosed in the balance sheet and deposits were explained, therefore allegation so made is bad in law and void ab-initio. (5) For that on the facts & in the circumstances of the case L'd Pr. CIT was not justified in initiating proceeding u/s. 263. (6) For that your petitioner craves the right to put additional gro....
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....onsideration of Rs. 36 lakh. On perusal of AIR information which is placed on page 1 of the paper book, we find that no immovable property has been sold by assessee in the year under consideration. Besides the above, there is also no whisper in the assessment order for any addition on account of capital gains. Therefore, we find that the allegation of Ld. CIT that AO has not conducted sufficient enquiry in relation to sale of immovable property is not true. 5.1 In view of the above we find that Ld. CIT has passed impugned order u/s. 263 of the Act by holding the order of AO as erroneous in so far as prejudicial to the interest of revenue on account of inadequate enquiry made by AO while passing order u/s. 143(3) of the Act. However, we find that proper and sufficient enquiries were conducted by the AO at the time of assessment as evident from the order of AO. Therefore it cannot be concluded that no proper enquiry has been conducted Mrs. Sonali Hemant Bhavsar by the AO at the time of assessment proceedings. The AO has taken conscious view after considering the facts and circumstances of the case and giving proper opportunity to the assessee. Thus, the view expressed by AO in th....
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....DIT (Inv.), Mumbai to ascertain the amount of on money received by the builder. Moreover, the case of M/s. Runwal Homes Pvt. Ltd. vs. DCIT in ITA No.5621/M/2017 A.Y. 2015-16 the issue of on money has been decided in favour of the M/s. Runwal Homes Pvt. Ltd. by deleting the addition on account of on money. In view of the aforesaid facts, we are of the view that the revisionary order passed by the Ld. Pr. CIT(A) is without jurisdiction and has to be quashed on legal issue as well as on merit. Accordingly, we quash the revisionary order passed under section 263 of the Act by Ld. Pr. CIT. 8. In the result, the appeal of the assessee is allowed." 8.2. The Chandigarh 'A' Bench of the Tribunal in the case of M/s. Agarwal Promoters vs. Pr. CIT in ITA No. 1708/Chd/2017; Assessment Year:- 2012-13, order dt. 16/04/2019, at para 9, has held as follows:- "9. At the outset, Ld. Counsel for the assessee has invited our attention to the assessment order in question of the Assessing officer dated 30.12.2014 passed u/s 143(3) of the Act and has submitted that the return filed by the assessee was originally processed u/s 143(1) of the Act, however, the case was later selected for limited scrut....