TaxTMI 
TaxTMI 
2021 (2) TMI 67
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....s letter No.526 dated 27th March, 2012. The AO completed the assessment u/s 147/143(3) on 28th March, 2013, determining the income of the assessee at Rs. 11,03,270/- as against the returned income of Rs. 9,00,355/- wherein he made the following additions:- a) Addition made u/s 17(2) of the Act Rs. 1,12,756 b) Income from other sources Rs. 4,554/- c) Unaccounted expenditure of ticket of daughter Rs. 4,000/- d) Disallowance of loss from house property Rs. 81,609/- Total Rs. 2,02,919/- 3. Subsequently, on 24.07.2013 the CIT-16, Delhi, called for a report from the AO regarding errors in assessment of the assessee and his wife Smt. Shumana Sen. An order u/s 127 of the Act was passed by the ld.CIT-16 on 27.08.2013 transferring the jurisdiction over the assessee's case from DCIT/ACIT, Circle 47(4), Delhi to DCIT/ACIT, Circle 40(1), Delhi. The DCIT, Circle 40(1) sent a report on 10th February, 2014 which was forwarded by the Addl.CIT, Range-64 to the CIT on 11th February, 2014, giving his comments as called for by the CIT. Subsequently, a report by the Addl. CIT, Range-40, Delhi, dated 31.03.2014 was forwarded to the CIT, wherein he....
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....te" and the unaccounted expenditure that was incurred by you on the trip abroad of you and your family was to be dealt with only u/s 69C of the Income Tax Act, 1961 which was not done by the AO and that the addition on account of "unexplained perquisite" cannot be sustained in appellate proceedings before the Appellate Authorities, the Assessment Order as passed by Assessing is erroneous and because of such errors has caused serious prejudice to the interest of revenue. 2.) That there were contradiction between the stand taken by M/s NDTV Ltd. about nature that company on your foreign trips with family, your own stand about the same where expenditure incurred by you was the cost to the company and the stand taken by your i abroad with your other family members, was personal trip and in view of the contradictions in the stand of you and your witnesses, your stand should not have been accepted by the Assessing Officer without weighing the relative merit of version of the each of the witnesses examined in the case. 3.) "That the complainant in your case was neither examined by the Assessing Officer nor was allowed to cross-examine the witnesses examined by you in sup....
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....ected as the addition on perquisite" cannot be sustained in appellate proceedings before the Appellate proceedings before the appellate Authorities. 2. That there were contradiction between the stand taken by M/s NDTV Ltd.. about nature of expenditure by that company on your foreign trips with family, your own stand about the same where you only stated that the expenditure incurred by you was the cost to the company and the stand taken by your, spouse who also travelled abroad with your other family members, that the same was personal trip and in view of the contradictions in the stand of you and your witnesses, your stand should not have been accepted by the Assessing Officer without weighing the relative merit of version of the each of the witnesses examined in the case. 3. The A.O. while passing the assessment order on dated 28.3.13 for AY2005-06 in your case did not follow the directions by the then Addl. CIT u/s 144A of the IT Act, was neither examined nor was allowed to cross-examine the witnesses examined by you in support of your claims and against the stand taken by the complainant though the same was specifically and statutorily directed. 4. Tha....
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....t, 1961 by undersigned in case of the said assessment order is required to protect the interest of revenue. You are hereby require to show cause as to why the action u/s 263 should not be taken against the said assessment order dated 28.03.2013 in your case for A.Y. 2005-06." 5. In response to the said show cause notice the assessee filed detailed reply challenging the initiation of proceedings u/s 263 of the Act. However, the ld.PCIT was not satisfied with the submissions made by the assessee and held that the various issues raised in the notice at para 11A to 11F were not properly examined and no conclusive findings were arrived at by the AO in the assessment order for the A.Y. 2005-06. Therefore, amounts taxable have escaped assessment either in the hands of this assessee or if evidences point out otherwise, in the hands of any other assessee as the case may be. Therefore, to this extent the order passed by the AO u/s 147/143(3) dated 28th March, 2013 is erroneous and prejudicial to the interest of the Revenue. He, therefore, set aside the order passed by the AO u/s 147/143(3) by invoking the revisionary power u/s 263 of the Act and directed the AO to make the assess....
