Sh. Rajeev Goyal Vs PCIT (ITAT Chandigarh)
In ITA 149/Chd/2021, in the case of Shri Rajiv Goyal, it has been alleged by the Ld. Pr. CIT that the issue of addition to capital account amounting to Rs. 3,63,458/- on account of compensation received and another issue of an amount of Rs. 2,55,800/- pertaining to property in Meerpur has apparently not been enquired into by the AO. A perusal of the record shows that this allegation of the Ld. Pr. CIT is correct in so far as no query has been raised by the AO on these two issues and neither has the assessee made any submissions either before the AO or even before the Ld. PR. CIT on these two issues even when the said issues were duly mentioned in the show cause notice issued u/s 263 of the Act. Accordingly, we have no option but to uphold the impugned order u/s 263 of the Act on these two issues. However, the remaining other issue in the impugned order is the nonacceptance of the trading results by the Ld. Pr. CIT. The same is not upheld in view of our detailed observations and findings in ITA No. 150/Chd/2021 for A.Y. 2016-17 in the case of M/s Pardeep Ispat (P) Ltd which has identical facts. Therefore, the proceedings u/s 263 of the Act are partly upheld and the impugned 263 order stands modified in ITA No. 149/Chd/2021 in the case of Shri Rajeev Goyal and the appeal of the assessee is partly allowed.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
The captioned six appeals, preferred by the respective assesses, are directed against the separate orders dated 30.3.2021 passed u/s 263 of the Income Tax Act, 1961 (hereinafter called ‘the Act’) by the Ld. Pr. Commissioner of Income Tax (Pr. CIT) for Assessment Year (AY) 2016-17. Since common issues have been raised in all these appeals, therefore, they were heard together and are being disposed of by this common order.
2.0 The grounds raised in the appeals are as under:
1. ITA No. 149/Chd/2021:
1. That order dated 30.3.2021 u/s 263 of the Act by learned Principal Commissioner of Income Tax, Rohtak has been made without satisfying the statutory preconditions contained in the Act and is therefore without jurisdiction and thus, deserves to be quashed as such.
2. That the conclusion of learned Principal Commissioner of Income Tax that “the AO has passed the order dated 29.12.2018 in a very casual manner without due diligence and without conducting any worthwhile enquiries. Therefore, it is very clear that assessment proceedings completed u/s 143(3) of the Act are erroneous so far as prejudicial to the interest of the revenue in terms of provisions of section 263 of the Act including Explanation 2 inserted by the Finance Act, 2015 w.e.f. 01.06.2015” is based on fundamental misconception of facts and provisions of law and thus not in accordance with law and, therefore untenable.
2.1 That the finding of learned Principal Commissioner of Income Tax that order of the learned Assessing Officer is erroneous and prejudicial to the interest of revenue on the following basis is factually incorrect, legally misconceived, contrary to evidence on record; and in any case is vague, based on surmiseful considerations; and therefore unsustainable:
a) That since during the assessment proceedings the AO had issued letter to creditors and debtors and they were either returned back unserved or were not replied to which led to the conclusion by the AO himself that assessee had bogus creditors and debtors and therefore addition on this account was required to be made however no such addition was made by the AO;
b) That since the assessee has shown bogus creditors the purchases remained unverified. The AO was required to disallow the purchases however no such addition was made by the AO;
c) That assessee had shown addition of Rs. 3,63,458/- in his capital account on account of compensation received however no details have been filed by the assessee during assessment proceedings as well as during current proceedings and AO has not enquired into the nature of these receipts and its taxability;
d) That assessee has shown an addition of Rs. 2,55,800/- in property at Meerpur and AO has made no enquiry in respect of this property such sources investment in purchase of property has not been quantified;
e) That the AO conducted no enquiry regarding creditors and debtors shown by the assessee;
f) That there is clear lack of inquiry regarding additions made in the capital account and addition made in property;
2.2 That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the fac:s on record and after making all possible enquiries had made additions by rejecting the books of accounts u/s 145 of the Act and estimating the profits and further also made disallowance of expenses and therefore computed thj net profit which estimation and computation have neither been rejected nor raised, in such circumstances the order of revision is perse misconceived, misplaced and untenable, more particularly when income surrendered in the course of survey on account of excess cash, unexplained investment, unexplained expenditure and unsecured loans have been separately brought to tax then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Pr. Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible or unsustainable view.
