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TMI Blog2024 (9) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 3.0 For the purposes of absolute clarity of the facts of the case, it is deemed necessary to reproduce the order dated 07.03.2024 of PCIT-1 Chennai. "......The assessee firm M/s. Shanthi Gold House is engaged in the business of trading in jewellery. The assessee filed its original Return of Income for AY 2017-18 on 24.10.2017 declaring a total income of Rs. 1,15,040/-, The case was selected for complete scrutiny under CASS on the issue of cash deposits made into its Bank account during demonetization period and assessment was completed u/s 143(3) of the Act on 21.12.2019 determining the assessed income of Rs. 4,10,765/- by making disallowance of Rs. 2,95,725/- towards unsubstantiated purchases reported during the month of March 2017. Subsequently, the case was taken up for revision u/s. 263 of the Income Tax Act by issuing notice for hearing on 14.03.2022. As the assessee did not respond to the notice issued and also has not filed written submissions called for, an ex-parte order u/s. 263 of the 1.T. Act, 1961 was passed on 23.03.2022 setting aside the assessment order u/s. 143(3) dated 21.12.2019 and directing the Assessing Officer to examine the following aspects:- 2.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees of Rs. 5,92,170/- and repairs and maintenance of Rs. 1,97,544/-. These payments by their nature do not give any scope for any business expediency, complexity or compulsion as these payments are made to the known persons/entities who have provided services to the assessee. 5.2 Further, the assessee has referred to the proviso to Section 40A(3) which specifies the circumstances under which no disallowance can be made for cash transactions and having regard to the nature and extent of banking facilities available. In the instant case, the assessee's place of business i.e. Usman Road, T. Nagar is a commercial hub in a Metro city, Chennai where all Nationalized Banking institutions as well as private sector Banking institutions are operating their branches. As such, the said proviso is not at all applicable to the assessee's case. 5.3 The assessee further claimed that (i) the assessing officer was satisfied with the genuineness of the disputed expenses while passing the assessment order, (ii) where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned. It has been noted that the present revisionary order has arisen only on account of an order issued by this tribunal to the PCIT to read judicate the matter. Needless to say the appellant had not complied with the notices of the tribunal also. Coming to the principle controversy as to whether the PCIT has passed an ex-parte order without providing adequate opportunity, it is seen that in Para-4 of his impugned order the PCIT has clearly mentioned that "...finally the assessee has filed its return submissions dated 23.02.2024...". The Ld. DR submitted that there is nothing on record to indicate that assessee's right to natural justice of being heard was violated and that it is the assessee which is a habitual defaulter. Thus the PCIT has duly considered the defence offered by the assessee and the blame of passing an ex-parte order without affording adequate opportunity of being heard cannot be rested on his shoulder. The argument of the assessee therefore fails. 5.0 Another issue raised by the assessee is that the impugned order was passed beyond available statutory time and without jurisdiction and hence deserves to be quashed. The Ld. DR argued that no such controversy is exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had admitted before the PCIT in revisionary proceedings that it had entered into cash transactions exceeding the limits prescribed u/s 40A(3) but its case was falling within the exemption clause of business expediency. The order of the Ld. AO nowhere indicates that any of the issues discussed by the Ld. PCIT in the revisionary order were enquired into by him during assessment proceedings. The Ld. AO has passed a very cryptic order alluding towards lackadaisical approach. There is nothing in the order to indicate as what was to be examined and how was it examined. There is not even an whimper of evidence to suggest that the cash transactions for which complete scrutiny was ordered was at all examined by the Ld. AO. To the extent the order of the Ld. AO falls within the mischief of an order being erroneous in so far as it is prejudicial to the interest of the Revenue as mandated in section 263. 8.0 The arguments of the Ld. Counsel for the assesses qua existence of element of business expediency have been adequately countered by the PCIT in his revisionary orders. Material available on records indicate that this was a case of complete scrutiny under CASS to examine the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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