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....1.07.2006 and 30.06.2005, as employer of the assessee filed during the course of assessement proceeding in A.Y. 2005-06, the assessee was granted ESOPs vide AGM held in Sept 2004 totalling 3,750 shares of NDTV valued at Rs. 7,50,000/- accrued in FY 2004-05 (A.Y. 2005-06). (11)(D) The A.O., while passing the assessment order dated 28.03.2013 for A.Y. 2005-06 in this case did not follow the directions by the then Addl. CIT u/s 144A of the IT Act, 1961 and the examination of the complainant and his cross examination by the assessee in support of his claims and against the stand taken by the complainant though the same was specifically and statutorily directed. (11)(E) Since above stated facts are fresh & new arising during assessment proceedings, but A.O. did not conduct any inquiry to find out veracity of such facts, hence the issues arising out of these facts are not the subject matter of Appeal filed by Assessee for A.Y. 2005-06. (11)(F) A.O. failed to conduct proper inquiry and failed to apply proper law leading to said assessment order being erroneous as well as prejudicial to the interest of revenue, and in support, the following relevant judicial view....
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....sessee. Since as per section 127(3) of the IT Act, there is no requirement of any Opportunity of being heard to be given to the assessee before such transfer, if the transfer is from any A.O. to any other A.O. whose offices are situated in the same city, locality or place, as was the case of this assessee, therefore, there is no lacuna in the jurisdiction of this office over the assessee's case. (12)(C) Judicial Views - the assessee in his submissions has cited the ruling of Hon'ble Supreme Court in that the Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC) and has claimed that the case of the assessee is squarely covered by the ruling without demonstrating such claim. In the case of Malabar Industrial Co. Ltd. Vs CIT, the Hon'ble Supreme Court held that the Commissioner has to be satisfied of twin conditions for taking revisionary action u/s 263, namely: (i) That the order A.O. sought to be revised is erroneous; and (ii) That it is prejudicial to the interests of the Revenue. The Hon'ble Apex Court in the ruling has opined that an incorrect assumption of fact or an incorrect application of law, or orders passed without applying the principles of natural justice o....
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.... there is a valid case for review u/s 263 of IT Act in view of the erroneous order of the AO which is prejudicial to the interest of revenue as has been elaborately clarified in the paras above while pointing out errors in the assessment order and the new facts which remain to be examined by the AO. Therefore, the assessee's plea that the findings in the show cause notice have already been examined and are in the ambit of "change of opinion" does not appear to be substantiated. (12)(E) Issue of ESOP As against the submissions made by the assessee, the Assessing Officer did not conduct complete inquiry regarding taxability of receipt arising out of ESOPs received from employer - M/s NDTV Ltd since it is seen from the NDTV Ltd's letter dated 01.07.2006 and 30.06.2005, as employer of the assessee filed during the course of assessment proceedings in A.Y. 2005-06, the assessee was granted ESOPs vide AGM held in Sept. 2004 totalling 3,750 shares of NDTV valued at Rs. 7,50,000/- accrued in FY 2004- 05 (A.Y. 2005-06). As has been admitted by the assessee in his submission, the relevant material regarding the ESOP was on record, which has clearly been over looked by the A.O. as to ....
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....Thus the impugned assessment order is erroneous in so far as it is prejudicial to the interest of revenue and is liable to be set-aside. Accordingly, in the exercise of revisionary power u/s 263 of the Income Tax the assessment of A.Y. 2005-06 completed u/s 147/143(3) on 28/03/2013 is is hereby cancelled and restored to the Assessing Officer to make assessment de-novo after examining the entirety of the issues considered in this revision order u/s 263 in assessee's case after affording reasonable opportunity of being heard to the assessee. The A.O. is directed to make all necessary inquiries with the concerned agencies to ensure that all the issues which are subject matter of this revision order u/s 263 as per the findings given in paras-ll(A) to 11(F) above, are properly examined vis-a-vis the evidences collected and required to be collected, the claims made by the assessee regarding such evidences and the position of law, so as to ensure that the errors pointed out in this order and the prejudices caused to revenue as fper this order are eliminated and the amounts involved in these issues are taxed in the hands of the assessee or in any other hands as per law." 6. Aggrieved wi....
