TMI Blog2021 (10) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore the condition for initiating the action u/s. 263 does not arise as on all the issues on which the ld. CIT took u/s. 263 were examined during the assessment proceedings. Jurisdictional High Court of Allahabad in CIT vs. Krishna Capbox (P.) Ltd. [ 2015 (3) TMI 17 - ALLAHABAD HIGH COURT] has held where the Assessing Officer made certain queries which were replied to by assessee and after inquiry, being satisfied in respect to any queries replied by the assessee, Assessing Officer accepted declared income and passed the assessment order, Commissioner cannot issue notice u/s. 263 on the ground that Assessing Officer had not made enquiry on certain accepted version of assessee without making any enquiry or verification. As in the case of CIT vs. Vikas Polymers,[ 2010 (8) TMI 745 - DELHI HIGH COURT] held that there is difference between lack of enquiry and inadequate enquiry and it is only cases of lack of enquiry that the Commissioner is empowered to exercise his revisional powers by calling for and examining the records of any proceedings under the Act and passing orders thereon. CIT was not justified in passing the order u/s. 263 of the Act and directing the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings and in this respect our attention was invited to the query raised by the Assessing Officer in his questionnaire at point No. 15 a copy of which is placed in PB, pgs. 255 and its reply submitted to the Assessing Officer vide letter dated 18/01/2016, a copy of which is placed at pages 259 to 261 of the paper book. Further it was submitted the observations of ld. CIT that no ledger account of expenses is available in the record, is also incorrect in view of the fact that Assessing Officer himself at pages 2 para 3 has noted that the assessee had maintained books of account on mercantile basis and books of accounts have been audited U/s. 44AB of the Act. As regards another objection of learned CIT regarding shop rent expenses, Learned counsel for the assessee invited our attention to the reply against question No. 10, 15 and 18 to the questionnaire dated 18/11/2015 wherein specific replies were filed before the Assessing Officer and our attention was invited to pages 24 and 25 of the paper book where the complete break-up of rent paid during the year was placed. Learned counsel for the assessee submitted that in respect of rent, vide question dated 18/11/2015 page 254, v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat how the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. It was submitted that the Assessing Officer, after due application of mind, had made certain additions which were confirmed by learned CIT(A) but which has been settled in favour of the assessee by the Tribunal. In view of all these facts and circumstances, it was submitted that the notices issued and order passed by learned CIT U/s. 263 is illegal and invalid that all the issues on which proceedings were initiated and order was passed U/s. 263 were already assessed and examined during the assessment proceedings and therefore, the order passed by learned CIT U/s. 263 is invalid and reliance in this respect was placed on an order of Hon'ble jurisdictional High Court in the case of CIT vs. Krishna Capbox (P) Ltd. [2015] 372 ITR 310 (All). In view of these facts and circumstances, it was argued that the order passed by learned CIT U/s. 263 be cancelled. 3. Learned CIT D.R., on the other hand, placed reliance on the order of learned CIT and argued that he has clearly recorded his findings that Assessing Officer has not carried out the assessment proceedings i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oneous as well as prejudicial to the interest of the revenue. Accordingly, the order u/s. 43(3) of the I.T. Act, 1961 passed by the assessing officer on 31.03.2016 is set aside to be framed denovo. The assessing officer is directed to pass a fresh assessment order, after considering all the facts of the case and above observations after providing an opportunity of being heard to the assessee, within the time limit as given in the Income Tax Act, 1961. 5. Before ld. CIT against show cause notice, the assessee filed detailed replies with respect to his each observation which the ld. CIT has made part of his order. We find that the assessee before ld. CIT had explained that Assessing Officer had raised the queries during original assessment proceedings and assessee had filed necessary explanations to which Assessing Officer was satisfied and therefore he had passed the assessment order and therefore the order passed by the Commissioner u/s. 263 of the Act is not as per the provisions of law. We find that as regards the observations of ld. CIT with respect to various aspects the Assessing Officer besides other questions during assessment proceedings raised the following queries: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orts of the above facts, assessee is furnishing herewith the copy of Balance Sheet as on 31.03.2011 for your honour kind perusal and records. At may be appreciated that all the members are individually assessed to tax with the ITO having jurisdictions over the case. The addition was made by him out of their withdrawal from firm as on 31.03.2012 as well as theirs own sources and regular income shown to Income Tax Department. The assessee is furnishing-herewith the confirmations received from partners, their capital accounts, in support of justification of investment in, the form of Capital. 7. The assessee also relied on certain case laws in support of its claim that the firm is not required to satisfy itself that money which it received from the partners was the money which had partners earned by honest means. With respect to Query relating to Question No. 10, the assessee filed following reply: Point No. 10 That as required by your honour, assesses is furnishing herewith the followings: (i) That Shop address details is being furnished herewith. (ii) Shop wise details of rent paid giving name, address of Land Lord. (iii) Shop wise details of employees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Trading and Profit Loss Account. With regards it genuineness and reasonableness of the expenses, it is submitted that all the expenses claimed are having direct nexus with the assessee's nature of business. The assessee has not claimed any expenses which are either personal nature or capital nature. The assessee is also furnishing comparative details of expenses claimed in preceding 3 years to justify the claim. The assessee has also maintained proper books of accounts. The Books of accounts are duly audited and auditor has not made any adverse comments on the reasonableness of the expenses. In view of the above, your honour is, requested to allow the claim and oblige. 10. With respect to Query No. 17, the assessee submitted as under: Point No. 17 That as required by your honour to furnish the proof of all employees. In this regards it is submitted that all the employees are residing at various places of Basti, Siddhartha Nagar and Gorakhpur shops and therefore it is very impracticable to collect ID. proof immediately. The assessee make humble request that at least 1 month time may please very kindly be allowed to get the ID. proof. Without prejudice to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted by the revisionary authority himself to record finding that assessment order passed by the Assessing Officer was erroneous and prejudicial to the Revenue. In Salora International Ltd. vs. Addl. CIT [2005] 2 SOT 705 (Del) the Tribunal held that merely because from a preferential point of view it is apparent that some more enquiry and verification could have been made by the Assessing Officer while making assessment order cannot be declared to be erroneous and prejudicial to the interest of the Revenue. The Hon'ble Delhi High Court in the case of CIT vs. Vikas Polymers, 194 Taxman 57 (Del) held that there is difference between lack of enquiry and inadequate enquiry and it is only cases of lack of enquiry that the Commissioner is empowered to exercise his revisional powers by calling for and examining the records of any proceedings under the Act and passing orders thereon. 14. In view of the facts and circumstances, we find that ld. CIT was not justified in passing the order u/s. 263 of the Act and directing the Assessing Officer to make assessment order de novo and therefore we cancel the order passed by the ld. CIT(A) u/s. 263 of the Act. 15. In the result, the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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