- (1.) This order shall dispose of a bunch of seven appeals bearing I.T.A. Nos. 360, 362 of 2011, 167, 246, 299, 300 and 301 of 2012 as, according to the learned counsel for the appellant, similar issue arises in these appeals. For brevity, the facts are being taken from I.T.A. No. 360 of 2011. This appeal has been filed by the Revenue under section 260A of the Income-tax Act, 1961 (in short "the Act"), against the order dated June 24, 2011 (annexure A-IV), passed by the Income-tax Appellate Tribunal, Chandigarh Bench "A", Chandigarh (hereinafter referred to as "the Tribunal"), in I.T.A. No. 1048/Chandi/2008 (ITO v. Arora Alloys Ltd,2011 12 ITR 263) for the assessment year 2005-06 claiming the following substantial questions of law : "(i) Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal has erred in law in cancelling the order dated November 20, 2008, of the Commissioner of Income-tax-I, Ludhiana, passed under section 263 of the Income-tax Act, 1961, which was solidly based on the information received from the Central excise authorities is well as the facts and circumstances narrated in detail in paragraphs 3 and 4 of the impugned order? (ii) Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal has erred in law in cancelling the order under section 263 ignoring its own opinion expressed in this combined order related to I.T.A. No. 319/Chandi/2008 : assessment year 2004-05 in paragraph 18, 'As held by the hon'ble High Court (reproduced supra), proceeding under the Central Excise Act have relevance only for formation of opinion of escapement of income and, thereafter, the income-tax authorities have to independently finalise the reassessment irrespective of the final view in excise proceedings' when such is the legal position then, why his considered opinion about an order being 'erroneous and in so far as prejudicial to the interests of the Revenue' has been given no weightage in the impugned order?"
(2.) Put shortly, the facts necessary for adjudication of the instant appeal as narrated therein are that the assessee is engaged in the business of manufacturing of non-alloys Steel ingots, trading in scrap, etc., and filed its return on October 24, 2005, for the assessment year 2005-06 declaring nil income. The assessment was framed under section 143(3) of the Act, vide order dated December 31, 2007 (annexure A-I) at an income of Rs. 60,410. On March 25, 2004, an inspection was conducted by the team of the Central Excise Department in the business premises of the assessee. On the basis of the information received from the Central Excise Department, the Commissioner of Income-tax ("the CIT"), vide order dated November 20, 2008 (annexure A-II), passed under section 263 of the Act held the order of the Assessing Officer to be erroneous and prejudicial to the interests of the Revenue. The Commissioner of Income-tax set aside the assessment order to be framed de novo on the issue of the installed capacity of the furnace, unrecorded purchase of raw material, production of ingots and sale of the same out of books of account. The assessment de novo was to be framed after taking into consideration the statement of Shri Harmesh Arora, Director before the Central excise authorities who admitted the capacity of furnace to be 5 metric tonnes instead of 4 metric tonnes per heat vide which it was concluded that the assessee had produced 624 metric tonnes of non-alloys ingots from December, 2003, to March 24, 2004, on the basis of the capacity of furnace hut not recorded in the books of account. In compliance with the order dated November 20, 2008 (annexure A-II), the Assessing Officer, vide order dated December 31, 2009 (annexure A-III) assessed the income of the assessee at Rs. 5,27,74,260 and made additions of Rs. 1,77,48,529 on account of unexplained sales and Rs. 3,49,65,324 on account of unexplained purchases. Feeling aggrieved against the order of the Commissioner of Income-tax under section 263 of the Act, the assessee filed an appeal before the Tribunal. The Tribunal, vide order dated June 24, 2011 (annexure A-IV) allowed the appeal and cancelled the order passed by the Commissioner of Income-tax under section 263 of the Act. In view of cancellation of order of the Commissioner of Income-tax under section 263 of the Act by the Tribunal, the appeal of the assessee against the assessment order was allowed by the Commissioner of Income-tax (Appeals) which was upheld by the Tribunal. Hence, the present appeals by the Revenue. I.T.A. No. 360 of 2011 raises issue relating to validity of proceedings initiated under section 263 of the Act whereas I.T.A. No. 246 of 2012 is regarding assessment order passed in pursuance of the order under section 263 of the Act for the assessment year 2005-06. I.T.A. No. 362 of 2011, I.T.A. No. 299 of 2012, I.T.A. No. 300 of 2012, I.T.A. No. 167 of 2012 and I.T.A. No. 301 of 2012 concern assessment years 2004-05, 2006-07, 2007-08, 2008-09 and 2009-10, respectively.
(3.) In I.T.A. No. 246 of 2012, the following substantial questions of law have been claimed : "(i) Whether, on the facts and in law, the hon'ble Income-tax Appellate Tribunal was justified in deleting the additions made by the Assessing Officer of Rs. 1,77,48,529 and Rs. 3,49,65,394 on account of unexplained sales and unexplained purchases without deciding the issue on the merits of the case? (ii) Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal was justified in dismissing the appeal of the Revenue merely relying upon the submission of the assessee's authorised representative that the order passed by the Commissioner of Income-tax-I, under section 263 has been cancelled by the hon'ble Income-tax Appellate Tribunal whereas the decision of the hon'ble Income-tax Appellate Tribunal has not been accepted by the Revenue and has filed an appeal before the hon'ble Punjab and Haryana High Court against the cancellation of the order under section 263?";