Kamlesh Jethmal Shah, Silvassa V. The Principal Commissioner of Income Tax, Valsad

ITA 433/SRT/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1660 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-07-2022
• Assessment Year: 2008-2009
• Appeal Filed On: 03-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Revision of order; Period of limitation; Set aside; Capital Gains
• Section: 147; 148; 263; 271(1)(c); 143(2)

Judgement Text

आयकर अपीलȣय अͬधकरण, स ु रत Ûयायपीठ, स ु रत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND Dr ARJUN LAL SAINI, ACCOUNTANT MEMBER आ.अ.सं./ITA No.433/SRT/2018 (AY 2008-09) (Hearing in Physical Court) Shri Kamlesh Jethmal Shah, C/o. Bharat Printers & Cement, Opp.Bus Stand, Tokarkhada, Silvassa-396230 (D&NH) PAN : AEQPS 7259 R Vs Principal Commissioner of Income-tax, Room No. 301, Palak Arcade, Shanti Nagar, Tithal Road, Valsad- 396001 अपीलाथȸ/Appellant Ĥ×यथȸ /Respondent Ǔनधा[ǐरती कȧ ओर से /Assessee by None राजèव कȧ ओर से /Revenue by Shri H.P.Meena, CIT-DR सुनवाई की तारीख/Date of hearing 29.07.2022 उɮघोषणा कȧ तारȣख/Date of pronouncement 21.09.2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of learned Principal Commissioner of Income tax-Valsad [for short to as ‘Ld. PCIT’] passed under section 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 30.03.2018 for assessment year (AY) 2008-09. The assessee has raised the following grounds of appeal:- “1. The learned Commissioner of Income Tax, Valsad (“the CIT”) erred in fact and in law in revising the assessment by invoking ITA No.433/SRT/2018 (A.Y 08-09) Kamlesh Jethmal Shah 2 power u/s 263 of the Income Tax Act, 1961 (“the Act”) despite the fact that conditions stipulated invoking such extra-ordinary jurisdiction were not satisfied. 2. The learned CIT erred in fact and in law in initiating the proceeding u/s 263 of the Act beyond period of limitation. 3. The learned CIT erred in fact and in law in passing order u/s. 263 of the Act beyond period of limitation. 4.The learned CIT erred in fact and in law calculating the time limit for passing order u/s 263 of the Act from the end of financial year in which the order u/s 147 was passed ignoring the fact that issue of cash deposit, development charges, advances and short term capital gain was not therein in reassessment and therein no discussion in the reassessment order on these issues. 5.That the order u/s 263 is bad in law for the reason that proceedings u/s 147 initiated itself is bad in law, and an invalid assessment can’t be set aside u/s 263. 6.That the order u/s 263 is also otherwise bad in law for the reasons that no addition was made for the reasons recorded for reopening of assessment u/s 147 and as such no other addition could have been made by the AO, therefore the CIT can’t direct the AO to enquire and make addition of issue unconnected to reassessment. 7. It is therefore prayed that order passed by learned CIT be quashed. 8. The appellant craves leave to add, amend, alter, modify or delete any ground(s) either before or in course of hearing of appeal.” 2. Brief facts of the case are that case of assessee was re-opened under section 147 of the Act for assessment year 2008-09. The Notice under section 148 of the Act was issued on 20.03.2015. ITA No.433/SRT/2018 (A.Y 08-09) Kamlesh Jethmal Shah 3 In response to notice under section 148, the assessee filed his return of income on 04.03.2016 declaring total income of Rs.18,61,460/-. The Assessing Officer recorded that the reasons recorded were provided to assessee on same date i.e., 04.03.2016. Thereafter notice under section 143(2) was served on 04.03.2016 itself. The assessee submitted various details as called for. The Assessing Officer noted that in response to notice under section 148, the assessee while filing his return of income declared short term capital gains of Rs.16,41,634/- and that the said income was disclosed only on service of notice under section 148 of the Act. The Assessing Officer though accepted the return of income, however initiated penalty under section 271(1)(c) of the Act, while passing the assessment order on 28.03.2016. The assessment order was revised by Ld. PCIT by exercising his power under section 263 of the Act vide order dated 30.03.2018. 3. Before revising the assessment order, Ld. PCIT issued show cause notice dated 07.04.2017, fixing the date of hearing on 12.04.2017. The contents of show cause notice under section 263 is recorded in para-5 of the order of Ld. PCIT. In the show ITA No.433/SRT/2018 (A.Y 08-09) Kamlesh Jethmal Shah 4 cause notice, the Ld. PCIT identified following five issues (i) that no inquiries were conducted with regard to cash deposits in bank accounts of assessee; (ii) no inquiry made by the Assessing Officer regarding land development charges of Rs.22,69,920/-; (iii) the assessee has shown unsecured loans from seven persons amounting to Rs.23,37,44/-,the Assessing Officer asked for confirmation of such loans and only one confirmation was filed by assessee without any proper address and another confirmation is filed under signature of assessee himself and no confirmation with regard to five remaining creditors were filed; (iv) there are advances given for land purchase amounting to Rs.42,76,444/- but no confirmation of any those parties are available; (v) the assessee declared short term capital gains of Rs.16,41,634/- on sale of three properties in earlier years; the short term capital gains work out to Rs.42,45,889/- approximately as stamp duty on purchases not taken into account in the computation of income. The ld PCIT was of the view that on all the five issues the assessing officer has not made inquiries on all such issues. On the basis of such observation, Ld. PCIT was of the ITA No.433/SRT/2018 (A.Y 08-09) Kamlesh Jethmal Shah 5 view that assessment order passed by Assessing Officer is erroneous as well as prejudicial to the interest of revenue. The Ld. PCIT recorded that nobody attended, despite service of notice to the assessee have recorded in para-6 of the order of Ld. PCIT. The Ld. PCIT after perusal of the contents of assessment order and the materials available on record held that the assessment order has been made without making any inquiries in respect of issues mentioned in the show cause notice. Therefore, the assessment order was set aside with the direction to pass assessment order afresh after given opportunities to assessee. Aggrieved by the order of Ld. PCIT the assessee has filed present appeal before the Tribunal. 4. None appeared on behalf of assessee despite services of notices on more than three occasions, therefore, we left no option, but to decide the appeal on the basis of material available on record and after hearing Ld. Commissioner of Income-tax-Departmental Representative (Ld. CIT-DR) for the Revenue. 5. The Ld. CIT-DR for the Revenue submits that the Assessing Officer passed the assessment order without examining the ITA No.433/SRT/2018 (A.Y 08-09) Kamlesh Jethmal Shah 6 five issues identified by Ld. PCIT in his order, the assessee was given full opportunities to contest the revision proceedings but assessee failed to contest the revision proceedings. The Ld. PCIT after elaborate discussion on all the issues set aside the assessment order and directed the Assessing Officer to pass the assessment order afresh, after giving due opportunity to assessee. The assessment order is not only erroneous but also prejudicial to the interest of revenue. 6. We have considered the submission of Ld. CIT-DR for the Revenue and perused the order of Ld. PCIT. We find that Ld. PCIT before revising the assessment order identified five issues, which we have noted above and served the show cause notice under section 263. No reply to the show cause notice was filed by the assessee. We find that Ld PCIT passed the impugned order after detailed discussion and on clearly holding that it was the duty of the Assessing Officer to investigate the fact in the return of assessee, when circumstances demand to make such inquiries. Thus, in absence of proper inquiry, the assessment order passed by Assessing Officer is erroneous and prejudicial to the interest of revenue. We find that in absence of ITA No.433/SRT/2018 (A.Y 08-09) Kamlesh Jethmal Shah 7 proper investigation of the issues the order passed by assessing officer in erroneous, the Revenue suffered loss of due tax. Thus, the assessment order is prejudicial to the interest of Revenue as well. In our view, the order passed by the Assessing Officer is not only erroneous but also in so far as prejudicial to the interest of revenue. Before us, the present appeal was filed on 04.06.2018, no document till date filed by the assessee. In absence of any material or evidence or written submission, we do not find any reason to deviate from the finding of Ld. PCIT, which we affirm. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 21/09/2022 and the result was also placed on the Notice Board. Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) [लेखा सद᭭य/ACCOUNTANT MEMBER] [᭠याियक सद᭭य JUDICIAL MEMBER] Surat, Dated: 21/09/2022 Dkp. Out Sourcing Sr.P.S Copy to: 1. Appellant- 2. Respondent- 3. CIT(A)- 4. CIT 5. DR 6. Guard File True copy/ By order Sr.P.S./Assistant Registrar, ITAT, Surat