TaxTMI 
TaxTMI 
2020 (2) TMI 985
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....has filed its return of income on 30.7.2011 declaring total income at Rs. 1,87,160/-. The case of the assessee was selected for scrutiny assessment, and assessment order was passed on 24.12.2013 under section 143(3) of the Act. The ld.AO has accepted the returned income shown by the assessee. It is a one page assessment order, which reads as under: "The assessee filed his Return of Income on 30.07.2011 declaring total income of Rs. 1,87,160/- vide Ack.No.1031002275. The same has been processed u/s.143 (1) of the Income-tax Act, 1961. 2. The case of the assessee has been selected for scrutiny through CASS. On selection for scrutiny, notice u/s. 143(2) of the Act was issued on 06.08.2012, which was duly served upon the assessee by post. 3. Thereafter, notice u/s. 142(1) of the IT. Act along with an Annexure in the form of detailed questionnaire issued on 19.11.2012 which was served upon the assessee by Post. 4. In response to the above notices, Shri Samir Shah, CA, duly authorized by the assessee, attended office time to time and filed written submissions along with requisite details which were verified on random basis during the course of....
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...., the assessee had submitted a xerox copy of the receipt. On verification of the receipt it is noticed that no details of cheque No., bank name, etc. are available. Further, complete address/telephone number of the person issuing the receipt was not available. The AO had also failed to call for the details and verify the correctness of the allowability of the entire expenditure as the authenticity of the receipt was doubtful. Therefore, the Asseessee's claim of expenditure of Rs. 15,00,000/- for "Dastavej" fees paid to Shri Vipin Shantilal Parikh was wrongly allowed and without any proper verification of the expenditure which made the assessment erroneous and prejudicial to the interests of the Revenue. (iii) In the return of income the Assessee had worked out Long term capital gain of Rs. 7,30,05,250/- during the year against which he had claimed deduction of Rs. 7,36,00,000/- u/s.54/54EC as under : Net Long term capital gain Rs. 7,30,05,250 Less : Deduction U/S.54/54EC Investment in New House Rs. 4,00,00,000 Capital gain account scheme Rs. 2,36,00,000 REC Bonds Rs. 1.00,00.000 Rs. 7.36r00,000 Net Taxable Long term capital gain ....
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....nterests of the Revenue. (d) From the records, it was noticed that during the financial year under consideration, the following house properties were owned by the Assessee : (i) Devji Saraiya S.Pole, Sankadi Sheri, Ahmedabad (ii) D/ll-12, Silver Arc, Kavi Nanalal Marg, Ellisbridge, Ahmedabad (e) As per the proviso to section 54F(1) of the Act, if the assessee owns more than one residential house, other than the new asset, on the date of transfer of the original asset; the deduction u/s.54F is not allowable. Therefore, the AO had wrongly allowed deduction u/s. 54F of the Act without verifying the correctness of the claim, which made the assessment erroneous and prejudicial to the interests of the Revenue." 5. After hearing the assessee, the ld.CIT has held that the AO has not conducted any inquiry before accepting the accounting entries as it is. Accordingly, the ld.CIT set aside the assessment order, and directed the AO to frame fresh assessment order and after examination of the record carry out inquiry and verification on the issues set out in the 263 proceedings. The ld.counsel for the assessee contended that the AO had issued n....
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....ions 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 authorized 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 proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, ....
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.... in the case of Malabar Industries 243 ITR 83 and has propounded the following broader principle to judge the action of CIT taken under section 263. (i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated as prejudicial to the interests of the Revenue and if the AO has adopted one of the courses permissible under law or where two views are possible and the AO has taken one view with which the CIT does not agree. If cannot be treated as an erroneous order, unless the view taken by the AO is unsustainable under law (vi) If while making the assessment, the....