SHAMBHU SHARAN SINGH,GOPALGANJ vs. DCIT, CIRCLE-2(1), MUZAFFARPUR

This appeal of the assessee is directed against the order dt. 30- 03-2017 passed u/s. 263 of the Income-tax Act, 1961 [ hereinafter, 1. AY 2012-13 Shambhu Sharan Singh referred to as ‘the Act’] by the ld. Pr. Commissioner of Income-tax [ in short, hereafter referred to as ‘the ‘ld. PCIT, Muzaffarpur.

The assessee has raised the following grounds of appeal for the AY 2012-13:-

When the case was called, none appeared on behalf of the assessee. Perusal of note sheet shows that in the past when the case was fixed for hearing none appeared. We, therefore, deem it proper to adjudicate the appeal on merits ex parte qua the assessee with the assistance of the ld. Departmental Representative and material available on record.

The sole grievance of the assessee is that the ld.PCIT erred in invoking the provisions of section 263 of the Act and holding the assessment order passed u/s. 143(3) of the Act dated 19-03-2015 as erroneous and prejudicial to the interest of the revenue. 5. Brief facts of the case are that the assessee is an individual, engaged in the business of civil contractor. Income at Rs. 65,87,030/- declaring in the return filed for the assessment year 2012-13 on 08- 09-2013. After the case being selected for scrutiny, the ld. AO framed the assessment u/s. 143(3) of the Act rejecting the books of account u/s. 145(3) of the Act and estimating the profits thereby assessing income at Rs.72,31,910/-. 2. AY 2012-13 Shambhu Sharan Singh

Subsequently, the ld. PCIT called for assessment records invoking the jurisdiction u/s. 263 of the Act and show cause notice dt. 22-02-2017 issued raising the following two issues:- 1) It has been observed that in the assessment the assessing officer had not properly examined the issue of Rs. 1,61,03,705/- credited in your bank account of SBI, Gopalganj and that a sum of Rs. 5,81,189/- was left to be included in the gross contractual receipt during the year. 2) An amount of Rs. 72,08,670/- withheld by the deductor under the head “Time Extension” was wrongly debited in the Profit & Loss account which was required to be entered in the balance sheet. This issue has also not been examined properly by the assessing officer.

After receiving the said show cause notice issued u/s. 263 of the Act the assessee made written submissions on 20-03-2017, which is incorporated in the impugned order at page-2. Relevant portion of which is reproduced herein below:-

However, the submissions filed by the assessee were not found to be satisfactory and the ld. PCIT held that the ld. AO failed to conduct any enquiry nor made application of mind on the issues raised/referred in the show cause notice, thus, set aside the assessment order dt. 19-03-2015 and directed the ld.AO to frame the assessment afresh after considering the observations made in the impugned order.

Aggrieved, the assessee is now in appeal before this Tribunal. 10. The Ld. Departmental Representative ( in short, the Ld. DR) vehemently argued supporting the impugned order of the ld. PCIT. 11. We have heard the Ld. DR and perused the material placed on record before us. The ld. PCIT issued show cause notice u/s. 263 regarding the issues firstly, a sum of Rs. 1,61,03,705/- credited in the bank account of SBI, Gopalganj, that a sum of Rs. 5,81,189-/- was left to be included in the gross contractual receipt and lastly sum of Rs.72,08,670/- withheld by the deductor under the head “Time Extension” was wrongly debited in the Profit & Loss account. 12. Now before us only assessment order is available and no other details have been filed by the assessee, which could indicate that whether any enquiry has been conducted by the ld. AO regarding the issues raised/referred in the show cause notice issued u/s. 263 of the Act. Perusal of the assessment order shows that the ld. AO rejected the book results and estimated the profits. Estimation of profit is an exercise, which is confined to the P & L account, but if there are any other credits in the bank account or any expenditure debited to the P & L account, which are not in the nature of expenditure then necessary enquiry has to be done about such unexplained credits/investment. 13. Under these given facts and circumstances of the case, we find that since the ld. AO failed to make any such enquiry in this regard, therefore, we do not find any infirmity in the finding of the ld. PCIT setting aside the assessment order dt. 19-03-2015 u/s. 143(3) to be framed afresh considering the finding given in the impugned order. Thus, all the grounds raised