TaxTMI 
TaxTMI 
2018 (11) TMI 1322
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....rd 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 issued and served upon the assessee. Assessment order was....
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....ment 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 Commissioner suo motu under it, is that the order of the Income-tax Officer is erroneous in so far as it is pr....
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....ementing 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 sub-section under which it is claimed and a copy of the agreement with the authority for execution of services rendered by your company. Also submit a copy of report of your Chartered Accountant on Form No. 10CCB." 1....
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....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 substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Officer while making an assessment examines the accounts, ma....
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....nue 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 expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assesse....
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....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 the Revenue" while not to be confused with the loss of tax will certainly include an erroneous order which results in a person not paying tax which is lawfully payable to the Revenue. [See Malabar Industrial Co. Ltd. (supra)]. (v) Every loss of tax to the Revenue cannot be treated as being "prejudicial to the interest o....
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....een 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 scrutiny. The point to be noted is that on a perusal of the record the Tribunal observed, by reference to a general practice in vogue, that merely because the assessment order did not refer to the queries raised during the course of the scrutiny and the response of the assessee thereto, it could not be said that there was no enquiry and hence the assessment was er....
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....cord 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 notice dated 11.05.2006. For this purpose, the learned counsel for the assessee sought to place reliance on the impugned judgment passed by the Tribunal, wherein this aspect of the matter has been discussed elaborately. In order to satisfy ourselves we called upon learned counsel for the Revenue Mr Sanjeev Sabharwal to place on record any communication, order or any other document which w....
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....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 adequate investigation. In the instant case the Order-in-Revision refers to issues and discrepancies which did not find mention in the initial notice dated 11.05.2006 and not to additional or supporting material as in the case of Rampyari Devi (supra). Therefore, to suggest that it would be sufficient compliance of the provisions of Section 263 of the Act, if an opportunity to respond ....
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....aterial." 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 Commissioner of Income-tax under section 263 of the Income-tax Act. As noted above, the submission of learned counsel for the Revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the enti....