Shri Ashwani Marwah, Shimla V. Pr.CIT, Shimla

ITA 307/CHANDI/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 8271 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 03-08-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: TDS
• Section: 12; 142(1); 22

Judgement Text

आयकर य कर , य य “ए एए ए”, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘A’, CHANDIGARH BEFORE: SHRI SUDHANSHU SRIIVASTAVA, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ITA No. 307/Chd/2020 (Assessment Year: 2015-16 Ashwani Marwah, Marwah Niwas, Dhanda, Totu, Distt. Shimla. बनाम Pr. Commissioner of Income Tax, Shimla. थायी लेखा सं./PAN NO: ABOMP1175H नधा रती क ओर से/Assessee by : Shri Sudhir Sehgal, Adv. राज व क ओर से/ Revenue by : Shri Vivek Nangia, CIT DR स ु नवाई क तार ख/Date of Hearing: 14.02.2022 उदघोषणा क तार ख/Date of Pronouncement: 23.02.2022 (Hearing through Webex) आदेश/ORDER Per Vikram Singh Yadav, Accountant Member: This is an ap peal filed b y the asses se e aga inst t he or der of Lear ned Pr inc ipa l Commis sioner of I ncome Ta x [ i n s ho r t t h e ‘ L d . P r . C I T’ ) ] , Shi mla, pa ssed u /s 263 of the Inco me Ta x Ac t, 1961 (in shor t ‘the Act’) da te d 19. 03.202 0 pe r tain ing to assessme nt ye ar 2015 -16 , w he rein the assesse e ha s taken the foll owi ng ground s of appea l: ITA No.307/Chd/2020 A.Y.2015-16 2 “1. On the facts and in the circumstances of the case, the learned Principal Commissioner of Income Tax (hereafter, "the Pr. CIT") had no occasion to initiate proceedings under section 263 of the Income Tax Act, 1961 (hereafter, "the Act") as the assessment order sought to be revised is neither erroneous nor prejudicial to the interests of the revenue. 2. The impugned order of the learned Principal Commissioner of Income Tax is bad in law as there is no specific finding in the order that the order of assessment is erroneous insofar as it is erroneous in respect of any of the issues raised. 3. The learned Pr. CIT acted without jurisdiction in passing an order in respect of agreed addition and verification of creditors and wages payable already carried out by the Ld. AO before passing order u/s. 143(3). 4. For these and other grounds that may be adduced at the time of hearing, the order of the learned Pr. CIT may be quashed and the appeal allowed. The appellant craves leave to add to, or, amend/ alter/ withdraw any of the above grounds of appeal. All the grounds of appeal are without prejudice to each other.” 2. Briefly, the fact s of the case a re that the a ssesse e, who is in the business of civil cons truction , filed h is return of inco me de clar ing total income of Rs.2 2,9 2,8 90 /-, which w as sele cted for li mit ed scrut iny as p e r CASS to e xa mine sund ry credito rs a nd sa l es turnove r mis-m atch a nd the reafte r noti ces u/s 14 3(2 ) and 142(1) we re issued to the as se ssee. I n re sponse, the L d. AR on behal f of the as se ssee attende d the proce eding s a nd file d nece ssar y in for mation a n d docu men tat ion s o cal led for b y the AO. There after the assessme nt was comp lete d u /s 143( 3) of the Act, date d 12.1 2.2 017 m a king an ad diti on of Rs.3 l acs and assesse d ITA No.307/Chd/2020 A.Y.2015-16 3 inco me wa s det ermi ned at Rs. 25,9 2,8 90 /-. Su bse que ntly, assessme nt re cor ds we re called for a nd exa mined by the Ld. Pr.CI T and a show ca use notice u /s 2 63 of t he Act was iss ue d on 28 .02.20 20. I n the show ca use notice, the Ld . Pr.CI T h as stated that the assesse e in his re turn of income furnishe d with the De pa rtment ha s de cl ared sundry cr e ditors of Rs.7 6,5 8,1 17 /- whic h incl udes wa ges paya ble of Rs.5 6,7 3,4 22 /-. I t has be en furth er state d by the Ld. Pr.CI T that dur ing t he cour se of ass essme nt procee dings , the assesse e has file d copy of the le dger account show ing lab ou r wages pa ya ble at Rs.5 6,7 3,4 22 /- s how ing only na me s of labo ure rs. Howe ver, no doc ume ntar y e vidence s, such as labo ur regi ster co ntainin g na me s & addresse s of t he labourers and lab ou r p ayment vouc he rs, e tc. we re furni shed during assessme nt procee dings. I t ha s bee n furthe r obse rved by the Ld. Pr.CI T tha t most of the wa ge s were paid in cas h a nd without dedu cti n g tax at sour ce , whic h makes the se payments susp ici ous bu t no inde pendent e nq ui ries were conducted by the AO and only agre ed a ddition of Rs. 3 l acs w a s made by hi m. It h as bee n further ob se rve d by t he Ld. P r.CI T tha t the assesse e ha s deb ite d a sum of Rs.47,41, 630 /- o n account of labo ur w ages in the Profit & Loss Account, whe r eas in the Bala nce Shee t, labou r wage s pa yable ha s bee n shown a t Rs.5 6,7 3,4 22 /-. I t has be en furth er state d by the Ld. Pr.CI T ITA No.307/Chd/2020 A.Y.2015-16 4 that no e nqui ries we re made in respect of othe r sund ry credito rs sho wn by the as se ssee at Rs.76,58 ,116 /- in its Bala nce Sheet which was t he core issue of the ca se be ing sele cted for scr utiny. 3. I n response to the show cau se notice, the asse ssee subm itted t hat he is a civil co nt ractor enga ged i n the civil constructi on wor k exclusive ly for HPC L an d I OC and he has de clare d net pr ofit of Rs.2 6, 04 ,889 /- inclu ding intere st inco me of Rs. 4,14 ,96 9 /- on total sales t urnover of Rs.2 ,59 ,18 ,41 4 /- and a fte r de duc ti ng the inte rest in co me fro m the net profit, t he net profit perce ntage declared by hi m is 8.45 %, wh ich is i n e xce ss of the presumpt ive rate accepted in nu mber of j udi cia l pronoun ce ments in the case of contra cto rs. It wa s f urt he r su b mit ted tha t a s a gain st the sun dr y cre ditors of R s. 76,58, 117/ - menti oned in the show c ause notice, the tota l sun dry c reditor s are only a t Rs.1 9,84,6 95 /- and lis t of the sund ry cred itor s for ms p art of the audited financia l state me nts. It was further sub mitte d tha t the ledger account for t he se cre ditors was veri fie d durin g the cour se of assessme nt pr ocee dings an d most of the se ba la nces were indepe nde ntly confir me d b y the pa rties and the ir confirm ation also for m p art of the assessme nt records. Re gardi ng the labo ur wage s pa yable a mounti ng to Rs.56, 73, 422 /-, it w as subm itted tha t t he sa me wa s a lso du ly ve rified d urin g the ITA No.307/Chd/2020 A.Y.2015-16 5 cour se of asses sme nt procee dings and b ill v ouchers and labo ur wa ge mus te r rol ls we re pr oduced. Re ga rdi ng the fact that the w age s w ere paid in cash, it wa s su b mitte d th at the wages were paid at differe nt lo cations a ll over Hima chal Pra de sh a nd P u njab w he re the asse ssee was workin g as a contrac tor a nd l ocal and outside laboure rs we re engaged at the respective sites. I t was furthe r sub mitted th at the wages to the laboure rs do not attra ct TDS since all were drawing sala ry below the tax able l i mit. I t wa s subm itted tha t the assesse e e mploy the se people who work far -a wa y f rom t he ir homes and only draw e nou gh mone y to b uy f oods a nd nor ma ll y d raw the ir w age s w hile goi ng ho me s. It wa s accordingly, sub mitte d that the se facts we re duly verifie d by the AO d uri ng a ssessme nt p roce edings an d at the s a me ti me to buy pie ce of mind, an ad dit io n of Rs.3 lacs wa s agre ed to buy pe ace of mind and, there fore , the orde r so pas se d by the AO a fter d ue ve rifi ca tion ca nno t be held a s erro ne ous a nd pre judi cia l to the intere st of the Revenue. 