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....IT. He submitted that on the tax evasion petition of Shri S.K. Srivastava, CIT, OSD, action u/s 147 was initiated against the assessee and his spouse for F.Y.s 2004-05 to 2007-08 relevant to A.Y. 2005-06 to 2008-09 and the status of the aforesaid action is as under:- 8. Referring to the decision of the Tribunal in the case of the wife of the assessee, vide ITA No.3281 to 3284/Del/2015, order dated 11.10.2019, copy of which is placed in the paper book, page 364 to 435, he submitted that the coordinate Bench of the Tribunal has set aside the combined order dated 30th March, 2015 for all the assessment years. The ld. Counsel for the assessee submitted that the issue of unexplained perquisites is no longer res integra in view of the decision dated 11.10.2019 of the Delhi Bench of the Tribunal in the case of the spouse of the assessee in ITA No.3281 to 3284/Del/2015. He submitted that in the case of the assessee's spouse also, the case was reopened u/s 147/143(3) on the basis of the complaint of Shri S.K. Srivastava, CIT-OSD and further against the order u/s 147/143(3) of the Act action was taken u/s 263 by the PCIT which was set aside by the Tribunal. He submitted that when the appe....
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....sessment year i.e., A.Ys 2006-07. However, admittedly, the AO has made the addition for both i.e., two tickets and 1000 USD in the assessment year 2005-06 only. The ld. Counsel referring to various pages of the paper book submitted that the AO has made proper enquiry from the assessee and every parties like spouse of the assessee, employer of the assessee and even from the complainant also. The ld. Counsel filed the following chart stating the enquiries conducted by the AO:- 9. So far as ESOPs is concerned, the ld. Counsel submitted that the finding of the PCIT on the above issue is not in accordance with the law and is, therefore, misplaced and not tenable. He submitted that during the year under consideration i.e., A.Y. 2005-06, there was no provision in the Act to treat the ESOPs as perquisites in the hands of the assessee. He submitted that the amendment in section 17(2)(vi) of the Act was w.e.f. 01.04.2010. He submitted that prior to such amendment ESOPs were treated as capital receipts in the hands of recipient and were taxable only after the sale of the shares. Therefore, the observation of the PCIT that the AO did not conduct any enquiry regarding tax on receipt arisi....
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....ncometax Act, in any case satisfy the condition that order of assessment is prejudicial to the interests of the Revenue. He submitted that in case the order of the AO is erroneous, but is not prejudicial to the interest of the Revenue, the CIT is not competent to exercise jurisdiction u/s 263 of the Act. Therefore, the order passed u/s 263 is invalid and illegal and should be set aside. 11. The ld. Counsel submitted that admittedly, undisputedly and undeniably it is not a case of lack of enquiry or lack of investigation. A perusal of the show cause notice itself would show that it has not been stated in any manner how the AO has failed to apply his mind particularly when it has not been denied or disputed that all information including bank statement of the assessee, passport of the assessee and his family, information from employer have been furnished/collected in the course of assessment proceedings. Referring to the assessment order dated 28th March, 2013 passed u/s 147/143(3), he submitted that the order is neither erroneous nor prejudicial to the interest of the Revenue since it is not based on either incorrect information of law or fact or non-application of mind. There is....
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....as to proceed by some immediate enquiry. However, in the instant case PCIT has not conducted any enquiry and, therefore, the exercise of jurisdiction u/s 263 of the Act by the PCIT is liable to be set aside. For the above proposition, he relied on the decision of the Hon'ble Delhi High Court in the case of PCIT vs. Vinita Chaurasia, 394 ITR 758 (Del) and the decision in the case Delhi Airport Metro Express (P) Ltd., 398 ITR 8 (Del). Relying on various decisions, the ld. Counsel for assessee submitted that section 263 does not permit revision of order on the basis of suspicion, conjectures and surmises. For the above proposition, he relied on the order of the Hon'ble Supreme Court in the case of Sirpur Paper Mills Ltd. vs. CWT, 77 ITR 6 and Jeewanlal Ltd vs. Addl. CIT, 108 ITR 407 (Cal). Relying on various other decisions, the ld. Counsel submitted that section 263 of the Act cannot be invoked to make deeper enquiry. The ld. Counsel also relied on various other decisions placed in the synopsis and submitted that proceedings u/s 263 cannot be initiated for inadequate enquiry, but, only for lack of enquiry which is distinct from inadequate enquiry. He accordingly submitted that the....
