TaxTMI 
TaxTMI 
2018 (11) TMI 1322
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....dered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules. Judicial decisions relied upon were carefully perused. 4. The ld. Representatives, in addition to their oral arguments, placed written synopsis for our consideration. 5. We have heard the rival submissions and have given thoughtful consideration to the orders of the authorities below and gone through the written synopsis placed on record by both the sides. 6. Facts on record show that the appellant company has been set up with the primary objective of undertaking upgradation, modernization, financing, operation, maintenance and management of Cargo Terminal. The appellant company entered into Concessionaire Agreement with Delhi International Airport Private Limited (DIAL) which gives right to operate, maintain, develop, modernize and manage the cargo terminal for the period till March 2034. 7. The return was electronically filed on 30.11.2011 after availing the deduction u/s 80IA. However, tax was paid on book profits. Subsequently, the return was revised on 30.03.2013. Thereafter, the case was selected for scrutiny and, accordingly, statutory notices were is....
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....eeping all the above facts and the assessment record for the A.Y. 2011-12, the assessment order u/s 143(3) dated 14.03.2014 appears to be prejudicial to the interest of revenue. In accordance with the section 263 of the Income Tax Act, 1961. I hereby require you to appear before the undersigned in Room No. 394, 3ld Floor, C.R. Building at 11 A.M. on 11.03.2016 and to it your reply on the issue on or before the said date." 9. In reply to the aforesaid notice, the assessee filed a detailed reply dated 18.03.2016. The ld. PCIT was not convinced with the reply of the assessee and held that the assessment order dated 14.03.2014 framed u/s 143(3) of the Act was erroneous in so far as it was prejudicial to the interest of the Revenue and accordingly set aside the assessment with a direction to pass an order afresh after taking into account all relevant facts and after making necessary enquiries and verification. 10. The Hon'ble Supreme Court in Malabar Industrial Co. Ltd., 243 ITR 83, has laid down the following ratio: "A bare reading of section 263 of the Income-tax Act, 1961, makes it clear that the prerequisite for the exercise of jurisdiction by the Commiss....
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..../s Celebi Delhi Cargo Terminal Management India Private Limited (the Concessionaire) as a special purpose company for the sole purpose of implementing the Concession Agreement. Pursuant to the Concession Agreement, Celebi is responsible to upgrade, modernize and finance the Cargo Terminal and operate, maintain and manage the Cargo Terminal (approximately 70,000 sq.mt area comprising of warehouses for handling export, import and perishable jcafgo) for a period of 25 years until 31 March 2034. The company earns its revenue from warehouse management." 13. And the details of deduction claimed read as under: FY-2009-10 FY-2010-11 FY-2011-12 ; AY-2010-11 AY-2011-12 AY-2012 13 U/S 80 S ( 50% of Donation paid 250,000 U/s 80IA 831,539,055 154,863,614 Total Deductions 250,000 831,539,055 154,863,614 14. For further verification, the Assessing Officer again issued a notice dated 10.12.2013. Query No. 1 of the said notice reads as under: "A note on the claim of deduction claimed u/s 80IA of the Act mentioning exact clause and su....
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....nue. It has, therefore, to be considered firstly as to when an order can be said to be erroneous. We find that the expressions "erroneous", "erroneous assessment" and "erroneous judgment" have been defined in Black's Law Dictionary. According to the definition, "erroneous" means "involving error; deviating from the law". "Erroneous assessment" refers to an assessment that deviates from the law and is, therefore, invalid, and is a defect that is jurisdictional in its nature, and does not refer to the judgment of the Assessing Officer in fixing the amount of valuation of the property. Similarly, "erroneous judgment" means "one rendered according to course and practice of court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal principles". 12. From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately This section does not visualise a case of....
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....ng any enquiry in undue haste. We have also held as to what is prejudicial to the interests of the Revenue. An order can be said to be prejudicial to the interests of the Revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised. There must be material available on the record called for by the Commissioner to satisfy him prima facie that the aforesaid two requisites are present. If not, he has no authority to initiate proceedings for revision. Exercise of power of suo motu revision under such circumstances will amount to arbitrary exercise of power. It is well-settled that when exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on record to satisfy it in that regard. If the action of the authority is challenged before the court it would be open to the courts to examine whether the relevant objective factors were available from the records called for and examined by such authority. The Income-tax Officer in this case had made enquiries in regard to the nature of the expenditu....