4. The sub mission s so filed b y the assesse e were consi dere d but not foun d acce ptable to the Ld. Pr.CI T. The Ld . P r.CI T h as stated th at the ca se of the assesse e was selecte d for li mi te d scru tin y through CASS fo r the re a son s “ sundry cr editors an d sales tur nove r misma tch ” and w ithout ve ri fying the rea sons for which the case was se lected for scrut iny, the AO has made ITA No.307/Chd/2020 A.Y.2015-16 6 additio n of Rs .3 la cs and i ncome wa s a s se ssed at Rs.2 5,9 2,8 90 /-. Further the Ld. Pr.CI T reite rated the i nitial find ings a s gi ven in the show c ause noti ce that most of the wages we re pa id in cas h w ith out deduct ing ta xes at source, which makes the se payme nts su spici ous a nd no i ndepende nt enquiries we re conducte d by the AO to ve rify wage s payab le be ing ol d ones. I t wa s he ld tha t the order ha s be en pa ssed by the AO w ith ou t maki ng a ny e nq uiries or veri fica tion wh ich should ha ve be en ma de in the case of the a ssesse e. I t wa s also he ld th at the AO has not pr operly e xamined the issue of othe r sund ry creditors which is one of t he reasons for selection of the case for li mited scruti ny. F urt he r the ple a of the asse ssee that labo ur w age s pa yab le as per b ooks w as veri fie d by the AO was not found te nable a s there was a mi s-matc h of sund ry credito rs in the I TR a nd au dit report, and le dg er accou nt furnishe d by the asse ssee durin g the c our se of a ssessme nt proce eding s. I t w as ac cor din gly he ld that the fai l ure on the pa rt of the AO t o ve rify the a bove issue s dur ing the cou rse of assessme nt pro cee dings has re nde red asse ss ment order erroneous in s o fa r as it is p reju dici al to t he inte rest of the Revenue a nd in the light of Ex planation-2 to se ction 26 3 of the Act, the AO has p asse d the orde r without ma king enquiries or verifi cation w hic h shou ld ha ve bee n made therea fter relyin g on certain judicial aut hor itie s on the ITA No.307/Chd/2020 A.Y.2015-16 7 subje ct of i nvoki ng of provis ions of se ction 26 3 of the Act, the Ld. Pr.CI T has s et aside the order so pa sse d by the AO a nd has directed hi m to re -a ssess a nd re co mpute the income of the asse ssee in the light of the dire ctions so conta ined in the impu gned or der by con duc ting furthe r e nqui ries after providi ng re asona ble opp ort uni ty to the a ssesse e. 5. Agai nst the said order and fin dings of the Ld. Pr.C IT, the assesse e is in a p peal before u s. F irst ly, it wa s sub mitte d by the Ld. AR t ha t the Ld. P r.C I T h as not a pplied his indepe nde nt mind whi le initiat ing the procee dings u/s 2 63 of the Act a s the ba la nce of sun dry cre ditor s in the financia l state me nts of th e asse ssee comp any h as be en re fle cte d at Rs.1 9,8 4,6 95 /- a nd not R s.7 6,5 8, 117 /- wh ich ha s been state d by the Ld. P r.CI T while iss uin g the show cause not ice. I t was subm itted tha t the la bour and w age s pa ya ble has been duly re fle cted unde r the se pa rate he ad of ‘lab our wage s pa yab le’ a mou nting to R s.56,73, 422/-. It was accord ingly submitte d that the proce edings a s in iti ate d by the Ld. Pr .C I T on wr ong figu res an d mis-i nterpretation of de tails, w hich for m p art of the asse ss ment r ecords, are ba d i n law a nd de se rve s to be set aside. It wa s fur the r sub mi tted th at the case of the asse ssee was se lected f or li mited scruti ny for exa mini ng su nd ry credito rs a nd sales mi sma tch and t he AO a fter due examina tion of the sund ry credi tors and s ales mis-match ITA No.307/Chd/2020 A.Y.2015-16 8 which we re dul y e xplai ne d durin g the