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Income Tax Appellate Tribunal, JAIPUR BENCHES ‘A’ JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 481/JP/2019
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES ‘A’ JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 481/JP/2019 fu/kZkj.k o"kZ@Assessment Year :2014-15 cuke M/s SDC Construction The Pr. Commissioner of Vs. A-8, Shyam Nagar, Ajmer Road, Income Tax, Jaipur-1, Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABIFS9788E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : S. L. Poddar (Adv.) jktLo dh vksj ls@ Revenue by : Varinder Mehta (CIT) lquokbZ dh rkjh[k@ Date of Hearing : 06/11/2019 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 29/11/2019 vkns'k@ ORDER PER: VIKRAM SINGH YADAV, A.M.
This is an appeal filed by the assessee against the order of ld. Pr.CIT-1, Jaipur dated 29.03.2019 wherein the assessee has taken the following grounds of appeal:- “1. In the facts and circumstances of the case the Learned Pr. CIT-1, Jaipur has erred in passing the order u/s 263 of the Income Tax Act, 1961.
2. In the facts and circumstances of the case the learned Pr. CIT, Jaipur-1, Jaipur has erred in holding that the order passed by Learned Assessing Officer u/s 143(3) of the Income Tax Act, 1961 dated 19.12.2016 was erroneous and prejudice to the interest of the revenue.
3. In the facts and circumstances of the case, the learned Pr. CIT, Jaipur-1, Jaipur has erred in holding that the Assessing Officer has wrongly allowed deduction under section 80IB of the Income Tax Act, M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur 1961 for Rs. 78,03,786/- without examining the eligibility of the assessee firm.”
Briefly stated, the facts of the case are that the assessee is engaged in the business of construction and development of low cost housing projects. It filed its return of income on 23.09.2014 declaring Nil income after claiming deduction u/s 80IB of the Act. The case was selected for scrutiny under CASS and a notice u/s 143(2) was issued to the assessee on 10.09.2015. Subsequently, the assessment order was passed u/s 143(3) dated 19.12.2016 wherein the returned income was accepted. Thereafter, the assessment records were called for and reviewed by the ld. Pr. CIT and the order u/s 263 was passed setting aside the assessment order passed by the Assessing Officer u/s 143(3) with the following directions:
“12. Keeping the above discussion in view, by the virtue of the powers conferred on the undersigned under the provisions of Section 263 of the IT Act 1961, I hold that the order under Section 143(3) dated 19.12.2016 for assessment year 2014-15 passed by the assessing officer is erroneous in so far as it is prejudicial to the interest of revenue as the order has been passed by the assessing officer in a routine and perfunctory manner without making enquiries/verification which ought to have been made before accepting the submission made by the assessee regarding deduction u/s 80IB during the year. It is therefore liable to revision under explanation (2) clause (a), clause (b) of section 263 of the Income Tax Act. Hence the assessment order is set aside on the issue of deduction claimed u/s 80IB of the Act during the year with a direction to the Assessing officer to assess the case of the assessee denovo in accordance with law after making the necessary enquiries, examination and verification in respect of the deduction claimed by the assessee u/s 2 M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur 80IB of the Act which can only be allowed if all the conditions laid down for its allowability are fulfilled by the assessee. The AO is directed to finalize the assessment keeping in view the aforesaid directions. However an opportunity to the assessee to state its case is to be allowed in the interest of natural justice.”
Against the aforesaid findings of ld. Pr. CIT, the assessee is in appeal before us. During the course of hearing, the ld. AR submitted that the case of the assessee was selected for limited scrutiny and said fact has been mentioned by the ld. Pr.CIT in her show cause notice u/s 263 dated 10.01.2019. It was submitted that in limited scrutiny cases, the Assessing Officer is required to make inquiry and frame the assessment with respect to the issues for which the case was selected. In this regard, reference was drawn to the instructions issued by the CBDT on 14.07.2016 vide instruction No. 5 of 2016. It was accordingly submitted that the Assessing Officer was therefore precluded from making any other enquiries except those covered under limited scrutiny. In the instant case, the parameter for limited scrutiny selection were high interest expenditure against new capital added working progress or addition made to fixed assets and sale consideration of the property in ITR is less than sale consideration in AIR. It was submitted that in view of the same, it was not within the powers of the Assessing Officer to examine the correctness of the claim of deduction u/s 80IB of the Act which is the substance of the order passed by the ld Pr. CIT u/s 263 that the Assessing Officer has allowed deduction u/s 80IB without verifying and examining the claim of the assessee. It was submitted that in the instant case, the assessment order cannot be held as erroneous and prejudicial to the interest of the Revenue when the Assessing Officer was not supposed to examine the issue at all. Once the Assessing Officer was not competent to examine the issue of deduction u/s 80IB of the Act, he cannot be held responsible for not 3 M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur examining and verifying the claim u/s 80IB of the Act. It was accordingly submitted that ld. Pr. CIT was wrong in setting aside the assessment order and therefore, the order so passed by the ld. Pr. CIT deserves to be quashed.
