TMI Blog2022 (7) TMI 1352X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus it would mean that the assessee had accepted the allegations against them and precisely for such reason they offered that 2% of the bogus purchase may be added to the total income. If such was the factual position in the case on hand then it is incumbent upon the AO to inquire into the matter and take the proceedings to the logical end. Having not done so, PCIT was fully justified in exercising jurisdiction u/s 263 of the Act. Thus, we are of the view that Tribunal erroneously interfered with the order passed by the PCIT. Appeals filed by the revenue are allowed and the order passed by the Tribunal is set aside. - THE HON BLE JUSTICE T.S. SIVAGNANAM And THE HON BLE JUSTICE BIVAS PATTANAYAK Mr. Soumen Bhattacharjee, Adv. . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase and in law the Learned Income Tax Appellate Tribunal erred in ignoring the fact that the Assessing Officer should have made further investigation to reach a logical conclusion rather than making a baseless estimation of income, which fundamentally satisfies the requirement of an order being erroneous in nature? Since the facts are identical, we take up the facts for consideration in ITAT 27/2022 where the assessee is Premlata Tekriwal. The said assessee filed the return and income for the assessment year 2009-10 declaring a total income of Rs.3,85,822/-. The assessment was reopened based on information received from the Director General of Income Tax (Investigation). The reasons for reopening was based on information received from Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here would be no denial of the fact that the assessee s estimated income will increase to a certain extent. After making such an observation, the Assessing Officer estimates the addition at 3% of the bogus purchase and accordingly a sum of Rs.1,62,405/- was added to the total income of the assessee. The Principal Commissioner of Income Tax 10, Kolkata exercised his power under Section 263 of the Act. It is seen that the Assessing Officer himself had submitted before the PCIT that an error has occurred in the assessment order. After perusing the entire files as well as the stand taken by the Assessing Officer, the PCIT was of the prima facie opinion that the Assessing Officer failed to take logical action on the information available with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative, in my office at 5th floor, Aayakar Bhawan Dakshin, 2 Gariahat Road South, Kolkata 700068, on 14.02.2018 at 1.00 P.M. , and show cause as to why an order u/s 263 of the I.T. Act shall not be passed in your case, enhancing/modifying/canceling the assessment the assessment order in question or directing a fresh assessment to be made. 5. In the event of failure to comply with the above, it shall be presumed that your have no objection to the proposed action and the matter shall be finalised on merits on the basis of material on record, without further notice. Though the show cause notice was served on the assessee none appeared before the PCIT. Thereafter, with a view to offer further opportunity the matter was adjourne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer without making any inquiry or verification then it would be a case where the order is deemed to be erroneous in so far as it is prejudicial to the interest of the revenue. Accordingly, the PCIT held that the entire expenses has to be disallowed as being bogus purchases. The Assessing Officer was directed to reassess the income of the assessee for the relevant assessment years. The assessee carried the matter on appeal to the Tribunal. The Tribunal had allowed the assessee s appeal by relying upon the decision of the Coordinate Bench in Om Foregoing Engineering P. Ltd. Vs. PCIT in ITA Nos. 509 510/Kol/2017 for the assessment yeas 2010-2011 and 2011-2012 dated 13.12.2017 and the decision of this Court in PCIT Vs. M/s. Subarn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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