cour se of assessme nt proce eding s and after inde pe ndent app lic ati on of min d has pa ssed the as se ss ment order. It was accord ingly submitte d that be ing a li mited sc rutiny c ase, the Ld. Pr.CI T c ann ot initiate the proceedings u /s 263 of the Act, on th e issue of labo ur a nd wage s pa yab le a mo unti ng to Rs.5 6 ,73, 422 /-, which are beyond the scope of li mited scr uti ny. I t was subm itted th at the case of the asse ssee is cove red by the de cisio n of the Coor din ate Be nc hes in t he ca se of Tejp al Bha rdwa j, 8 8 I TR ( Tr ib.) 35 3 wh ich h as bee n su bseq ue ntly foll owe d in the ca se of Te nzi n Cons truction C o. P vt. Ltd in I TA No.3 06 /C hd /20 2 1, date d 27. 1 0.20 21. I t w a s furthe r subm itted that eve n though the issue of la bou r a nd wa ges pa ya ble was not subje ct ma tte r of li mited scrutiny eve n the n the AO ha s gone ahe ad a nd ha d exa mi ned the sai d issue an d duri ng the cou rse of assessme nt procee dings, the info rma tion was cal led for b y issuin g n oti ce s fro m ti me to ti me and the assesse e ha s dul y responde d to those notices and sub mitte d re quisi te info rma tion /d ocu men ta tion. In this r ega rd, our re ference was dra wn to the su b mis sion s fi led by the asse ssee be fore the AO w here copy of the le dge r a ccount for lab our wages payable as we ll as details of the wages pay able a s on 31.0 3.2 015 were duly s ub mitted. It was sub mi tted that t he se de tails were duly examined by the AO and there after by way of ITA No.307/Chd/2020 A.Y.2015-16 9 a speaki ng order the asse ss men t order ha s bee n pas se d whe rein the re is a clear findi ng i n pa r a 2 of the assessme nt order th at t he la bour and wage s account ha s bee n duly te st- checked b y t he AO a nd gi ven th at some o f the outst and ings were old, an addi tion of Rs.3 l acs was ma de by the AO which was accepted by the assesse e to buy piece of min d . Further, our refere nce wa s dra wn t o t he sub mi ssi ons filed before the Ld. Pr.CI T where agai n the asses see has sub mi tted tha t the labo ur wa ges p ay able we re duly ve rified w ith the bil l vou chers and la bou r wa ges muste r roll s we re produce d duri ng assessme nt proc eedings. It was acco rdingl y su b mitted that whe re the AO has duly e xa mine d the ma tter and has app lie d his inde pendent mind a nd b asis t he reof, an ad ditio n by way of disa llo wance of l abou r/wa ges e xp enses has a lso be en ma de, the orde r so pa sse d by t he AO ca n not be te r med a s erroneous and prejudicia l to the in tere st of th e Re ve nue. 6. Per contra , the ld CI T DR su b mit ted that the ld AR is tryi ng to ma ke distinction betwe en the wa ges pa yable and other su ndry credito rs. However, such a d istinctio n which is more in the for m of a nomen cla ture ca nnot e sc a pe the fa ct that all t he se expe nses are in the nature of sun dr y creditors havi ng not be en pa id at the ye ar-end and re maine d outsta ndin g for eithe r goo ds p urc hase d or se rvices availed b y the asse ssee and whether pa ya ble to the labou re rs/empl oye es ITA No.307/Chd/2020 A.Y.2015-16 10 or to outside t hird par ties and , the refore, the conte ntion adva nce d by the Ld. A R tha t the Ld. Pr .CI T ha s in itia ted the proce eding s o n w rong fa cts and e xcee de d his jurisd icti on u/s 263 in ter ms of e xamini ng the matter of labour and wa ges pa ya ble as be yond the scope of li mited scr uti ny a ssessme nt cannot be acce pte d. It was furthe r sub mitte d th at when the matte r w as selecte d for l i mi ted sc rut iny and tha t too specifi cally for examini ng the matte r re lati ng to sund ry credito rs whi ch i nclude s la bour a nd w ages pa ya