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2018 (4) TMI 986
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....onation petition before the Tribunal to condone the aforesaid delay. The ld. Counsel for the assessee, Shri S.K. Tulsiyan, has submitted before us that these assessee's are not much aware of the intricacy of income tax and thus, used to rely on the expert advice rendered by their Tax Consultants. Later, on an advice from a senior lawyer, the assessee's came to know that the order of ld. Principal CIT u/s 263 of the Act is appealable before the Tribunal. Since, their earlier Authorized Representative/Tax Consultants had not intimated the assessee's about future course of action which needs to be taken against the said order u/s 263 of the Act, the assessee's did not prefer an appeal before the Tribunal. On advice from a senior lawyer, the assessee's came to know that the order u/s 263 is appealable and thereafter the assessee's handed over the relevant records to the senior lawyer who prepared the necessary documents for filing the appeal against the order u/s 263 and therefore, there was a delay about 211 days. The ld. DR opposed the admissions of appeal. According to him, Ignorantia juris non excusat" i.e. ignorance of law is not an excuse. According to ld. CITDR, the assessee ....
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....al already on record. 4. That the Ld. Pr. CIT under wrong notion has invoked provisions of sec.263 of the Act without considering that during search operation u/s.132 on two occasions, nothing incriminating was found and the impugned assessment u/s.153A/143(3) of the Act was made by the A.O. after making due verification and after being satisfied with the complete details and authentic documents of the share capital filed by the appellant. 5. That the impugned order passed by the A.O. originally being neither erroneous nor prejudicial to the interest of the revenue, the Ld. Pr. CIT wrongly invoked jurisdiction by making allegation which is not supported by any evidence or by law. 6. That, therefore, as the assessment order passed by the A.O. u/s.153A/143(3) of the Act is neither erroneous nor prejudicial to the interest of the revenue as there is no loss of revenue, the impugned order u/s.263 of the Act of the Ld. Pr. CIT directing to reframe the assessment as per his guidelines on the same set of facts and evidence on record being devoid of any merit and bad in law is liable to be quashed and the appellant be given such relief(s) as prayed for. ....
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....see before the AO in the assessment proceedings u/s 153A of the Act. The assessee submitted that during the assessment proceedings, the assessee has submitted bank statements, balance sheet, Profit & Loss A/c, Income Tax Return Acknowledgement, source of funds for two layers. During the proceedings before the ld. Principal CIT the assessee submitted that during the course of search action conducted on 02.03.2016 and also the earlier search action conducted 29.05.2012, in all the search actions, the Department did not find a single document from the premises of the assessee group evidencing that the assessee had in fact, paid cash for raising share capital. The assessee also submitted before the Pr. CIT that except the statement of some of the alleged accommodation entry operators, the investigation wing does not have a single document under its possession to prove its allegation that the share capital raised by the assessee company is accommodation in nature. Therefore, the assessee pleaded before the ld. Principal CIT that the order passed by the AO u/s 153A is neither erroneous nor prejudicial to the interest of the Revenue. 9. However, the ld. Principal CIT, having gone throu....
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....re operation which confirmed the findings of the Investigation Wing. The entry operators admitted to have provided accommodation entry in the form of share capital/premium to the Banktesh Group of Companies in lieu of commission. In view of the above discussion, the assessment completed on 30.03.2015 may be erroneous in so far as it is prejudicial to the interest of the revenue. You are, therefore, requested to show cause as to why the Assessment Order passed on 30.03.2015 u/s.153A by the DCIT, Central Circle 3(2), Kolkata should not be treated as erroneous in so far as it is prejudicial to the interests of the revenue as per the provisions of sec.263 of the Income Tax Act." 12. The ld. Counsel for the assessee drew our attention to following facts which are undisputed and important to adjudicate the issue. 1. Search & seizure operation u/s 132 was conducted on 29.05.2012 on Benktesh group and nothing incriminating was found. 2. Consequent upon the said search, the A.O initiated 153A proceeding on the appellant-company for A.Y 2009-10, which was an unabated year. He was thus not required to investigate further in relation to this unabated year....
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....he so-called entry operators were provided to the appellant to ensure authentication of documents collected at the back of the appellant. As a corollary, the appellant was denied to have any opportunity to cross-examine such deposed persons, whose statements were out rightly used against the appellant. Therefore, the whole exercise of the Ld. Pr. C.I.T. in having invoked jurisdiction u/s.263 of the Act is bereft of principle of natural justice. 16. Our attention was drawn to the decision of Hon'ble Allahabad High Court in the case of Vijay Kumar Sharma vs. Appropriate Authority (1996) 220 ITR 509 (AII). In that case, the notice issued by the Appropriate Authority did not refer to the material on which opinion was formed nor any document whatsoever was annexed to the SCN. It was thus held as under: "Held, on the facts, that the notice did not state that in the opinion of the appropriate authority, the fair market value of the property in question was 15 per cent more than the apparent consideration mentioned in the agreentent to sell between the parties nor did it refer to the material on which such an opinion was formed. No document whatsoever was annexed to this show-c....
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....r (page 438 of 6 RC) : "The Revenue has preferred an appeal from the order of the Tribunal setting aside the imposition of penalty under rule 173Q of the Central Excise Rules, 1944. The Tribunal has set aside the order of the Commissioner on the ground that neither the show-cause notice nor the order of the Commissioner specified which particular clause of rule 173Q had been allegedly contravened by the appellant. We are of the view that the finding of the Tribunal is correct. Rule 173Q contains six clauses the contents of which are not same. It was, therefore, necessary for the assessee to be put on notice as to the exact nature of contravention for which the assessee was liable under the provisions of rule 173Q. This not having been done the Tribunal's finding cannot be faulted. The appeal is, accordingly, dismissed with no order as to costs." 123. In the above case the apex court held that if allegations in the show cause notice are not specific and are vague, lacks details and/or unintelligible, that is sufficient to hold that noticee was not given proper opportunity. Such notice was struck down. The cited decisions are applicable to the facts of the case and ....
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....ce of the above is a gross violation of natural justice. b. Lack of the aforesaid leads to absence of reasonable and adequate opportunity to the assessee to make his case, thereby making the proceedings initiated by the issue of the said notice bad in law. c. The SCN lacking the above ingredients is illegal and bad in the eyes of law. d. The matter needs to be set aside on the above counts and not to remit the matter for fresh consideration. 9. To buttress the above submission, following further case laws are relied upon by the Ld. AR: CIT v. Rajesh Kumar [2008] 306 ITR 027 (Del), Hon'ble Delhi High Court has held that - "the material collected by the Department behind the back of the assessee was used against him without disclosing the material or giving an opportunity to cross-examine the person whose statement had been used by the Department against the interest of the assessee. There was violation of the principles of natural justice ". Laxmanbhai S. Patel vs. CIT (2008) 174 Taxman 206 (Guj.) - Hon'ble Gujarat High Court following the decision of Hon'ble Supreme Court in the case of Kishinch and Che....
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....tails/documents as per requisitions in relation to share capital raised during the year, which were examined. The same confirmation is echoed in the showcause notice u/s.263 of the Act, to quote "On analysis of assessment records, it is observed that in the year under consideration, the assessee raised share capital and premium to the tune of Rs. 10.40 crore. During the assessment proceeding, the assessee furnished the list of investors who subscribed in shares of the assessee company. The assessee furnished the supporting documents regarding share transactions of investor companies." Admittedly, it is not the scenario in the case of the appellant that the A.O. had asked for any further information or evidence from the appellant which were not submitted or received. Similarly, it was not also the case that he had called for some information/report from any other quarter or departmental authority to verify the impugned share transaction, which was not received, far behind passing of the order without receiving such report. That being the admitted position in this case, for invoking provision of s. 263 of the Act, which was received by him after a long gap of one year from the date o....
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....dings which constitute evidence on which the assessment order is based must normally be regarded as part of the record. So long as the revisional authority does not rely on any extraneous matter, his jurisdiction cannot be questioned. The assessment order which, on the face of it, was a good order at the time when it was passed mat, in the light of information which although asked for but received subsequent to the completion of the assessment appear to be erroneous. The Commissioner has the jurisdiction to rectify the order in such a case so as to eliminate the error. An assessment without considering the valuation report for which proceeding had already been initiated in the course of an assessment proceedings is not a proper assessment and such assessment is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner of Income-tax has jurisdiction to revise such an assessment. [Emphasis supplied] 22. Therefore according to ld AR, it is evident from the above decision thus would be that - (1) if the A.O. during pendency of assessment proceeding calls for report from any authority to verify the claim of the assessee and before receiving such repor....
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..../s 153A/143(3) of the Income Tax Act, 1961 was made by the Learned Assessing Officer after making due verification of the share capital raised by the aforesaid assessee. During the course of assessment proceedings the Ld. Assessing Officer was provided with complete details of the share capital raised and allotted during the year along with documents like bank statement, balance sheet and profit and loss account, ITR acknowledgement, source of fund for two layers. As per information available with us due verification of the documents filed was made by the Ld. Assessing Officer. After being satisfied by the documents filed and enquiries made, the Ld. Assessing Officer made addition in respect of 14A, Preliminary Expenses and Interest on IT & FBT therefore, the order passed u/s 153A/143(3) of the Income Tax Act, 1961 should not be considered as erroneous and prejudice to the interest of the revenue. 25. The ld. Counsel submitted that the reason for initiation of revision proceedings as mentioned in notice u/s 263 of the Income Tax Act, 1961, is on the basis of allegations made by the Ld. DDIT (Inv.), Unit-2(2), Kolkata. In this regard it wassubmitted that during the course of sear....
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.... v. Rajesh Kumar 306 ITR 27 (Delhi) and the decision of the Hon'ble Supreme Court in the case of Andaman Timber Industries v. Commissioner of Central Excise 281 CTR 241 (SC). Also in the case of K.P. Varghese v. Income Tax Officer (SC)(1981) 131 ITR 597 the Hon'ble Apex Court held that - "the consideration actually received by the assessee is more than what is declared or disclosed by him and the burden of proving such an understatement or concealment is on the revenue. This burden may be discharged by the revenue by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has not corrected declared or disclosed the consideration received by him and there is an understatement or concealment of the consideration in respect of the transfer. Sub-section (2) has no application in the case of an honest and bona fide transaction where the consideration received by the assessee has been correctly declared or disclosed by him, and there is no concealment of suppression of the consideration." 28. According to the ld. Counsel, the order passed by the Assessing Officer cannot be treated as erroneous as he had nothing to do mo....
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....r the Commissioner to take such a different view. There was nothing on record to suggest that the view taken by the Assessing Officer was unsustainable in law. The Hon'ble Punjab and Haryana High Court in the case of CIT vs. Deepak Mittal, 324 ITR 411 held that change of opinion by reappraising the evidence is not within the parameters of revisional jurisdiction of the Commissioner under section 263 of the Income Tax Act, 1961. In the case of CIT vs. Anil Kumar Sharma (1010) 194 Taxman 504 (Del) the Hon'ble High Court has held that though the assessment order does not patently indicate that the issue in question had been considered by the Assessing Officer, the record showed that the Assessing Officer had applied his mind. Once such application of mind is discernible from the record, the proceedings u/s 263 of the I.T. Act, 1961 would fall into the area of the Commissioner having a different opinion. Hence, the case would not be one of lack of inquiry and commissioner cannot reopen case u/s263 of the Income Tax Act, 1961. The Hon'ble Supreme Court in the case of CIT vs. Max India Ltd. 295 ITR 282 considering its earlier decision in the case of....
