TaxTMI 
TaxTMI 
2015 (12) TMI 1743
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....e assessee at Rs. 4,84,82,800/- vide order dated 30-12-2010. The Commissioner of Income Tax invoked his jurisdiction u/s. 263 and issued notice to the assessee on 03-05-2011 for the impugned assessment year. The assessee filed reply to the said notice on 21-07-2011. Thereafter, the Commissioner of Income Tax passed the impugned order setting aside the assessment order dated 30-12-2010 and directed the Assessing Officer to pass fresh assessment order. Aggrieved by the order of Commissioner of Income Tax passed u/s. 263, the assessee is in appeal before the Tribunal. 3. Shri Shri Ketan Ved appearing on behalf of the assessee submitted that the Commissioner of Income Tax has erred in invoking the jurisdiction u/s. 263 without any substance and material. The ld. AR submitted that a perusal of show-cause notice which is at pages 83 to 85 of the paper book would show that the only reason for initiating proceedings u/s. 263 by the Commissioner of Income Tax is that the assessment order has been passed without making proper enquiry. The Commissioner of Income Tax has erred in holding that the assessment order was passed without proper enquiry as the issues raised by the Commissioner ....
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.... "the Dy. Commissioner of Income Tax has pointed out the following deficiencies in the assessment order". Thereafter, the Commissioner of Income Tax has merely reproduced the alleged shortcoming pointed out by Dy. Commissioner of Income Tax. As per the provisions of section 263 the Commissioner of Income Tax has to form independent opinion that the order passed by the Assessing Officer is erroneous as well prejudicial to the interest of the Revenue. To substantiate his contentions the ld. AR placed reliance on the decision of Mumbai Bench of the Tribunal in the case of Vinay Pratap Thacker, Vs. Commissioner of Income Tax in ITA No. 2939/Mum/2011 decided on 27-02-2013. The ld. AR further submitted that the Commissioner of Income Tax cannot assume jurisdiction u/s. 263 of the Act only on the ground of inadequate enquiry. The provisions of section 263 cannot be invoked to make a mere fishing and roving enquiry. In support of this argument, the ld. AR draws attention to the decision of Ahmedabad Bench of the Tribunal in the case of M/s. J B Experts Vs. Commissioner of Income Tax in ITA No. 1646/Ahd/2010 decided on 16-12-2010 and the decision of Hon'ble Calcutta High Court in the ca....
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....ommissioner of Income Tax has also raised doubt over genuineness and admissibility of travelling expenses Rs. 33,91,004/- and rent paid Rs. 17,50,680/-. Both these issues were discussed by the Assessing Officer at the time of assessment proceedings. The assessee had given the details of all these expenditure including the traveling expenses and the rent paid. Therefore, the observations of the Commissioner of Income Tax that the aforesaid expenditure have been allowed without proper enquiry or without any basis is wrong. The ld. AR prayed for setting aside the impugned order. 4. On the other hand Shri S.K. Rastogi representing the Department vehemently supported the impugned order. The ld. DR submitted that the Assessing Officer has simply collected the information and thereafter has not applied his mind thereon. There is no discussion by the Assessing Officer in the order with regard to issues highlighted by the Commissioner of Income Tax. This clearly shows that the Assessing Officer has not applied his mind on the issues raised by the Commissioner of Income Tax in revision proceedings. The Commissioner of Income Tax is justified in invoking the provisions of section 263 of th....
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....ion The AO has taken this amount at Rs. 3,36,334/-. This has resulted into short disallowance of Rs. 11,81,094. ii. Your company claimed Rs. 88,21,760/- on account of commission. No enquiry was carried out in this regard before accepting the claim. Your company had hardly any business activity during the year and income earned was mostly from other sources. It is also observed from the Balance-sheet that a sum of Rs. 1,91,57,738/- is shown as outstanding on account of commission. In view of the fact that your company had little business activity, the genuineness of commission expense needed verification more so in view of the fact that provisions made in the pass have mostly remained unpaid. iii. Your company claimed an amount of Rs. 42,00,500/- as incentive. Record; show that no verification of this claim was carried out to examine its genuineness and also its admissibility. Since your company had little business activity during the year, nature of the incentive expense and genuineness thereof was required to be inquired into which was not done. iv. Your company claimed to have paid Rs. 27,50,000/- as compensation to deceased employee. Records do not sho....
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....s invoked the provisions of section 263 on the proposal submitted by the Dy. Commissioner of Income Tax and deficiencies in the assessment order pointed out by the Dy. Commissioner of Income Tax. 6. As per the provisions of section 263 it is the Commissioner of Income Tax who has to examine the records and thereafter form an independent opinion that the order passed by the Assessing Officer is erroneous in so far as it prejudicial to the interest of revenue. In the present case we find that the Commissioner of Income Tax has not exercised his independent judgment for invoking revisional powers. For assuming the revisional jurisdiction, the Commissioner of Income Tax first has to call for the records of any proceedings under the Act and examine the same. After examining the records, if the Commissioner of Income Tax considers that the order passed by Assessing Officer is erroneous in so far as it is prejudicial to the interest of the revenue, he may issue show cause notice to the assessee. After giving an opportunity of hearing to the assessee and conducting enquiry as may be necessary, the Commissioner of Income Tax shall pass order as the case may be including enhancing or m....
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....ular assessment proceedings and thereafter an audit objection was raised, which was used by the AO to convince the CIT to invoke his jurisdiction under section 263. When we read the section, which reads, as, "(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment". This clearly shows, that the CIT must himself come to a conclusion, after applying his own mind, because, the words used in the section are,"..... and if he considers .....", here, application of his own mind becomes important. It is important to examine the similarity of the expression used under section 147(1) and 263(1). Under section 147(1), the expression used is "has reason to believe" and unde....