TMI Blog2023 (5) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... did not deal with any of the points raised in the submission. Without verification of the documents only to remand the matter to the ld. AO for consideration of the points raised in the assessee's written statement. In our considered view the order U/s 263, passed by the ld. PCIT is setting aside and quashed. Assessee appeal allowed. - I.T.A. No. 17/Asr/2021 - - - Dated:- 27-4-2023 - DR. M. L. MEENA , ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE , JUDICIAL MEMBER For the Appellant : Sh. J. S. Bhasin , Adv. For the Respondent : Sh. Hitendra Bhauraoji Ninawe , CIT. DR ORDER Per : Anikesh Banerjee , JM : The instant appeal of the assessee is directed against the order of the ld. Principal Commissioner of Income Tax-1,Jalandhar,[in brevity the PCIT ] order passed u/s 263 of the Income Tax Act 1961,[in brevity the Act] order dated 30.03.2021. The impugned order was emanated from the order of the ld. Income Tax Officer, Ward II, Kapurthala order passed u/s 143(3)/147 of the Act. The assessee has taken the following ground: - 1. That the impugned order, passed in a most mechanical and summary manner, by neither allowing sufficient opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statements of accounts through email on 27.03.2021-. I have considered the reply of the assessee on the issues raised in the show cause notice and the documents filed by the assessee which need to be verified. Therefore, the order passed by the Assessing Officer is held to be erroneous and prejudicial to the interest of the revenue. The case is, therefore, set aside to the file of the A.O. for fresh assessment on the above mentioned issue. 3 In view of the above facts and discussions, I am satisfied that the assessment order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue. Therefore, the said order passed is set aside to this extent to the file of the assessing officer to pass fresh order after making necessary enquiries/investigations in the light of the discussions made above and after giving due opportunity to the assessee of being heard. 2.2 The ld. AR fully relied that the same issue was agitated by the revenue during the reopening of assessment u/s 148 and relevant approval was received u/s 151 of the Act. During hearing before he ld. PCIT, the ld. AR submitted the following details which are enclosed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payment of VAT, being part of the purchase price paid to the suppliers, the entire purchase itself was to be first verified for its genuineness. One fact, which cannot be lost sight of, is that in this case, it was the second round of regular proceedings reinitiated to examine an issue, which in the earlier course of regular proceedings too, had stood the litmus test of scrutiny. It is na ve to assume that the assessee, aware of the fact that his case, though reopened to examine VAT paid to parties with cancelled TINs, was also first to justify the genuineness of purchases made, VAT being integral to same, would be so causal as not to provide the relevant details and documents, even when he was possessed of the same, and thus add to his unending woes as he had faced similar situation in earlier years too. iv) As a matter of fact, the assessee, while denying any bogus purchases made from these parties, had made available all documents in the shape of copies of a/c of these parties as per his books, as also from the books of suppliers, and also produced his ledger, purchase bills, his bank account with PNB wherefrom the payments were made by RTGS/Cheques etc, and VAT 23, 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO, are appended at Page 23-30, 32-33, 35-36, 39-42, 45-47, 51-52, 55-56, 58-59, 62-64 67, alongside the respective accounts as per assessee s ledger, which hardly show any difference. All the purchase bills, as entered in the ledger, are also available and were duly shown to ld.ITO and copies of few are appended at page 89-104. If the AO chooses not to record such facts in the order, then it leads to his satisfaction, not to make addition on such point. It defies logic as to why should the assessee feel shy of showing all these records to ld.ITO when the same were with him and can be produced even before your goodself, if so desired ? Obviously, the facts have been misread, which now seek to have triggered the present proceedings u/s.263. vii) Another important point, contextually relevant, is that the sales made by assessee, are mostly to well established Companies of national repute namely M/s Jagatjit Industries Ltd, Hamira, M/s JCT Mills Ltd, Phagwara, M/s A B Sugar Mills, Dasuya, M/s Mahavir Spinning Mills, Hoshiarpur and so on. There is no cash sales made to any such customers. As per the trading account, duly audited (copy placed below at Page 81), total sales made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per assessee s ledger is placed at Pg.34-35 and parallel copy of a/c though not readily available, copy of VAT-23 filed by said party, which bears their VRN no and also the assessee s name, among other parties, as their purchaser is enclosed at Page.36. Though taxable value shown is Rs.12.50 lacs, inclusive of the vat element of Rs.68750/-, the gross figure shown by assessee would fully match. d) Hari Om Trading Co. (at S.No.7 of list) Copy of a/c as per assessee s ledger is at page 38 and the parties a/c is at page 39-42, which reconciles with assessee s a/c. e) Bharat Gram Udyog Samiti, Bathinda (at S.No.8 of list) Copy of a/c as per assessee s ledger is at page 43-44 and the parties a/c is at page 45047, which reconciles with assessee s a/c. f) Vij Agro Industries Phagwara ( at S No.10 of list) Copy of their a/c in assessee s ledger is at Page 49 and copies of two VAT 23 forms filed by said party, for two different quarters, are enclosed at page 5-51, wherein the assessee s name appears as their purchaser . g) King Rice General Mills, Phillaur (at S No.13 of list) Their copy of a/c as per assessee s leder is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T invoices raised by the said suppliers, inclusive of VAT on sale price, then its mechanical disallowance is absolutely arbitrary and illegal. This apart, if the parties having received VAT from the assessee, failed to further pay to Govt at their end, the assessee cannot be faulted with. 14. Thus from the facts and figures stated hereinabove, the proposed action u/s.263 is unwarranted since, the order even if erroneous, is not prejudicial to interest of revenue, twin conditions essentially required as held by Hon ble Apex Court in the case of Malabar Industrial Co.Ltd. v. CIT (2000) 243 ITR 83(SC). If given resort to, it would simply push the assessee into third round of proceedings, with seamless litigation, when in set aside proceedings, the AO hardly deviates from the standpoint taken by the PCIT in order u/s.263. Thanking you, 2.3 The ld AR relied on the order of Hon ble Punjab and Haryana High Court in the case of Commissioner of Income-tax vs. R.K. Metal Works [1978] 112ITR445 (PUNJ HAR.). The relevant paragraph is extracted as below: - A perusal of the order of the Commissioner of Income-tax clearly shows that the criticism of the Tribunal is well- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oneous insofar as the same is prejudicial to the interest of the Revenue because the Assessing Officer has failed to carry out his statutory obligation and duty and failed to discharge it by holding further probe and inquiry. More so, when the assessee virtually had no answer to his notice. Secondly, very reliable and genuine information was received from the VAT and Sales Tax authorities with regard to the operations with these dealers styled as 'hawala traders'. This certainly brought the matter within the purview of section 263 of the Income-tax Act 1961. No error of law or perversity is committed either by the Commissioner or the Tribunal. We do not find that their order raised any substantial questions of law. ITAT- Jaipur, in the case of JR Industriesv. Principal Commissioner of Income-tax, [2021] 132 taxmann.com 302 (Jaipur - Trib.). Held that I. Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue (Scope of Jurisdiction) - Assessment year 2011-12 - Whether Commissioner can assume jurisdiction under section 263 during pendency of appeal before Commissioner (Appeals) - Held, yes - Whether further, in view of Expl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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