2.3 That the learned Principal Commissioner of Income Tax has erred in holding that it is a case of “lack of enquiry” and, further failing to appreciate that alleged inadequate enquiry in the manner suggested without any independent evidence and, without any further enquiries by him cannot be a basis for assumption of jurisdiction u/s 263 of the Act.
2.4 That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the facts on record and after making all possible enquiries had accepted claim of the appellant then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Pr. Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible view.
2.5 That the learned Pr. Commissioner of Income Tax has also failed to appreciate that, u/s 263 of the Act, an order of assessment cannot be set-aside to simply to make further enquiries and thereafter pass fresh order of assessment and as such, impugned order is contrary to law and hence, unsustainable
2.6 That the learned Principal Commissioner of Income Tax has failed to appreciate that surmises, conjecture and suspicion could not be a basis much less a valid basis to invoke section 263 of the Act.
2.7 That while passing the order u/s 263 of the Act the learned Principal Commission of Income Tax cannot travel beyond the show cause notice and therefore findings and observation and also the material relied upon not referred in the show cause notice but made part of the order could neither in law and nor on fact be made a basis to assume jurisdiction u/s 263 of the Act; and thus order on this ground alone deserve to be quashed t s such.
2.8 That various other adverse findings recorded in the notice u/s 263 of the Act and, also in impugned order are factually incorrect, vague, legally misconceived and untenable.
3. That the learned Principal Commissioner of Income Tax has framed the impugned order without granting sufficient opportunity to the appellant and therefore the order made is illegal, invalid and, vitiated order
Prayer – It is therefore prayed that, impugned order dated 30.3.2021 under section 263 of the Act be held to be without jurisdiction and, therefore be quashed and appeal of the appellant be allowed.
2. ITA No. 150/Chd/2021:
1. That order dated 30.3.2021 u/s 263 of the Act by the learned Principal Commissioner of Income Tax, Rohtak has been made without satisfying the statutory preconditions contained in the Act and is therefore without jurisdiction and thus, deserves to be quashed as such.
2. That the learned Principal Commissioner of Income Tax has framed the impugned order without granting sufficient opportunity to the appellant and therefore the order made is illegal, invalid and, vitiated order
3. That while passing the order u/s 263 of the Act the learned Principal Commission of Income Tax cannot travel beyond the show cause notice and therefore findings and observation and also the material relied upon not referred in the show cause notice but made part of the order could neither in law and nor on fact be made a basis to assume jurisdiction u/s 263 of the Act; and thus order on this ground alone deserve to be quashed as such.
4. That finding and conclusion of the learned Principal Commissioner of Income Tax. that order of the learned Assessing Officer is erroneous and prejudicial to the interest of revenue on the following basis is based on fundamental misconception of facts and provisions of law and hence untenable.
a) That since during the assessment proceedings the AO had issued letters to creditors and they were either returned back unserved or were not replied to which led to the conclusion by the AO himself that assessee had bogus creditors and therefore addition on this account was required to be made however no such addition was made by the AO;
b) That since the assessee has shown bogus creditors the purchases remained unverified. The AO was required to disallow the purchases however no such addition was made by the AO;
c) That the AO conducted no enquiry in respect of unsecured loans from Sh. Mohit Mehta and Smt. Satya Dev; and
d) That there is clear lack of inquiry regarding purchase of fixed assets
5. That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the facts on record and after making all possible enquiries had made additions by rejecting the books of accounts u/s 145 of the Act and estimating the profits and further also made disallowance of expenses and therefore computed the net profit which estimation and computation have neither been rejected nor raised, in such circumstances the order of revision is perse misconceied, misplaced and untenable, more particularly when income surrendered in the course of survey on account of excess cash, unexplained cash and unsecured loans have been separately brought to tax then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible or unsustainable view.