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....he Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. This is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. It may be said in such a case that in the opinion of the Commissioner the order in question is prejudicial to the interests of the Revenue. But that by itself would not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, namely, that the order is erroneous, is absent." 32. Reference was also made to the decision of Guwahati High Court in SantalalMahendiRatta (HUF) v. Commissioner of Taxes (2006) 143 STC 511 (Gau): (2002) 1 GLR 197 (Gau), where in this High Court while examining section 36 of the Assam General Sales Tax Act, 1993, which is parimateria, held as under: "The revisional authority for various good reasons may be inclined to view an assessment order from a negative standpoint. The revisional a....
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.... Commissioner should have his own view and it should be based on others view. Besides there should have sufficient reasons for terming the assessment order to be erroneous. The Supreme Court, in the case of Sirpur Paper Mills Ltd. v. CWT (1970) 77 ITR 6 (SC), held that while exercising power, the Commissioner must have an unbiased mind and decide the dispute according to the procedure which is consistent with the principles of natural justice and cannot permit his mind to be influenced by the dictation of another authority. The relevant observations made by a three-judge Bench of the Supreme Court in the case of Sirpur Paper Mills Ltd. (1970) 77 ITR 6 (SC), reads as follows - "In the exercise of that power the Commissioner must bring to bear an unbiased mind, consider impartially the objections raised by the aggrieved party, and decide the dispute according to procedure consisted with principles of natural justice: he cannot permit his judgment to be influenced by matters not disclosed to the assessee, nor by dictation of another authority." 35. The Division Bench of the Calcutta High Court too in the case of Jeewanlal (1929) Ltd. vs. Addl. CIT reported in (1977) 108 IT....
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....a special power, which has almost no parallel in any other statute. It is an extraordinary revisional power. This power cannot be exercised as a jurisdictional corrective power or as a review of the orders passed by subordinate authorities. This power under section 263 of the Income Tax Act, 1961 can be invoked only for the purpose of correcting such wrongs, which have taken place because of non-application of law or for a wholly incorrect application of law and when such application or non-application of law causes prejudice to the revenue. The power under section 263 cannot be equated to, or be regarded as, an appellate jurisdiction or even ordinary revisional jurisdiction. The revisional jurisdiction under section 263 of the Income Tax Act, 1961 is a unique jurisdiction, which has to be understood in the context of the scheme of the Act. Such power can be exercised only against orders which are erroneous, in the sense that it goes to the root of the jurisdiction and also prejudicial to the interests of the revenue. 38. According to ld AR, revisional authority before treating an assessment as erroneous should apply its own mind and should not base its decision on others view. ....
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....cluding the decision of Hon'ble Kerala High Court in the case of Bismillah Trading Co. vs. Intelligence Officer (248 ITR 292) and held that the A.O. has power to investigate the identity, creditworthiness and the genuineness of the shareholders. 42. It is submitted by the ld AR that the Ld. Principal CIT did not speak a word in respect of the various authorities which were brought to his notice supporting the appellant's claim that without incriminating material no further investigation or enquiry is required and that the assessment order of the Assessing Officer did not suffer from any deficiency and hence there is no lack of enquiry. Therefore, as no prejudice has been caused to the revenue, the proceeding initiated u/s.263 of the Act is bad in law. In spite of the above facts, the Ld. Principal CIT proceeded to hold that the action of the A.O. in having not enquired into the identity, creditworthiness and genuineness of the shareholders has led to an erroneous order in so far as it is prejudicial to the interests of revenue for the reason that no enquiry or investigation was done at the time of assessment regarding the genuineness of the share capital to the tune of R....
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....t year for which original assessments have already been completed on the date of search the total income shall be determined restricting the additions only to those which flow from incriminating material found during the course of search. If no incriminating material is found in respect of such completed assessment, the total income in the proceedings under section 153A of the Income-tax Act. 1961, shall be computed considering the originally determined income. If incriminating material is found in respect of such assessment years for which the assessment is not pending, then the "total income" would be determined considering the originally determined income and the income emanating from the incriminating material found during the course of search. In respect of an assessment pending on the date of search which abates in terms of the second proviso to section 153A(1), the total income shall be computed afresh uninfluenced by the fact whether or not there is any incriminating material." [Emphasis supplied] 45. CIT vs. Veerparabhu Marketing Ltd. (2016) 388 ITR 574 (Cal), held as under: "The existence of incriminating material in the seized material is a prerequisite befor....