On merits, it was submitted by the ld AR that during the proceedings u/s 263 before the Pr. CIT, it was submitted that all the conditions for allowing claim u/s 80IB of the Act stood complied with by the assessee and there was no occasion for issuing directions to the Assessing Officer to re-examine the issue. It was submitted that it is not the case of the ld. Pr.CIT that the assessee did not comply with the provisions of section 80IB rather the case of the ld. Pr. CIT is that the claim u/s 80IB of the Act was allowed without verification and examination. Further, it was submitted that in respect of various objections raised by the ld. Pr. CIT vis-à-vis conditions for claiming the deduction, the assessee has complied with the same as per details below:-
Sr. Objection by Learned Pr. CIT Compliance by the assessee No. (i) Form no. 10CCB not sent It stood furnished during the course electronically of assessment proceedings. (ii) Form no. 10CCB does not That there is only one project in the relate to any specific project assessee firm which is Metroplis. Except the Metroplis Project, the company has no other project for construction. (iii) Firm has taken loans and has The assessee firm is not engaged in given advances which shows other business except the business that it was engaged in other of construction/real estate. The activities also assessee company has obtained loans only from its partners without making any payments for interest. The assessee has also advanced loan to its sister concerns and partners which is also interest free. Therefore 4 M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur there is no business other than construction of project namely Metropolis. Hence there is no violation of any provisions of rules of which makes the assessee defaulter for claim of deduction u/s 80IB of the Income Tax Act, 1961. (iv) Interest expenses cannot be The interest expenses claimed by the related to eligible project assessee are wholly and exclusively for the purpose of business. The loans were utilized in completing the Metropolis Projects. (v) No separate books of accounts Since there is only one project in the were kept for eligible project assessee firm as such the books maintained are only for such project. (vi) Two flats sold to one person That the assessee firm has sold flat Shri Rahul Mishra in violation no. 207-208 to Shri Rahul Mishra of section 80IB(10) which is single unit and the total built-up area of this unit is 1247 square feet.
(vii) Flat having super-built area of Flat no. 612 sold to Shri Sudesh 1170 sqft sold to Shri Sudesh Singh Soman is having only 1363 Singh in violation of limit of square feet built-up area which is in 1500 sqft the cap specified in the section i.e. 1500 square feet. The area of 1770 square feet is super built-up area. The built-up area is only 1363 square feet. Hence the assessee firm has not violated any provisions of the act. (viii) Approval of competent The assessee firm has taken authority not filed approval of this project from Jaipur Development Authority on 30.03.2007 which is competent authority. (ix) Date of commencement of 07.04.2007 M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur activity by the firm (x) Date of completion of the 17.10.2009 project
Further, referring to the provisions of section 80IB (10) of the Act, the ld. AR submitted that the assessee fully complied with the provisions of section 80IB(10) of the Act. In this regard, it was submitted as under:- “The perusal of the aforesaid provision reveals following: - (i) The deduction is available to the assessee where the housing project has been approved by the Local Authority on or after 1st April 2005 and the construction is completed within five years from the end of the financial year in which the project is approved by the local authority. In the case of the assessee the approval was given on 30.03.2008 and the project stood completed on 17.10.2009. Thus the assessee has complied with the provisions of section 80IB(10)(a)(iii).
(ii) In the order u/s 263 the Pr. CIT has wrongly stated that the circular of the Board No. 4/2009 mandates completion of the project within the specified time in four years. In fact this time limit of four year is applicable in cases where approval by the local authority was given between 01.04.2004 to 31.03.2005 [Provisions of section 80IB(10(a)(ii)].