6. That the learned Principal Commissioner of Income Tax has failed to appreciate that action u/s 263 of the Act is otherwise too inapplicable on the factual matrix of the facts of the instant case since admittedly, undisputedly and undeniably not a case of “lack of enquiry” or “lack of investigation” and therefore the invocation u/s 263 of the Act is not in accordance with law.
7. That the learned Pr. Commissioner of Income Tax has also failed to appreciate that, u/s 263 of the Act, an order of assessment cannot be set-aside to simply to make further enquiries and thereafter pass fresh order of assessment and as such, impugned order is contrary to law and hence, unsustainable.
8. That the learned Principal Commissioner of Income Tax has failed to appreciate that surmises, conjecture and suspicion could not be a basis much less a valid basis to invoke section 263 of the Act.
9. That various other adverse findings recorded in the notice u/s 263 of the Act and, also in impugned order are factually incorrect, vague, legally misconceived and untenable.
Prayer It is therefore prayed that, impugned order dated 30.3.2021 under section 263 of the Act be held to be without jurisdiction and, therefore be quashed and appeal of the appellant be allowed.
3. ITA No. 151/Chd/2021:
1. That order dated 30.3.2021 u/s 263 of the Act by learned Principal Commissioner of Income Tax, Rohtak has been made without satisfying the statutory preconditions contained in the Act and is therefore without jurisdiction and thus, deserves to be quashed as such.
2. That the conclusion of learned Principal Commissioner of Income Tax that “the AO has passed the order dated 29.12.2018 in a very casual manner without due diligence and without conducting any worthwhile enquiries. Therefore, it is very clear that assessment proceedings completed u/s 143(3) of the Act are erroneous so far as prejudicial to the interest of the revenue in terms of provisions of section 263 of the Act including Explanation 2 inserted by the Finance Act, 2015 w.e.f. 01.06.2015” is based on fundamental misconception of facts and provisions of law and thus not in accordance with law and, therefore untenable.
2.1 That the finding of learned Principal Commissioner of Income Tax that order of the learned Assessing Officer is erroneous and prejudicial to the interest of revenue on the following basis is factually incorrect, legally misconceived, contrary to evidence on record; and in any case is vague, based on surmiseful considerations; and therefore unsustainable:
a) That since during the assessment proceedings the AO had issued letter to creditors and debtors and they were either returned back unserved or were not replied to which led to the conclusion by the AO himself that assessee had bogus creditors and debtors and therefore addition on this account was required to be made however no such addition was made by the AO;
b) That since the assessee has shown bogus creditors the purchases remained unverified. The AO was required to disallow the purchases however no such addition was made by the AO;
c ) That Assessing officer conduced no enquiry in respect of investment made for construction of house and did not arrive at the actual investment made by the assessee;
d) That Assessing officer has made no enquiry in respect of property and the source of investment in purchase of property has not been quantified.
e) That the Assessing officer conducted no enquiry regarding the purchases and sales made by the assessee ;
f) That there is clear lack of inquiry regarding purchase of fixed assets.
2.2 That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the facts on record and after making all possible enquiries had made additions by rejecting the books of accounts u/s 145 of the Act and estimating the profits and further also made disallowance of expenses and therefore computed the net profit which estimation and computation have neither been rejected nor raised, in such circumstances the order of revision is perse misconceived, misplaced and untenable, more particularly when income surrendered in the course of survey on account of excess cash, unexplained investment, unexplained expenditure and unsecured loans have been separately brought to tax then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Pr. Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible or unsustainable view.
2.3 That the learned Principal Commissioner of Income Tax has erred in holding that it is a case of “lack of enquiry” and, further failing to appreciate that alleged inadequate enquiry in the manner suggested without any independent evidence and, without any further enquiries by him cannot be a basis for assumption of jurisdiction u/s 263 of the Act.
2.4 That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the facts on record and after making all possible enquiries had accepted claim of the appellant then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Pr. Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible view.
