TaxTMI 
TaxTMI 
2016 (1) TMI 1469
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....s herein were found and seized and accordingly, notices under section 153C of the I.T. Act were issued to the respective assessees and in response to the said notice, the assessees filed their returns of income for the relevant assessment year. Thereafter, the assessments were completed under section 143(3) read with section 153C of the I.T. Act after considering the information filed by the assessees' particularly with regard to the capital gains arising out of the transfer of land at Survey No.78, Hafeezpet (v), Serilingampally (M), R.R. District. The A.O. observed that there were 8 assignees/owners of ac.5.00 of land in the undivided ac.40.00 of land at Sy.No.78, Hafeezpet (v), Serilingampally (M), R.R. District and that all the assignees alienated their rights in the ac.5.00 of land in favour of Smt. Indrani Prasad w/o. Dr. P.S. Prasad one of the assesseees herein by a registered agreement of sale cum GPA registered vide Document No.8955/2005 dated 19.12.2005. It was further observed that during the F.Y. 2008-2009, the assessees through their Attorney vide three different sale deeds, sold their piece of land and the A.O. was of the opinion that the capital gains arising out of ....
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....ees are in appeal before us. 4. At the time of filing of appeal, the assessee has raised 12 grounds of appeal against the jurisdiction of the Ld. CIT under section 263 and also on the merits of the issue directed by the Ld. CIT for re-consideration. Subsequently, vide letter dated 25.08.2015, assessee raised additional grounds of appeal i.e., Ground Nos. 13 to 20 against the jurisdiction of the Ld. CIT in assuming jurisdiction under section 263 of the Act on the ground that the order passed by the A.O. under section 143(3) read with section 153C of the Act becomes invalid on the ground that there is no satisfaction recorded by the A.O. of the assessee's herein as well as the A.O. having jurisdiction over the persons searched and therefore, consequently, the impugned revision order under section 263 of the Act also would become invalid. Subsequently, vide letter dated 22nd December, 2015, the assessee raised further additional grounds of appeal Nos. 21 and 22 stating that the Ld. CIT has erred in law as well as on facts in invoking the provisions of section 263 of the Act on the proposal made by the A.O. and therefore, the impugned order under section 263 is to be quashed. The ad....
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....ted 04.12.2015, has held that 263 proceedings cannot be initiated without revising the directions of the Addl. CIT given under section 153D of the I.T. Act. He has submitted that the Tribunal has followed the decisions of earlier Benches of this Tribunal in the case of Mr. Ch. Krishna Murthy, Hyderabad Vs. ACIT, C.C.3, Hyderabad in ITA.No.766/Hyd/2012 dated 13.02.2015 to take this view. Copies of all these decisions are filed before us. 6. The Ld. D.R. however, opposed the contentions of the assessee and submitted that the Ld. CIT have considered the issues in their proper perspective before revising the assessment orders. Therefore, according to him, no interference is called for. 7. Having regard to the rival contentions and the material on record, we find that assessee has filed copies of the assessment orders passed by the A.O. under section 143(3) read with section 263 of the I.T. Act wherein at para-3 of the order, the A.O. has recorded as under : "3. Accordingly, the same was assessed as Short Term Capital Gain (Vide order u/s 154 of the IT Act dated 08.03.2013) raising a total demand of Rs. 3,44,12,086/-. Later, it is noticed that the market value of this lan....
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....o himself called record and examined the same for any proceeding under s. 263 of the Act. Therefore, it can be said that the learned CIT had not applied his mind but the matter was referred by the AO for initiating the proceeding under s. 263 of the Act. In the present case, from para 3 of the impugned order, it is noticed that the notice dt. 9th Jan., 2013 under s. 263 of the Act was issued only on receipt of the proposal under s. 263 of the Act from the ITO, Ward-l (2), Kota and the assessee explained, vide written submission which has been reproduced in para 4 of the impugned order, each and every objection raised by the ITO, Ward2, Sawai Madhopur. It is well-settled that the learned CIT while exercising the revisionary powers under s. 263 of the Act may call for and examine the records of any proceedings and thereafter if he considers that any order passed therein is erroneous insofar as it is prejudicial to the interest of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. Therefore, before taking any action, lea....
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.... Revision of assessment u/s. 263 of the IT Act, 1961 - Issue of show cause notice - Reg. The ACIT-Central Circle-3, Hyderabad has completed assessment u/s. 143(3) r.w.s.153C of the Income tax Act 1961, for the A Y 2008-09, in your case on 25-12-2011, determining taxable income at Rs. Nil. On verification of records, following facts are noticed : (1) As per balance sheet there is a minus balance of Rs. 1,56,77,454/- in the Partners' Capital account. As per deed of partnership, interest @12% was payable by the Firm on the credit balance in the partner's capital account. Similarly when there is debit balance i.e., minus balance in partners' capital account, interest needs to be charged and offered as income of the Firm. (2) As per Trading a/c there were no sales but assessee firm debited Rs. 32,18,144/- towards sales tax and no supporting challan for the payment of Sales tax was brought on record. Since the above issues have not been verified during the assessment proceedings, I am of the opinion that the Order passed by the Assessing Officer u/s, 143 (3) r.w.s. 153C, dated 25-12-2011 for the AY 2008-09 is erroneous in so far as it is pr....
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.... it is prejudicial to the interest of revenue. Hence, a proposal u/s 263 along with MRs in 1 vol. for AY 2008-09 is hereby submitted for kind perusal. Encl : MRs in 1 Vol. for AY 2008-09 Sd/- (RAJESH NATARAJAN) Asst. Commissioner of Income-tax, Central Circle-8, Hyderabad. Submitted to the Commissioner of Income-tax (Central), Hyderabad through the Addl. Commissioner of Income-tax, Central Range-3, Hyderabad." 5.2. Thus we can see that except for some cosmetic charges, the reasons are adopted verbatim by the CIT. In these circumstances, we find that the decision of Jaipur Bench of the Tribunal in the case of Dharmendra Kumar Bansal vs. CIT (supra), is squarely applicable to the facts before us. Respectfully following the same, we hold that the revision orders passed by the Ld. CIT are not maintainable for want of valid initiation of the proceedings under section 263 of the Act. Since the additional ground of appeal of the assessee has been allowed, the regular grounds on merits of the revision have become academic and therefore, we do not see any reason to adjudicate the same at this stage." 8. In the case before us also, ....