TaxTMI 
TaxTMI 
2021 (5) TMI 484
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....The ld.Commissioner perused the assessment record and formed an opinion that the assessment order is erroneous as well as prejudicial to the interest of Revenue because according to him, the ld.AO has not conducted a proper inquiry with regard to the land development expenditure. Therefore, he issued a show cause notice under section 263 of the Act; copy of such notice is available at page no.6 of the paper book, which reads as under: "Pr.CIT-7/ABD/Tech/Revisionu/s.263/KPP/2018-19 Date: 14/03/2019 To, Shri Kaushikbhai P. Patel, 43, GIDC State, Naroda, Ahmedabad. PAN: AAAAVPP9887F Sub; Show cause notice u/s. 263 of the Income Tax Axt, 1961 for the AY. 2014-15-Reg. Ref: Proposal u/s 563 of the Income Tax Act, 1961 submitted by the ITO, Ward-7(2)(2),Ahmedabad vide letter No.ITO/Ward-7(2)(2)/263/KPP/2018-19 dated 30/07/2018 ***** Kindly refer to the above. On perusal of your case records, it is observed that return of income for the above mentioned assessment year was filed u/s 139(1) of the Income Tax Act, 1961 on 24/ 11/2014 declaring total income at Rs. 10,71,190/-. Upon scrutiny u/s 143(3) of the Act, the then AO i.e. DCIT, Central-1(4), Ahmedabad in....
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....ide to this limited issue and he is directed to make necessary enquiries regarding the genuineness of such expenses. In this regard, the A.O. may also summon these persons (who have allegedly received the payment) and ask them to produce evidences as to their living in that property and also as to why different members of the same family have been paid compensation by the assessee. The A.O. will also inquire if recipients have offered such receipts as income in their returns of income. 6. In view of the fact that. In this view of the matter, the aforesaid assessment order is set aside to the file of A.O. with a direction to examine the issue afresh, in light of the discussion above and finalize the assessment as per the Income Tax Act, 1961. The AO shall grant adequate and effective opportunity of being heard to the assessee before finalizing the assessment as per Income Tax Act, 1961." 5. While impugning order of the ld.Commissioner, the ld.counsel for the assessee drew our attention towards page no.4 of the paper book whereby copy of profit & loss account has been placed. He pointed out that the assessee has shown land development expenditure at Rs. 21,46,500/-. Further he h....
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....rformance 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 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, an....
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.... 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 AO examines the accounts, makes enquiries, applies his mi....