TaxTMI 
TaxTMI 
2016 (7) TMI 207
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....etermining total income at Rs. 27,42,717/- against return income of Rs. 20,04,169/-. The assessee filed appeal before the C.I.T. (A)- XXXII Kol against the said order of the A.O. on 03/02/2011. 4. On 06/11/2012 the Administrative C.IT.- XVII Kolkata issued a notice U/s. 263 of the I.T. Act proposing to issue direction as the assessment order passed U/s.144 on 31/12/2010 was considered by her as erroneous and prejudicial to the interest of revenue. The C.I.T.-XVII Kol further stated in the notice that closing balance of advance as per Balance Sheet ended on 31/03/2008 was Rs. 2,88,21,596/- and no details of such advances were filed during assessment proceeding. According to her the said advance was actually not utilized in the business activity, rather it was utilized for investment and the A.O. had not examined the issue at all. 5. In reply to the show cause notice, the assesee stated that the said advance was originally received in Asst Year 1999-2000 and was carried forward from earlier years and accordingly the same cannot be taxed as income of Asst Year 2008-09. It was submitted that the said advance was received by the assessee during Asst Year 1999- 2000 and the same wa....
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....es leave to adduce additional grounds and / or to amend or alter or withdraw any of the foregoing grounds before or at the time of hearing of the appeal." 8. The ld. AR also placed the details of advance position appearing in the balance sheets as below:- 31.3.2005 (AY 2005-06) Rs. 3,01,71,816 31.3.2006 (AY 2006-07) Rs. 2,89,30,431 31.3.2007 (AY 2007-08) Rs. 2,88,97,095 31.3.2008 (AY 2008-09) Rs. 2,88,21,596 It was further stated that the final left over advance received for construction activity amounting to Rs. 50,75,641/- has been duly taxed by the ld. AO in Asst Year 2005-06 vide order passed u/s 143(3) dated 24.12.2007. He also placed the copies of various balance sheets commencing from Asst Years 1999-2000 to 2005-06 to show that the advances have been gradually decreasing over the years. He also placed on record the copies of various scrutiny assessment orders to prove his contentions that the advances received has been taxed on piecemeal basis based on estimation of net profits in earlier years. It was argued that since the entire advance relatable to construction activity had been already taxed in the earlier years , there is nothing left out ....
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....ated by the assessee and in the light of earlier tribunal decisions in assessee's own case. Hence no prejudice or harm is caused to the assessee by this direction and accordingly argued that the ld. CIT had rightly invoked his revisionary jurisdiction u/s 263 of the Act. 10. In defence, the ld. AR argued that the framing of assessment u/s 144 of the Act is also one of the recognized modes of assessment prescribed under the statute and no shelter can be taken by the revenue that the issues were not properly examined in the said section 144 assessment. He argued that there is absolutely no element of income involved in the entire gamut of transactions that could get taxed in Asst Year 2008-09 as the advance received had already been taxed in the earlier years upto Asst Year 2005- 06. He accordingly prayed for quashing of the section 263 order. 11. We have heard the rival submissions and perused the materials available on record. The facts stated hereinabove are not reiterated for the sake of brevity. We find that in the instant case, the ld. CIT had not made any enquiry to arrive at a prima facie conclusion that the order passed by the ld. AO is erroneous. He simply passed on t....
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....eceived to its income, it could be seen beyond doubt that no concealment of income towards advance received has been made thereon. Hence the action of the assessee and consequential order passed by the ld. AO for Asst Year 2008- 09 cannot be treated as prejudicial to the interests of the revenue. We hold that the ld. CIT had only tried to initiate proceedings with a view to start fishing and roving enquires in matters or orders which are already concluded. 11.3. We find that the entire revision proceedings had been triggered merely on the basis that the advances received were remaining outstanding in the balance sheet as on 31.3.2008. This might at best could be construed only as an error committed by the assessee in his books. But that does not make the order of the ld. AO erroneous. In these circumstances, it could only be inferred that the ld. AO had taken one of the possible views by duly appreciating the contentions of the assessee that the advance received had already been taxed in the earlier years and he had rightly not brought the same to tax in the assessment even though the same is framed u/s 144 of the Act. 11.4. We find that the reliance placed on the following d....
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....e interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law." CIT vs Gabriel India Ltd reported in (1993) 203 ITR 108 (Bom) The power of suo motu revision under sub-section (1) of. section 263 of the Income-tax Act, 1961, is in the nature of supervisory jurisdiction and can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise the power of revision under this sub-section. Viz., i) the order should be erroneous and (ii) by virtue of the order being erroneous prejudice must have been caused to the. interests of the Revenue. An order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him. the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income tax Officer, who passed the order, unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Of....