TMI Blog2022 (4) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... n from the respective authorities. CBDT also issued press release explaining the above mechanism on PRESS RELEASE, DATED 14-8-2019 . On 11 March, the ld PCIT sent a communication stating intimation letter for order under section 263 dated 11 March 2021 stating, this is to inform you that order under section 263 of the Act dated 11th March, 2021 is having document No. (DIN) ITBA/REB/M/REB5/ 2020- 2021/ 1031404838(1).) This communication states that DIN for order passed under section 263 of the Act dated 11th March 2021 has some DIN. Surprisingly, no order was passed under section 263 of the Act in case of the assessee on 11th March 2021. Impugned order was as passed on 10th March 2021. Therefore, it is apparently clear that the order passed by the learned PCIT on 10/03/2021 was in clear violation of the instructions of Central Board Of Direct Taxes vide circular no. 19/2019 dated 14th August, 2019. For this reason, the order passed by the learned PCIT deserves to be quashed. Unsecured loans - In absence of any independent bank account of M/s Sri Gopikrishna Trust no information is available about whether loan given by sources from sources of the corporate trustee or by the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER PRASHANT MAHARISHI, AM: 01. This appeal is filed by the assessee against the order passed by the Pr. Commissioner of Income-tax-8, (in short Ld. PCIT) Mumbai-20, dated 10th March, 2021 passed under section 263 of the income-tax Act, 1961 (the Act) holding that assessment order passed under section 143(3) of the Act on 13th December, 2017 by The Income-Tax Officer-7(1)(1), (the learned Assessing Officer) Mumbai for Assessment Year 2015-16 is erroneous and prejudicial to the interest of the Revenue. 02. Assessee has raised the following grounds of appeal:- GROUND NO. I: IMPUGNED ORDER PASSED IS INVALID: 1. On the facts and circumstances of the case and in law, the ld. PCIT erred in passing order u/s. 263 of the Act in complete contravention of CBDT Circular No. 19 of 2019. 2. The Appellant prays that the order passed u/s. 263 of the Act be treated as invalid and be quashed. WITHOUT PREJUDICE TO GROUND NO. I: GROUND NO.II: IMPUGNED ORDER PASSED BY INVOKING PROVISIONS OF SECTION 263 OF THE ACT IS BAD IN LAW: 1. On the facts and circumstances of the case and in law, the ld. Pr. CIT erred in invoking the provisions of section 263 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the amount of loan as well as maximum outstanding amounts was disclosed. Therefore, on this basis, ld Ao has accepted the loan as genuine. Thus ld AO has made due inquires. Before LD PCIT assessee submitted tax audit report of the trust, where the loan given to the assessee company is also disclosed and the financial capacity of the trust to give loan of ₹ 67.65 lacs is evident from the audited financial statements of the trust and from the income tax return of the trust. Therefore on this account the order of the LD AO is neither erroneous and nor prejudicial to the interest of revenue. 06. It was also stated that with respect to the details of other payable of ₹ 13,48,320/- as well as loan of ₹ 3,27,83,970/-, assessee is compiling the details and requested for short adjournment. 07. The learned PCIT passed an order under section 263 of the Act on 10th March, 2021 noted that; i. Assessee has accepted loan of ₹ 68,55,000/- from M/s Sri Gopikrishna Trust, which is having a corpus fund of ₹ 1 lacs. Further, the loan sanctioned of HDFC Bank to that trust is on 26th September, 2014 of ₹ 750,00,00,000/-, whereas, the loan has been given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther loans and advances , when those issues were raised during the course of hearing by the ld PCIT, assessee sought time for furnishing the reply, but the learned PCIT with a predetermined mind held that as the issue would be set aside to the file of the Assessing Officer, no further time was given. Therefore, ld PCIT did not give any further opportunity to the assessee. He submitted that neither the adjournment was rejected nor a fresh opportunity is granted. Therefore, the order is bad in law to that extent. d. learned PCIT has held that ld Assessing Officer has failed to make any inquiry with respect to certain issues. On aspect of loan accepted from Gopikishan Trust, He referred to the paper book submitted before us and submitted that the Assessing Officer has made an inquiry by issue of notice under section 142(1) of the Act dated 19th June, 2017 with respect to unsecured loan from the persons. On 14th August, 2017, the assessee vide point no. 26 submitted that assessee has received unsecured loan of ₹ 67,55,000/- from M/s Sri Gopikrishna Trust through its corporate trustee Akshar Fincom Pvt. Ltd. It was further stated that name, address, Loan amount, and PAN of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order passed under section 143(3) of the Act dated 13th December, 2017 was pursuant to selection of return For Limited scrutiny under CASS. For this proposition, he referred to the notice issued under section 143(2) of the Act dated 22nd September 2016. He submitted that the issue of loans and advances was not a matter of limited scrutiny and therefore, the ld PCIT could not have initiated action under section 263 of the Act on that issue. i. Assessee filed reply dated 10th December, 2019, before ld PCIT wherein assessee , with respect to loan of Gopikrishna Trust, submitted following details; (i) Board resolution appointing Akshar Fincom Pvt. Ltd. as corporate trustee (ii) Letter of opening of bank account of the M/s Sri Gopikrishna Trust (iii) return of income for Assessment Year 2016-17 of the trust. (iv) the assessment order of the corporate trustee Akshar Fin Com Ltd. under section 143(3) of the Act on 26th March, 2015 (v) The letter dated 24th May, 2017 filed by the M/s Sri Gopikrishna Trust before the learned Assessing Officer of the trust along with its bank statement (the bank statement in the name of Akshar Fincom Pvt. Ltd.) (vi) The letter dated 25th September ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his aspect. h. With respect to the other payables, loans, and advances given, it was submitted that neither before the learned Assessing Officer nor before the learned PCIT, assessee has uttered a single word on this issue, therefore, there is no inquiry , so learned PCIT has directed to the Assessing Officer to correct the same. i. it is not correct that assessee has not been granted an opportunity on this aspect but despite opportunity, assessee sought adjournment and never furnished the details. He submitted that the request for adjournment was made on 9th March 2021 for 4 to 5 days and the notice was given for the above information on 31st March, 2021 and therefore, it is the assessee who has not availed opportunity. j. On the issue of mentioning the DIN in the order passed by the learned PCIT he referred to the intimation letter dated 11th March, 2021, wherein PCIT has mentioned the DIN number in the order passed under section 263 of the Act dated 11th March, 2021. He therefore, submitted that the claim of the assessee that DIN is not mentioned in order passed under section 263 of the Act is not correct. 013. The learned Authorized Representative in rejoinder submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided that to maintain proper audit trail of communication the Central Board Of Direct Tax (CBDT) in exercise of its power under section 119 of the Act has directed that no communication have been issued by income tax authorities relating to assessment, appeals, orders, statutory or otherwise, exemptions, inquiry, investigation, verification of information, penalty, prosecution, rectification and approval etc. to the assessee or to other person on or after the 1st October, 2019 shall have a computer generated document identification number allotted and is duly quoted in the body of such communication. In paragraph No. 3, the Board has also made certain exception where it may not be mentioned, that there has to be a proper recording of reasons in writing needs to be recorded in the file as well as the approval of Chief Commissioner etc. Further, the communication issued should also contain the fact that it is issued manually without a DIN and the date of obtaining written approval of higher authorities. There is also a specific format given in the circular of recording such as fact. In paragraph no. 4 it is also provided any communication, which is not in conformity with the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d advances of ₹ 330,92,46,575/- against Rs. Nil in the previous year. Further, on the revenue of ₹ 30,92,46,575/- the assessee has incurred a loss of ₹ 28,75,898/-. The facts show that the assessee has taken unsecured loan of ₹ 67,55,000/- from M/s Sri Gopikrishna Trust during the year. Gopikrishna Trust has claimed to own 100% shareholding of the assessee company. Ld Assessing Officer asked the assessee with respect to unsecured loans vide letter dated 19th June 2017. Vide letter dated 14th August 2017, the assessee merely narrated that the name, address and PAN of the lender are mentioned in clause 31 of the tax audit report. No other inquiries were made by the learned Assessing Officer and no further information was submitted by the assessee. Merely submitting the name, address, PAN number of the lender does not prove any creditworthiness and genuineness of the transaction. Further, the learned PCIT, on information produced by assessee, clearly carried out her own independent enquiry on the documents furnished by the assessee to note that GopiKrishna Trust did not have any bank account of its own but is transacting from the bank account of its corporate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmit the copy of certificate of provisional fees of ICRA limited of ₹ 13,48,320/-. The assessee tried to explain before the Assessing Officer with respect to the schedules in the balance sheet along with names of the parties on 5th October, 2017. The letters dated 26th October 2017 submitted by the learned Authorized Representative vide page No. 26 of the paper book. The assessee vide letter dated 8th November, 2017 [ page 68 of paper book] stated details about serial No. 39 schedule details of payment made to ICRA and further vide serial No.42 submitted the copy of the Term sheet and agreement for loans and advances to Piramal Estate Pvt. Ltd. and Shri Hari trust. It also submitted agreement dated 2nd June 2014 before the Assessing Office . Thus the finding of the ld PCIT that assessee did not submit necessary details before the ld AO. is devoid of any merit. The learned Assessing Officer carried out due inquiries on this issue and therefore order of the learned Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue on this aspect. 019. As we have already held that order of learned PCIT on the issue of other payables and loans and advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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