TaxTMI 
TaxTMI 
2018 (11) TMI 116
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....410/- after making an addition of Rs. 70,000/- on account of unvouched expenses. 2.1 Subsequently, the Ld. Pr. CIT issued notice u/s 263 of the Act on 5.12.2016 on the grounds that no effort was made by the Assessing Officer to know the reasons for low net profit, the Assessing Officer did not examine the increase of Rs. 1,54,27,250/- in the unsecured loans and the Assessing Officer had not verified the closing stock of finished goods as there were no supporting documents. 2.2 In response, the assessee submitted detailed explanations but the Ld. Pr. C.I.T. was unconvinced and observed that the Assessing Officer had failed to examine the case properly and, therefore, the assessment order was erroneous in so far as being prejudicial to the interest of the revenue and set aside the assessment order with directions to pass a fresh assessment order in accordance with provisions of law. 2.3 Aggrieved, the assessee is now before the ITAT and has raised the following grounds of appeal:- "1. That the order of the Learned Principal CIT is against law' and facts of the case. 2. That the Learned Principal CIT has erred in holding that the original assessment order passed by Learned ....
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....ntative has also been enclosed along with delay condonation application to substantiate the same. Photocopies of passports of both the Directors have also been enclosed along with the delay condonation application in support of the contention that both the Directors were travelling outside India. Thus, it is apparent that the delay was not intentional and, therefore, the same deserves to be condoned. Accordingly, we condone the delay of 58 days and admit the appeal for regular hearing. 6.0 The Ld. AR drew our attention to the show cause notice issued u/s 263 of the Act and also placed on record a copy of the order sheet of the original assessment proceedings and submitted that vide order sheet entry dated 25.8.2014, the AO had made query regarding advances from customers and trade receivables, unsecured loans and advances including squared up loans, copy of accounts of sundry debtors and creditors along with their complete addresses, details of sales, purchases separately for domestic purposes and export along with justification of stock and justification for low GP/NP rate. The Ld. AR thereafter drew our attention to the submissions made by the assessee before the AO in response....
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....der that the same had been passed in a hasty manner without making adequate inquiries, specially on the issues on which the assessee's case was selected for scrutiny. It was prayed that the impugned order should be upheld. 8.0 We have heard the rival submissions and perused the material available on record. It is settled law that in order to assume jurisdiction under section 263 of the Act, the prerequisites are that the order passed by the Assessing Officer should be erroneous and it should be prejudicial to the interests of revenue. In other words the twin conditions have to be satisfied, namely, (i) the order of the Assessing Officer sought to be revised should be erroneous and (ii) it should be prejudicial to the interests of the revenue. Both the conditions must be satisfied. In case the order of the Assessing Officer is erroneous but is not prejudicial to the interests of the revenue, the Commissioner would not be competent to exercise jurisdiction under section 263. In a case, where two views are possible and the Assessing Officer has taken a view with which the Commissioner does not agree, the said order cannot be treated as an erroneous order prejudicial to the interests ....
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.... inadequate that would not by itself give occasion to the Commissioner to pass orders under Section 263 of the Act, merely because he has different opinion in the matter. It is only in cases of "lack of inquiry" that such a course of action would be open." 8.4 The Hon'ble Madras High Court held in the case of CIT vs. Valliammal (D.) (1998) 230 ITR 695 (Mad) that assessment order made after considering all fact and information cannot be revised. Where the assessee had furnished the requisite information and the Assessing Officer had completed the assessment after considering and the facts but the commissioner revised the assessment order on the ground that the Assessing Officer had not made proper enquiries, the Tribunal was held justified in reversing the order of the commissioner and restoring that of the assessing officer. Commissioner cannot re-examine accounts and substitute his judgment for that of the Assessing Officer. An order cannot be termed as erroneous unless it is not in accordance with law. If assessing officer makes assessment in accordance with law, the same cannot be branded as erroneous by the commissioner simply because, according to him, the order should have ....