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TMI Blog2023 (3) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... made during survey, by relating it to impounded documents, to cover the discrepancies noticed by Ld. A.O. offered as business income in return, duly accepted by Ld. AO after detailed inquiry and verification of all relevant documents in assessment by further enhancing the same by Rs.5 lacs, the Ld. PCIT's allegation that no inquiry and verification was made by AO on this point, is wholly unfounded so as not to vest him with valid jurisdiction to invoke powers under section 263 of the Act ibid. 4. That a legally sustainable view taken by the Ld. AO, backed by documents found during survey, already accepted by survey team as discrepancies in business income taxable at normal rates, duly secured by collecting cheques for tax due thereon, the Id. PCIT grossly erred in arbitrarily imposing his view, de hors the facts and material on record, to direct its taxation u/s 115BBE, more so when on the date of survey, such higher tax rate was not on statute. 5. That by not disputing the nature of Rs.5 lacs, added by Ld. AO as discrepancies in order to cover other minor deviations business income by enhancing the surrendered income offered qua the same set of impounded documents, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable) e) In cases where order has to be passed under Section 16315 153A/153C of the Income Tax Act, 1961 read with section 143(3), assessment proceedings would be conducted manually Yours faithfully AMIT SHUKLA CIR-2(1)(1) GHAZIABAD ANNEXURE 1. A brief note on the nature of business activity carried out during the FY2016-17. 1. Furnish computation of income for FY2016-17 1 Furnish copy of Balance sheet and P/L account, with all annexures, for the period FY2016-17 1 Furnish comparative figures of turnover and profits (GP as well as NP) for three previous years. Explain the sudden jump in NP rate from 3.98% in FY2015-16 to 28.68% in FY2016-17 even when the turnover has declined from Rs 616 cr to 36.85cr 1. You have reported sundry creditors of Rs 12,38,56,4271-as on 31.03.2017. Furnish the complete details of sundry creditors with outstanding above Rs 10,00,000/- as on 31.03.2017 in the following format: Name and complete address of the creditor Opening balance as 01.04.2016 (Rs.) Total Purchases during FY2016- 17 (Rs) Total payments during FY2016- 17 (Rs) Closing balance as on 31.03.2017 (Rs 1. Furnish evidence of additions made in the fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee has submitted all of the information with regard to queries as raised by your honour. Should, however, any further clarification required the assessee would be obliged to furnish the same. Yours faithfully [Samit Bajaj] Counsel for assessee" Sir, This has reference with the ongoing assessment proceedings in which the assessee is furnishing following statements relating to A.Y. 2017-18 as required by your honour.- 1. That the assessee is enclosing confirmation of S. Creditors account of the following assessees: Mis. Kansai Nerolac Paints Ltd. Mis. Spencer Trading Corporation Mis. Chintamani Sharma & Sons Mis. J itendra Strips & Tubes Pvt. Ltd Mis. Ankur Enterprises Mis. Maa Jagdambe Engineering Works 2. The assessee is enclosing the party wise details with PAN & TDS for commission paid during this assessment year. 3. The assessee is also submitting the details of Sundry Creditors in the format given by your honour for the outstanding amount above Rs. 10,00,000.00 4. That the assessee had surrendered Rs.IO crs during the survey proceedings held on 09/08/2016 to cover up the deficiencies as noted at the time of Survey. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 10.64 crores. 8. Assuming jurisdiction u/s 263 of the Assessing Officer, the ld PCIT issued the following show cause notice: "M/s/Mr/Ms Subject Notice for Hearing in respect of Revision proceedings us 263 of the THE INCOME TAX ACT, 1961-Assessment Year 2017-18 In this regard, a hearing in the matter is fixed on 17/03/2022 at 03:00 PM You are requested to attend in person or through an authorised representative to submit your representation if any alongwith supporting documents/information in support of the issues involved (as mentioned below) if you wen that the Revision proceeding be concluded on the basis of your written submissions/representations filed in this office, on or before the said due date, then your personal attendance is not required. You also have the option to file your submission from the e-fling portal using the link: incometaxindiaefiling.gov.in ITR for AY 2017-18 was e-filed on 1.11.2017 declaring total income of Rs. 10,59,75,100/-. Later on, the case was selected for scrutiny under CASS. The AQ. Circle-2(1)(1), Ghaziabad completed assessment order u/s 143(3) of the IT. Act 1961, dated 11.06.2019 on total income of Rs.10,64,75,100/- 2. From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the provisions of section 68, 69, 69A, 69B, 69C and 69D of the Act are not attracted on the surrendered amount of Rs. 10 crores. 12. We are of the considered view that the evidence on record shows that the said amount of Rs. 10 crores was offered in case any discrepancy is found in the books of account but the fact of the matter is that neither the Assessing Officer nor the PCIT has brought anything on record to show that there is unexplained investment or unexplained expenditure was found during the course of survey proceedings. With these facts, it can be safely concluded that the surrender of Rs. 10 crores can be said to have been offered to cover up the discrepancies in respect of likely disallowances of claims /bogus expenses/cash payments/bogus purchases relating to business income. 13. Provisions of section 115BE of the Act are not at all attracts on the facts. It is pertinent to note that he Assessing Officer himself made a proposal to the PCIT, Ghaziabad for revision u/s 263 of tht Act which reads as under: "Madam, Sub: Proposal for revision u/s 263 of the IT Act in the case of M/S Arun Enterprises (PAN: AADFA9183D), AY: 2017-18-Reg. In connection with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. The co-ordinate bench in ITA No. 1287/PUN/2017 in the case of Alfa Laval Lund AB order dated 02.22.2021 has taken an adverse view in such a case where the Assessing Officer himself has proposed for revision u/s 263 of the Act. The relevant findings of the co-ordinate bench read as under: 5. It is trite that a power which vests exclusively in one authority, can't be invoked or cause to be invoked by another, either directly or indirectly. Section 263 of the Act confers power on the CIT to revise an assessment order, subject to certain conditions. Instantly, we are confronted with a situation in which the revision was initiated on the basis of the AO sending a proposal to the CIT and not on the CIT suo motu calling for and examining the record of the assessment proceedings and thereafter considering the assessment order erroneous and prejudicial to the interests of the revenue. The AO recommending a revision to the CIT has no statutory sanction and is a course of action unknown to the law. If AO, after passing an assessment order, finds something amiss in it to the detriment of the Revenue, he has ample power to either reassess the earlier assessment in terms of section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me is not reflected in the return of income furnished under section 139 of the Act, income tax payable shall be @ 60% on income so referred in the said section. 19. Change which has been brought about in the provisions relates to income so referred to in the afore-stated sections so defined which is either not reflected in the return of income or determined by the assessing officer and in both the cases it will be covered by the provisions of section 115BBE of the Act and the rate of taxation has been increased from 30% to 60% on such specified income. 20. There is, therefore nothing stated in the pre-amended or post amended provisions of section 115BBE of the Act that where the assessee surrenders undisclosed income during search action for the relevant year, the tax rate has to be charged as per provisions of section 115BBE of the Act. Therefore, the applicability of the amended provisions which prompted the PCIT to assume jurisdiction under section 263 of the Act is highly debatable issue, and therefore, in our understanding of the law, the PCIT has wrongly assumed jurisdiction. 21. Considering the facts of the case in hand, in totality, in light of judicial decisions and rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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