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....in the course of original assessment. "[Emphasis given] v) LMJ International Ltd. vs. DCIT (2008) 119 TTJ 214 (Kol) "13. In view of the above discussions, it is possible to effect reconciliation of the two provisos appended to s. 153A by restricting the meaning of the term "assess or reassess" appearing in the first proviso. After the search, in our considered opinion, the total income of the assessee is to be recomputed on the basis of the undisclosed income unearthed during search and the same is to be added with the regular income assessed under s. 143(3) or computed under s. 143(1) for each of the six preceding assessment years. Where any prepaid taxes are there, the same ore required to be given credit for computing the further tax payable by the assessee. The assessee is also required to pay interest under ss. 234A and 234B on the tax due on the basis of new calculation. Where nothing incriminating is found in the course of search relating to any assessment years, the assessments for such years cannot be disturbed in our considered view. [Emphasis given] 47. Furthermore, according to the ld. AR, it is a settled position in law that jurisdiction u/s.263 of the A....
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....essment. The said departmental appeal was dismissed on the proposition that the bar which applies to the assessing officer equally applies to the CIT, for the purposes of section 263 of the Act. c) The Full Bench of the Hon'ble Delhi High Court in the case of CIT vs. Kelvinator of India Ltd. (2002) 256 ITR 1 (Del) observed as under: " ... It is well settled principle of law that what cannot be done directly cannot be done indirectly. If the Income tax Officer does not possess the power of review, he cannot be permitted to achieve the said object by taking recourse to initiating a proceeding of reassessment or by way of rectification of mistake." [Emphasis given] d) CIT vs. Software Consultants (2012) 341 ITR 240 (Del) In this case, the AO initiated proceedings u/s 147 on the issue of taxability of certain FDRs, which were found in possession of a director of the company. However, the director claimed that the FDRs, in her name, actually belonged to the assessee. This stand was accepted by CIT(A) in the appeal filed by the said director. Thereafter, the AO in the case of the assessee issued notice u/s 148 of the Act and passed assessment order accepting that th....
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.... company had raised its equity share capital of Rs. 10.40 crores by issuing shares to various corporate share subscribers through proper banking channel and after observing all procedural and legal norms. On the basis of a search & seizure operation conducted u/s.132 in the case of Banktesh Group and notice issued u/s.153A of the Act, the appellant filed ROI showing the income which was declared in its original return of income. According to the ld. AR, it is pertinent to reiterate here that during the said search, no incriminating material was discovered. Assessment u/s.153A/143(3) was, therefore, completed after calling for various documents and evidences, inter alia, in relation to share capital and finding no incrimination in the claim vis-a-vis supporting documents, no addition was made in respect of share capital raised during the year. Therefore, according to the ld. AR, there is no denying the facts that the decision in the case of CIT Vs. Software Consultants (supra) is squarely applicable to the facts and circumstances of the present case and hence notice issued u/s 263 and subsequent order passed by the Ld. Pr. C.I.T. is legally unsustainable and calls for being quashed.....
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....r search and seizure operation was conducted on assessee (hereinafter termed as "second search"). Thereafter, impugned action of Pr. CIT started by issuance of a show-cause notice dated 04/09.11.2016 calling upon the assessee as to why the order passed by the Assessing Officer dated 30.03.2015 u/s 153A/143(3) should not be interfered by invoking his revisional jurisdiction u/s 263 of the Act. According to the ld. Principal CIT, the order passed by the Assessing Officer dated 30.03.2015 (which is the assessment framed u/s 153A/143(3) as a fallout of first search) is erroneous and prejudicial to the interest of the Revenue because the Assessing Officer has not conducted proper investigation in respect of share capital and premium to the tune of Rs. 10.40 crores. In the SCN the ld. Principal CIT, has mentioned about certain statement recorded by the Investigation Wing during search and seizure dated 02.03.2016 (second search) wherein the statement of certain purported entry operators were recorded against the assessee company in respect of the share capital introduced in the assessment year under consideration. Based on the aforesaid reasoning, the ld. Principal CIT found fault with t....
