TaxTMI 
TaxTMI 
2014 (10) TMI 1005
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....er of Income Tax has erred in cancelling the assessment completed u/s 143(3) of the Act vide assessment order dt. 28.03.2013 holding that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of revenue with the direction to reframe the assessments after examining the issues, whereas the impugned assessment order has already been merged with the appellate order dated 30.01.2013 passed by the Ld. Commissioner of Income Tax (Appeals), Raipur (CG), camp at Bhopal, M.P." 2. The grounds of appeal in each of the assessment year are common therefore all these appeals are disposed of by this common order. The brief facts of the case are that the CIT, after pursuing the assessment records, was of the prima facie view that consolidated assessment order for the assessment years 2003-04 to 2009-10 passed vide order dated 31.12.2010 by the than Dy. Commissioner of Income Tax, 1(1), Bhopal u/s 153A r.w.s.143(3) of the Income Tax Act 1961 was erroneous and pre-judicial to the interest of the revenue. Accordingly, the CIT issued show cause notice to the assessee dated 25.3.2013 which states as under :- "On examination of records, it was found that the order u/s ....
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....ers. You had admitted Rs. 4 crores as your additional undisclosed income on account of the transactions recorded in these dairies. 3.2 However, the Assessing Officer has erroneously failed to make any addition on this account. This has resulted in under assessment of income by Rs. 4 crores. This shows that the assessment order is erroneous in so far as it is prejudicial to the interests of Revenue. 4. In your statement on oath recorded on 21.07.2008 vide question no. 4 your were enquired in relation to page 78 LPS 1/1 wherein you had shown some loan transactions against your name and in the name of your wife, Smt. Neena Sharma totaling to Rs. 1.11 crores in the year of search. You were also enquired about the loans appearing in the name of Sh. Rajesh Bajaj, Sh. Manohar Lal Bajaj, Ms. Riya Bajaj, Ms. Chandra Bajaj etc. whose names appeared in the LPS and were enquired about their antecedents, their address and whether the loans shown were genuine. 4.1 In your answer to question no. 4, you had deposed on oath that these entries shown in the form of loans from various persons was actually your undisclosed income which had been shown in the form of loans. You had also stated that....
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....ther, you had stated in the statement recorded that you had shown your agricultural and licensing income on estimated basis and that no books were being maintained by you. You were asked to comment on these discrepancies. 7.1 In your answer to question no. 25 of your statement recorded on oath, you had deposed on oath that keeping in view the discrepancies, you had admitted the said amount as your undisclosed income. Further, in the Financial year 2008-09, you had also admitted Rs. 1 crores as your undisclosed income. 7.2 However, the Assessing Officer erroneously failed to make any addition of this amount inspite of yourself admitted disclosure. This shows that the assessment order is erroneous in so far as it is prejudicial to the interests of Revenue. In view of the above, the assessment order passed by the Assessing officer is erroneous in so far as it is prejudicial to the interests of revenue and is therefore, proposed to be cancelled u/s 263 of the I.T. Act, 1961. You are hereby given an opportunity of being heard as per section 263(1) of the Income Tax Act to present yourself in person or through an authorized representative on 28.03.2013 at 11 A. M. to explain your c....
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....deration was paid by him)." "However the assessee‟s denial regarding payment "ON Money" can not be accepted because of the overwhelming and clinching evidence available on record." Sir, the Assessing Officer findings were finally concluded in this regard in page number 59 as under:- "Since the assessee‟s share in the stated consideration is 1/10th only, the unaccounted payment made by the assessee is held to be Rs. 87,46,000/- which is his undisclosed income for the A. Y. 2009-10. Penalty Proceedings u/s 271AAA of the I.T. Act are being initiated." "The balance addition will be considered in the hands of the 14 other persons of Dabra in whose names, the land has been purchased and /or the actual person who has made investment in the name of these 14 persons." Sir, from the discussion as above, it is apparently clear that the Assessing Officer has well considered the surrender of Rs. 5 Crore and the documents LPS 1/1 page 71 to 75 and after detailed investigation has given his findings as above by making addition of Rs. 87,46,000/- being 1/10th share of the assessee of the unaccounted payment made by him and added the same as his undisclosed income for A. Y. 20....
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....ng not properly explained. Thus, the order passed by the Assessing Officer is not erroneous and has not prejudicial to the interest of the revenue. 4. Sir, this issue was also discussed in paragraph 8 page number 61 to 69 of the assessment order and particularly on page number 67 wherein it is mentioned by the Assessing Officer that the issue of M/s Shikhar Builders was well considered and hence, no addition is made on this account. Sir, being this issue was also well considered by the Assessing Officer at the time of passing the assessment order and the addition was not made after satisfying the explanation offered by the assessee, it cannot be said that the order passed by the Assessing Officer is erroneous on this issue. 5 & 6 Regarding point number 5 and 6 above, pertaining to Rs. 3,00,000/- paid to Shri Sukhram as advance against land and Rs. 3,00,000/- cash found and Rs. 4,00,000/- being cash given to mother, it is submitted that the Assessing Officer has considered all these issues while passing the assessment order as all the documents found during the search were well discussed and found place in the assessment order. Further, this is included in the income of Rs. 4,13....
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....ith twin conditions, namely, (i) the order of the AO sought to be revised is erroneous, and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent - if the order of the AO is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue- recourse cannot be had to section 263(1) [Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83, 87 (SC)] Further, the error envisaged by section 263 is not one which depends on possibility or guesswork, but it should be actually an error either of fact or of law [CIT v. Trustees of Anupam Charitable Trust, (1987) 167 ITR 129 (Raj.)]. Sir, only if it is self-evident and apparent from the record that the assessment order is erroneous either on the facts or on law or if the assessment order is perverse in so far as it has drown conclusions which no authority should have drown or it has ignored various significant facts on record or the law, would a revision be justified. The revisional authority must either set out briefly the heads of the charge that emerge under the head of error, vis-à-vis the assessment order, or more importantly, it must record the material that wo....
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....ss it is not in accordance with law. If an Assessing 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. Section 263 does not visualize a case of substitution of the judgment of the Commissioner for that of the Assessing Officer, who passed the order, unless the decision is held to be erroneous. Sir, it is held by various court that the revisional power is not meant to be exercised to correct every error of fact, but the error must be of such a nature that it is erroneous and prejudicial to the interest of the Revenue. Further, the power of revision is not to meant to be exercised for the purpose of directing the officer to hold another investigation when the order of the officer was not found to be erroneous or further inquiry will not result to more revenue. (CIT v. Sakthi Charities (2000) 160 CTR Mad, 107.) Sir, it is further held that proceedings should not be initiated with a view to start fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well accepted po....
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.... the interest of revenue and accordingly, he cancelled the same u/s 263 of the Income Tax Act, 1961 and directed the assessing officer to reframe the assessment in each of the assessment years after examining these issuesafresh and affording sufficient opportunities of being heard to the assessee by observing as under vide order dt.28.3.13:- "I have carefully examined the records of the assessment proceedings, and explanations submitted by the assessee, keeping in view the relevant provisions of law and judicial precedents. 11.1 The assessee has challenged the jurisdiction of section 263 mainly on the ground that the Assessing Officer has examined all the issues during the assessment proceedings. However, it is evident from the record that the Assessing Officer has not examined many of the issues arising out of voluntary disclosure made u/s 132(4) of I.T. Act, 1961 by the assessee which warranted adjudication by him. Further, the Assessing Officer has also not carried out any independent enquiries on these issues before forming any opinion. Thus, the assessment order is erroneous in so far as it is prejudicial to the interests of revenue. 11.2 Another main argument of the ass....
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....f the assessee, since the enquiry ordered in this order are specific and are based on seized documents and admission made by the assessee on oath. 12.5 The ratio laid down in State of Karnataka vs. Marico Industries Limited (2001) 124 STC 196 (Kar) is not applicable in case of the assessee as the said judgment is in relation to the revision proceedings under Karnataka Sales Tax Act, 1957 and not Income Tax Act, 1961. Nevertheless, the conditions of said judgment are duly met in this case as the notice u/s 263 is very detailed and contains all the documentary and testamentary evidence in support of such a belief. 13. It is important to note that admission of undisclosed income was made by the assessee in his statements recorded on oath in July and August 2008. The assessee has not denied the facts deposed in these statements until assessment proceeding in December 2010. There is a long gap in admission on oath of unaccounted income and denial of the portion of unaccounted income during the assessment proceedings. It is well settled law that an admission prejudicial to the interests of person making the deposition is more reliable than an admission made by same person in his own ....
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.... basis of the papers, spiral diaries, and documents found and on the basis of the enquiries made during the course of the assessment proceedings. The assessments were approved by the Additional Commissioner u/s. 153D. Thus, it was contended that even the higher authority has considered the additions made by the AO. The assessee went in appeal for part of the additions made by AO. Part of the additions are deleted by the CIT (A) vide order dated 30.01.2013 for which our attention was drawn to the order of the CIT(A). 6. It was further submitted that Subsequent to the order of CIT(A), the Ld. CIT issued the common show cause notice u/s. 263 for the A.Yrs. 2003-04 to 2009-10. On all the points, the CIT has stated that in the statements recorded u/s. 132(4), the assessee has surrendered the different income as enumerated in the said show cause notice, but the same has not been assessed to tax. The CIT has basically relied on the surrender made and came to the conclusion that the AO has erroneously failed to make the additions of these amounts on the basis of the statement recorded u/s. 132(4). The CIT did not take any cognizance about the affidavit and the various replies on each quer....
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....rtain additional addition. In this regard attention was drawn to page 28, 32, 36, 40, 44 and 48 of the paper book. 10. Regarding the additions of loans as mentioned in para 5 about the addition of Rs. 1.11 crores, the AO has discussed this point from pages 62 to 69 and has made the addition of Rs. 70 lakhs. The Ld. AO has also narrated the question put to the assessee and the disclosure made on page 65. The Ld. CIT(A) has after considering the detailed submissions in para 4 ground 7, has restricted the addition to Rs. 5 lakhs. For this attention was invited to the order of the CIT(A). It was further submitted that the assessing officer has also discussed while discussion this surrender the unsecured loan of Rs. 10 lacs relating to Shikhar Builders and came to the conclusion that the loan was genuine and the assessee discharged his burden of proof as envisaged u/s 68 of the Income Tax Act, 1961. 11. Regarding the addition of loan in para 6, the point has been discussed by the AO in para 8 page 61 to 69 and has specifically came to the conclusion that in the case of Shikhar Builders, no addition is required to be made . In this regard, attention was invited to the order of the asse....
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.... 164 ITR 197 wherein it was held that CIT has no power u/s. 263 to revise the order which merged with the order of the Appellate Assistant Commissioner. It is further submitted that explanation (c) to section 263 provides that where any order referred to in this sub-section and passed by the Assessing Officer has been the subject matter of any appeal, the powers of the Commissioner under this sub-section shall extend to such matters as had not been considered and decided in such appea. iii. The orders for the A.Yrs. 2003-04 to 2008-09 cannot be set aside since the points noted by the Ld. CIT do not pertain to these assessment years. For this attention was drawn towards computation statement of the return for the assessment years 2003-04 to 2008-09 available in the the paper book as well as copy of the statements recorded. Thus it was vehemently contended that the order passed by CIT u/s 263 be quashed. 14. The ld. D.R on the other hand vehemently relied on the order of the CIT. The assessing officer has not conducted due inquiry. The assessee has made surrender in the statement recorded u/s 132(4) on 21.7.2008 and 20.8.2008 before the DDIT, Investigation but did not return the ....
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....he revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation.-For the removal of doubts, it is hereby declared that, for the purposes of this sub-section, - (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include - (i) an order of assessment made by the Assistant Commissioner or Deputy Director or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the power or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorised by the Board in this behalf under section 120; (b) "record" shall include and shall be deemed always to have included all records relating to any proc....
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....o be made such enquiry as he may deem fit, pass such order thereon as the circumstances of the case may justify including an order enhancing or modifying the assessment or cancelling assessment and directing a fresh assessment. This empowers the CIT to cause or make such enquiries as he deems necessary. Fourthly, the CIT u/s 263 can enhance or modify the assessment as a result of enquiry conducted and hearing of the assessee. 17. For invoking the provisions of section 263, both the conditions that the order passed by the A.O. is erroneous and also that it is prejudicial to the interest of Revenue must be satisfied. If one of them is absent, the provisions of section 263 cannot be invoked. The term "erroneous‟ has not been defined under the Income-tax Act but it is well settled that each and every type of mistake or error committed by the A.O. cannot be said to be an error. The expressions "erroneous‟, "erroneous assessment‟ and "erroneous judgment have been defined in Black‟s Law Dictionary, Sixth Edition, page 542. According to the definition, "erroneous‟ means "involving error, deviating from the law‟. "Erroneous assessment‟ refers to an....
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.... has examined each and every document found and seized during the course of the search relating to the issues raised by the CIT and which has the bearing on the statements recorded from the assessee and after examining each of the points, he made the addition in respect of the some issues while he did not make any addition in respect of other issues. In respect of some issues, the assessee surrendered the un disclosed income in the return filed by him and therefore, the assessing officer did not make any addition after getting satisfied. In respect of point no. 3, 6 & 7 the assessing officer was duly satisfied that these income are duly covered by the disclosure made by the assessee in the return filed in response to the notice issued u/s 153A. The Ld. AR relied in this regard on certain decisions also and submitted that inadequacy of enquiry according to the whims and caprice of CIT does not give jurisdiction to the CIT to invoke section 263 and set aside the assessment. Now, the question before us is whether the assessing officer has examined each and every issue relating to the question which has been raised by the CIT in the show cause notice and after examining the same he has....
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....ated 13.9.2010 why this amount of Rs. 5 crore plus expenses should not be added in his income. The assessing officer also noted from the seized document that actually total payment of Rs. 14,24,60,600/- was paid towards the land on the basis of certain other paper seized during the course of the search relating to land dealing. The assessee submitted the reply about the purchase of land by 15persons. The reply submitted by the assessee has been reproduced in the assessment order at page 47 to 49 which consists of para no.11.1 to 11.6. After examining the reply of the assessee, the assessing officer made the addition on this account and on the basis of the various documents seized relating to land dealing and after examining the bank accounts of the other buyers also for Rs. 87,46,000/- in the hands of the assessee relating to the assessee‟s share in the land deal. He took this money has been incurred out side the books of account in land dealing on the basis of the documents seized. The finding of the assessing officer is very exhaustive appearing at page 49 to 1st para of page 59. We have gone through the finding of the assessing officer after going through the finding, it c....
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....w arises. - CIT vs. Max India Ltd. (2007) 213 CTR (SC) 266 : (2007) 295 ITR 282 (SC), Malabar Industrial Co. Ltd. Vs. CIT (2000) 159 CTR (SC) 1 : (2000) 243 ITR 83 (SC) and CIT vs. Associated Food Products (P) Ltd. (2006) 202 CTR (MP) 192 : (2006) 280 ITR 377 (MP) relied on." b) In the case of CIT Vs K.L. Rajput, 59 CTR 65 (M.P) (FB) 32, Taxman 326 has held as under :- "The principles of merger has correctly been laid down in CIT vs. R.S. Banwarilal (1982) 28 CTR (MP) (FB) 49 : (1983) 140 ITR 3 (MP): TC57R.415 that the ITO‟s order merges with the appellate order of the AAC, only to the extent it was considered and decided by the AAC but the matters which are not covered by the appellate order of the AAC are left untouched and to that extent, the ITO‟s assessment order survives permitting exercise of revisional jurisdiction by the CIT under s. 263.- CIT vs. R.S. Banwarilal (1982) 28 CTR (MP) (FB) 49: (1983) 140 ITR 3 (MP) : TC57R.415 approved on this point) 19. The second issue relates to the failure of the assessing officer to make the addition of Rs. 4 crores on the basis of the statement 20.8.2008. This surrender was made in the statement dated 20.8.2008 on the ba....
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....e in the case of assessee and to the extent of Rs. 25,00,000/- are non-genuine in the hands of assessee‟s wife Mrs Neena Sharma out of the said sum of Rs. 1.11 crores and to that extent he has sustained the addition totalling to Rs. 95,00,000/- in the hands of assessee as well as his wife. We also noted the sum of Rs. 1.11 crores unsecured loan also include the sume of Rs. 10 lacs received from Shikhar builder as unsecured loans as per the details given and produced by the assessing officer in the assessment order. This is not a case where assessing officer has sustained only Rs. 70,00,000/- addition out of this sum of Rs. 1.1 crore this is apparently clear from the finding at page 69 of the order which are reproduced as under :- "An addition of RS.70,00,000/- is being made in the hands of the assessee being non genuine unsecured loans appearing in the balance sheet of Shri Mukesh Sharma and Mrs Neena Sharma. Whereas an addition of Rs. 25,00,000/- will be made to the total income of Smt Neena Sharma on protective basis being non genuine unsecured loans appearing in her balance sheet as a part of the undisclosed income admitted by Shri Mukesh Sharma during the course of his ....
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....ken one of the views. Until and unless that view is unsustainable in law, the CIT cannot take action under section 263 holding the order passed by the A.O. to be erroneous. There is nothing on record how the explanation given by the assessee were not acceptable. The A.O. who has been empowered under section 143(3) r.w. 153A to frame the assessment and determine the taxable income of the assessee in accordance with the provisions of law. The powers under section 263, as has been pointed out by us earlier, can be invoked by the CIT if there is an error in the order of the A.O. and the order so passed is prejudicial to the interest of the Revenue. If the A.O. has duly considered the issue and has taken the view which may be in favour of the assessee that will not empower the CIT to invoke the provisions of section 263 of the Act until and unless that view is unsustainable in law or illegal? Coming to the contention of the ld. A.R. that it is not necessary by the A.O. to discuss in the order all the contentions by the assessee, we do agree with the ld. A.R. that there is no provisions in the Income-tax Act which provides that the A.O. should pass the Assessment Order in the manner so t....
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....pinion that merely because the ITO had not written lengthy order, it would not establish that the Assessment Order passed under section 143(3)/148 of the Act is erroneous and prejudicial to the interest of the Revenue without bringing on record specific instances, which in the present case, the CIT has failed to do." 25. A perusal of the order framed by CIT indicates that the Assessment Order passed by the A.O. was cancelled on the ground that the A.O. has not made the additions while making the assessment in respect of each and every income which has been surrendered by the assessee in the statement dated 21.7.2008 and 20.8.2008. This, in our considered opinion, cannot be sufficient ground for cancelling the assessment. While making Assessment Order, it is the satisfaction of the A.O. who made the enquiry and it should be a touchstone of the assessment order passed by him, the CIT cannot substitute his view in place of finding of the A.O. until and unless the view taken by the A.O. is unsustainable in law. No cogent material or evidence was brought to our knowledge by the ld. D.R. which may prove that the decision taken by the A.O. in the case of the assessee was unsustainable in....
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....pting the same without application of mind as such will be erroneous and prejudicial to the interest of the revenue." 26. In the case of CIT vs. R.K. Construction Co., Hon‟ble Gujarat High court 313 ITR 65 (Guj.) as confirmed by supreme court, confirming the order of the ITAT for which the undersigned was the author, has held as under:- "The details of sub-contractors examined by the AO as per the directions of CIT in revision proceedings, inter alia, include the names of these sub-contractors, their permanent account numbers, their permanent addresses, amount given to them, name of work entrusted to them, nature of such work and statements recorded by the AO, etc. These details reveal that during the course of examination under s. 131, no question was put to many of these sub-contractors as to the variation in their signatures. Similarly, no question was put to them for the reasons of discounting with the Shroff. It is the stand of the assessee right from the beginning that all these sub-contractors were mainly working for the assessee and they did not have any office set up and since they were working for the assessee, they have used assessee‟s address for correspo....
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....er, in the revisional proceedings under s. 263, it is not open for the CIT to take such a different view. No substantial questions of law arise out of the order of the Tribunal and hence, the appeal filed by the Revenue deserves to be dismissed. - CIT vs. Arvind Jewellers (2002) 177 CTR (Guj) 546 : (2003) 259 ITR 502 (Guj) and Malabar Industrial Co. Ltd. vs. CIT (2000) 159 CTR (SC) 1 : (2000) 243 ITR 83 (SC) relied on)." The impugned case is duly covered by this decision also in our opinion. 27. Hon‟ble Supreme Court in the case of CIT vs. Max India Limited, 295 ITR 282 (SC) has held as under :- "The phrase "prejudicial to the interests of the Revenue" in section 263 of the Income-tax Act, 1961, has to be read in conjunction with the expression "erroneous" order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when the Assessing Officer adopts one of two courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Assessing Officer has taken one view with which the Commissioner does not agr....
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....ted that the Hon‟ble High Court relied on the earlier decision of the High Court in the case of CIT vs. Sunbeam Auto Ltd., 332 ITR 167 in which it was held that if there is some inquiry by the AO in the original proceedings, even if inadequate, that cannot clothe the Commissioner with jurisdiction u/s 263 merely because he can form another opinion. At the most the case of the assessee can be regarded to be the lack of inquiry in accordance with CIT if he has different opinion how to proceed with the assessment of the assessee. 31. Similar view has been taken by Hon‟ble Delhi High court in the case of CIT Vs Software Consultants 341 ITR 240 (Del.) in which it has held as under :- "The assessee-company did not file its return of income for the assessment year 1993-94. During the course of assessment proceedings for the assessment year 1997-98, it was noticed that the central Bureau of Investigation had conducted search in the premises in which fixed deposit receipts worth Rs. 20 lakhs relating to assessment year 1993-94 were found in the possession of P, a director of the company. However, P claimed that the fixed deposits though in her name, actually belonged to the a....
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....ssessee had been able to show and establish the genuineness and capacity of the share applicants to make the investment. The Assessing Officer did not make any addition for the reasons recorded at the time of issue of notice under section 148 of the Act. This position was not disputed or disturbed by the Commissioner in his order under section 263 of the Act. The assessment order was not erroneous. Thus, the Commissioner could not have exercised jurisdiction under section 263 of the Act." 32. In the case of CIT Vs Sunbeam Auto Ltd, 332 ITR 167 (Del.) High court has held that inadequacy of enquiry will not give the jurisdiction to CIT u/s 263. In this Hon‟ble High court has held as under :- "The Assessing Officer in the assessment order is not required to give a detailed reason in respect of each and every item of deduction, etc. Whether there was application of mind before allowing the expenditure in question has to be seen. If there was any inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under section 263 of the Income-tax Act, 1961, merely because he has a different opinion in the matter. It is only in cases of lack of i....
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....red by the assessee in the replacement of dyes and tools was to be treated as revenue expenditure or not. Therefore, it could not be said that it was a case of lack of inquiry. The accounting practice followed for a number of years had the approval of the income-tax authorities. Even for future assessment years, the very same accounting practice was accepted. (ii) That the dyes were components of the machines. They needed constant replacement, as their life was not more than a year. The assessee also explained that since the parts were manufactures for the automobile industry, which had to work on complete accuracy at high speed for a longer period, replacement of the parts at short intervals become imperative to retain the accuracy. Neither with the replacement of tools and dyes to new asset comes into existence nor was their benefit of enduring nature. They did not even enhance the life of the existing machine of which the tools and dyes were only parts. Therefore, the view taken by the Assessing Officer was one of the possible views and the assessment order passed by him could not be held to be prejudicial to the interests of the revenue. The opinion of the Assessing Officer i....
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....enefit of those persons, as provided by section 13(2) of the Act. The Commissioner was of the view that the Income Tax Officer had allowed exemption under section 11 of the Act to the assessee without examining in detail the applicability of the provisions of section 13(1)(c)(ii) of the Act. Therefore, the Commissioner of Income Tax set aside the assessment orders and directed the Income Tax Officer to assess afresh. On appeal, the Tribunal set aside the order of the Commissioner. On a reference under section 256(2), the revenue contended that the assessment order did not disclose that the Income Tax Officer had examined the applicability of section 13(1)(c )(ii) : Held, that the Tribunal, after examining the record, found that to the audit objections that the assessee was not entitled to the benefit of exemption, by virtue of the provisions of section 13(1) of the Act, the Income Tax Officer had given detailed replied showing that the Income Tax Officer was alive to the relevant provisions of law and the facts before passing the orders of assessment. Since from the entire record, the Tribunal found that the Income Tax Officer was alive to the relevant facts and provisions of law b....
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....ent order had been passed after a draft order along with survey file had been forwarded to the Commissioner for his approval. Both the appellate authorities had failed to take the trouble of even referring to the assessment record. Once the assessment order had been passed with the approval of the Commissioner, the successor - Commissioner could not possibly say that the matter had been decided without application of mind by the Assessing Officer. Thus, the findings of the Tribunal were liable to be reversed and the order of the Commissioner was liable to be set aside." 37. We noted under the similar facts, in the case of CIT Vs Hari Singh & Associates, 267 CTR 442(Raj.) Hon‟ble Rajasthan High court has also taken a view in favour of the assessee when it has held as under :- "Assessee having disclosed the impugned amount as advance towards sale of agriculture land, and the AO having treated the same to be part of business income, the order of AO could neither be treated as erroneous nor prejudicial to the interest of the revenue and, therefore, CIT was not justified in invoking his jurisdiction under s. 263 simply because he held as different opinion that addition ought to....