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Pushkar Corporation, Ahmedabad vs PCIT | ITAT Ahmedabad 2019 | BharatTax

PUSHKAR CORPORATION,AHMEDABAD vs. THE PR.CIT, CENTRAL, AHMEDABAD

ITA 356/AHD/2016Status: DisposedITAT Ahmedabad26 July 2019AY 2012-1312 pages

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Canara Housing Development Co. v. DCIT
49 Taxmann.com 98 · 2014 · HC
272 citing

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SHRI PRADIP KUMAR KEDIA

For Appellant: Shri M. S. Chhajed, A.R, Smt. Aparna Agrawal, CIT

आदेश/O R D E R

PER PRADIP KUMAR KEDIA - AM:

1.

The captioned appeal has been filed at the instance of the assessee seeking to impugn the revisional order passed by the Principal Commissioner of Income Tax (Central), Ahmedabad (‘PCIT’ in short) under S. 263 of the Income Tax Act, 1961 (the Act) dated 28.01.2016 in connection with the assessment order passed by the AO under s. 143(3) of the Act dated 30.03.2015 concerning AY. 2012-13.

[Pushkar Corporation vs. Pr.CIT] AY 2012-13 - 2 -

2. The grounds of appeal raised by the assessee read as under:

“1. Order U/s of the Act passed by the Ld. Pr. Commissioner of I. Tax, Central, Ahmedabad is bad and illegal. 2. The Ld. Pr. Commissioner of I. Tax, Central, Ahmedabad has erred in law and on facts while passing order U/s 263 of the Act in considering that the order passed by Ld.A.O. is erroneous & prejudice to the interest of revenue.”

3.

As per the grounds of appeal, the essential grievance of the assessee is that in the facts and the circumstances of the case the Pr.CIT was not justified in exercising revisionary powers under s.263 of the Act as the order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue

4. To adjudicate the grievance of the assessee, the relevant facts are noted as follows:

4.1 The assessee filed its return of income for AY 2012-13 in question on 28.08.2012 declaring total income at Rs.32,50,130/-. A notice under s. 143(2) of the Act was issued on 08.08.2013 and the return filed by the assessee was subjected to scrutiny assessment. In the assessment order, it was noticed that a search and survey action was conducted on Sarkar Group under s.132/133A of the Act. Subsequently, search and survey proceedings were also conducted on Soham Group as well. Apart from these facts, the assessment order does not state anything else of any relevance. The income offered by the assessee was accepted as such by a non-descript and brief order.

5.

In view of the above, the assessment order u/s. 143(3) of the I. T. Act dated 30/03/2015 passed by the AO is prima facie both-erroneous as also prejudicial to the interest of the revenue and therefore, I intend to revise the said order u/s. 263 of the IT Act. 8. Vide this letter, you are, therefore, given an opportunity of being heard in this regard. You are requested to attend my office in person or through your authorized representative along with your submissions, if any, in this regard. The hearing for this purpose is fixed on 29/12/2015 at 11:45 am at the above mentioned address. Yours faithfully, (M. K. DUBEY) Pr. Commissioner of Income-Tax, Central, Ahmedabad 4.3 As per the show cause notice, the PCIT essentially observed that a loose paper file containing 142 pages were seized in the course of search on 12.06.2013 at the office of Soham Group. The loose paper filed contained details of purchase and sale document of land by the assessee firm. Page No.242 of the loose paper was referred which was found and seized from the office premises of Shri Narendra J. Patel who is one of the partners of the assessee firm. The PCIT observed that evidence indicated certain parcel of land purchased by the assessee and its respective sale. It was noted with reference to the above evidence that four parcels of land bearing Survey Nos. 315, 318, 389/1 and 316 were purchased by the assessee. Some of the land parcels were sold in FY 2010-11 concerning AY 2011-12 whereas some other parcels (as tabulated at page no.3 of its order) were sold in FY 2011-12 concerning AY 2012-13 in question. This apart, the loose paper showing unaccounted cash transactions were also seized from the resident of one of the partners (Yogendra Sarkar) of the assessee firm. The PCIT essentially observed that these two vital evidences were not considered at all in the course of assessment proceedings for AY 2012-13 and issues emanating therefrom were not investigated by the AO and hence, the assessment order passed under s.143(3) of the Act in revision is vitiated by lack of inquiry and thus bad in law. It was further observed that the above mentioned seized documents [Pushkar Corporation vs. Pr.CIT] AY 2012-13 - 7 - were considered for the purposes of assessment for AY 2011-12 whereas transactions concerning AY 2012-13 were not examined by the AO while framing the assessment for impugned AY 2012-13 in question.

