TaxTMI 
TaxTMI 
2019 (5) TMI 1319
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.... Ld. AO was erroneous nor prejudicial to the interest of revenue. 3. That the Ld. CIT erred in giving directions u/s 263 of the Act to the Ld. AO on the issues which were not raised by him in his notice u/s 263 and it is settled law that no direction can be given u/s 263 on the issues which were not raised in the notice. 4. Without prejudice to Ground no. 3, the Ld. CIT erred in giving directions u/s 263 of the Act to the Ld. AO, although the issues were duly considered by the Ld. AO during assessment proceedings and after examining all the documents/submissions, one of the possible view was taken. 2. The brief facts of the case are that the assessee filed return of income on 05.03.2012 declaring income at Rs. 1,58,434/- filed in ITR-2. The assessee derives income under the head 'short term capital gain on shares and income from other sources. The case was selected for scrutiny under CASS and statutory notices were issued to the assessee. During the course of scrutiny proceedings, the assessee submitted that the assessee has maintained three bank accounts, out of which two are personal accounts - one with IndusInd Bank and other one with UCO Bank and third one ....
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....turnover and offered the income derived there from at the profit rate of 8%. Therefore, there was complete enquiry by the Assessing Officer in the original assessment proceedings. Many case laws support the case of assessee that the assessment order was neither erroneous nor prejudicial to the interest of Revenue. It was submitted that the ld. CIT has wrongly exercised jurisdiction u/s. 263 of the IT Act. 4. On the other hand, the ld. DR relied on the order of the ld. CIT and submitted the gist of various case laws relied upon. He further submitted that the order of Assessing Officer was erroneous and prejudicial to the interest of revenue which has been rightly revised by the ld. CIT. The ld. DR has also filed a written synopsis giving the gist of various case laws in support, which reads as under : "Submissions of Revenue on provisons of Income Tax Act & position of law on the issue of Section 263 The Order of PrCIT under section263 is well within the ambit of law The order of Pr CIT under section 263 of the Income Tax Act, 1961 is well within the ambit of law and in keeping with the provisions of Income Tax Act. The provisions of section 26....
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....tion (Civil) No. 6884/2010 decided on 1st December, 2011. In the last decision it has been observed: 13. Supervisory and revisionary power under Section 263 of the Act is available, if an order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. An erroneous order contrary to law that has caused prejudiced can be corrected, when jurisdiction under Section 263 is invoked. 15. Thus where an Assessing Officer incorrectly or erroneously applies law or comes to a wrong conclusion and income chargeable to tax has escaped assessment, resort to Section 263 of the Act is available and should be resorted to. As regards the scope and ambit of the expression "erroneous", Hon'ble Bombay High Court in CIT vs. Gabriel India Ltd., (1993) 203 ITR 108 (Bombay), while referring to Black's Law Dictionary that an "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" There must be material on record to show that tax which was lawfully exigible has not been imposed as held in Gabriel India Ltd. (supra).....
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....ssessee for the purpose of deduction u/s 80IB(7A) of the Act specially on the issue of exclusion of income/receipt on sale of shop and FDR interest. In this situation, we have no hesitation to hold that the order of the AO which is apparently very precise and cryptic, was not passed after due examination and verification of certain issues and therefore, there was an error on the part of AO which leads to a correct conclusion of the CIT that the order of the AO is not only erroneous but also prejudicial to the interest of Revenue. We may further point out that the assessment order suffers from lack of necessary enquiry on certain important issues which have been raised by the CIT in the notice issued to the assessee and impugned order u/s 263 of the Act. Therefore, we reach to a conclusion that the assessment order is not sustainable and in accordance with the provisions of the Act which is not only erroneous but also prejudicial to the interest of the Revenue. Hence, we are inclined to hold that the issuance of notice u/s 263 of the Act and impugned order passed by the CIT u/s 263 of the Act is validly assumed jurisdiction of revisional powers u/s 263 of the Act which cann....
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....pted by a civil court in the absence of any rebuttal. The civil court is neutral. It simply gives decision on the basis of the pleading and evidence which comes before it. The Income-tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. The meaning to be given to the word "erroneous" in section 263 emerges out of this context. It is because it is incumbent on the Income-tax Officer to further investigate the facts stated in the return when circumstances would make such an inquiry prudent that the word "erroneous" in section 263 includes the failure to make such an inquiry. The order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct." Reference was also made to decisions of the Supreme Court in Rampyari Devi Saraogi versus CIT, (1968) 67 ITR 84 (SC) and Tara Devi Aggarwal (Smt) versus CIT, (1973)....
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....n'ble Bench may kindly dismiss the appeal. 5. After hearing both the parties and going through the material on record, we find that the ld. CIT has rightly revised the impugned assessment order by resorting to the provisions of section 263 of the IT Act. For ready reference, the findings of the ld. CIT are reproduced as under : "I have considered the matter. Perusal of the assessment records shows that the AO has not made adequate enquiry and has simply accepted the submission of the assessee. It was abundantly clear that during the assessment proceedings assessee had furnished inaccurate particulars and had tried to conceal the true facts on several occasions. One of the bank account, where several lacs of cash has been deposited by the assessee, was deliberately not disclosed to the department till the assessee filed its return of income for the relevant assessment year. Assessee has even not disclosed this bank account before issuance of notice u/s 143 (2] on 31.07.2012. Even after issuance of notice u/s 143(2) and specific requisition of the details of bank account was made in the questionnaire dated 03.05.2012, in the assessment proceedings for AY 2010-11, he h....
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....ble to the assessee to conduct such activity should have been taken into account as undisclosed money available to the assessee and should have been added to the total income. It was held in the case of Ram Pyari Devi Saraogi Vs. CIT [1968) 67 ITR 84 [SC) and Tara Devi Aggarwal Vs. CIT(1973) 88 ITR 323 (SC) that in a stereo-typed order which simply accepts what the assessee has stated and fails to make enquiries which are called for in the circumstances is erroneous. In another order in the case of K.A. Ramaswami Chettiar Vs. CIT (1966) 220 ITR 657 (Mad), it was also held that will the officer is accepted to make an inquiry of a particular item of income and if he does not make an inquiry as expected, that would be a ground to interfere u/s 263 as such an order passed by the assessing officer is erroneous and prejudicial to the interest of revenue. On considering the entire facts of the case, 1 am of the opinion that the AO, by not making adequate inquiries and considering the nature of transactions differently in two assessment years for the same bank account, for the same activity and for similar cash deposits and withdrawals, has made the order erroneous and pr....
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.... assessee had maintained bank account with ICICI bank which was not disclosed by assessee upto filing of return, but the same was declared to the Assessing Officer in his submissions filed in response to notice issued by the Assessing Officer. On perusal of the bank statement submitted by the assessee, we notice that there are cash deposits at various occasions and same has been withdrawn mostly through ATM. In the assessment year 2011-12, the assessee has also offered income of Rs. 1,28,700/- as commission income from cash collection activities, but during the course of assessment proceedings, the assessee was unable to explain the name of the depositors in the bank account. Later only, he accepted before the Assessing Officer that total deposit is a business turnover of the assessee. Earlier, the assessee submitted before the Assessing Officer that various parties deposited the cash in the name of assessee to facilitate the cash collection. These facts have not been examined by the Assessing Officer. The assessee was unable to substantiate the source of deposits and he accepted 8% net profit of the total deposits. The Assessing Officer is not only an adjudicator, but also an i....