FRIENDS AUTOMOBILE ENGINEERS,PURNEA vs. ACIT, CIRCLE-3(1), PURNEA

IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA BENCH, PATNA VIRTUAL HEARING AT KOLKATA �ी संजय गग�, �या�यक सद�य एवं �ी मनीष बोरड, लेखा सद�य के सम� Before Shri Sanjay Garg, Judicial Member and Dr. Manish Borad, Accountant Member I.T.A. No.02/Pat/2023 Assessment Year: 2014-15 Friends Automobile Engineers…………………….....…...……………....Appellant NH-31, Ford Company, Purnea-854301, Bihar. [PAN: AABFF8239P] vs. ACIT, Circle-3(1), Purnia..….................................................…..…..... Respondent Appearances by: Shri Abhinash Srivastava, AR, appeared on behalf of the appellant. Smt. Rinku Singh, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : May 28, 2024 Date of pronouncing the order : July 22, 2024 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 09.12.2022 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The assessee is aggrieved by the action of the CIT(A) in dismissing the appeal of the assessee in a mechanical manner without any discussion on merits. 3. In this case, earlier a scrutiny assessment order u/s 143(3) of the Act was passed on 31.08.2016. Thereafter, the ld. Principal Commissioner of Income Tax (in short, the ‘PCIT’) exercised his revision jurisdiction u/s 263 of the Act and set aside the assessment order for

I.T.A. No.02/Pat/2023 Assessment Year: 2014-15 Friends Automobile Engineers de novo assessment vide his order dated 29.03.2019. The concluding lines of the order of the ld. PCIT are reproduced as under:

“I am of the considered view that the A.O had not made proper inquiries on correctness of various expenses, assessment order passed u/s 143(3) of the Act on 20.12.2016 is erroneous and prejudicial to the interest of revenue within the meaning of sec. 263 of the Act and accordingly the same is set aside with a direction to pass assessment order afresh after making proper inquiries, necessary verifications and investigation on the foregoing mentioned issue(s).” 3.1 Thereafter, a fresh assessment order dated 13.11.2019 was passed by the Assessing Officer u/s 143(3) r.w.s 263 of the Act assessing the income of the assessee at Rs.1,35,74,600/- as against disclosed income in the Income Tax Return as Rs.97,61,550/-.

3.2 Being aggrieved by the said order of the Assessing Officer, the assessee preferred appeal before the CIT(A), however, the ld. CIT(A) dismissed the appeal of the assessee observing as under:

“6.2 The A.O has merely given effect to the direction of the Pr. CIT in adding back this amount of Rs.1,35,74,600/- and no independent decision has been taken by the A.O in this behalf. Revisionary order u/s 263 passed by the Pr. CIT is not an appealable order before the CIT(A) and correctly so since the Pr. CIT is higher in rand to the CIT(A). Thus, no comment/findings or decision can be given by the CIT(A) on the directions contained in the 263 order passed by the Pr. CIT. In view of the above, all the grounds of appeal of the appellant are treated as infructuous and hence are dismissed for statistical purposes.” 4. A perusal of the above order of the ld. CIT(A) would reveal that the ld. CIT(A) has dismissed the appeal of the assessee without application of mind. The ld. PCIT vide his revision order dated 29.03.2019 has set aside the order of the Assessing Officer for de novo assessment. He did not give any direction to make the impugned additions, rather, he directed the Assessing Officer to make proper enquires, necessary verifications and investigations on the issues involved and thereafter to pass a fresh assessment order. Therefore, all the issues were open

I.T.A. No.02/Pat/2023 Assessment Year: 2014-15 Friends Automobile Engineers before the Assessing Officer and the assessee had the right to make its submissions and contentions on each and every issue, not only before the Assessing Officer but also before the ld. CIT(A). In view of this, the impugned order of the CIT(A) is not sustainable, the same is accordingly set aside and the matter is restored to the file of the ld. CIT(A) with a direction to decide the appeal on merits in accordance with law. 5. In the result, the appeal of the assessee is treated as allowed for statistical purposes. Kolkata, the 22nd July, 2024. Sd/- Sd/- [डॉ�टर मनीष बोरड /Dr. Manish Borad] [संजय गग� /Sanjay Garg] लेखा सद�य /Accountant Member �या�यक सद�य /Judicial Member Dated: 22.07.2024. RS Copy of the order forwarded to: 1. Friends Automobile Engineers 2. ACIT, Circle-3(1), Purnia 3.CIT (A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches