TaxTMI 
TaxTMI 
2015 (10) TMI 2552
X X X X Extracts X X X X
X X X X Extracts X X X X
....for the A.Y. 2011-12, which was processed u/s 143(1) on 14/03/04. Assessee's case was selected for scrutiny under CASS and accordingly notice u/s 143(2) dated 23/09/2013 was issued and duly served on the assessee. In response to notices u/s. 143(2) and 142(1), assessee's AR appeared and filed details. 3.1 The assessee company carried on business mostly of railways contracts of South Central Railway. During the year the assessee had received an amount of Rs. 2,89,69,203/- towards the gross work bills. All the works were executed by the assessee directly. 3.2 The assessee claimed current year loss of Rs. 94;32,045/- for the Asst. Year 2011-12. On perusal of the books of accounts and its supporting vouchers, AO noticed that the vouchers ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The adopt ion of Rs. 2,89,69,203/- as gross receipts was not correct Since, the P & L account and Balance Sheet submitted along with Return of Income was an audited account of the Company and the same has to be taken into the account for the Tax Assessment . Whereas. the P & L account submitted on 3rdt March, 2014 was not an audited account and hence putt ing reliance on this account is not in order. The Assessing Off icer failed to adopt the gross receipts of Rs. 9.98,15,051/- as against Rs. 2,89,69,203/- and the balance amount of Rs. 7,37.84,916/- is taxable. 4.1 Accordingly, notice u/s 263 was issued to assessee on 26/12/2014 requiring assessee to show cause as to why the assessment should not be revised or set aside. 4.2 In response....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the Hon'ble Supreme Court in case of Goetz India Ltd., [2006] 284 ITR 323 (SC). Pr. CIT further observed as under: "7............If the AO has not taken proper view based on the facts of the case, the Pr. CIT has every power to set aside such an assessment with a direction to redo the same as per the law. In the instant case, the AO totally failed to consider the gross contract receipts declared by the company and neglected in its audited reports and proceeded to compute the income based on revised computation filed in the assessment proceedings, which does not have any authenticity and credibility." 5. Aggrieved by the order of Pr. CIT passed u/s 263 of the Act, assessee is in appeal before us. 6. Ld. AR submitted that assessee is en....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is erroneous and after reaching this conclusion, he derives jurisdiction to pass an order under s. 263 only if he further considers it to be prejudicial to the interests of the Revenue. In other words, the two conditions must be satisfied before the CIT can exercise the powers under s. 263, namely, the order of the assessing authority must be found to be erroneous and further it must also be found to be prejudicial to the interests of the Revenue. Unless both the conditions are satisfied, the CIT does not get jurisdiction to pass an order under s. 263 revising the assessment order. It is not necessary that every order which is found erroneous is also prejudicial to the interests of the Revenue. What is meant by the words "prejudicial to th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....made thereon. The two questions are interlinked and the authority exercising the powers under s. 263 is under an obligation to consider the entire material about the existence of income and the tax which is realisable in accordance with law and further what tax has in fact been realised under the alleged assessment orders. The CIT had not addressed himself to this relevant inquiry and the Tribunal was right in coming to the conclusion that if the order of the CIT is allowed to stand, it would result in double taxation of the very income which is quite contrary to the scheme of the Act and which is never the purpose of exercise of powers under s. 263. Even the CIT has not found that permitting the assessment order passed in respect of the as....