(iii) Regarding default of the assessee in not furnishing form no. 10CCB electronically with the return of income it is submitted that assessee cannot be denied deduction simply on this ground if the assessee has successfully filed form no. 10CCB before final assessment order is made. CIT vs. G.M. Knitting Industries (P) Ltd. (2015) 375 ITR 456 (SC).
M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur Provisions of section 80-IA(7) requiring filing of audit report along with return are not mandatory but directly and if audit is filed at any time before framing of assessment then requirement of section 80-IA(7) would be met. The following case laws are quoted in support: -
• CIT vs. Contimeters Electricals (P) Ltd 178 taxman 422 (Del) • CIT vs. Ace Multitaxes Systems P. Ltd (2009) 317 ITR 307 (Kar.) • CIT vs. Medicaps Ltd. (2010) 323 ITR 554 (MP) • CIT vs. AKS AlloyP Ltd. (2012) 205 taxman 11 (Mag.) • CIT vs. Sanjay Kumar Bansal (2013) 219 Taxman 41 (UK)
(iv) Regarding committing mistake in dating the certificate in form 10CCB as 30.03.2008 instead of 30.03.2007, an affidavit of the concerned CA is submitted herewith.”
It was accordingly submitted that the ld. Pr. CIT was not justifying in passing the order u/s 263 of the Act and the same deserves to be quashed.
Per contra, the ld. CIT DR strongly supported the findings and the directions of the ld. Pr. CIT in setting aside the assessment order passed u/s 143(3) of the Act. Referring to the notice u/s 143(2) and assessment order passed u/s 143(3), it was submitted that the case of the assessee was selected under CASS as mentioned in both the notice and the assessment order. Further, our reference was drawn to the issue of notice by the AO u/s 142(1) dated 11.08.2016 which has been reproduced by the ld Pr. CIT at para 4 of the order which shows that the Assessing Officer has issued the queries and sought information/documents on various matters arising out of the return filed by the assessee company. Further, our reference was drawn to the Para 2 and 3 of the ld. Pr. CIT order wherein it was stated that the case was selected for 7 ITA No. 481/JP/2019 M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur complete scrutiny under CASS. It was further submitted that the case was taken for review by the ld. Add. CIT, Range 2, Jaipur and in his report as well, he has also stated that the case was selected for complete scrutiny. It was accordingly submitted that even though in the show cause notice issued by the ld. Pr. CIT. it has been stated that the case was selected for limited scrutiny, the same appears to be inadvertent mistake and factually not correct in view of the other materials facts available on record. It was accordingly submitted that the case of the assessee was clearly selected for complete scrutiny and not limited scrutiny. Therefore, the contention advanced by the ld AR should not be accepted. It was further submitted that even where it is held by the Bench that the case was initially selected for limited scrutiny, given that the Assessing Officer was seized of the material that the assessee has claimed deduction u/s 80IB(10) of the Act and on prima facie reading of the report in Form no. 10CCB so submitted manually by the assessee, it is reasonably possible to form the view that the claim so made by the assessee company is not admissible, the Assessing Officer should have sought the permission of the concerned Higher authorities to convert the case from limited scrutiny to complete scrutiny and our reference was drawn to the instruction No. 5/2016 dated 14th July, 2016 issued by the CBDT. It was accordingly submitted that where there exists material and information on record that the claim made by the assessee is prima facie not admissible then the Assessing Officer should have referred the matter to superior authorities and sought the necessary permission to convert the matter from limited scrutiny to complete scrutiny. It was therefore, submitted that there was a failure on the part of the Assessing Officer and non application of mind by the Assessing Officer in respect of material available on record and where on perusal of the said material, the ld. Pr. CIT has invoked her jurisdiction u/s 263 of the Act, the same cannot be challenged by the assessee as the same will render the provisions of section 263 redundant and M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur make the invocation of jurisdiction u/s 263 in all cases of limited scrutiny otiose.
It was further submitted by the ld CIT DR that the assessee submitted a copy of Form No. 10CCB during the course of assessment proceedings only on 15.12.2016 and thereafter, the assessment was completed and order passed on 19.12.2016 by simply accepting the claim of the assessee u/s 80IB of the Act without any query and any question being asked by the Assessing Officer. It was further submitted that basis the review of the Form No. 10CCB and other information and documents submitted by the assessee during the revision proceedings before the ld. Pr. CIT, the latter has carried out detail examination and given her finding at pages 15 to 19 of her order basis which further examination by the Assessing Officer has been directed, hence the matter was rightly set aside to the file of the Assessing Officer.
