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Income Tax Appellate Tribunal, DELHI BENCH, ‘B’: NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI M. BALAGANESH
per books of accounts which have been incorporated in para 5
hereinabove. After considering these entire materials on record and
submissions of the assessee, the learned Assessing Officer has
accepted the explanation that the assessee was able to demonstrate
the difference and reconciled each and every entry and explained the
difference. The observation of the AO has also been incorporated
above.
Now the learned PCIT, in his revisionary jurisdiction has tried
to give a different angle by stating that the AO has failed to consider
the books of accounts and accepted the reconciliation without
verification. If that was the case, then learned PCIT himself should
himself point out, what was the defect or error in the finding of the
learned AO as well as explanation and material given by the assessee
during the course of assessment proceedings. If the books of
accounts have been produced in the original assessment 21
ITA No.1110/Del/2022
proceedings and then again before the AO in reassessment
proceedings and they have given a categorical observation and
finding that the assessee has produced books of accounts and the
details, which has been verified and examined, then saying that it
was not produced before the Investigation Wing after gap of more
than 10 years, then the finding of AO, both in the original
assessment proceedings and reassessment proceedings cannot be
believed, is bald allegation just because assessee stated before the
Investigation Wing that books of accounts are not available at
present. Does he contend to show that the AO’s observation and
finding are wrong?
Here the only issue was, there was a difference of credit in the
bank and the turnover of Rs.8,59,45,770/- and some commission
paid to two persons. Once, that was reconciled and explained before
the AO who has examined it and has even dealt with in his order,
then there could not be case of lack of inquiry. The only basis of
learned PCIT is reference to some NHRM scam and observation of
the Hon’ble Allahabad High Court, which have been reproduced
above. Thus, his entire edifice to set aside the assessment order is
based upon the observation of the Hon’ble High Court and nothing
else. If this was foundation of setting aside the assessment order,
then this can no longer the basis, because the Hon’ble Supreme
Court against the said very judgment of Hon’ble Allahabad High 22
ITA No.1110/Del/2022
Court has reversed and set-aside the said observation of the Hon’ble
Court. For the sake of ready reference, the concluding part of the
judgment of the Hon’ble Supreme Court dated 13.12.2019 is
reproduced hereunder:-
“15. In the present case, even if one assumes that Surender Chaudhary, the accused in the pending criminal case was involved and had sought to indulge in objectionable activities, that ipso facto could not have resulted in unilateral action of the kind which the State resorted to- against Daffodils, which was never granted any opportunity of hearing or a chance to represent against the impugned order. If there is one constant lodestar that lights the judicial horizon in this country, it is this: that no one can be inflicted with an adverse order, without being afforded a minimum opportunity of hearing, and prior intimation of such a move. This principle is too well entrenched in the legal ethos of this country to be ignored, as the state did, in this case.
The High Court, in the opinion of this court, fell into error in holding that in matters of award of public contracts, the scope of inquiry in judicial review is limited. Granted, such jurisdiction is extremely circumscribed; no doubt the court had refused to grant relief to Daffodils against its plea of wrongful rejection of its tender. However, what the impugned judgment clearly overlooks is that the action of the state, not to procure indefinitely, on an assumption of complicity by Daffodils, was in flagrant violation of principles of natural justice.
Normally, this court would have quashed the Government of U.P.'s decision, and left it to grant a hearing to Daffodils, before taking any action. However, given that the impugned order of debarring (i.e. directive not to procure locally from Daffodills) was made over 4 years and 3 months ago, this court is of the opinion that it would be in the overall interest of justice that appropriate relief is granted. Accordingly, the said order of the Principal Secretary, Government of U.P. directing all 23
ITA No.1110/Del/2022
concerned departments to desist from resorting to local purchase from the appellant is hereby quashed. The impugned judgment of the High Court is hereby set aside. The appeal is allowed in the above terms. No costs.”
Thus, in the light of Hon’ble Supreme Court judgment, all the
observation made by the learned PCIT deserves to be quashed.
Apart from that, once the AO has carried out the necessary
verification of the details which was his reason to believe and
assuming jurisdiction under section 147 and has accepted the
explanation, then learned PCIT could not have set-aside the
assessment unless he himself founds any error or defect in such
material or in explanation. Thus, we agree with the contention of the
learned counsel for the assessee that once the entire order of the
Hon’ble High Court has been reversed and set-aside by the Hon’ble
Supreme Court, then the basis of setting aside itself does not stand.
Accordingly, the order of the learned PCIT is quashed and the order
of the AO is restored.
ITA No.1110/Del/2022
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 04th March, 2024.
Sd/- Sd/- [M. BALAGANESH] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 04.03.2024 ff^ ff^ ff^ ff^ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi