Shambhu Sharan Singh, Gopalganj V. DCIT, Circle-2(1), Muzaffarpur

ITA 102/PAT/2017

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The case involves Shambhu Sharan Singh, a civil contractor, who appealed against the order of the PCIT, Muzaffarpur, which set aside his assessment for the assessment year 2012-13. The original assessment had been completed under section 143(3) of the Income-tax Act, 1961, where the AO rejected the books of account and estimated the profits. The PCIT invoked section 263, finding the assessment order erroneous and prejudicial to the interest of the revenue, primarily due to inadequate examination of significant credits in the assessee's bank account and improper accounting of certain contractual receipts. The Tribunal, after hearing the arguments and reviewing the materials, dismissed the appeal, supporting the PCIT's decision for a fresh assessment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 113041 (ITAT-PATNA)
• Duration Of Justice: 5 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-08-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 05-06-2017
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 263; 143(3); 145(3)

Judgement Text

1. ITA No.102/Pat/17 AY 2012-13 Shambhu Sharan Singh आयकर अपील य अ धकरण, PATNA पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH आभासी मा यम से स ु नवाई Hearing Through Virtual Medium At ITAT, Kolkata सम : ी राजपाल यादव, उपा य एवं ी मनीष बोरड, लेखा Before: Shri Rajpal Yadav, Vice President and Shri Manish Borad, Accountant Member आयकर अपील सं.य/ ITA No. 102/Pat/2017 Assessment Year: 2012-13 Shambhu Sharan Singh Amtha Khem, P.O Line Bazar, irganj,Gopalganj- 841428. PAN AAYFS8234L (APPELLANT) बनाम V/s. DCIT, C-2(1), Muzaffarpur (RESPONDENT) अपीलाथ क ओर से/By Appellant None appeared यथ क ओर से/By Respondent Shri Saumyajit Das Gupta, CIT, Ld. DR स ु नवाई क तार ख/Date of Hearing 30-08-2022 घोषणा क तार ख/ Date of Pronouncement 12-12 -2022 आदेश /O R D E R PER MANISH BORAD, AM. 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, 2. ITA No.102/Pat/17 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. 2. The assessee has raised the following grounds of appeal for the AY 2012-13:- 1. For that order passed u/s. 263 is bad both in law and in facts. 2. For that Pr CIT was not correct in observing that the AO passed the order u/s. 143(3) without making proper verification and considered it to be erroneous and therefore erred in cancelling the assessment u/s. 263. 3. For that any other ground at the time of hearing of the appeal. 3. 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. 4. 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/-. 3. ITA No.102/Pat/17 AY 2012-13 Shambhu Sharan Singh 6. 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. 7. 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:- a) Out of Rs. 1,61,03,705/- the amount of Rs. 23,67,023/- deposited on 04/04/2011 is amount of security deposit returned back. b) Out of Rs.1,61,03,705 the amount of Rs. 2,00,000/- deposited on 13/07/2011 is deposit of earnest money returned back which was given for the purpose to obtain contract work. c) Out of Rs. 161,03,705 the amount of Rs. 9,00,000/- was sent through RTGS which was not materialised therefore, the reverse entry was passed crediting assessee’s a/c with the amount of Rs. 9,00,000/-. d) Out of Rs. 1,61,03,705 the amount of Rs. 1,55,050/- was return of security deposit. e) Out of Rs. 1,61,03,705 the amount of Rs. 86,84,736/- is contract receipt from RWD, Gopalganj. Payment certificate issued from RWD was furnished to assessing officer. 4. ITA No.102/Pat/17 AY 2012-13 Shambhu Sharan Singh 8. 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. 9. 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 5. ITA No.102/Pat/17 AY 2012-13 Shambhu Sharan Singh 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 by the assessee are dismissed. 14. Apart from the above, it is observed that as per Rule 34 of ITAT Rules, 1963 an order is required to be pronounced preferably within 90 days from the date of hearing. We are conscious of this fact, but it is pertinent to observe that after the hearing one of us ( i.e. Hon’ble Vice President (KZ)) remained on tour to ITAT Mumbai Benches as well as Hyderabad Benches, thereafter, on medical leave. Therefore, he was out of Kolkata for more than 1 month. Therefore, due to these reasons the order could not be pronounced within 90 days. Thus, order is pronounced today. प रणामत: नधा रती क अपील खा रज क जाती है। 15. In the result, the appeal of the assessee is dismissed. आदेश ख ु ले यायपीठ म दनांक ...12-12-2022 को उ घो षत। The order pronounced in the open Court on 12-12-2022 Sd/- Sd/- ( RAJPAL YADAV) (MANISH BORAD) VICE PRESIDENT ACCOUNTANT MEMBER Dated :12-12-2022 6. ITA No.102/Pat/17 AY 2012-13 Shambhu Sharan Singh **PP/SPS आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1.अपीलाथ /Appellant/: Shambhu Sharan Singh Amtha Khem, P.O Line Bazar, irganj,Gopalganj-841428. 2. यथ /Respondent/: DCIT, C-2(1), Muzaffarpur 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त- अपील / CIT (A) 5. वभागीय त न ध, आयकर अपील य अ धकरण कोलकाता / DR, ITAT, Patna 6.गाड फाइल/Guardfile. By order/आदेश से, /True Copy/ Assistant Registrar ITAT, Kolkata