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....s laid down by the Courts which govern the exercise power by the Commissioner under the provisions of Section 263 of the Act are as follows: (i) The power is supervisory in nature, whereby the Commissioner can call for and examine the assessment records. (ii) The Commissioner can revise the assessment order if the twin conditions provided in the Act are fulfilled, that is, that the assessment order is not only erroneous but is also prejudicial to the interest of the Revenue. The fulfilment of both the conditions is an essential prerequisite. [See Malabar Industrial Co. Ltd vs CIT (2000) 243 ITR 83(SC)] (iii) An order is erroneous when it is contrary to law or proceeds on an incorrect assumption of facts or is in breach of principles of natural justice or is passed without application of mind, that is, is stereo-typed, in as much as, the Assessing Officer, accepts what is stated in the return of the assessee without making any enquiry called for in the circumstances of the case, that is, proceeds with „undue haste‟. [See Gee Vee Enterprises vs ACIT, Delhi-I & Ors. (1975) 99 ITR 375] (iv) The expression "prejudicial to the interest of t....
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.... business, called for the assessment record and scrutinized the same. The Tribunal returned a finding of fact that the assessee had submitted copies of documents and details with regard to various matters, including, in particular, with respect to the properties at Malviya Nagar as well as those located at Gitanjali Enclave and Defence Colony. The issue that has been raised before us is that, since the assessment order adverted to only Malviya Nagar property and was silent with respect to the properties located at Gitanjali Enclave and Defence Colony; on this short ground alone the Revisional order of Commissioner ought to be sustained. It would be important to remind ourselves that while the supervisory power of Commissioner is wide, it cannot be invoked to substitute the view of the Assessing Officer. If upon a perusal of the record filed with the authorities below the Tribunal formed a view that there had been an enquiry which had not been conducted with „undue haste‟ surely we would be slow to hold otherwise. More so when, this conclusion, the Tribunal had arrived at after examining the record which the assessee filed with the Assessing Officer during the course of ....
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.... the Commissioner calls for and examines the record, pertaining to the assessee, and forms a prima facie view that the order passed by the Assessing Officer is both erroneous and prejudicial to the interest of the Revenue, he is obliged to afford an opportunity to the assessee before passing an order, to the prejudice of the assessee. In the instant case, the Commissioner sought to accord such an opportunity to the assessee by putting him to notice as regards aspects which the Assessing Officer had failed to scrutinize. During the course of the revisionary proceedings this was conveyed to the assessee by way of a notice dated 11.05.2006. It is not disputed that in the order dated 18/19.01.2007 the Commissioner has referred to certain other issues which did not form part of the initial notice dated 11.05.2006. To our minds it was always open to the Commissioner to put such issues/discrepancies, found by him based on material on record, to the assessee. It is to be noted, however, that the learned counsel for the assessee vehemently denied that the assessee had been given any opportunity to meet issues other than those to which reference has been made in the Commissioner‟s noti....
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....passing an order an opportunity has to be granted to the assessee and, such an opportunity granted to the assessee is a necessary concomitant of the enquiry the Commissioner is required to conduct to come to a conclusion that an order for either an enhancement or modification of the assessment or, as in the present case, an order for cancellation of the assessment is called for, with a direction to Assessing Officer to make a fresh assessment. This defect cannot be cured by first reopening the assessment and then granting an opportunity to the assessee to respond to the issues raised before Assessing Officer during the course of fresh assessment proceedings. To buttress his submission the learned counsel for the Revenue has relied upon the judgment of the Supreme Court in the case of Rampyari Devi Saraogi vs CIT, West Bengal & Ors. (1968) 67 ITR 84. This is a case in which, the order issued by the Commissioner, itself revealed that the assessment was being reopened based on an additional supporting material. The Supreme Court in such fact situation thus ruled that non supply of additional supporting material would not effect the basic issue of assessment being carried out without a....
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....t be said to be an enquiry at all, much less an enquiry needed to reach the level of satisfaction of the Assessing Officer on the given issue. The level of satisfaction would obviously mean that he has conducted the enquiry in a manner whereby he placed on record the material enough to reach satisfaction, which a rationale person, being informed of nuances of tax laws would read after due appreciation of such material." 27. The ld. DR has concluded by stating that if the Assessing Officer has merely accepted the assessee's explanation on various issues without proper enquiry, then the same would come within the ambit of lack of enquiry and inadequate enquiry. 28. In our considered opinion, the answer to the objections raised by the ld. DR is given by the Hon'ble Jurisdictional High Court in the case of Sunbeam Auto Ltd 332 ITR 167 wherein the Hon'ble High Court was considering the aspect, when there is no proper or full verification and it has held as under: "We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the Commis....