Income Tax Appellate Tribunal Cochin V Guard Industries Limited, Vennala vs The Principal Commissioner Of Income ... on 20 March, 2023 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Sanjay Arora, Accountant Member and Shri Sandeep Gosain, Judicial Member ITA No. 63/Coch/2022 (Assessment Year: 201617) VGuard Industries Ltd. Principal CIT1, 42/962, Vennala High School C R Building, I S Press Road, vs. Road, Vennala, Kochi 682018 Ernakulam 682028 [PAN: AAACV5492Q] (Appellant) (Respondent) Appellant by: Shri Anil D. Nair, Advocate Respondent by: Shri Prashant V.K., CITDR Date of Hearing: 01.02.2023 Date of Pronouncement: 20.03.2023 ORDER Per: Bench This is an Appeal by the Assessee challenging the revision of it's assessment under section 143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) dated 28/12/2018 for Assessment Year (AY) 201617 by the Principal Commissioner of Income Tax1, Kochi ('Pr. CIT' for short) vide order u/s. 263 dated 22/03/2021. 2. The appeal, filed on 08/03/2022, though delayed by 256 days, was admitted in view of the blanket condonation by the Apex Court in Suo Motu WP(C) No.3/2020, dated 10/01/2022, excluding the period from 15/3/2020 to 28/02/2022 in reckoning the delay in computing limitation under law, and the hearing accordingly proceeded with. The assessee is a company manufacturing electrical cables, pumps, solar water heaters, etc., and trading in electrical and electronic goods. Revision of it's impugned assessment is on several issues on which the revisionary authority found an absence or lack of enquiry by the Assessing Officer 2 ITA No. 385/Coch/2020 M/s. Kunnummakkara Service/Income Tax Officer, W(2)(2) (AO), necessitating restoration back to his file for the said verification and examination, holding as: '6.4 From the above discussion, it is clear that the Assessing Officer in the impugned assessment order has incorrectly assumed the facts of the case and has incorrectly applied the law as applicable to the issues at hand. He has failed to take note of the salient aspects of the case and has passed the assessment order without application of mind and without making any enquiry whatsoever and in my view has committed an error in the assessment which is also prejudicial to the interests of the revenue. Therefore, I hold that the AO has passed an erroneous order which is prejudicial to the interests of the revenue.' 3. At the outset, Shri Nair, the ld. counsel for the assessee, would submit that he would proceed qua each of the 07 issues raised vide the impugned order for verification by the AO in the set aside proceedings, demonstrating of the same having been in fact already considered by the AO in assessment, so that the revision was impermissible in law in the facts and circumstances of the case. We consider this as apposite, and adopt the same manner for adjudication purposes; the assessee having raised corresponding Grounds of Appeal. Gd. 1, though is general in nature, making an omnibus claim as to the various issues raised by the Pr. CIT as having been already enquired into by the AO. The same, even as remarked by the Bench during hearing, would necessarily require us to visit each of the issues separately. Shri Nair would for the purpose take us in the main through the assessee's reply during assessment proceedings (PB4, pgs.2122, 23 36); the showcause notice u/s. 263 dated 03/02/2021 (PB2, pgs.328329); and the assessee's reply dated 22/02/2021 (PB2, pgs.330358). 4.1 Issue # 1: Difference in stock reporting The issue stands delineated by the ld. Pr. CIT, thus: 'In the ITR, part AQDQuantitative Units given for different products are identical, i.e., 107 units, 102 kgs, etc. AO has omitted to notice this. He has also not noticed that there is excess stock reported for raw materials Copper and PVC.' With reference to the assessee's tax audit report in Form 3CD (PB2, pgs.370 371, 3 ITA No. 385/Coch/2020 M/s. Kunnummakkara Service/Income Tax Officer, W(2)(2) 413), reflecting the quantitative details as to consumption, production, and yield, it was shown to us by Sh. Nair that there is no inconsistency in, nor any excess, stock. There is, on the contrary, loss in manufacturing, which, at 1%, was normal