×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
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13-06-2019, Prabhakar Paper Mills, Section 115JB, 263, 144A, Tribunal Indore
This appeal at the instance of assessee pertaining to Assessment Year 2007-08 is directed against the order of Pr. Commissioner of Income Tax-2, Bhopal, (in short ‘Pr. CIT’), dated 31.07.2018 framed u/s 263 of the Income Tax Act 1961(hereinafter called as the ‘Act’).
2. Brief facts of the case as culled out from the records are that the assessee is a Private Limited Company engaged in Manufacturing of Papers. Return of income filed on 31.10.2007 declaring income at Rs.Nil. Case selected for scrutiny and assessment u/s 143(3) of the Act framed on 31.12.2009. The Learned Assessing Officer ( in short Ld. AO) while framing the assessment order made on addition towards unexplained creditors at Rs.34,22,380/- treating them as bogus creditors. However, income assessed at Rs. Nil as the assessee has accumulated losses and Ld. AO allowed the set off brought forward loss of earlier years at Rs.54,00,565/- as against Rs 19,78,185/- claimed by the assessee.
3. Against this addition assessee preferred an appeal before the Ld. CIT(A) but partly succeeded. Against the order of Ld. CIT(A) dated 02.01.2014 both the assessee and revenue came in appeal before the Tribunal and vide order dated 05.10.2015 in ITANo.248 &226/Ind/2014,Tribunal restored the issue of verification of genuineness of five creditors to the file of the Ld. AO with a direction that the assessee shall provide correct address ad details. Necessary verification shall be made by the Assessing Officer to test the genuineness of the creditors totalling to Rs.10,73,727/-
4. In compliance to the directions given by the Tribunal vide order dated 05.10.2015. Ld. AO carried out the proceedings u/s 143(3) r.w.s. 254 of the Act and vide order dated 28.11.2016 confirmed the addition of Rs.10,19,818/- pertaining to 4 creditors holding them to be non-genuine.
5. Ld. Pr. CIT-2 invoked the powers vested with her u/s 263 of the Act and held that the order of the Ld. AO framed u/s 143(3) r.w.s 254 of the Act dated 28.11.2016 is erroneous and prejudicial to the interest of revenue as the Ld. AO has not made any inquiry, about the application of provisions of u/s 115JB of the Act for computing tax on Book Profit and directed the Ld. AO to frame assessment afresh in pursuance to the order u/s 263 of the Act.
6. Now, the assessee is in appeal before the Tribunal challenging the order of Ld. Pr. CIT framed u/s 263 of the Act raising following grounds of appeal:
“1. That on the facts and in the circumstances of the case of the assessee, the order passed by the ld. CIT is barred by limitation.
2.That on the facts and in the circumstances of the case of the assessee, the Ld. CIT(A) was not justified in holding that the order passed by the AO is erroneous and prejudicial to the interest of the revenue.
3. That on the facts and in the circumstances of the case of the assessee, the Ld. Commissioner of Income Tax(A) was not justified in holding that the provisions of section 115JB are applicable in the case of the assessee.”
7. At the outset, Ld. counsel for the assessee submitted that the impugned order u/s 263 of the Act passed by Ld. Pr. CIT is barred by limitation and also exceeds the jurisdiction because the order framed by the ld. AO u/s 143(3) r.w.s 254 of the Act was for the limited purpose of adjudicating the issues of examining genuineness of five sundry creditors as per direction given by the Tribunal vide order dated 05.10.2015. There was no occasion with the Ld. AO to examine any other aspect other than to make compliance to the direction given in the order of the Tribunal. He further submitted that as regards original assessment framed u/s 143(3) of the Act dated 31.12.2009, time limit to frame the order u/s 263 of the Act stood expired on 31.03.2012 as per the provisions u/s 263(2) of the Act. He, therefore, prayed that the impugned order u/s 263 of the Act may be quashed.
8. Per contra, Learned Departmental Representative (Ld. DR) vehemently argued supporting the order of Pr. CIT.
9. We have heard rival contentions and perused the records placed before us. The sole issue raised by the assessee is