bl e , it w as incu mbent o n t he part of the AO to verif y complete fa cts a nd carr y out t horough enquir ies. Howe ver, it ca n be see n as rightly poi nted o ut by the ld P CI T in the impugned order that no doc ume nta ry e vidence in the form of labour registe r contain ing na me , add re sses of the labourers a nd la bou r pa yment vouche rs we re fu rnishe d duri ng the cour se of assessme nt pr oce edings. I t was su b mitte d tha t the Ld. Pr.CI T has also observed th at the payme nts we re ma de in cash a nd without deductin g ta x at source , a fa ct w hic h h as not bee n de nie d by the asse ssee a nd gi ve n that it wa s i ncu m bent on the pa rt of the AO to exa mine a nd c arr y out i ndepe nde nt verification to exa mi ne the a uth e nticity of the p ayment so clai med to be made to the labourers and a lso to examine whe ther any t ax is de ductible at sou rce or not. It was subm itted that no indepe nde nt enquir ies at all wer e made by ITA No.307/Chd/2020 A.Y.2015-16 11 the AO in thi s r egard. What all has bee n sub mitte d by the assesse e has been take n on fac e value by the AO. It was further su b mitted th at the Ld. Pr .C I T has a lso sta ted in his order tha t n o enqui ry ha s be en ma de in re spec t of othe r sund ry credi tors othe r tha n lab ou r and wa ges paya ble shown by the asse ssee in his B ala nce Shee t. I t was accordi ngl y, subm itted th at in ter ms of Expla na tion -2 to se cti on 263 of the Act, w he re the AO ha s pas se d the orde r without ma king proper e nq uir ie s a nd verifica tion which should have bee n made, there is not infi r mity i n the order so pa sse d by the Ld. Pr.CI T, holding the order so pa ss ed by the AO a s e rroneous and p re judi cia l to the inte rest of the Revenue. Furthe r re liance wa s pl a ce d on va rious decisions w hic h ha ve bee n re lied upon b y th e Ld. P r.CI T in hi s orde r as well a s de cision s in case of C o m m i s s i o n e r o f I n c o m e Ta x v s A c t i v e T r ad e r s ( P ) L t d . 2 1 4 I TR 5 8 3 H i g h C o u r t o f C a l c u t t a 0 3 . 0 2 . 1 9 9 2 , I TA T N o . 2 0 9 o f 2 0 1 3 , G . A . N o . 3 4 3 6 o f 2 0 1 3 i n t he c a se o f C o m m i s s i o n e r o f I n c o m e Ta x v s M / s M a i t h a n I n t e r n a t io n a l H i g h C o u r t o f C a l c u t t a d a t e d 1 0 . 0 4 . 2 0 1 4 , C o m m i s s i o ne r of I n c o m e Ta x v s N a g e s h K n i t w e a r e P v t L t d . I TA N O S . 5 9 1 / 2 0 0 8 H i g h C o u r t o f D e l h i d a t e d 0 1 . 0 6 . 2 0 1 2 , M / s G e e V e e E n te r p r i se vs A d d i t i o n a l C o m m i s s i o n e r o f I n c o m e Ta x 9 9 I TR 3 7 5 H i g h C o u r t o f D e l h i d a t e d 0 7 . 1 0 . 1 9 7 4 , R a j m an d i r E s t a t e s P v t v s P r i n c i p a l C o m m i s s i o n e r o f I n c o m e Ta x G . A . ITA No.307/Chd/2020 A.Y.2015-16 12 N o . 5 0 9 o f 2 0 1 6 w i t h I TA T N o . 1 1 3 o f 2 0 1 6 H i g h C o u rt o f D e l h i d a te d 1 3 . 0 5 . 2 0 1 6 . 7 . W e h a v e h e a r d t h e r i v a l c o n t e n t i o n s a n d p u r u s e d t h e m a t e r i a l a v a i l a b l e o n r e c o r d . F i r s t l y , w e r e f e r t o t h e c o n t e n t i o n a d v a n c e d b y t h e l d A R t h a t the p roce edings initiate d by t he Ld. Pr.CI T were on w ron g fi gures and mis- inte rpreta tion of de tails a vai lab le on record and secondly, be ing a li mited s crutiny case, it h as been contended tha t the Ld. P r.CI T ca nnot initi ate the proce edings u/s 263 of the Act , on t he issue of lab our and w a ges pa yable a m ounting to Rs.5 6,7 3,4 22 /-, which a re beyond the scope of li mited scru tin y for verif ication of sundr y cre dit ors. I n th is rega rd, we find that the case of the