UNIVERSAL INFRAPROJECTS,MUMBAI vs. ITO 32 (3)(2), MUMBAI

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ITA 2443/MUM/2019Status: DisposedITAT Mumbai28 November 2019AY 2011-124 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Principal CIT's order under Section 263 was not sustainable as it failed to provide specific findings on how the N.K. Proteins Ltd. decision applied to the assessee's facts and how the assessment order was erroneous and prejudicial to revenue.

What were the facts?

The assessee's assessment order, passed under Section 143(3) read with Section 147, was revised by the Principal CIT under Section 263. The revision was based on the Supreme Court's decision in N.K. Proteins Ltd., to treat purchases as bogus.

What were the issues?

Whether the revision order passed by the Principal CIT under Section 263 was justified without specific findings on the applicability of the cited Supreme Court judgment and the erroneous nature of the assessment order.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI

Before: SHRI C.N. PRASAD, HONBLE & SHRI N.K. PRADHAN, HONBLE

For Appellant: Shri Anant N. Pai
For Respondent: Shri Sushilkumar Poddar
Hearing: 18.09.2019Pronounced: 28.11.2019

O R D E R PER C.N. PRASAD (JM)

1.

This appeal is filed by the assessee against the order of the Principal Commissioner of Income-tax-32, Mumbai [hereinafter for short "Ld. Pr.CIT] dated 25.03.2019 passed U/s. 263 of the Act.

2.

The assessee in its appeal mainly challenged the order of the Ld.Pr.CIT in passing revision order U/s. 263 of the Act holding that the assessment order passed by the Assessing Officer U/s. 143(3) r.w.s 147 of the Act is erroneous and prejudicial to the interest of the Revenue. Ld.Counsel for the assessee submitted that revision order was passed

2 ITA.NO. 2443/MUM/2019 (A.Y:2011-12) M/s. Universal Infraprojects merely relying on the decision of the Hon'ble Supreme Court in the case of N.K. Proteins Ltd., in SLP (C) CC No. 769 of 2017 to treat 100% of the purchases of ₹.12,49,430/- made by the assessee as bogus. Ld. Counsel for the assessee submits that while completing the assessment U/s. 143(3) r.w.s 147 of the Act the Assessing Officer estimated the profit element @25% of the bogus purchases relying on the decision of the Hon'ble Gujarat High Court in the case of Simit P. Sheth [356 ITR 451] and completed the assessment. However, by way of revision the Ld.Pr.CIT directed the Assessing Officer to pass a fresh order based on the decision of the Hon'ble Supreme Court and ratio of N.K. Proteins Ltd., (supra). Ld. Counsel for the assessee submitted that order passed by the Assessing Officer U/s. 143 r.w.s. 147 of the Act is not erroneous and prejudicial to the interest of the Revenue and there is no finding by the Ld.Pr. CIT to that effect.

3.

On the other hand, Ld. DR strongly supported the orders of the Ld.Pr. CIT.

4.

We have heard the rival submissions and perused the orders of the authorities below. We observe from the order of the Ld. Pr. CIT that the order passed by the Assessing Officer U/s. 143 r.w.s. 147 of the Act was held to be erroneous and prejudicial to the interest of the Revenue based on the decision of the Hon'ble Supreme Court in the case of N.K. Proteins

3 ITA.NO. 2443/MUM/2019 (A.Y:2011-12) M/s. Universal Infraprojects Ltd., (supra). On a perusal of the order of the Ld. Pr.CIT we find that the Ld. Pr.CIT has not recorded any finding as to how this decision of N.K.Proteins Ltd., (supra) is applicable to the facts of the assessee’s case and there is no finding by the Ld. Pr.CIT as to that how the order passed by the Assessing Officer U/s. 143 r.w.s. 147 of the Act is erroneous and prejudicial to the interest of the Revenue. Ld. Pr. CIT in the order passed U/s. 263 of the Act merely stated that the order passed by the Assessing Officer is contrary to the decision of the Hon'ble Supreme Court in the case of N.K. Proteins Ltd., (supra). Except saying that it is contrary to the decision of the Hon'ble Supreme Court in the case of N.K. Proteins Ltd., (supra) the Ld. Pr. CIT has not explained how the decision is applicable and how the assessment order passed in this case is contrary to the decision of the Hon'ble Supreme Court. In the circumstances, we are not able to agree with the view of the Ld. Pr.CIT that order passed U/s.143 r.w.s. 147 of the Act is erroneous and prejudicial to the interest of the Revenue. Thus, we quash the order passed by the Ld. Pr.CIT U/s.263 of the Act.

5.

In the result, appeal of the assessee is allowed.

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