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....two views are possible and the Assessing Officer has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue "unless the view taken by the Assessing Officer is unsustainable in law". 52. Taking note of the aforesaid dictum of law laid down by the Hon'ble Apex Court, let us examine whether the Assessing Officer passed order u/s 153A/143(3) dated 30.03.2015 (assessment framed after first search) is erroneous as well as prejudicial to the interest of the revenue. Undisputedly, the assessment year under question i.e. Assessment Year 2009-10 which was not pending before the Assessing Officer on the date of search on 29.05.2012 (first search), therefore, the assessment which is not pending before the Assessing Officer is an unabated proceeding and the Assessing Officer is empowered to make any addition only based on incriminating materials found/unearthed during search. This is a settled position of law and is no longer res integra. The following judgments are given in support of the above proposition of law:- The Hon'ble Delhi High Court in Kabul Chawla (supra) has laid down the law which spells out th....
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....sment can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the course of property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. . 53. The Hon'ble Jurisdictional Calcutta High Court in Veerprabhu Marketing Ltd though in the context of section 153 of the Act has held as under: "We agree with the view expressed by the Delhi High Court that incriminating material is pre-requisite before power could have been exercise u/s 153(C) R.W. Section 153(A). In the case before us, the AO has made a disallowance of the expenditure, which was held disclosed, for one reason or the order, but such disallowances made by the AO were upheld by the L.D.CIT (A) but the Ld. Tribunal deleted these disallowance. We find no infirmity in the aforesaid Act of the Ld. Tribunal. The appeal is therefore, dismissed. . 54. The Hon'ble Apex court in the case of CIT v. Sinhgad Technical Education Society 397 ITR 344 in the context of section 153 of the Act has held as under: "18) In this behalf, it was noted by th....
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....ncriminating materials unearthed by the Department during search conducted on 29.05.2012 (first search). We have gone through the assessment order of Assessing Officer in all the counts before us and we find that the Assessing Officer has not made a whisper of any incriminating material which has been unearthed/seized during first search on 29.05.2012. The Assessing Officer having no incriminating materials unearthed during the search on 29.05.2012 against the assessee company, did not make any additions (with the aid of any incriminating material) against the assessees before us for Assessment Year 2009-10. 56. We are aware of the fact that the Assessing Officer's role while framing an assessment is not only an adjudicator. The AO has a dual role to dispense with i.e. he is an investigator as well as an adjudicator; therefore, if he fails in any one of the role as afore-stated, his order will be termed as erroneous. We note that in this case since there was no incriminating material unearthed during the first search, the Assessing Officer has not made any additions in his assessment order dated 30.03.2015 based on incriminating material since there was none unearthed. We take n....
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....ation entry operators. The allotment of shares made by the above assessee amounting to Rs. 10.40 crore. On 31.09.2009 is one of the transactions found as accommodation entry by the Investigation wing. The allottee companies were found to be bogus and non-existing. The statements of entry operators were also recorded during the search & seizure operation which confirmed the findings of the Investigation Wing. The entry operators admitted to have provided accommodation entry in the form of share capital/premium to the Banktesh Group of Companies in lieu of commission. In view of the above discussion, the assessment completed on 30.03.2015 may be erroneous in so far as it is prejudicial to the interest of the revenue. You are, therefore, requested to show cause as to why the Assessment Order passed on 30.03.2015 u/s.153A by the DCIT, Central Circle 3(2), Kolkata should not be treated as erroneous in so far as it is prejudicial to the interests of the revenue as per the provisions of sec.263 of the Income Tax Act." You are given an opportunity of being heard before the undersigned on 22.11.2016 at 3:00 P.M. at my office chamber of Aayakar Bhawan Poorva, Room ....
