2017 (1) TMI 1387

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....ing the Notice inspite of the fact that Scrutiny assessment u/s. 143(3) r.w.s. 153C of the Income Tax Act, 1961 has been completed by the DCIT Central Circle - 1(3), Bangalore after duly examining and considering facts while framing the assessment order U/s 143 (3) r.w.s. 153C of Income Tax Act, 1961. The Hon'ble CIT has erred in raising the issues and making rowing enquiries in the Proceedings U/s 263 of the Income Tax Act, 1961, Further Order U/s 263 is also passed without any conclusion merely setting aside the assessment to the file of the learned assessing officer which is unjustified. It is therefore submitted that the order passed U/s 263 should be cancelled. Without prejudice to ground No. 1. The CIT has mentioned that M/s. ST....

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....s. 35 lakhs including bank statements, loan accounts, confirmation, etc. However, Ld. Principal CIT, without bringing on record how the order passed by the AO was erroneous, has set aside the assessment order. It was submitted that proceedings u/s 153C were initiated for examining the seized material from the office premises of M/s Convention Hotels Pvt Ltd. The satisfaction did not include any mention about impugned loan received from M/s STI Products Pvt Ltd. Thus, it was beyond the jurisdiction of the AO to examine this loan. Under these circumstances, it cannot be said that order passed by the AO was erroneous or prejudicial to the interest of Revenue. Therefore, Ld. Principal CIT could not have exercised his jurisdiction to invoke sect....

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....573 (Del). 4. Under these circumstances, when the AO himself did not have the jurisdiction to examine the said loan, then how the Ld. Principal CIT can take a view that non examination of loan by the AO made the assessment order as erroneous and prejudicial to the interest of Revenue. It is noted by us that the legal position has also been clarified in this regard by the co-ordinate bench of Mumbai Bench in the case of Jitendra Mehta (supra) by observing as under:- "4. We have heard both the parties and their contentions have carefully been considered. Relevant portion of the order of Ld. CIT(A) has already been reproduced in which he has dealt with the contention of the assessee that assessment order cannot be considered to be erroneous....