We have heard the rival contentions and perused the material available on record. Firstly, on the issue of whether the matter was selected for limited scrutiny or complete scrutiny, on perusal of the notices issued u/s 143(2), 142(1) and the assessment order passed u/s 143(3), we are of the considered view that the case of the assessee was selected under CASS for complete scrutiny and not for limited scrutiny. We find that firstly, there is no mention in the notice u/s 143(2) that the matter has been selected for limited scrutiny, secondly, along with notice u/s 142(1), a detailed questionnaire was issued by the Assessing Officer on various issues emanating from the return of income filed by the assessee and the same have been responded by the assessee company from time to time. Had the case of the assessee being selected for limited scrutiny as so claimed by the ld AR, the questionnaire/inquiry/investigation would have been limited and restricted to such issues as also apparent from Instruction No. 5/2016 dated 14th July, 2016 9 M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur issued by CBDT, which has been relied upon by the ld. AR and binding on the Assessing officer. Para 4 of the said instructions is relevant and the same reads as under:-
“4. It is further clarified that in cases under ‘Limited Scrutiny’, the scrutiny assessment proceedings would initially be confined only to issues under ‘Limited Scrutiny’ and questionnaires, enquiry, investigation etc. would be restricted to such issues. Only upon conversion of case of ‘Complete Scrutiny’ after following the procedure outlines above, the AO may examine the additional issues besides the issue(s) involved in ‘Limited Scrutiny’. The AO shall also expeditiously intimate the taxpayer concerned regarding conducting ‘Complete Scrutiny’ in such cases.”
The aforesaid instructions issued by the CBDT are clear to the effect that only when the case has been converted from limited into complete scrutiny, the additional issues can be examined by the Assessing officer and that too, after the assessee has been informed that the case has been converted into complete scrutiny. In the instant case, therefore, had it been the case of limited scrutiny, the enquiry and line of investigation would have been limited. However going by the notices and the questionnaire issued by the Assessing officer and subsequent responses filed by the assessee company, it is very apparent that the case was selected for complete scrutiny only. Further, similar factual position have been recorded at Para 2 and 3 of the ld. Pr. CIT’s order and also apparent from the following findings of ld. Pr. CIT which reads as under: “The case of the assessee had been selected under complete scrutiny category to examine all the financial aspects of the case having potential implication on revenue. This itself mandated a careful and M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur detailed examination to be done of all material available before the claim of deduction/ exemption could be allowed to the assessee.”
Further, the ld. Add. CIT, Range 2, Jaipur in his report has also stated that the case of the assessee was selected for complete scrutiny. We are therefore unable to agree with the contentions of ld AR that merely because in the initial show cause notice issued by the ld. Pr. CIT., it has been stated that the case was selected for limited scrutiny, it should be accepted that the case of the assessee was selected for limited scrutiny in view of material facts, as we have noticed above, as emanating from the records which shows clearly that the case of the assessee was selected for complete scrutiny. Further, we find that the assessee having participated in the assessment proceedings and not raising this objection before the Assessing officer during the assessment proceedings cannot be permitted to raise this contention in the revision proceedings. We are therefore of the considered view that the case of the assessee had been selected under complete scrutiny and not under limited scrutiny.
