आयकर अपील(cid:10)य अ(cid:11)धकरण,च(cid:16)डीगढ़ (cid:20)यायपीठ, च(cid:16)डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील स.ं/ ITA No. 206/CHD/2023 (cid:13)नधा(cid:17)रण वष (cid:17) / Assessment Year: 2018-19 Hemant Fabrics Pvt.Ltd., The PCIT, C-95, Mahendru Enclave, Vs Panchkula.

G.T.Karnal Road, New Delhi.

(cid:22)थायी लेखा स.ं /PAN NO: AADCM2810N अपीलाथ(cid:26)/Appellant (cid:27)(cid:28)यथ(cid:26)/Respondent Assessee by : Shri Ajay Jain, C.A.

Revenue by : Shri Rohit Sharma, CIT DR Date of Hearing : 05.03.2025 Date of Pronouncement : 25.03.2025 HYBRID HEARING O R D E R PER RAJPAL YADAV, VP The present appeal is directed at the instance of the assessee against the order of the ld. Commissioner of Income Tax ( in short ‘CIT’ ) dated 22.03.2023 passed under Section 263 of the Income Tax Act, 1961 in assessment year

2018-19.

2. The assessee has taken three grounds of appeal, however its grievance revolves around a single issue namely, ld. CIT has erred in taking cognizance under Section 263 of the Income Tax Act and thereby setting aside the assessment order dated 10.06.2020 passed under Section 143(3) of the Income Tax Act in assessment year 2018-19.

3. The brief facts of the case are that assessee has filed its return of income on 04.10.2018 declaring taxable income of Rs.30,64,460/-. The case of the assessee was selected for scrutiny assessment and a notice under Section 143(2) was issued and served upon the assessee. A survey under Section 133A of the Income Tax Act was carried out at the business premises of the assessee on 01.11.2017. The assessee has surrendered an income of Rs.25 lacs which was included in the return of income. The ld. AO issued notices under Section 142(1) on 20.01.2020, 18.02.2020 and 18.05.2020. Thereafter, he has passed the assessment order on 10.06.2020. The AO has accepted the returned income after satisfying himself with the replies of the assessee on the queries raised in its notices.

4. The ld. CIT perused the assessment record and formed an opinion that assessment order is erroneous as much as it has caused prejudice to the interests of Revenue. He issued a Show Cause Notice under Section 263 on 06.03.2024. The copy of the Show Cause Notice has been placed on page No. 19 to 24 of the Paper Book. A perusal of its Show Cause Notice would indicate that ld. CIT termed the assessment order as suffering from error on account of three issues, namely ;

a) No enquiry on the alleged shortage of stock found during the course of survey.

b) No enquiry on the alleged shortage of cash unearthed during the course of survey.

c) The AO did not conduct enquiry on certain discrepancies noticed in digital record maintained by the assessee which has been summarized in the Show Cause Notice from page No. 3 to 6.

5. The assessee has filed a detailed reply qua all the issues and relevant part of the reply has been reproduced by the ld. CIT on page Nos. 6 to 11 of the impugned order. The ld. CIT, thereafter, rejected the explanation of the assessee and set aside the assessment order by recording following findings :

“4. I have considered the reply of the assessee to the Show Cause Notice under Section 263 of the Act and the assessment records.

(a). In his reply to the Show cause notice u/s 263 reproduced in pare 2 above, the assessee has furnished only a general reply. No reply has been filed to specific issues raised at points (iii), (iv), (v), (v), (vi) and (vii) of the SCN. It is, therefore, held that the assessee has nothing to show that these issues were in any manner examined by the AO during assessment proceedings or that these were explained by the assessee at his own end.

(b). A reference to the ITR, Trading Account, P & L account, Computation of Total Income and the Audit report filed by the assessee does not shows where the surrender amount of Rs. 25,00,000/- has been credited by it/ entered in the b