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.... other than the factual contents given in the SCN issued by him (supra), only the list of shareholders are reproduced by the Principal CIT in his order. In the impugned order of Principal CIT, after reproducing certain extracts of the reply of the assessee and judicial precedents, we note that the Principal CIT without giving any factual finding or reasoning as to how the order of the AO can be held to be erroneous in so far as it is prejudicial to the interest of Revenue has simply without adducing any new facts other than what has been stated and reproduced by us in SCN (supra) has simply held that "no enquiry or examination and verification was done at the time assessment regarding the genuineness of introduction of share capital to the tune of Rs. 10.40 crores. Therefore, the assessment made is lacking such examination/verification which is necessary to assess the income of the assessee and such omission to make necessary enquiry has made the order erroneous in so far as prejudicial to the interest of the Revenue''. Since, there is nothing new in the impugned order other than what is stated in SCN reproduced above and detailed analysis stated in Para52 above, we note that facts....
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....nearthed during first search on 29.05.2012, we have no hesitations to hold that for A.Y 2009-10, the AO could have only reiterated the assessment intimated u/s 143(1) of the Act, because the time for issuance of scrutiny notice u/s 143(2) expired on 30.09.2010 and the assessment for this relevant assessment year, therefore, was not pending before the AO on the date of search on 29.05.2012 and, therefore, is an unabated assessment. Therefore, as per the law laid down by the Hon'ble High Court, the AO could not have disturbed the assessment already existing without the aid of incriminating materials seized during search on 29.05.2012 (first search). Therefore, the order of the AO cannot be held to be erroneous order. Therefore, without finding the order of the AO to be erroneous, the ld. Principal CIT lacks jurisdiction to usurp the revisional jurisdiction u/s 263 of the Act. 62.For completeness of the adjudication, when we look at the SCN and the impugned order of ld. Principal CIT, we note that the following facts have influenced him to invoke the section 263 jurisdiction which are (vi) to (ix) which are again reproduced for better understanding. (vi).On 02.03.2016 anot....
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....und fault with the share capital raised by the assessee company for Assessment Year 2009-10. It should be noted that the Assessing Officer has framed assessment u/s 153A on 30.03.2015 as per the law laid down by the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) and other High courts/Apex Court as stated above which according to us is the correct view or at the most can be definitely termed as a plausible view. Therefore, the view taken by the Assessing Officer cannot be held to be erroneous order and prejudicial to the interest of the revenue as held by the Hon'ble Supreme Court in the case of Malabar Industries vs. CIT (supra). The Assessing Officer's order dated 30.03.2015 at any rate cannot said to be unsustainable in law. 65. In any event, we note that the Assessing Officer has adopted one of the courses permissible in law and even if it has resulted in loss to the revenue, the said decision of the Assessing Officer cannot be treated as erroneous and prejudicial to the interest of the revenue as held by Hon'ble Supreme Court in Malabar Industries Ltd. vs. CIT (supra). Since the order of the Assessing Officer cannot be held to be erroneous as well as pr....
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....gement or intimation issued u/s.143(1), the proceedings initiated by filing the return are closed, unless a notice u/s 143(2) of the Act is issued. In the present case, the period for issuing the notice u/s 143(2) elapsed. Therefore the process has attained the finality which can only be assailed u/s 148 or 263 of the Act. It can thus be concluded that making of an addition in an assessment under section 153A of the Act, without the backing of incriminating material, is unsustainable even in a case where the original assessment on the date of search stood completed under section 143(1) of the Act, thereby resulting in non-abatement of such assessment in terms of the Second Proviso to section 153A(1) of the Act. 17. In the light of the discussion above, our conclusion is that in the present case, the issue with regard to additional depreciation could not and ought not to have been examined by the AO in the assessment proceedings u/s.153A of the Act as the said issue stood concluded with the assessee's return of income being accepted u/s.143(1) of the Act prior to the date of search and no notice having been issued u/s.143(2) of the Act within the time limit laid down in....