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TMI Blog2022 (10) TMI 1211X X X X Extracts X X X X X X X X Extracts X X X X ..... on. More particularly, there was a confusion between the partners, who will keep a track about the income tax litigation and contact with the Tax Consultant. Due to certain communication gap between the two-three new inducted partners, vis-a-vis existing two partners, this remained out of sight and could not be filed well in time. When a Demand Notice came up, only then it was realised that appeal ought to have been filed. 4. On the other hand, ld. D.R. contended that the assessee should be vigilant about all the issues relating to income-tax proceedings. 5. We have duly considered the rival contentions and gone through the record carefully. 6. Sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross-objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This expression "sufficient cause" employed in this Section has also been used identically in sub-Section 3 of Section 249 of the Act, which provides power to the Id. Commissioner to condone the delay in filing of the appeal before the Commissioner. Similarly, it has been used in Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order for passing a fresh assessment order. 11. Brief facts of the case are that the assessee has filed its return of income on 01.11.2017 declaring total income at Rs.1,39,246/-. The case of the assessee was selected for scrutiny assessment and a notice under section 143(2) was issued and served upon it. The ld. Assessing Officer thereafter issued show-cause notice inviting explanation of the assessee on number of issues. In other words, a questionnaire under section 142(1) was issued, whose copy is available on pages number 7 to 9 of the paper book. The ld. Assessing Officer has passed the assessment order on 01.02.2019 under section 143(3) of the Income Tax Act. 12. The ld. CIT has gone through the record and formed an opinion that during demonetisation period, there was abnormal increase in cash deposit as compared to average rate of cash deposit during predemonetisation period. Hence, ld. CIT was of the view that the ld. Assessing Officer should have investigated this issue more vigorously. Copy of the show-cause notice is available on pages no. 1 & 2 of the second paper book, which reads as under:- "GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the assessee had received, payments & paid to parties through bank accounts. Name of the parties are also evident from the bank statement. Detailed investigation from the A.O. had escaped. In view of the above, it appeals that the AO has passed the impugned assessment order without any application of mind nor examined the issue which should have been made in this case. 2. Having regard to the facts and circumstances of the case and in law and accordance with the provisions of section 263(1) of the I.T Act, 1961. You are hereby given an opportunity of being heard to show cause as to why the impugned assessment order passed u/s 143(3) on 01.02.2019 for AY: 2017-18 should not be held as erroneous in so far as it is prejudicial to the interest of revenue. You may accordingly furnish your written submissions u/s 263(1) of the I.T Act, 1961 by 19.02.2021 in this regard elaborating and/ or evidencing your contentions/ submissions. Considering in the pandemic situations arising due to COVID 19, physical attendance is not considered necessary and you are requested to make a written submissions with necessary details through E-mail ID: [email protected] and it will be tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Kerala High Court decision (198 ITR 611) has held that the phrase "Prejudicial to the Interests of the Revenue" is of wide import and is not confined to only loss of taxes. If the A.O. has accepted the claim of the assessee without any enquiries then such assessment order passed by the A.O. was held to be erroneous. (9) In this regard it is mentioned that mere non enquiry would also render a particular order passed by lower authority as erroneous and prejudicial to the interests of Revenue. This position has been clearly confirmed by Hon'ble Supreme Court in the case of Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 & Smt. Tara Devi Aggarwai v. CIT [1973] 88 ITR 323 (SC). The reasoning for this proposition has been explained by Hon'ble Delhi High Court in the case of Gee Vee Enterprise v. Addl. CIT [1975] 99 ITR 375 in the following para :- "It is not necessary for the Commissioner to make further inquiries before cancelling the assessment order of the Income-tax Officer. The Commissioner can regard the order as erroneous on the ground that in the circumstances of the case the Income-tax Officer should have made further inquiries before accepting the statements mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee an opportunity of being heard, that the impugned assessment order for the A.Y. 2017-18 is liable to be set-aside. Therefore, I set aside the said assessment order directing the A.O. to frame the assessment afresh after considering the aforesaid observations, Hon'ble Supreme Court and Hon'ble High Court decisions and as per law. 12. In the result, the assessment order u/s 143(3) for A.Y. 2017-18 is set-aside to the file of the Assessing Officer with a direction to pass a fresh assessment order after considering the aforesaid observations, as per law and after giving an opportunity of being* heard to the assessee". 14. The ld. Counsel for the assessee while impugning the order of ld. CIT filed written submission running into 11 pages. He pointed out that during the course of assessment proceedings, the ld. Assessing Officer has issued a specific questionnaire and collected specific details on the point for which ld. Commissioner has taken action under section 263. For buttressing this contention, he took us through pages no. 1 to 9, where copy of the notice under section 142(1) and questionnaire annexed with such notice are placed on record. He submitted that the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) "record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. Khatiza S. Oomerbhoy Vs. ITO, Mumbai, 101 TTJ 1095, analyzed in detail various authoritative pronouncements including the decision of Hon'ble Supreme Court in the case of Malabar Industries 243 ITR 83 and has propounded the following broader principle to judge the action of CIT taken under section 263. (i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated as prejudicial to the interests of the Revenue and if the AO has adopted one of the courses permissible under law or where two views are possible and the AO has taken one view with which the CIT does not agree. If cannot be treated as an errone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement along with the ledger copy for the period 01.04.2016 to 08.11.2016, 09.11.2016 to 31.12.2016 and 01.01.2017 to 31.03.2017 and give a short synopsis of the Account in following format: A/c No. & Bank details (IFS Code) Cash deposit from 01.04.2016 to 08.11.2016 Cash deposit - 09.11.2016 to 31.12.2016 Cash deposit from 01.01.2017 to 31.03.2017 Other than cash deposit 01.04.2016 to 31.03.2017 Total deposits Old currency New Currency Old currency New Currency Old currency New Currency (c) Please explain the sources of such cash deposit relevant to the FY 2016-17 and give the details of source thereof. In this connection, you are requested to furnish your cash book or cash trail from 01.04.2015 to 07.11.2016 and from 08.11.2016 to 31.12.2016 respectively. (d) If you have received such cash from your sale proceeds, please furnish the details of such parties along with ledger and give a short synopsis in following format...." In response to the above detailed requisition, the assessee filed pointwise requisite information vide e-response dated 24.01.2019. Copy of the reply enclosed at pages -9 of the p/b. For ready reference, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rict Controller of Food and Supply starts purchasing of rice from the Mills from October, the assessee [being a rice mill], with the intention to purchase paddy from the farmers/cultivators, withdrew cash from bank during the month of October, 2016, for making cash payments to the farmers/cultivators. It is for this reason that cash aggregating to Rs. 1,35,10,000/- was withdrawn from its cash credit [A/c no. 0541008700004281] and current account [A/c no. 6070002100000448] during October, 2016. However, with the sudden declaration of the demonetization scheme from 08/11/2016, vide which currencies of Rs.1,000/- & Rs.500/- notes were scrapped, the assessee was unable to make payment to the farmers as they refused to accept the defunct currency and under such circumstances, the assessee had no other option but to redeposit the cash aggregating to Rs.97,36,000/- out of the cash withdrawal of Rs. 1,35,10,000/- to its bank account. It was further clarified that such cash deposits were not related to any sale. 20. Apart from the above details, the assessee has filed copy of the bank statements on pages no. 27 to 72. A perusal of the above would indicate that total withdrawals are Rs.1,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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