2.5 That the learned Pr. Commissioner of Income Tax has also failed to appreciate that, u/s 263 of the Act, an order of assessment cannot be set-aside to simply to make further enquiries and thereafter pass fresh order of assessment and as such, impugned order is contrary to law and hence, unsustainable.
2.6 That the learned Principal Commissioner of Income Tax has failed to appreciate that surmises, conjecture and suspicion could not be a basis much less a valid basis to invoke section 263 of the Act.
2.7 That while passing the order u/s 263 of the Act the learned Principal Commission of Income Tax cannot travel beyond the show cause notice and therefore findings and observation and also the material relied upon not referred in the show cause notice but made part of the order could neither in law and nor on fact be made a basis to assume jurisdiction u/s 263 of the Act; and thus order on this ground alone deserve to be quashed as such.
2.8 That various other adverse findings recorded in the notice u/s 263 of the Act and, also in impugned order are factually incorrect, vague, legally misconceived and untenable.
3. That the learned Principal Commissioner of Income Tax has framed the impugned order without granting sufficient opportunity to the appellant and therefore the order made is illegal, invalid and, vitiated order
Prayer – It is therefore prayed that, impugned order dated 30.3.2021 under section 263 of the Act be held to be without jurisdiction and, therefore be quashed and appeal of the appellant be allowed.
4. ITA No. 152/Chd/2021:
1. That order dated 30.3.2021 u/s 263 of the Act by learned Principal Commissioner of Income Tax, Rohtak has been made without satisfying the statutory preconditions contained in the Act and is therefore without jurisdiction and thus, deserves to be quashed as such.
2. That the conclusion of learned Principal Commissioner of Income Tax that “the AO has passed the order dated 29.12.2018 in a very casual manner without due diligence and without conducting any worthwhile enquiries. Therefore, it is very clear that assessment proceedings completed u/s 143(3) of the Act are erroneous so far as prejudicial to the interest of the revenue in terms of provisions of section 263 of the Act including Explanation 2 inserted by the Finance Act, 2015 w.e.f. 01.06.2015” is based on fundamental misconception of facts and provisions of law and thus not in accordance with law and, therefore untenable.
2.1 That the finding of learned Principal Commissioner of Income Tax that order of the learned Assessing Officer is erroneous and prejudicial to the interest of revenue on the following basis is factually incorrect, legally misconceived, contrary to evidence on record; and in any case is vague, based on surmiseful considerations; and therefore unsustainable:
a) That since during the assessment proceedings the AO had issued letter to creditors and debtors and they were either returned back unserved or were not replied to which led to the conclusion by the AO himself that assessee had bogus creditors and debtors and therefore addition on this account was required to be made however no such addition was made by the AO;
b) That since the assessee has shown bogus creditors the purchases remained unverified. The AO was required to disallow the purchases however no such addition was made by the AO;
c) That the Assessing officer conducted no enquiry regarding the purchases and sales made by the assessee;
d) That there is clear lack of inquiry regarding purchase of fixed assets.
2.2 That the learned Pr. Commissioner of Income Tax
has failed to appreciate that once the learned Assessing Officer on examination of the facts on record and after making all possible enquiries had made additions by rejecting the books of accounts u/s 145 of the Act and estimating the profits and further also made disallowance of expenses and therefore computed the net profit which estimation and computation have neither been rejected nor raised, in such circumstances the order of revision is perse misconceived, misplaced and untenable, more particularly when income surrendered in the course of survey on account of excess cash, unexplained investment, unexplained expenditure and unsecured loans have been separately brought to tax then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Pr. Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible or unsustainable view.
2.3 That the learned Principal Commissioner of Income Tax has erred in holding that it is a case of “lack of enquiry” and, further failing to appreciate that alleged inadequate enquiry in the manner suggested without any independent evidence and, without any further enquiries by him cannot be a basis for assumption of jurisdiction u/s 263 of the Act.
2.4 That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the facts on record and after making all possible enquiries had accepted claim of the appellant then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Pr. Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible view.