asses see was se lected for li mited scru tin y thr ou gh CASS t o exa mi ne inter-alia the issue of sund ry creditors . The i nfo rma tion and d ocume nta tion which for ms the basis for said compute r ize d sele ction is the re turn of income di scl osing computation of in come un der var iou s he ads of inco me as we ll as the pa rticula rs of i ncome a nd expe nditure a s w e ll a s pa rticul ars of as sets a nd lia bili tie s. I n the re turn of i ncome in For m 4 so fi led a nd sub mi tte d on line by the asse ssee, we find tha t as pa rt of curre nt lia bili tie s and provisi ons , t he assesse e has shown sundr y c r editors at Rs 76,58, 117 /- a nd othe r prov isions a t Nil a s p art of h is ba la nce sheet as on 31.0 3.2 015 . At the sa me time , we also ITA No.307/Chd/2020 A.Y.2015-16 13 note th at in the hard co py of the fina ncia l sta tements so filed subseq ue nt ly by the asse ssee , a s part of cur rent liab ilitie s and provisions, the assesse e has shown sundry cr e ditors at Rs 19, 84,695 /- and la bo ur w ages p aya ble a s p art of provisi ons at Rs 56,7 3,422 /. At the relevant poin t in ti me , we find th at when th e return o f incom e was se lected for scr uti ny, only informa ti on which wa s a vai la ble with the depa rt ment w as the re turn of i ncome fi led online contai ning p arti cul ars a s per the fina nc ia l sta teme nts and not har d copy of the finan cia l state me nts filed subsequently an d there fore , what has bee n sele cted for e xamina tion is the figure of su ndr y cre ditors a mou nting to Rs 76,58 ,117 /- by the Assessin g officer and duri ng the cour s e of a ssessme nt procee dings, the Asse ssing offi ce r bas is such selection has procee ded to exa mine the sund ry cre ditors a mounti ng t o Rs 76 ,58,11 7 /- as pa rt o f li mi te d scru tin y assessme nt to which the ass esse e has volu nta ry p artici pated witho ut r aising a ny ob je ctions and supplied in for mation /doc ume nta tion and there fore, where the ld P C I T i ssue s a sh ow cause u/s 26 3 rega rding t he matter re latin g to exa mination of la bou r and wa ge s paya bl e, we donot find an y in fir mity in the sa id action in his as su mpti on of juri sdi ction u /s 263 wh ich is well within the limite d scrutin y for which t he ma tter wa s in itia ll y se le cted for e xamination b y the Asse ss ing of ficer. ITA No.307/Chd/2020 A.Y.2015-16 14 8 . N o w , c o m i n g t o o t h e r c o n t e n t i o n s a d v a n c e d b y th e l d A R t h a t the AO h as d uly exa mine d the matter and h as a pplie d his inde pendent mind a nd b asi s t he reof, an ad ditio n by way of disa llo wance of l abou r /w age s e xp ense s has al so be en made and the order s o pa ssed by the AO cann ot be terme d as erroneous and pre judici al to the intere st of the Revenue. 9. I n this rega rd, firstl y, we refer to the a ssess ment orde r so p assed by the Asse ssing o ffi ce r an d fin d that the AO has discussed this ma tte r in p ara 2 of the asse ssment orde r whe rein he has state d that the case of the asse ssee was discussed wit h the AR of the a sse ssee in light of the reason for se le ctio n of case for scr utiny and the lab our and wages account wa s test-che cked. I t has be en state d by the AO that some of the outs tand ings we re old which was con fronte d to the AR and to wh ich, t he ld AR ha d sub mitte d tha t the wages and l abour c har g es were paid on dema nd a nd c onsidering the subm ission s so made and afte r disc ussion s wi th the AR, an additio n of Rs.3 lacs was made by the AO which wa s accepte d by the AR on be ha lf o f the ass essee as so stat ed in the assessme nt orde r . We therefore tha t it i s not a case where the AO has not e