“6. A notice u/s. 263 of the I T Act was issued upon the assessee on 4.12.2015, asking the assessee to show cause as to why the assessment order passed by the AO should not be revised as it was both erroneous and prejudicial to the interest of revenue. Since no response carne forth, another opportunity was given vide notice dated 31.12.2015. Shri Mahesh Chhajed, C.A. & A.R, attended on 21.01.2016 and submitted the explanation, contending as under:- a. That the proposed revision is based on mere surmises and without any evidence on record. b. That during the course of search/survey, no evidence was found regarding receipt of on-money by the assessee. c. That the land has been sold much above the jantri price and also above the comparable sale instances. d. That 73% of the partners of the assessee firm are 100% partners in Kunjan Corporation. Therefore, there cannot be any earning of self out of self. e. That the evidence being rough notings on a chit so relied upon by the Revenue is merely a dumb document. f. That Shri Sarkar had categorically stated during the course of search, in his statement recorded u/s. 132(4) of the I T Act that the Right Hand side notings of the seized document is in his handwriting and the handwriting on Left Hand side at page no.42 is not his, but he also expressed ignorance as to why the contents on the said page has been written. The contents in the hand writing of the Shri Sarkar are nothing but mere jottings. g. That the legislature, in its wisdom has enacted section 50C as per which, the full value of consideration for the purpose of section 48 and section 28 shall be deemed as is assessed by the Stamp Valuation authority for the purpose of payment stamp duty. h. The AO as well as the Investigation Wing has not brought anything on record to prove that on money has changed hands. 6.1 The assessee has also relied upon various judicial pronouncements challenging the proposed revision of the assessment order u/s.263 of the IT Act. The judicial decisions so relied upon by the assessee, is being considered separately.”

6.3 In so far as lack of inquiry on the transactions found to be recorded in the seized paper relatable to the assessee firm, we find that the controversy is plain and simple and is not capable of any debate. A bare reading of the assessment order shows no reference whatsoever to the loose paper seized. The seized documents were found to be relatable and connected to the assessee. A part of the transactions recorded in the loose papers were subjected to assessment in AY 2011-12. It was thus incumbent upon the AO to at least state as to how the transactions found to be unrecorded from the drastic action of search are not liable to be assessed. The assessee has also failed to show that relevant enquiries were actually carried out by AO while framing assessment. On the conspectus of the facts and circumstances narrated by the PCIT, we are of the view that AO has totally failed to make any inquiry on such vital documents and merely accepted the return of income perfunctorily and without application of mind. This is not to say that the claim of the assessee on merits is incorrect or otherwise. The pertinent question here is whether when there is no or total absence of inquiry on certain entries discovered and relatable to the assessee which has a bearing on ultimate taxable income of the assessee, is it open to the PCIT to invoke jurisdiction under s.263 of the Act or not. The answer to this question is clearly in affirmative. In these circumstances, the order passed by the AO in discharge of its quasi judicial functions is clearly erroneous and prejudicial to the interest of the revenue as noted. [Pushkar Corporation vs. Pr.CIT] AY 2012-13 - 11 - 6.4 We may notice here that the assessee has challenged the validity of order passed under s.143(3) of the Act for the first time before us. However the question before us is the correctness of the action of the PCIT on an order passed which continues to hold field as on date. The validity of assumption of jurisdiction under s. 153C instead of Section 143(2)/143(3) of the Act sought to be raised requires factual examination and legal analysis of several factual aspects. We, at this stage, and in these proceedings are not equipped to look into such complex aspects on altogether new facts referred for the first time. Such question may be relevant only in regular proceedings, if suitably challenged.

6.5 It may be pertinent to observe that the proceedings under s.143(2) of the Act would abate only upon valid assumption of jurisdiction under S. 153C of the Act. Stringent pre-requisites have been prescribed under s.153A/153C of the Act for completion of assessment by taking resort to such provisions. In the absence of a valid and maintainable notice demonstrated to be subsisting under s. 153C of the Act during the pendency of assessment proceedings in revision, it does not lie in the mouth of the assessee to take a plea of non-maintainability of assessment order under revision by supervisory authority and take shelter of judgment of Hon’ble Karnataka High Court Canara Housing Development Company (supra) to escape the assessment proceedings altogether. The judgment in Canara Housing Development Company (supra) was rendered in the context of Section 153A of the Act where it was prima facie demonstrable on facts without any efforts that the assessment which was subject matter of revision was not sustainable in law. No examination of facts was needed unlike the proceedings under s. 153C of the Act which is dependent on many conditions and satisfaction of competent officers and bears many altogether different trappings. Looking from a different angle, any proceedings (unless abated) under the Act can be subject matter of revisional proceedings under s. 263 of the Act. Thus, unless it is known that the proceedings under s.143(3) of the Act stood invalidated, the PCIT/CIT is empowered to exercise powers conferred under s.263 of the Act. The determination of validity and jurisdiction of regular assessment [Pushkar Corporation vs. Pr.CIT] AY 2012-13 - 12 - is thus in altogether sphere. Hence, at the threshold, the conclusion of the PCIT of the order being erroneous and prejudicial to the interest of the Revenue cannot be faulted where the correctness of the objection raised on behalf of the assessee has not been tested in any other proceedings at all. In the result, we do not find any force in the appeal of the assessee. Resultantly, appeal of the assessee stands dismissed.