TaxTMI 
TaxTMI 
2019 (12) TMI 144
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....t it is prejudicial to the revenue - recourse cannot be had to Section 263 of the Act as held by Hon'ble Supreme Court in Malabar Industrial Co. Ltd. V/s CIT [243 ITR 83 10/02/2000] & noted by Hon'ble Delhi High Court in CIT V/s Vikas Polymers [194 Taxman 57 16/08/2010]. The Hon'ble Supreme Court in Malabar Industrial Co. Ltd. V/s CIT (supra) has held that the phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an 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 an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue, unless the view taken by the Income-tax Officer is unsustainable in law. The said principal has been reiterated by Hon'ble Court in its subsequent judgement titled as CIT V/s Max India Ltd. (295 ITR 282). S....
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....rary power. The exercise of the power is limited to cases where the Commissioner on examining the records comes to the conclusion that the earlier finding of the Income-tax Officer was erroneous and prejudicial to the interest of the revenue and that fresh determination of the case is warranted. There must be material to justify the Commissioner's finding that the order of the assessment was erroneous insofar as it was prejudicial to the interest of the revenue. 1.4 The Hon'ble Delhi Court, in the cited decision, further observed that there is a fine though subtle distinction between "lack of inquiry" and "inadequate inquiry". It is only in cases of "lack of inquiry" that the Commissioner is empowered to exercise his revisional powers by calling for and examining the records of any proceedings under the Act and passing orders thereon. In Gabriel India Ltd. (supra), it was expressly observed: - "The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, tha....
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....ower conferred on different authorities under the Act has to be exercised within the areas specifically delineated by the Act and the exercise of power under one provision cannot trench upon the powers available under another provision of the Act. In this regard, it must be specifically noticed that against an order of assessment, so far as the revenue is concerned, the power conferred under the Act is to reopen the concluded assessment under section 147 and/or to revise the assessment order under section 263. The scope of the power/jurisdiction under the different provisions of the Act would naturally be different. The power and jurisdiction of the revenue to deal with a concluded assessment, therefore, must be understood in the context of the provisions of the relevant sections. While doing so, it must also be borne in mind that the legislature had not vested in the revenue any specific power to question an order of assessment by means of an appeal. Regarding applicability of Section 263, what has to be seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudicial to the interest of the revenue is the basic pre-condition for exerc....
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....ssessing officer u/s 143(3) of the I.Tax Act on 03.12.2016 to be erroneous and prejudicial to the interest of the revenue as per Section 263 of the IT Act for the only reason that certain documents from the applicants case records were not available, ignoring that all information necessary for completion of assessment including books of accounts, bills, vouchers were produced before the Ld. AO in the asst. order and therefore, the assumption of jurisdiction by the Pr. CIT u/s 263 of the I.T. Act, 1961 was not valid and justified. 2. The learned Pr. CIT erred in setting aside the assessment framed u/s 143(3) of the I.Tax Act, 1961 on 03.12.2016, by relying upon the provisions of Sec. 263 of the I.Tax Act, 1961, without in any manner indicating as to how the assessment framed was erroneous and prejudicial to the interest of the revenue and therefore, the order u/s 263 dt. 19.03.2019 be held to be invalid and bad-in-law. 2.2 The assessment for year under consideration was framed by Ld. AO on 03/12/2016 accepting returned income of Rs. 17.82 Crores e-filed by the assessee on 30/11/2014. The assessment order is a short order which note that notice u/s 142(1) dated 15/06/2016....
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....ons which should have been done. The assessee failed to submit details at the time of assessment proceedings and Ld. AO failed to make inquiries on the issues mentioned in the questionnaire. Noticing the deeming fiction of Clause (a) of Explanation-2 to Section 263, the order was deemed to be erroneous as well as prejudicial to the interest of the revenue. Finally, the assessment order was set aside and a direction was issued to redo the assessment de-novo after affording adequate opportunity to the assessee. Aggrieved, the assessee is under appeal before us. 3. We have heard and considered the submission made by respective representatives. We have also perused the material placed before us including questionnaire dated 15/06/2016 issued by Ld. AO during assessment proceedings and the assessee's response thereto. 4. Upon perusal of notice u/s 142(1) dated 15/06/2016 issued to the assessee during the course of original assessment proceedings, it could be seen that a detailed questionnaire was issued to the assessee asking him to submit the requisite details / documents under various heads etc. The said details were furnished by the assessee in couple of replies which are pl....