Case Law Details
PCIT Vs Sandip Kumar Tekriwal HUF (Calcutta High Court)
The short question involved in these appeals is whether the Principal Commissioner of Income Tax – 10, Kolkata [PCIT] could have exercised his powers under section 263 of the Act. In our considered view, the tribunal has elaborately examined this issue, taken note of the decision of the Hon’ble Supreme Court in Malabar Industrial Co. Ltd. vs. CIT [2000] 243 ITR 83 [SC] and allowed the appeal. Further, the tribunal has noted that the assessing officer had made an addition of 2% to the gross profit over and above the rate of gross profit of 4.63% totalling to 7.63%. It appears that after completing the assessment the assessing officer addressed the PCIT stating that certain error has occurred in the assessment order and requested him to review the order under section 263 of the Act. Whether such a procedure adopted by the PCIT was legally sustainable was examined by the tribunal and in our considered view after taking note of the various decisions of the Hon’ble Supreme Court it was rightly pointed out that section 263 of the Act does not permit substituting one opinion for another. That apart, the tribunal has specifically recorded a factual finding that the assessee had produced all necessary details of the purchase, sales, audited books of accounts, quantity details, etc.. Further, the tribunal found that the assessee’s books of accounts were audited by the Chartered Accountant, the quantity details were given in respect of opening stock, purchase, sales, closing stock, etc. Furthermore, the tribunal pointed out that no discrepancy was found between the purchase shown by the assessee and the sales decline. Thus, on facts, the tribunal concluded that assumption of jurisdiction by the PCIT under section 263 of the Act was erroneous. In our considered view, there is no error in the order passed by the tribunal nor there is any perversity in its approach for us to interfere.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
The Court : This appeal by the revenue filed under section 260A of the Income Tax Act, 1961 [the Act, for brevity] is directed against the common order passed by the Income Tax Appellate Tribunal, “B” Bench, Kolkata in ITA No.1135/Kol/2018 for the assessment year 2010-11.
The revenue has raised the following substantial question of law for consideration.
i) Whether on the facts and in the circumstances of the case, the Ld. ITAT is
right in law to ignore the fact that purchase are bogus as per the finding of investigation wring of the Department and the assessing authority ?
ii) Whether the Learned ITAT was right in law to conclude that revision is bad
in law contrary to the fact that the assessment was erroneous in so far as prejudicial to the interest of revenue, the assessing officer having failed to disallow bogus purchases fully, but resorted to a certain percentage ?
We have heard the learned standing Counsel appearing for the appellants and the respondents.
The short question involved in these appeals is whether the Principal Commissioner of Income Tax – 10, Kolkata [PCIT] could have exercised his powers under section 263 of the Act. In our considered view, the tribunal has elaborately examined this issue, taken note of the decision of the Hon’ble Supreme Court in Malabar Industrial Co. Ltd. vs. CIT [2000] 243 ITR 83 [SC] and allowed the appeal. Further, the tribunal has noted that the assessing officer had made an addition of 2% to the gross profit over and above the rate of gross profit of 4.63% totalling to 7.63%. It appears that after completing the assessment the assessing officer addressed the PCIT stating that certain error has occurred in the assessment order and requested him to review the order under section 263 of the Act. Whether such a procedure adopted by the PCIT was legally sustainable was examined by the tribunal and in our considered view after taking note of the various decisions of the Hon’ble Supreme Court it was rightly pointed out that section 263 of the Act does not permit substituting one opinion for another. That apart, the tribunal has specifically recorded a factual finding that the assessee had produced all necessary details of the purchase, sales, audited books of accounts, quantity details, etc.. Further, the tribunal found that the assessee’s books of accounts were audited by the Chartered Accountant, the quantity details were given in respect of opening stock, purchase, sales, closing stock, etc. Furthermore, the tribunal pointed out that no discrepancy was found between the purchase shown by the assessee and the sales decline. Thus, on facts, the tribunal concluded that assumption of jurisdiction by the PCIT under section 263 of the Act was erroneous. In our considered view, there is no error in the order passed by the tribunal nor there is any perversity in its approach for us to interfere. We find that there is no question of law, much less substantial question of law arising in this appeal. Consequently, the appeals are dismissed.
Consequently, all the connected applications are dismissed.