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....t conduct any enquiry to find out the veracity of such facts. 16. We find, identical issue had come up before the Tribunal in the case of spouse of the assessee, namely, Mrs. Shumana Sen wherein the coordinate Bench of the Tribunal, vide ITA No.3281-3284/Del/2015 (pages 364 to 435 of the paper book II) had decided identical issue. In that case also, the case was reopened u/s 147/143(3) of the Act on the basis of a complaint of Shri S.K. Srivastava, CIT(OSD) and further against the order passed u/s 147/143(3) of the Act action was taken by the PCIT u/s 263 of the Act. The Tribunal set aside the order of the PCIT by observing as under:- "10. The basis for the entire assessment proceedings and assumption of jurisdiction by the PCIT are based upon the complaints made by Shri S.K. Srivastava. It would not be out of place to refer to the directions of the Hon'ble High Court of Delhi on 01.03.2013 in an Interim Order in Appeal [C] No. 1 of 2013 wherein the Hon'ble High Court has observed with regard to Shri S.K. Srivastava as under: "No communication addressed by the petitioners qua any issue should be given any cognizance or taken into consideration and furth....
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....ted value of such gratification and corresponding expenditure involve in the region of about Rs. 3-5 crores. The Add/ CIT. Range-40. New Delhi vide his letter dated 02 12 2011 forwarded to TEP and letter of CIT, Delhi-XlV. New Delhi in the case of Mrs. Sumana Sen an existing assessee in this charge to take necessary action as per applicable law. The complainant being an IRS officer of 1087 batch and holding the rank of Commissioner of Income Tax subsequently also provided a copy of the letter dated 17/10/2011 written by Mrs. Sumana Sen to the Chairperson, Complaint Committee on Sexual Harassment, New Delhi wherein also Mrs. Sumana Sen has admitted that she had travelled abroad several times at the time of her husband's employment with M/s NDTV Ltd. before, during and after her stint in Circle-13(1). New Delhi. Pursuant to the receipt of the copy of the TEP the matter was independently examined in exercise of independent quasijudicial discretion by the undersigned. It was found that the Returns of Income of Mrs. Sumana Sen an existing assessee in this office for the relevant period i.e. A.Y. 2004-2005, 2005- 2006, 2006-200 7, 200 7-2008 & 2008- 2009 re....
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....sions of Rule 26(2)(b) is being relied upon. The assessee while claiming that the expenditure incurred by her on her foreign travels alongwith her family was part of the salary package of her Spouse Sh. Abhisar Sharma has not made any mention of the above refer red to statutory documents which are mandatorily to be submitted by the concerned assessee nor has included any of these documents either with the affidavit filed by her before Hon'ble Delhi High Court nor with official letter dated 17/10 2011. In view of the above facts there is an admitted position about expenditure incurred on foreign travels of the assessee and her family during the period F.Y. 2003-2004 to F. Y. 2007-2003. The sources of expenditure incurred by the assessee on her foreign travels during the above mentioned period required to be verified to ascertain the correct and full tax payable by the assessee on her taxable income. In view of the facts and circumstances stated hereinabove and the material available on the record of this office. I have reasons to believe that income far in excess of the limit prescribed in law and much more than the limit of Rs. One lakh prescribe....
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.... 3 Apart from that, claim oj Shumana Sen is incorrect in so much expenditure incurred on the trip was Bribe paid to Ms Shumana Sen DCIT, Cir. 13(1) and Assessing Officer of NDTV Ltd. at the material time, the entire amount of expenditure incurred on yearly vacation abroad by Sh. Abhisar Sharma and Shumana Sen. paid by employer of Sh. Abhisar Sharma it/ 17 of the I T Act, 1961 being the income oj the assessee. 4 M/s NDTV Ltd. has also not included the expenditure incurred on vacation abroad of Ms Shumana Sen in the salary of Sh. Abhisar Sharma . and has not deducted any tax on that nor has included any perquisite in the Form of 16 issued by NDTV Ltd. to Sh. Abhisar Sharma and thereby it is clear that expenditure incurred on the vacation abroad of Ms Shumana Sen was not the salary of Sh. Abhisar Sharma but bribe and illegal gratification received by Ms. Shumana Sen ay DCIT Cir. 13(1), for favouring M/s NDTV Ltd. illegally." 17. The reopening vis a vis notices u/s 148 of the Act was challenged by the assessee before the Hon'ble High Court of Delhi by way of writ petition and the said writ petition was disposed of by the Hon'ble High Court vide order da....