2.5 That the learned Pr. Commissioner of Income Tax has also failed to appreciate that, u/s 263 of the Act, an order of assessment cannot be set-aside to simply to make further enquiries and thereafter pass fresh order of assessment and as such, impugned order is contrary to law and hence, unsustainable
2.6 That the learned Principal Commissioner of Income Tax has failed to appreciate that surmises, conjecture and suspicion could not be a basis much less a valid basis to invoke section 263 of the Act.
2.7 That while passing the order u/s 263 of the Act the learned Principal Commission of Income Tax cannot travel beyond the show cause notice and therefore findings and observation and also the material relied upon not referred in the show cause notice but made part of the order could neither in law and nor on fact be made a basis to assume jurisdiction u/s 263 of the Act; and thus order on this ground alone deserve to be quashed as such.
2.8 That various other adverse findings recorded in the notice u/s 263 of the Act and, also in impugned order are factually incorrect, vague, legally misconceived and untenable.
3. That the learned Principal Commissioner of Income Tax has framed the impugned order without granting sufficient opportunity to the appellant and therefore the order made is illegal, invalid and, vitiated order
Prayer – It is therefore prayed that, impugned order dated 30.3.2021 under section 263 of the Act be held to be without jurisdiction and, therefore be quashed and appeal of the appellant be allowed.
5. ITA No. 154/Chd/2021:
1. That order dated 30.3.2021 u/s 263 of the Act by learned Principal Commissioner of Income Tax, Rohtak has been made without satisfying the statutory preconditions contained in the Act and is therefore without jurisdiction and thus, deserves to be quashed as such.
2. That the conclusion of learned Principal Commissioner of Income Tax that “the AO has passed the order dated 29.12.2018 in a very casual manner without due diligence and without conducting any worthwhile enquiries. Therefore, it is very clear that assessment proceedings completed u/s 143(3) of the Act are erroneous so far as prejudicial to the interest of the revenue in terms of provisions of section 263 of the Act including Explanation 2 inserted by the Finance Act, 2015 w.e.f. 01.06.2015” is based on fundamental misconception of facts and provisions of law and thus not in accordance with law and, therefore untenable.
2.1 That the finding of learned Principal Commissioner of Income Tax that order of the learned Assessing Officer is erroneous and prejudicial to the interest of revenue on the following basis is factually incorrect, legally misconceived, contrary to evidence on record; and in any case is vague, based on surmiseful considerations; and therefore unsustainable:
a) That since during the assessment proceedings the AO had issued letter to creditors and debtors and they were either returned back unserved or were not replied to which led to the conclusion by the AO himself that assessee had bogus creditors and debtors and therefore addition on this account was required to be made however no such addition was made by the AO;
b) That during the assessment proceedings itself it was established that the assessee has shown fake mode of transportation of goods, therefore the loss claimed by the assessee on sale was bogus one and was required to be disallowed and the AO was required to disallow the losses on bogus sale however no such disallowance made by the AO on this account;
c) That since the assessee had shown debtors amounting to Rs. 12.78 crore however no inquiry was made to verify the same particularly when there were glaring evidences of fake transport mode available with the A.O; and
d) That the AO conducted no enquiry regarding that the assessee had shown fake transportation receipt therefore the purchases remained unverified;
e) That the Assessing officer conducted no equiry regarding the assessee has shown penalty of Rs. 3408016/- appearing in the Balance Sheet.
2.2 That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the fac:s on record and after making all possible enquiries had made additions by rejecting the books of accounts u/s 145 of the Act and estimating the profits and further also made disallowance of expenses and therefore computed the net profit which estimation and computation have neither been rejected nor raised, in such circumstances the order of revision is perse misconceived, misplaced and untenable, more particularly when income surrendered in the course of survey on account of excess cash, unexplained investment, unexplained expenditure and unsecured loans have been separately brought to tax then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Pr. Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible or unsustainable view.
2.3 That the learned Principal Commissioner of Income Tax has erred in holding that it is a case of “lack of enquiry” and, further failing to appreciate that alleged inadequate enquiry in the manner suggested without any independent evidence and, without any further enquiries by him cannot be a basis for assumption of jurisdiction u/s 263 of the Act.
2.4 That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the facts on record and after making all possible enquiries had accepted claim of the appellant then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Pr. Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible view.
2.5 That the learned Pr. Commissioner of Income Tax has also failed to appreciate that, u/s 263 of the Act, an order of assessment cannot be set-aside to simply to make further enquiries and thereafter pass fresh order of assessment and as such, impugned order is contrary to law and hence, unsustainable
2.6 That the learned Principal Commissioner of Income Tax has failed to appreciate that surmises, conjecture and suspicion could not be a basis much less a valid basis to invoke section 263 of the Act.
2.7 That while passing the order u/s 263 of the Act the learned Principal Commission of Income Tax cannot travel beyond the show cause notice and therefore findings and observation and also the material relied upon not referred in the show cause notice but made part of the order could neither in law and nor on fact be made a basis to assume jurisdiction u/s 263 of the Act; and thus order on this ground alone deserve to be quashed t s such.
2.8 That various other adverse findings recorded in the notice u/s 263 of the Act and, also in impugned order are factually incorrect, vague, legally misconceived and untenable.
3. That the learned Principal Commissioner of Income Tax has framed the impugned order without granting sufficient opportunity to the appellant and therefore the order made is illegal, invalid and, vitiated order
Prayer – It is therefore prayed that, impugned order dated 30.3.2021 under section 263 of the Act be held to be without jurisdiction and, therefore be quashed and appeal of the appellant be allowed.
6. ITA No. 157/Chd/2021:
1. That order dated 30.3.2021 u/s 263 of the Act by learned Principal Commissioner of Income Tax, Rohtak has been made without satisfying the statutory preconditions contained in the Act and is therefore without jurisdiction and thus, deserves to be quashed as such.
2. That the conclusion of learned Principal Commissioner of Income Tax that “the AO has passed the order dated 29.12.2018 in a very casual manner without due diligence and without conducting any worthwhile enquiries. Therefore, it is very clear that assessment proceedings completed u/s 143(3) of the Act are erroneous so far as prejudicial to the interest of the revenue in terms of provisions of section 263 of the Act including Explanation 2 inserted by the Finance Act, 2015 w.e.f. 01.06.2015” is based on fundamental misconception of facts and provisions of law and thus not in accordance with law and, therefore untenable.
2.1 That the finding of learned Principal Commissioner of Income Tax that order of the learned Assessing Officer is erroneous and prejudicial to the interest of revenue on the following basis is factually incorrect, legally misconceived, contrary to evidence on record; and in any case is vague, based on surmiseful considerations; and therefore unsustainable:
a) That since during the assessment proceedings the AO had issued letter to creditors and debtors and they were either returned back unserved or were not replied to which led to the conclusion by the AO himself that assessee had bogus creditors and debtors and therefore addition on this account was required to be made however no such addition was made by the AO;
b) That during the assessment proceedings itself it was established that the assessee has shown fake mode of transportation of goods, therefore the loss claimed by the assessee on sale was bogus one and was required to be disallowed and the AO was required to disallow the losses on bogus sale however no such disallowance made by the AO on this account;
c) That since the assessee had shown debtors amounting to Rs. 21.84 crores however no inquiry was made to verify the same particularly when the glaring evidences of fake transport mode were available with the A.O; and
d) That the AO conducted no enquiry regarding that the assessee had shown fake transportation receipt therefore the purchases remained unverified;
e) That the AO should enquire into the amount invested by the assessee in construction of building and if it is required to do so, refer the matter to valuation officer for valuation of property;
f) That investment and sources should be inquired into by examining documentary evidences
2.2 That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the facts on record and after making all possible enquiries had made additions by rejecting the books of accounts u/s 145 of the Act and estimating the profits and further also made disallowance of expenses and therefore computed the net profit which estimation and computation have neither been rejected nor raised, in such circumstances the order of revision is perse misconceived, misplaced and untenable, more particularly when income surrendered in the course of survey on account of excess cash, unexplained investment, unexplained expenditure and unsecured loans have been separately brought to tax then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Pr. Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible or unsustainable view.