Now coming to the contentions of ld. AR on merits that the assessee company has fully complied with all the necessary conditions prescribed for claiming deduction u/s 80IB(10) of the Act and thus, there is no basis for invocation of jurisdiction u/s 263 and setting aside the assessment order. Firstly, we find that the claim of the assessee u/s 80IB was not examined by the Assessing officer during the course of assessment proceedings. Admittedly, the Assessing officer raised an initial query on 11.08.2016 and in response, the assessee submitted vide letter dated 26.08.2016 that it fulfills all conditions stipulated in section 80IB of the Act. However, there is nothing on record to substantiate such claim by the assessee company. It is only towards the fag end of the assessment proceedings that the assessee submitted a copy of Form No. 10CCB on 15.12.2016 and thereafter, the assessment was completed and 11 M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur order u/s 143(3) passed on 19.12.2016 by simply accepting the claim of the assessee u/s 80IB of the Act without any query and any question being asked by the Assessing Officer as to how the assessee has fulfilled the conditions for such claim. The fact that the Assessing officer has not examined the claim is apparent from the fact that on a reading of the Form No. 10CCB filed by the assessee company, deduction is prima facie not admissible as the date of commencement of operation/ activity by the undertaking or enterprise shown at 07/4/2007, date of approval from authority was shown on 30/3/2008 and the date of completion of project shown on 18/3/2013. Further, we note that in the assessment order passed u/s 143(3), the Assessing officer has stated that “the assessee firm is notified by the Central Govt. in the special economic zones for construction and development of low cost project of houses and is also entitled for claim of deduction under section 80IB for any 10 consecutive assessment years out of fifteen years beginning from the year in which special economic zone has been notified.” This finding of the Assessing officer is clearly out of sync with the factual position and claim made by the assessee company in its return of income. This again shows clear non-application of mind and mechanical acceptance of the claim of deduction. Further, on examination by the ld. Pr. CIT, she has given specific findings at pages 15 to 19 of her order and which have been summarized as under:
“…This action has allowed the claim of deduction to the tune of Rs. 78,03,786/- to be accepted without any investigation thus rendering the order not only erroneous but also prejudicial to the interest of revenue to that extent. This by itself leaves it open to the invocation of section 263 of the I T Act 1961 specially when it is required that complete investigation, enquiry and verification is to be done so that the deduction claimed is first established beyond doubt before acceptance. The case of the assessee had been selected under complete scrutiny category to examine all the 12 M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur financial aspects of the case having potential implication on revenue. This itself mandated a careful and detailed examination to be done of all material available before the claim of deduction/ exemption could be allowed to the assessee. In this case it is seen that no effort to do so has been made. The AO has not made any enquiry on the issue. The discussion in the preceding paragraphs has clearly made it apparent that routine allowance of claim of deduction as made by the assessee without any scrutiny by the assessing officer has resulted in an erroneous assessment order being framed under Section 143 (3) of the Income Tax Act, which is clearly prejudicial to the interest of revenue and clearly calls for invocation of section 263 of the income tax act 1961. In the said order a claim of deduction u/s section 801B stands mechanically allowed by the AO which apparently was not to be allowed with the set of facts available before the AO i.e the assessee has not filed auditor's report in form 10CCB • electronically with return of income which is mandatory as per rule 12(2) for claiming deduction u/s. 80IB of Act. AO failed to observe the same. • The dates of projects available in the physical copy of the audit report filed during assessment does not allow the benefit of Section 80IB to the assessee in the current year. Here it is also for consideration that till the said defect was pointed out to the assessee the assessee had relied upon the auditor's report submitted during the assessment proceedings for claiming the deduction. It is only on pointing out the defect and its ineligibility to claim the said deduction that the assessee has stated that the first report of the auditor was incorrect and has submitted another report stating that it is the correct one. M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur • If the second report is true then it stands that the first report will need to be disregarded and it would mean that there was no report filed which will render the assessee ineligible for the said claim as the mandatory condition would not have been fulfilled. • Secondly the assessee has given no reason or basis of changing its report except to say that there was a typographical error. It is not understood how a professional Chartered Account firm would have made the said error in respect of all the dates concerned. Besides even if they had done so it is expected that the assessee company which is run by experienced educated individuals who regularly take the help of experienced Chartered accounts for their Income Tax issues would have noticed the error made and not relied on it blindly. Therefore it can safely be presumed that the assessee at the stage of revisionary proceedings has tried to introduce material/documents the veracity of which has not been explained at all to claim the deduction u/s 801B of the act which as per factual details available on assessment record was not allowable to him.
• Here it is also to be appreciated that the second audit report filed cannot be accepted due to lack of affidavit by the auditor as to why and on what basis the changes have been made and as to why a wrong audit report was submitted earlier and not corrected till the defects were pointed out.
• The auditor's report in Form 10CCB filed nowhere records a specific project but it shows assessee's name and project name same as "SDC construction". • No separate Profit & Loss account were submitted for the eligible project but only firm's P&L account submitted.
M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur • It was apparent that during the year firm was engaged in other activities also which is evident from the fact that the firm has shown loans & advances of Rs. 19,78,43,679/- which is for firm's business advance and not related to the project. • From the reply of assessee dated 14/9/2016, it is clear that the firm has taken new loan of Rs. 13,83,44,622/- during the year which certainly cannot be related to the project for which deduction stands claimed by the assessee as the project has already completed on 18/3/2013. The firm has also claimed interest expense which cannot be expense of the eligible project as the borrowed fund which taken during previous year was not utilized for the project. This definitely needed looking into and the necessary calculations be made regarding the deduction claimed.ln absence of separate books, Profit & loss account and balance sheet of eligible business for which deduction u/s 8018(10) is claimed should not have allowed by the AO. AO failed to appreciate these facts during the assessment proceedings. • From the Form 10CCB report which was submitted manually during the proceedings, it is observed that the date of commencement of operation/ activity by the undertaking or enterprise shown at 07/4/2007, date of approval from authority was shown on 30/3/2008 and the date of completion of project shown on 18/3/2013. AO should have gone through the CBDT instruction No.4/2009 in which Board clarify that 3.(b) "in case it is late, found that the condition of completing the project within the specified time limit of 4 years as stated in section 80IB(10) has not been satisfied, the deduction granted 16 made to the assessee in earlier years should be withdrawn". M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur • Here it is seen that there was no claim for section 80IB deduction in AY 2012-12 and 2013-14 —the reason for which has not been inquired into by the AO and on what grounds have the claim be made in the AY under consideration and its allowability vis a vis the provisions of the Act/ rules and the various circulars / instructions on the subject. • There is apparent violation of provisions of section 80IB(10) where assessee has sold two units to one person i.e. Flat No. 207-208 to Rahul Mishra through POA Hari Ram Sharma which also does not stand questioned or explained during the assessment proceedings. • In fact with these set of acts the AO should have taken remedial action not only in the preceding years but also in all earlier years where deduction claimed by the assessee.
Basis the above discussions, we are of the considered view that it is a clear case of lack of enquiry on part of the Assessing officer in not examining the claim of deduction u/s 80IB of the Act and the order passed by the Assessing officer is clearly erroneous and prejudicial to the interest of the Revenue and where the ld Pr CIT has directed further examination by the Assessing Officer and the matter has been set aside to the file of the AO, we see no infirmity in the action of the ld Pr CIT by invoking her jurisdiction u/s 263 of the Act. In this regard, we draw useful reference to observations of the Coordinate Bench in case of Subhlakshmi Vanijya (P.) Ltd. vs Commissioner of Income-tax-I, Kolkata, reported in 60 taxmann.com 60 (Kolkata) wherein it was held as under: “…Scope of the term 'enquiry' can be diverse in different circumstances. There cannot be straight jacket formula to positively conclude as to conducting or non-conducting of 'enquiry' by the Assessing Officer. It depends on the facts and circumstances of each case. Where the facts 16 M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur are just ordinary and prima facie there is nothing untoward the recorded transaction, in such circumstances, the obtaining of the documents and the application of mind thereon, without a further outside enquiry, may mean that the Assessing Officer did conduct enquiry, leaving the question open as to whether it was a proper or an improper enquiry. But, where the factual scenario of a case prima facie indicates abnormalities and cry for looking deep into it, then a mere collection of documents cannot be held as conducting enquiry, leave aside, adequate or inadequate. In such later cases, only when the Assessing Officer, after collection of the initial documents, embarks upon further investigation, that it can be said that he initiated enquiry. Where the facts of a particular transaction cry hoarse about its non-genuineness and even a casual look at such facts, prima facie, divulges foul play, then the alarm bell must ring in the mind of the Assessing Officer for making further examination. Collection of papers on record in such circumstances cannot be construed as conducting a proper enquiry. If in such circumstances, the Assessing Officer simply gathers documents and keeps them on record, then such nominal enquiry falls within the overall category of 'no enquiry' because of the inaction on the part of the Assessing Officer to read a writing on the wall.”
Therefore, when the matter has not been examined at first place by the AO and there are specific directions given by the ld. Pr. CIT to examine the same after providing reasonable opportunity to the assessee, we do not see any infirmity in the action of the ld Pr CIT. The assessee would be within its right to raise all its contention on merit before the Assessing Officer and the same are left open and not examined by us. We therefore upheld the order passed by the ld Pr CIT u/s 263 of the Act and the grounds of appeal taken by the assessee are dismissed.
17. M/s SDC Construction, Jaipur Vs. Pr. CIT, Jaipur In the result, appeal of the assessee is dismissed.
Order pronounced in the open Court on 29/11/2019.