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.... Form No. 16 and a copy of his Passport. H) Moveable or Immovable property sold or purchased, individually or jointly, during the relevant period i.e F Y2004- 05 alongwith the sale purchase Deed and source of such expenditure or utilization of sale proceeds received if any Photocopy of immovable property declared in your office for the relevant period" 18. In her reply, inter alia, the assessee referred to the observations of the Hon'ble High Court of Delhi which have been mentioned by us elsewhere. During the course of assessment proceedings, the Assessing Officer called for information u/s 133(6) of the Act from NDTV Ltd in the case of Abhisar Sharma [spouse of the assessee]. The following information was called for: "Sh. Abhisar Sharma was employed by M/s NDTV Ltd. during October 2003 to October 2007, i.e. financial year 2003-04,2004- 05,2005-06,2006-07 and 2007-08. You are requested to provide the following information u/s 133(6) of the Income-tax Act, 1961 In the above mentioned financial years for the period October 2003 to Oct, 2007, there are five financial years involved i.e.2003- 04 to 2007-08, you are therefore required to provide ....
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....by them due to this reason." 21. The assessee replied vide letter dated 11.03.2013 in response to the questionnaire, statement of the complainant, exhibit filed by the complainant of year wise details of alleged unaccounted and undisclosed income, expenditure and investment submitted by Shri S.K. Srivastava and detailed point wise reply was filed before the Assessing Officer. Subsequently, on 22.03.2013, in response to summons u/s 131 of the Act, statement of the assessee was recorded. The relevant portion reads as under: "In response to Summon u/s 131 of the l.T. Act, 1961, the asses see eel the ease on 25/3/2013 and statement on Oath was recorded. The relevant portion is as under:- "08. As per Tax evasion petition. Sh S.K Srivastava alleged that you have incurred expenditure to the tune of Rs. 3 Crores or more on such foreign travels during the financial year 2004-05 2005-06 2006-07 and 200^-08, whether you have gone to foreign trip during the financial year 2004-05. 2005- 06. 2006-07 and 2007-08. What is the source of the expenditure incurred, and how much expenditure you have actually incurred with documentary evidence? Ans: As per t....
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....in reply 8 above are reiterated. In this regard, my detailed reply in my letter dated 11703/2013, which gives point wise reply to each and every allegations leveled, along with the facts and the documentary evidence where ever applicable have been provided. 0. 10 In your reply dated 11/03/2013, in para 1 you have replied that all such allegations made had been examined by the Vigilance directorate of the department as well as seniors and file had been closed pursuant to the same. So, have you any documentary evidence for this verification? Ans: I have no documents in my possession regarding the same However, as had been requested by my letter dated 11/03/2013. a copy of the report may be sought from the concerned authorities. Without prejudice to the same, it Is stated that these allegations have been withdrawn by the complainant as already been stated above by me and therefore have no bearing to the impugned assessment proceedings." 22. Proceeding further, the Assessing Officer issued summons u/s 131 of the Act to Shri Abhisar Sharma, husband of the assessee whose statement was recorded on oath on 29.03.2013. The relevant part of the statement r....
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....nd my family, consisting of my wife and my daughter, who was at that time 2 years and 8 months old. The source of my expenditure was my salary consisting of foreign travel allowance of foreign travel allowance of Rs. 1,32,996/- per annum and my savings. 1 had a balance of approx. Rs. 1,65,271 - in my account at that time. Boarding and lodging in U.K. was at my wife's Aunt place and in Ireland the boarding and lodging was through a package tour, made by travel agent The trip was for 7 to 10 days. 4. There was no foreign trip with family for the Asstt. Year. 2008-09 0.9. Ms Shuman Sen your wife has claimed in her writ Para3.43. page 17 and 18, a copy of affidavit submitted in Hon'ble Delhi High Court that her trip to Europe arose because of a yearly vacation abroad with family being part of salary package of Sh. Abhisar Sharma declared to be her spouse and an employee to M/s NDTV Ltd. in this context what do you want to say? Ans. 9. It has been correctly stated by my wife that foreign travel allowance was part of my salary package. The same is evident from the submissions made by me in my reply above in Q No. 8 " Copy of bank statement of A....
