Arihant Roller Flour Mills Vs ITO (ITAT Chandigarh)
The ITAT Chandigarh allowed the assessee’s appeal and quashed the revisionary order passed under Section 263, holding that revision is impermissible where the Assessing Officer has conducted detailed enquiries, applied his mind and adopted a plausible view. The reassessment, initiated to examine alleged bogus purchases of Rs. 2.48 crore and bogus sales of Rs. 2.61 crore, followed directions of the Punjab & Haryana High Court for a fresh assessment. During the fresh proceedings, the Assessing Officer issued multiple notices, examined the assessee’s documentary evidence, confronted discrepancies, rejected the books under Section 145(3) and estimated gross profit at 8% on the disputed turnover, resulting in an addition of Rs. 10.06 lakh and initiation of penalty proceedings under Section 270A. The Principal Commissioner invoked Section 263, contending that additions should instead have been made under Sections 68 and 69C and that penalty proceedings under Sections 271AAC and 271AAD should have been initiated. The Tribunal held that this was a case of adequate enquiry rather than lack of enquiry and that the Assessing Officer’s estimation of profit was a legally sustainable and plausible view which could not be replaced merely because the Principal Commissioner preferred another approach.