xa mined the matter for w hich the case was sele cted for scrutiny and he did e xa mine the ma tter and basi s such exa mina tion and sub missions so made on behalf o f the ITA No.307/Chd/2020 A.Y.2015-16 15 assesse e, an a ddi tion of Rs 3 lac s was ma de while passi ng the assessme nt or de r. 10. Now, let’s e xa mi ne as to how t he ld PCI T arr ive at a find ing that the AO ha s p asse d the asse ss ment or de r without making pr oper enquirie s or verif ication w hich sh ould h ave be en made and there fore, the ord er so passed wa s e rroneous in so f ar a s prejudici al to the intere st of the Revenu e. 11. Firstly, the ld PC I T has sta ted tha t there is a mis match in the figu res as debited in the profit/los s a cco unt a nd a s re fle cted in the ba la nce shee t which shows that the AO sh oul d have examine d this aspect of the matter and has n ot exami ne d In this re ga rd, on pe rusal of the le dge r acc ount of l abou r an d wages pa yable, which was sub mitted dur ing the course of assessme nt procee ding an d ha s al so bee n referre d by the ld PC I T tho ugh in c onte xt of othe r findings, we find that the re is an ope nin g bal a nce of Rs 65,6 0,42 0 /-, the re are credits duri ng the yea r amounting to Rs 47,41 ,63 0 /- in for m of fresh labo ur an d wa ge s e xpenses incur red during the ye ar, there are pa yme nts to t he tune of Rs 5 6, 28,6 28 /- a nd the n, there is clos ing b ala nce of Rs 5 6,7 3,422 /-. I n the pr ofit /lo ss ac count, the assesse e has shown lab our a nd wages of Rs 4 7,41,63 0/- and i n the ba lan ce she et, the asse ssee has shown labour a nd wages p aya ble of Rs 56,73, 422/ -. The re fore, on combine d ITA No.307/Chd/2020 A.Y.2015-16 16 re ading of le dge r acco unt a nd fin anci al sta te me nts, we donot find a ny mi sma tch in the figure s so contained in the books of accounts and so reported by the asse ssee . The refore, on this account, it ca nnot be he ld tha t th e AO has failed to exa mine this a spe ct of the matte r in respe ct of mi s-ma tch of the figu res where th e re is no such mis- match of f ig ure s at fir st place. 12. Secondly, the ld PCI T h as stated t ha t only ledger account has been sub mitte d during th e course of a ssessme nt proce eding s whi ch only conta ins the na me of the labou rers but no a ddress of such lab oure r s ha ve been fur nished, no labo ur re giste r cont aining sig na ture of la bour and la bour pa yment vouche r s has be en furn ished, t he payme nts ha ve be en made in ca sh without de ducting tax at source which makes the pa yme nt suspi cious a n d no i ndependent e nquiries have be en made to verify wage s pa yable be in g o ld o ne and therefore , the orde r so passed b y the AO has be en held as erroneous in so far a s p re judi cia l t o the inte rest of Revenue . 13. To our mi nd, w he re the matte r is se lected for precise re ason for exa m inati on of lab ou r a nd wage s pa yab le, ce rtai n ba si c q uestions arise s for c onsid eration wh ich a person of re asona ble intell ect and unde rstandi ng should r aise an d examine. F irstly , wh o are the se persons – w he th er re gular ITA No.307/Chd/2020 A.Y.2015-16 17 empl oye es or hir ed through a thi rd par ty, na me a nd add re ss and other basic identification p articul ars of the se pe rsons who are h ired and te r ms of such hir ing in te rm s of sala ry/wa ges /social securi ty, etc., w ork /pr oject for which they are hired a nd the ir a ttenda nce re cords, e tc to estab lish actu al rendering of service s an d pe rio d/hour s of service, pa yment/mu ster rolls e tc sho wing sa lar y/w age s paya ble , actu al pa yment and whethe r lia ble for TD S a nd actual TD S done and deposited in the ir re