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....tion u/s 133(6) of IT Act, 1961 was obtained from M/s NDTV L.td. regarding employment contracts of Abhisar Sharma for AY. 2005-06 to AY.2008-09. b) .Information u/s 133(6) of If Act, 1961 was obtained from DIT(Vigilance)- II, New Delhi regarding outcome vigilance proceedings in case of the assessee visa vis NDTV Ltd. c) . Information u/s 133(6) of IT Act, 1961 from ACIT Circle 47(1), New Delhi regarding investigations conducted in case of Abhisar Sharma and assessment order passed for AY.2005-06 by him. d) Statements recorded u/s 131 of IT Act,1961 of Sh. S.K. Srivastava, Sh. Abhisar Sharma and the assessee. e) Bank statements of Abhisar Sharma with Standard Chartered Bank and that of the assessee with Syndicate Bank were examined vis a vis these foreign trips. Bank statement with ICICI Bank (joint account of assessee with her husband) were examined. f) Apart from it information u/s 133(6) was called from ACIT(Finance) O/o CCIT-I, New Delhi, ACIT(Personnel) O/o CCIT-I, New Delhi and M/s British Airways and same was obtained. g) Copies of passports of the assessee and Abhisar Sharma were examined for verification of these foreign....
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....se foreign travels was foreign travel allowance provided by M/s NDTV Ltd. and his personal savings and the assessee and her daughter had accompanied him as family members. There are supporting withdrawals in the bank account of Abhisar Sharma regarding their foreign travels. j). A complaint to this effects was being processed by Vigilance Directorate of Income Tax Department against the assessee which has been closed as per details outlined in proceeding. paragraphs. The facts of the complaint were same and related foreign travels of the assessee w.r.t. M/s NDTV 1 td. k). The Assessing officer of Sh. Abhisar Sharma has made an addition for undisclosed perquisites in hands of Abhisar Sharma in AY. 2005-06 in regard to the two economy tickets and US $ 1000 received by him from M/s NDTV Ltd. 55 1) Thus, the reasons outlined in reopening of assessment do not stand proved in view of the employment contract provided by M/s NDTV Ltd. and other investigations conducted as elaborated above m). The statements recorded of Sh Abhisar Sharma u/s 131 of IT Act,1961 is separately being forwarded to ACIT Circle 47(1), New Delhi for information and action, as dee....
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....tion of law that powers u/s 263 of the Act can be exercised by the Commissioner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and prejudicial to the interest of the Revenue. By 'erroneous' it is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Our view is fortified by the decision of Hon'ble High Court of Bombay in the case of CIT vs. Nirav Modi, [2016] 71 taxmann.com 272 (Bombay). This view is further supported by the decision of the Hon'ble Gujarat High Court in the case of Shri Prakash 58 Bhagchand Khatri in Tax Appeal No. 177 with Tax Appeal No.178 of 201....
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....ught 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 Income-tax Officer 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) of the Act. The provision 60 cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous ". 32. The co-ordinate bench in the case of Technip UK Ltd, ITA No. 1116/DEL/2014 vide order dated 17.12.2018 has held as under: "62. We find the Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar reported in 335 ITR 83 has held that where it was discernible from record that the A.O has applied his mind to the issue in question, the ld. CIT cannot invoke section 263 of the Act merely because he has different opinion. Relevant observation of the High Court reads as under: 63. We find the Hon'ble De....
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.... that the assessee explained that the capital investment made by the partners, which had been called into question by the CIT was duly reflected in the 62 respective assessments of the partners who were I.T. assessees and the unsecured loan taken from M/s Stutee Chit & Finance (P) Ltd. was duly reflected in the assessment order of the said chit fund which was also an assessee." 64. Since in the instant case the A.O after considering the various submissions made by the assessee from time to time and has taken a possible view, therefore, merely because the DIT does not agree with the opinion of the A.O, he cannot invoke the provisions of section 263 to substitute his own opinion. It has further been held in several decisions that when the A.O has made enquiry to his satisfaction and it is not a case of no enquiry and the DIT/CIT wants that the case could have been investigated/ probed in a particular manner, he cannot assume jurisdiction u/s 263 of the Act. In view of the above discussion, we hold that the assumption of jurisdiction by the DIT u/s 263 of the Act is not in accordance with law. We, therefore, quash the same and grounds raised by the assessee are allowed." ....
