UTKAL MARINE PRIMARY FISH PRODUCTION &MARKETING CO-OP SOCIETY LTD.,JAGATSINGHPUR vs. PR. CIT-1, BHUBANESWAR

O R D E R

Per Bench : This is an appeal filed by the assessee against the order of the ld. Pr.CIT, Bhubaneswar-1, dated 04.02.2022, passed in ITBA/REV/F/REV5/2021-22/1039391202(1) for the assessment year 2017-2018. 2. It was submitted by the ld. AR of the assessee that the assessee is an AOP being a cooperative society consisting of fishing boat owners as its member s and engaged in trading in HSD and lubricants and running of a diesel pump for facilitation of fishing activities only among its members who are fishermen. It was the submission that the assessment came to be completed u/s.143(3) of the Act on 30.12.2019, wherein the AO had assessed the income of the assessee at Rs.1,18,55,800/-. It was the submission that the ld. Pr.CIT had invoked his powers u/s.263 of the Act and had issued a show cause notice holding that the AO had added undisclosed profit of Rs.29,18,346/- and consequently the gross profit as per the audited account was to be taken at Rs.56,88,898/- and after reducing the various expenses the net profit was to be determined at Rs.43,91,739/-. Thus, resulting in an under-assessment of Rs.14,73,393/- It was further submitted that the ld. Pr.CIT has also taken a stand that from the profit and loss account, the picnic expenses, entertainment expenses and pooja expenses were not liable to be allowed as it did not have any relation to the business activity of the assessee. The assessee has also claimed Rs.66,837/- in respect of other liabilities in Annexure-V. Ld. Pr.CIT has in para 3.3 raised further issues in respect of which he has alleged that there was violation on the part of the AO to examine various details. It was the submission that the ld. Pr.CIT after raising these issues, which have been mentioned by him in paras 3.1, 3.2 & 3.3 of his order, has given no direction specifically as to his view on the issues. It was the submission that the ld. Pr.CIT has not done any examination much less verification in respect of the said issues but proceed to hold the assessment order to be erroneous insofar as it is prejudicial to the interest of revenue and set aside the assessment on the limited issues as discussed in the notice keeping in mind, inter alia, the observations made hereinabove and the submissions of the assessee during the assessment and that may be furnished during the course of assessment to be done afresh. It was the submission that this was a classic case where there is no application of mind, there is no enquiry and only on the ground that the assessee had not responded to the show cause notice directed to revise the assessment. It was the submission that the accounts of the assessee being cooperative society are audited by the Accountant General (Cooperative Society). It was the submission that the AO has adopted the profit as audited and approved by the office of the AG(CS). It was the submission that when the AO has done the assessment, he has verified the accounts which have been audited and in respect of which no adverse comments have also been drawn by the office of the AG(CS). It was the submission that as no examination has been done much less an enquiry on the issues raised by the ld. Pr.CIT before passing his order u/s.263 of the Act, in view of the decision of the coordinate bench of this Tribunal in the case of M/s Earth Minerals Co. Ltd., passed in order dated 29.08.2022, which has also been upheld by the Hon’ble Jurisdictional High Court in ITA No.24 of 2023 vide order dated 06.03.2023 as also the decision of the Hon’ble Jurisdictional High Court in the case of Orissa State Police Housing & Welfare Corporation Ltd., reported in [2022] 139 taxmann.com 207 (Orissa) as also the proposition of law laid down by the Hon’ble Delhi High Court in the case of D.G.Housing Projects Ltd., reported in [2012] 20 taxmann.com 587 (Delhi), the order passed u/s.263 of the Act is liable to be quashed.