spective acc ounts. And in re spe ct of old ou tsta ndings , the p ersons in respect of who m the a mount h as r emai ned outst and ing, the pe riod an d re asons for su ch out sta ndings and whethe r any pa yme nts ha ve bee n made d uring the year or n ot a nd a ppli cab ili ty of TDS on s uch pa yments. The r efore , whe re the ld PC I T has stated that be side s le dge r ac coun t, the re is no docu menta tio n on recor d in supp ort of su ch expe nses, we agre e tha t the Assessi ng offi ce r did not ma ke prope r an d adeq uate e nq uiries while making the a ssessment. The expl anation i n s upp ort of cas h pa yments a nd re ason s for s uch p ayme nts no t li ab le for TD S can only be te sted once the comp l ete deta ils are availa ble on re cord an d in a bsence of the sa me , the same will remai n conte nt ion whi ch cann ot be ac ce pted withou t le a ding a ny evide nce in sup p ort there of. I t i s ordi nar ily expect ed tha t the Asse ssing offi ce r exa mine thes e transa cti ons thor oug hly ITA No.307/Chd/2020 A.Y.2015-16 18 ra ther than j ust re lying o n the in for mati on sub mit ted by the assesse e comp an y an d maki ng a n ad hoc a ddi tion wi thout specify ing the ba sis there of. I t i s not a question of kind an d extent of enq uir y an d he nce, a differe nce of ap p roach a nd meth odolog y of exa mina tion of a particular tra nsac tion as done by the AO and as s ugge ste d by the ld PCI T. N o doub t eve ry Asse ssing officer h as his u ni que style of functioning a nd no h ard a nd fas t rule c an be la id dow n a s to how he shoul d cond uct the e nquiry in disch arge of his sta tutory functions. However, w here the fac tu al sce nario of a ca se p ri ma fa cie indi cates a bnor malities and c ry f or looki ng deep into i t as rightly highligh te d by the ld PC I T i n ter ms of comple te lack of docu men tat ion, o ld ous tan dings, pay ment in cash, e tc, the n mere calling for the details of lab our and wa ges payable and accepti ng the le dger accou nt co ntainin g i ncompl e te deta ils and withou t c all ing for furthe r infor ma tion /d ocume nt ati on and cond uctin g inde pendent e nq uirie s c ann ot be he ld as cond ucting prope r e nq uir y. There fore, on this ac coun t, we agree with the findin gs of the ld PC I T that pr ope r e nq uiries have not be en conduc te d by the AO and the order thus p asse d is clear ly err oneous and pre jud icial to the intere st of the Revenue . 14. I t is n ot a case whe re the l d. P CI T has set-a sid e the assessme nt orde r ra ther he has e xa mi ned these tr ansa cti ons ITA No.307/Chd/2020 A.Y.2015-16 19 and ha s carr ied out broa d an alys is of the ledge r a ccount so subm itted by th e assesse e co mpany a nd has c ome to a conclusion th at the AO ha s f aile d to carr y o ut a de quate a nd proper enq uir ies which he shoul d have co ndu cted in respe ct of l abour and wa ges paya ble. 15. In light of a foresai d dis cussi ons an d in the e ntirety of facts a nd cir cu mstan ces of the ca se, we upheld the order so pa ssed by the ld PCI T u/s 263 a nd the ground s of a ppe al are dis missed. 1 6 . I n t he r e s u l t , th e a p p e a l f i l e d b y t h e a s s e s s e e i s d i s m i s s e d . O r d e r p r o n o u n c e d o n 2 3 . 0 2 . 2 0 2 2 . Sd/- Sd/- (SUDHANSHU SRIVASTAVA) (VIKRAM SINGH YADAV) /Judicial Member /Accountant Member Dated: 23.02.2022 *रती* # $ % & '( )* '! / Copy of the order forwarded to : 1. अपीलाथ+/ The Appellant 2. %,यथ+/ The Respondent 3. आयकर आय ु -त/ CIT 4. आयकर आय ु -त (अपील)/ The CIT(A) 5. 'वभागीय % त न0ध, आयकर अपील य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File # $ स / By order, सह (ंज / Assistant Registrar ITA No.307/Chd/2020 A.Y.2015-16 20