2.3 That the learned Principal Commissioner of Income Tax has erred in holding that it is a case of “lack of enquiry” and, further failing to appreciate that alleged inadequate enquiry in the manner suggested without any independent evidence and, without any further enquiries by him cannot be a basis for assumption of jurisdiction u/s 263 of the Act.
2.4 That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the facts on record and after making all possible enquiries had accepted claim of the appellant then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Pr. Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible view.
2.5 That the learned Pr. Commissioner of Income Tax has also failed to appreciate that, u/s 263 of the Act, an order of assessment cannot be set-aside to simply to make further enquiries and thereafter pass fresh order of assessment and as such, impugned order is contrary to law and hence, unsustainable
2.6 That the learned Principal Commissioner of Income Tax has failed to appreciate that surmises, conjecture and suspicion could not be a basis much less a valid basis to invoke section 263 of the Act.
2.7 That while passing the order u/s 263 of the Act the learned Principal Commission of Income Tax cannot travel beyond the show cause notice and therefore findings and observation and also the material relied upon not referred in the show cause notice but made part of the order could neither in law and nor on fact be made a basis to assume jurisdiction u/s 263 of the Act; and thus order on this ground alone deserve to be quashed as such.
2.8 That various other adverse findings recorded in the notice u/s 263 of the Act and, also in impugned order are factually incorrect, vague, legally misconceived and untenable.
3. That the learned Principal Commissioner of Income Tax has framed the impugned order without granting sufficient opportunity to the appellant and therefore the order made is illegal, invalid and, vitiated order
Prayer – It is therefore prayed that, impugned order dated 30.3.2021 under section 263 of the Act be held to be without jurisdiction and, therefore be quashed and appeal of the appellant be allowed.
3.0 ITA No. 150/Chd/2021 for A.Y. 2016-17 in the case of M/s Pardeep Ispat (P) Ltd. is taken as the lead case. The Ld. Pr. CIT in passing order u/s 263 of the Act has held that the assessment proceedings completed u/s 143(3) of the Act on 30.12.2018 were erroneous in so far as prejudicial to the interest of the revenue and, accordingly the assessment order made was set aside with the direction to pass an order afresh in accordance with law.
4.0 The brief facts of the case are that the assessee deals in trading business of iron and cement in the name and style of M/s Pardeep Ispat (P) Ltd., Sirsa. Return declaring an income of Rs. 89,620/- was e-filed by the assessee on 12.10.2016 which was processed as such u/s 143(1) of the Act. Subsequently, the case was selected for compulsory scrutiny and notice was issued u/s 143(2) of the Act. A survey operation u/s 133A of the Act was carried out at the business premises on 10.9.2015. During the course of survey, some excess cash, unaccounted loans and advances to various parties, unexplained investment in furniture and fixtures were found. The assessee voluntarily offered surrender of additional income of Rs. 31,00,000/- (Rupees Thirty-one lakh) over and above the normal business income for the assessment year 2016-17. From a perusal of the Income Tax return and audit report for the year under consideration, it was noticed by the Assessing Officer (AO) that the assessee had shown its business turnover at Rs. 2,30,72,738/- and shown gross loss of Rs. 23,44,693/- which was (-) 0.16% of the total turnover. In order to verify the genuineness of the assessee’s return of income, the assessee was required by the AO to provide complete addresses and furnish confirmed copies of accounts of all the sundry creditors. The assessee furnished unconfirmed copies of accounts in respect of sundry creditors/debtors. In some of the cases, addresses of the creditors were not provided. In cases, where addresses had been provided, information was called in 17 cases u/s 133(6) of the Act and the sundry debtors and creditors were asked to provide confirmed copies of account of the assessee from their books of account and the resultant situation of these notices has been summarized in the order of assessment as under:
