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TMI Blog2024 (8) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... rewal), the case of assessee was reopened by issuing notice u/s. 148 of the Act and after recording reasons for reopening the assessment. During the course of reassessment proceedings, the AO issued notices u/s. 142(1) of the Act on 03-09-2021, 24-11-2021, 08-12-2021 and 14-12-2021 asking the assessee to provide required details. The assessee also replied to all these notices. 2.1. The National Faceless Assessment Centre also sent one letter to jurisdictional AO requesting to provide all the details/documents seized during the course of search in case of Sanjay Govindram Agrawal indicating involvement of the assessee. 2.2. Considering the information and examining the documents provided by the assessee the NFAC completed the assessment u/s. 147 of the Act read with section 144B of the Act. 2.3. The PCIT observed that the case of the assessee was reopened on the basis of information of accommodation entries totalling to Rs. 1,36,02,120/- from the entry operator Sanjay Govindram Agrawal, but concluded that the AO has not made any addition despite availability of specific information. He further concluded that there is underassessment of the income and issued notice u/s. 263 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Austvinayak Textile. We have found that transactions amounting to 2,11,24,031 were entered into with independent Proprietor firm M/s. Dee Are Products Prop. of Divyaraj Madanlal Gupta (PAN: ACVPG1840P), we have also ascertained from the books of M/s. Dee Are Products and all transactions were matching. We submit herewith following documents for your honours verification. a. Ledger account of M/s. Dee Are Products Prop. Divyaraj Madanlal Gupta (PAN: ACVPG1840P) from the books of Austvinayak Textiles. b. Ledger account of Austvinayak Textiles from books of M/s. Dee Are Products Prop. Divyaraj Madanlal Gupta (PAN: ACVPG1840P). c. Income Tax Return of M/s. Dee Are Products Prop. Divyaraj Madanlal Gupta (PAN: ACVPG1840P). d. Audited Accounts of M/s. Dee Are Products Prop. Divyaraj Madanlal Gupta (PAN: ACVPG1840P). e. All Bank Statements of M/s. Dee Are Products Prop. Divyaraj Madanlal Gupta (PAN: ACVPG1840P) highlighting the transactions. f. All bank statements of present assessee DEE ARE TEXFAB PVT. LTD were already been submitted in earlier submissions. 7. We humbly submit that transactions with Sanjay Tibrewal group have been entered into by Proprietor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT v. Bhagwan Das [2005] 272 ITR 367 (All.)(HC). e. Hero Briggs & Stratton Auto Ltd. v. CIT [2007] 161 Taxman 127 (Delhi) (Trib.). f. Punjab Wool Syndicate v. ITO [2012] 17 ITR 439 (Chandigarh) (Trib.). g. Vijay Kumar Megotia v. CIT [2010] 3 ITR (T) 760 (Pat.)(Trib.). 2.7. However, Ld.Pr.CIT was not satisfied with the submission of the assessee and by exercising the powers u/s. 263 of the Act set aside the order of the AO with a direction to AO to pass a fresh order after duly examining the facts of the case to the extent of the issue. While doing so he primarily relied on the information available on INSIGHT PORTAL and concluded that there is ample evidence that the assessee has transacted with Sanjay Govindram Agrawal for accommodation entries. 3. Aggrieved by the order of the Ld.PCIT, the assessee is in appeal before us with following grounds of appeal: "1. Ld. PCIT-1, Ahmedabad erred in law as well as on fact in assuming jurisdiction u/s 263 of the IT Act. 2. Ld. PCIT-1, Ahmedabad erred in law as well as on fact in holding that assessment order passed by LD. AO is erroneous and prejudicial to interest of the revenue. The appellant curves leave to amend, alter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s.Dee Are Products, were submitted to both the AO and the Ld.PCIT. 6.3. The Ld.PCIT, relying primarily on information available on the INSIGHT portal, concluded that there was ample evidence of transactions between the assessee and Sanjay Govindram Agrawal for accommodation entries, thus exercising jurisdiction under Section 263 of the Act. In our opinion, mere information on the Insight Portal cannot be considered as evidence based on which the Ld.PCIT assumed his jurisdiction especially when the assessee has explained that the transactions are not pertaining to the assessee company but pertains to another person. 6.4. We have considered the judicial precedents cited by the assessee in the submission to the Ld.PCIT, including: 1. CIT vs. Sunbeam Auto Limited (332 ITR 167) (Del.): In this case the Hon'ble High Court deals with distinction between lack of inquiry and inadequate inquiry. An inquiry made by the AO, even if inadequate, does not give the PCIT the power to revise the order merely based on a different opinion. 2. Smt. Juthika Kar vs. ITO (ITA No.1128/Kol/2009): Where Tribunal held that adequate inquiry by the AO, and the formation of an opinion based on evidence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is sufficient ground to conclude that the AO formed an opinion based on the documents and explanations provided by the assessee, which included detailed evidence of transactions involving M/s. Dee Are Products. 6.8. The conditions necessary for invoking Section 263 of the Act, i.e., the order being erroneous and prejudicial to the interest of the revenue, are not satisfied in this case. The assessee provided substantial evidence to the AO and Ld.PCIT to demonstrate that the transactions in question were not conducted by the assessee but by M/s. Dee Are Products. The Ld.PCIT did not refute this evidence with any concrete findings. 6.9. We find that judicial precedents cited by the assessee to be applicable and supportive of the assessee's case. Specifically, the distinction between lack of inquiry and inadequate inquiry, as well as the necessity for the Ld.PCIT to demonstrate an erroneous and prejudicial order, aligns with the facts of this case. 6.10. Accordingly, the order of the Ld.PCIT invoking Section 263 of the Act is set aside. The reassessment order passed by the AO under Section 147 read with Section 144B of the Act is upheld. 7. In the result, the appeal filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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