TaxTMI 
TaxTMI 
2019 (8) TMI 1623
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....sp; 3. That the assessment order having been passed by the Assessing Officer after due application of mind and taking into consideration the various replies, material on record and books of account, the action resorted to by the Commissioner of Income Tax is unwarranted and uncalled for. 4. That the order of Commissioner of Income tax is erroneous, arbitrary, opposed to the facts of the case and is unsustainable in law. 3. From the above grounds it is gathered that the only grievance of the assessee relates to the jurisdiction of the Ld. Pr. CIT under section 263 of the Income Tax Act, 1961 (hereinafter referred to as 'Act'), in setting aside the assessment order dt. 28/10/2015. 4. Facts of the case in brief are that the assessee filed his return of income on 29/10/2013 declaring an income of Rs. 7,96,730/- which was processed under section 143(1) of the Act. Subsequently the case was selected for scrutiny through CASS. The A.O. framed the assessment under section 143(3) of the Act at an income of Rs. 7,96,730/- and observed in para 2 of the assessment order dt. 28/10/2015 as under: "2. Detailed questioner along with notice u/s ....
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....pportunity of being heard to the assessee and also make detailed inquiry regarding the LTCG claimed u/s 10(38) of the IT. Act, 1961 amounting to Rs. 37,17,800/- as exempt. 5. Now the assessee is in appeal. 6. Ld. Counsel for the Assessee submitted that the Ld. Pr. CIT without making any enquiry considered the assessment order passed by the A.O. as erroneous and prejudicial to the interest of the Revenue. It was further submitted that the assessee furnished all the details which were asked by the A.O. who enquired in details and examined all the details furnished by the assessee for making the investments, thereafter, on being satisfied, he has taken a possible view, therefore the Ld. Pr. CIT was not justified in considering the assessment order passed by the A.O. as erroneous and prejudicial to the interest of the Revenue. It was pointed out that the assessee replied to the A.O. in response to the various queries and informed that the assessee was a Director in the Company M/s Bhushan Oil and Fats Pvt. Ltd. and sold the shares of M/s S.E. Investments Ltd. worth Rs. 38,00,000/-, a reference was made at page no. 12 of the assessee's compilation. It was submitted t....
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....h the Ld. Pr. CIT was justified in setting aside the said order by invoking the provisions of Section 263 of the Act. Reliance was placed on the following case laws: * Malabar Industrial Co. Ltd. Vs. CIT [2000] 109 Taxman 66 (SC) * Surya Jyoti Software Pvt. Ltd. Vs. PCIT, I.T.A No. 2158/Del/2017 (ITAT Del) * Deniel Merchants Pvt. Ltd. Vs. ITO, GA No. 599 of 20196 with ITA No. 118 of 2016, Calcutta High Court, 2016 8. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case the Ld. Pr. CIT, set aside the assessment order passed by the A.O. by observing that no proper enquiries were made by the A.O. for the shares of S.E. Investments sold by the assessee. In the instant case, it is noticed that the A.O. vide letter dt. 19/05/2015 (copy of which is placed at page no. 10 & 11 of the assessee's paper book) specifically asked the assessee as under: (iv). Please give detail of any movable/immovable asset(s) purchased/sold by you during the year 2012-13 relevant to Assessment year 2013-14. Please give complete detail of source of investment in purchase of ....
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....e detailed enquiry relating to LTCG claimed under section 10(38) of the Act. 9. On a similar issue the Hon'ble Delhi High Court in the case of Pr. CIT Vs. Delhi Airport Metro Express Pvt. Ltd. (supra) held as under: "For the purposes of exercise of revisional jurisdiction under section 263 of the Income-tax Act, 1961 by the Principal Commissioner the conclusion that the order of the Assessing Officer is erroneous and prejudicial to the interests of the Revenue has to be preceded by some minimal inquiry. If the Principal Commissioner is of the view that the Assessing Officer did not undertake any inquiry, it becomes incumbent on him to conduct such inquiry. It has further been held as under: It was incumbent upon the Principal Commissioner to undertake an inquiry as regards which of the assets were purchased and installed by the assessee out of its own funds during the assessment year in question, 2011-12, and, which were those assets that were handed over to it by the Corporation. The Principal Commissioner only referred to the circular issued by the Board and concluded that the Assessing Officer was duty bound to calculate and allow deprec....
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.... erroneous and prejudicial to the interest of the Revenue. Orders which are passed without inquiry or investigation are treated as erroneous and prejudicial to the interests of the Revenue, but orders which are passed after inquiry/investigation on the question/issue are not perse or normally treated as erroneous and prejudicial to the interests of the Revenue because the revisionary authority feels and opines that further inquiry/investigation was required or deeper or further scrutiny should be undertaken. In cases where there is inadequate enquiry but not lack of enquiry, the Commissioner must record a finding that the order / inquiry made is erroneous. This can happen if an enquiry and verification is conducted by the Commissioner and he is able to establish and show the error or mistake made by the Assessing Officer, making the order unsustainable in law. An order of remit cannot be passed by the Commissioner to ask the Assessing Officer to decide whether the order was erroneous. It has further been held that : inquiries were certainly conducted by the Assessing Officer. It was not a case of no inquiry. The order under section 263 itself recorded that the Dir....