TaxTMI 
TaxTMI 
2016 (7) TMI 1496
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.... 263 of the Act as Assessing Officer during the assessment proceedings had examined all the aspects including the aspect raised by learned CIT. He further submitted that the proceedings u/s 263 has been started on the basis of 'audit objection'. He further submitted that in this case the same issue raised by learned CIT was first attempted to be reopened u/s 154 of the Act, however, the proceedings u/s 154 were dropped. The learned AR in this respect invited our attention to copy of the 'audit objection' placed at (PB page 23-24) also took us to copy of notice u/s 154 and its reply filed by assessee placed at (PB page 25 to 27). The learned AR also took us to (PB page-28) where a copy of order of Assessing Officer dropping proceedings u/s 1....
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.... as under: "Assessment in this case was completed under section 143(3) of the Income-tax Act, 1961 on 25-03-2013 at an income of Rs. 214450/- against the returned income of Rs. 119445/-. 2. During the course of audit, it has been noticed that the assessee has paid interest on the borrowed capital at Rs. 52,61,021/- and has debited this expenditure to the profit and loss account. Out of this, interest of Rs. 3872509/- has been paid on the CC Limit account. 2.1 It has been further noticed that M/s. Dashmesh Agro Industries is one of the sundry debtors of the assessee with Rs. 35,00,000/- as on 3103-2010. A perusal of the copy of account of M/s. Dashmesh Agro Industries in the books of assessee shows that during the ....
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....td. Vs. CIT-I, Ludhiana, but the AO has failed to make such disallowances. Failure on the part of the then AO in making the disallowances, as discussed above, has rendered the assessment order dated 25.03.2013 erroneous and prejudicial to the interests of revenue. In view of the above, you are hereby given an opportunity to explain as to why the above referred assessment order dated 25.03.2013 may not be cancelled u/s 263 of the Income Tax Act, 1961 for making fresh assessment since the said order passed by the Assessing Officer prima facie appears to be erroneous and prejudicial to the interest of the Revenue." From the above two documents i.e., audit objection and show cause notice as reproduced in his order itself we find tha....
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....the order passed by learned CIT u/s 263 by holding as under: "20. We find that similar issue of exercise of revisionary powers by the Commissioner of Income Tax on the basis of audit objections arose before the Hon'ble Punjab & Haryana High Court in CIT Vs. Sohana Woollen Mills (supra) and it was held that mere audit objection and the fact that a different view could be taken, were not enough to say that the order of Assessing Officer was erroneous or prejudicial to the interests of Revenue. The Hon'ble Court further held that "whether satisfaction of the Commissioner for exercising jurisdiction was called for or not, has to be decided having regard to the given fact situation". 21. The Hon'ble Gauhati High Cou....
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....nover, which had escaped assessment, has acted without jurisdiction, revisional jurisdiction could have been exercised. Emphasised the Supreme Court, in the case of Sirpur Paper Mill Ltd. v. CWT [1970] 77 ITR 6 , 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 Mill Ltd. 119701 77 ITR 6, read as follows (page 7): "In exercise of the power the Commissioner must bring to bear and unbiased mind, consider impartially the ....