9911796707
TMI Blog2025 (5) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income Tax (Appeals)-VI, (in short "Ld. CIT(A)"), Ahmedabad vide orders dated 20.02.2024 passed for A.Y. 2006- 07. 2. The assessee has taken the following Grounds of Appeal: ITA No. 1215/Ahd/2014 (A.Y. 2006-07) "1. The C.I.T. erred in passing an order u/s.263 of the Income Tax Act, 1961, revising the scrutiny assessment passed u/s. 143(3) of the Income Tax Act. 1961, which was neither erroneous nor prejudicial to the interest of revenue. 2. The C.I.T. tailed to appreciate that the Assessing Officer, in the original assessment made u/s. 143(3) of the Income Tax Act, 1961, had thoroughly scrutinized the case of the Appellant and only after that accepted the same. 3. The C.I.T. erred in law as well as on facts in adding an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, alter or modify any of the grounds stated hereinabove either before or at the time of hearing." 4. These are appeals filed by the assessee against the order passed by Principal CIT u/s 263 of the Act and the consequent levy of penalty u/s 271(1)(c) of the Act. Since, in both appeals common facts and issues are involved, both appeals filed by the assessee are being taken up together. We observe that despite large number of opportunities of hearing, the assessee has remained absent and therefore, we shall proceed with the merits of case on the basis of material on records and arguments of the Department. Even today, when the matter was called out for hearing, none appeared on behalf of the assessee and no application for adjournment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 263, the assessee primarily relied on a Memorandum of Understanding (MOU) dated 19.08.2004, whereas PPPL placed reliance on several other MOUs and documents, including those dated 19.11.2004, 16.02.2005, and others. Principal CIT examined the chain of MOUs which clearly indicated that the assessee was not merely a scrap dealer, as claimed, but was engaged in a structured business activity involving acquisition and disposal of land and associated assets. These MOUs revealed that the assessee worked with other entities, such as PPPL and I.B. Enterprises, to acquire properties where the consideration was funded partly by these entities in return for a share in the profits. The agreements also clarified that it was the responsibility of I.B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during reassessment proceedings. Moreover, the AO never examined the creditors, despite PPPL proactively seeking to place its position on record. Principal CIT also took note of numerous other MOUs between the assessee and PPPL in relation to unrelated properties, demonstrating a consistent business relationship involving advances and profit-sharing. These included the acquisition of Vishaldeep Sawing Mills, Rohtas Industries, and Solapur assets, all supported by formal agreements. Yet, the payment of Rs. 3.95 crores remained unexplained in terms of contractual backing, and no MOU was placed on record by the assessee linking it to any specific deal. The Commissioner, therefore, observed that the amount in question could not be said to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, we find no infirmity in the order of Principal CIT so as to call for any interference. 7. Another aspect of the matter is whether Principal CIT is empowered to suo moto pass 263 order thereby enhancing the assessment, as in the instant case. It would be useful to reproduce the relevant extracts of section 263 of the Act, for ready reference: Revision of orders prejudicial to revenue. 263. (1) The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the [Assessing] Officer.......is erroneous in so far as it is prejudicial to the interests of the revenue, he may, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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