TaxTMI 
TaxTMI 
2017 (6) TMI 870
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....ssessee filed its return of income u/s 153C for the assessment years 2009-10 and 2010-11. For the assessment year 2011-12, the assessee had filed regular return of income u/s 139 of the Act. The assessment order for the assessment years 2009-10 and 2010-11 were passed u/s 143(3) r.w.s 153C of the Act. For the assessment year 2011-12, the assessment order was passed u/s 143(3) of the Act. During the course of assessment proceedings, the Assessing Officer accepted the income returned by the assessee without making any further addition. 3. The Commissioner of Income Tax invoked revisional jurisdiction and issued notice dated 20.03.2015 u/s 263 of the Act for the assessment years 2009-10 to 2011-12. Thereafter, the Commissioner of Income Tax vide order dated 27.03.2015 common for all the three assessment years under appeal held that assessment order passed u/s 143(3) r.w.s 153C of the Act for the assessment years 2009-10 and 2010-11 and assessment order u/s 143(3) of the Act for the assessment year 2011-12 are erroneous and prejudicial to the interest of Revenue and set aside the same. The Commissioner of Income Tax further directed the Assessing Officer to frame assessments after mak....
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.... examined before passing of assessment orders. 5.1 The ld. AR made multiple submissions assailing the order of Commissioner of Income Tax (Appeals). The ld. AR submitted that no incriminating material was found during search against the assessee. It is a well settled law that when there is no incriminating material, no addition can be made. In support of his submission, the ld. AR placed reliance on the following decisions: I) CIT V/s. Sinhagad Education Society reported in 378 ITR 84 II) CIT V/s. Central Ware Housing Corporation (Nhava-sheva) reported in 374 ITR 645 The ld. AR contended that transactions found in the documents seized during search have already been reflected in the books of account of the assessee and hence, no further addition was made by the Assessing Officer during assessment. Further, to buttress his submissions, the ld. AR placed reliance on the decision of Co-ordinate Bench of the Tribunal in the case of Dr. D.Y Patil Pratisthan V/s. DCIT in ITA No. 1586/PN/2011, Assessment year 2000-01 decided on 07.09.2012. 5.2 The next submission of the ld. AR is that the Assessing Officer during the course of assessment proceedings had made enquiries with respect ....
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....ce u/s 263 of the Act for invoking revisional jurisdiction were very limited. While passing order u/s 263 of the Act, the Commissioner of Income Tax has gone much beyond the reasons for exercising revision power. Thus, the Commissioner of Income Tax has erred in travelling beyond show cause notice issued u/s 263 of the Act. In support of his contentions the ld. AR placed reliance on the decision of Hyderabad Bench of the Tribunal in the case of K. Sudhakar Reddy V/s. AITO in ITA No. 624/HYD/2010 decided on 07.11.2012. 6. On the other hand, Shri Shashi B. Prasad representing the department vehemently supported the action of Commissioner of Income Tax in invoking revisional powers u/s 263 of the Act. The ld. D.R. submitted that Assessing Officer has not conducted any enquiry with respect to incriminating documents seized during search from the premises of M/s ABL. The Commissioner of Income Tax (Appeal) has given specific instances to show that payment made by M/s ABL to assessee, were received back by M/s ABL in the form of loan and advances. The ld. DR further submitted that contract agreement between M/s ABL and the assessee was signed by one Shri Sanjay Kankariya on behalf of th....
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....he said notice, the assessee filed return of income declaring income as was returned in the original return of income filed u/s 139 of the Act. The contention of the assessee is that assessee has already disclosed the amounts in its return of income as has been found in the documents seized from the premises of M/s ABL. The ld. AR has challenged the invoking of jurisdiction u/s 263 by the Commissioner of Income Tax by raising four objections. i) Since no incriminating material was found during search from the premises of M/s ABL, therefore, no addition can be made in the hands of the assessee. ii) The Assessing Officer had made detailed enquiries at the time of assessment by issuing questionnaire twice which was duly replied by the assessee hence it cannot be said that there was 'lack of enquiry', at the best it can be a case of 'inadequate enquiry'. iii) The Commissioner of Income Tax has enlarged the scope of enquiry. The Commissioner of Income Tax has gone beyond the notice issued u/s 263 of the Act while passing revision order. iv) The Commissioner of Income Tax has erred in remitting the matter back to the Assessing Officer for conducting roving and fishing enquiry and....
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....d the assessment erroneous in so far as it is prejudicial to the interest of Revenue." A perusal of the above notice reveals that the Commissioner of Income Tax is of the opinion that proper enquiry was not conducted by the Assessing Officer with respect to the documents found during the course of search at the premises of M/s ABL. The apprehension of Commissioner of Income Tax that income of the assessee has escaped assessment arises from the fact that the assessee has claimed huge expenditure. The Commissioner of Income Tax at the time of passing of the order u/s 263 has mentioned certain instances which according to the Commissioner of Income Tax raises an eye of suspicion over the manner in which the assessee has conducted its business and the association of assessee with M/s ABL. 9. A perusal of the documents on record reveal that the questionnaire was issued to the assessee during the course of assessment proceedings for the years 2005-06 to 2011-12. The first questionnaire was issued to the assessee by the Assessing Officer on 27.11.2012. The assessee gave detailed reply to the questionnaire on 11.12.2012 and 14.12.2012. The reply of the assessee is at page No. 6 to 10 of....
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....gh Court in the case of CIT V/s. Nirav Modi (supra) has held that if during assessment proceedings queries were raised and the assessee has responded to the same, then even if an assessment order does not mention the same, it does not mean that Assessing Officer has not applied his mind to the issues. The relevant extract of the judgment reads as under: "7. Firstly, the Revenue contends that the exercise of powers under Section 263 of the Act is justified as in this case, as no inquiry in respect of the gifts received during the subject years was done by the Assessing Officer for the Assessment orders for Assessment Years 2007-08 and 2008-09. This according to the Revenue is evident from the Assessment Orders dated 31st December, 2009 and 30th December, 2010 which does not even make a mention of the gifts received much less discuss and/or deal with the same. This issue is no longer res integra as this Court in Idea Cellular Ltd. v. Dy. CIT [2008] 301 ITR 407 ( Bom.) has held that if during Assessment proceedings queries were raised and the assessee responded to the same, then even if an Assessment order does not mention the same, it does not mean that the Assessing Officer has no....
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....done by the Assessing Officer to find out whether the donor Mr Deepak Modi (father) had received money from M/s. Chang Jiang as claimed. Nor any inquiry was done to find out whether the sister had in fact earned amounts on account of Foreign Exchange Transactions as claimed by her. We find that this enquiry of a source of source is not the requirement of law. Once the Assessing Officer is satisfied with the explanation offered on inquiry, it is not open to the CIT in exercise of his revsional powers direct that further enquiry has to be done. At the very highest, the case of the Revenue is that this is a case of inadequate inquiry and not of "no enquiry." It is well settled that the jurisdiction under Section 263 of the Act can be exercised by the CIT only when it is a case of lack of enquiry and not one of inadequate enquiry. This view has been taken by this Court in the matter of CIT v. Shreepati Holdings & Finance (P.) Ltd. [ITA 1879 of 2013 dated 5th October, 2013], by the Delhi High Court in CIT v. Vikas Polymers [2012] 341 ITR 537/194 Taxman 57 and in D.G. Housing Projects (supra). In fact the Delhi High Court in D.G. Housing Projects (supra) while so holding placed reliance ....