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....may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. It may be said in such a case that in the opinion of the Commissioner the order in question is prejudicial to the interests of the Revenue. But that by itself will not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, viz., that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the interests of the Revenue, then also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second ....
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....eover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an expenditure of capital nature. He simply asked the Income-tax Officer to re-examine the matter. That, in our opinion, is not permissible. Hence the provisions of section 263 of the Act were not applicable to the instant case and, therefore, the commissioner was not justified in setting aside the assessment order." 34. The ld. DR, in his written submissions, has relied upon the judgment dated 20.07.2018 of the Hon'ble High Court of Delhi in the case of Braham Dev Gupta 907 of 2017. We find that the facts of the case in hand are not even remotely related to the facts of this case. 35. Reliance was also placed on the decision of the Hon'ble High Court of Delhi in the case of BSES Rajadhani Power Ltd 399 ITR 228 is again distinguishable on facts as in that case, the Assessing Officer did not go into the issue with respect to whole claim of deprecation and that was considered as an error justif....
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....serves to be set aside. We, accordingly, set aside the order of the PCIT and restore that of the Assessing Officer. We order accordingly. 40. Before parting with the present order, we are constrained to bring on record, to be looked into by the Central Board of Direct Taxes (CBDT) that proceedings u/s 263 of the Act have been initiated in this case apparently on the basis of false, frivolous and baseless allegations with malafide intention of the quarter concerned which were also examined and found not sustainable by the Vigilance Directorate of Income-tax Department. No doubt, proceedings u/s 263 of the Act having been initiated and completed on the allegations leveled by a Senior Officer of the Income-tax Department is an order passed by a quasi-judicial authority but it sans judicious approach required to be exercised by the quasi-judicial authority. Quasi-judicial proceedings initiated apparently on the basis of false, frivolous and baseless allegations have not only prejudiced appellant rather it has also wasted the valuable time of the Tribunal. Facts and circumstances of the case, available on record as discussed in the preceding paras prove, that the Senio....
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.... law that in order to assume jurisdiction u/s 263 of the Act, the twin conditions namely, (a) that the order is erroneous and (b) that the order is prejudicial to the interest of the Revenue must be satisfied. In the instant case, the AO after examining the facts on record and after conducting all possible enquiries had passed the order by making certain additions. Therefore, merely because the ld. PCIT does not agree with the order of the AO cannot make the order erroneous as long as the same was passed after all possible enquiries and due verification of facts on record. It is not a case of lack of enquiry or lack of investigation so as to invoke the provisions of section 263 of the IT Act, 1961. Further, the PCIT himself has not conducted any enquiry so as to give a definite finding that the order passed by the AO is erroneous. Even otherwise also when two views are possible and the AO has adopted one possible view, the order of the AO cannot be said to be erroneous so as to assume the jurisdiction u/s 263 since the twin conditions cannot be fulfilled. 20. In this view of the matter, we hold that the PCIT was not justified in assuming jurisdiction u/s 263 of the IT Act, 19....
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....ok-I) NDTV (Employer of Appellant during the period under consideration) 20.12.2012 Notice u/s 133(6) issued (pages 501- 502 of Paper Book-II) 11.1.2013 Reply received (pages 504-505 of Paper Book-II) 11.1.2013 Details asked by order sheet entry dated 11.1.2013 iv) Paper Book-II) 11 4.2.2013 (page 131 of Shri Manocha, Vice President of M/s NDTV Ltd. attended before learned Paper Book-II) 12 (page 132 of Paper Book-II) vi) 13 vii) (page 133 of Paper Book-II) 18 (page 138 of Paper Book-II) viii) 25 8.3.2013 (page 145 of Paper Book-II) ix) 26 (page 146 of Paper Book-II) x) 29 (page 149 of Paper Book-II) IV Spouse of Wife Assessing Officer and further detail has been asked from him. 11.2.2013 Details received from NDTV u/s 133(6) of the Act 14.2.2013 Notice u/s 133(6) issued (pages 517- 519 of Paper Book-II) Summon issued to Principal officer of NDTV u/s 131(1) of the Act Shri Manocha, Vice President of M/s NDTV Ltd. attended the office and filed letter dated 7.3.2013, further detail has also been asked from him. 11.3.2013 Not....