TaxTMI 
TaxTMI 
2020 (3) TMI 1389
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....ome of Rs. 16,92,180. The said return was processed under section 143(1) of the Income-tax Act, 1961. Subsequently, the case was selected for "complete" scrutiny through CASS (computer assisted scrutiny selection). Accordingly, notice under section 143(2) of the Income-tax Act, 1961 was issued for compliance. In response thereto, the authorized representative of the assessee appeared from time to time and furnished the details. The books of account with bills and vouchers of expenses were produced and the same were examined and verified. On scrutiny, the Assessing Officer, after disallowing Rs. 94,561 on account of freight and transportation charges, expenses under the head "Income-tax demand and deduction of tax at source demand" and penalty in electricity charges, completed the assessment on September 29, 2016 and determined the total income of Rs. 17,86,740 for the assessment year 2014-15. 2.1 But subsequently, the Principal Commissioner of Income-tax, Sambalpur called the assessment record and observed that the Assessing Officer has not examined the provisions of excise duty of closing stock of finished goods debited to profit and loss account, which has been shown as ....
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....ssessing Officer is erroneous and prejudicial to the interests of the Revenue on account of the fact that how and why if the profit is neutral after making provision by the assessee, he has made provisions and debited to profit and loss account which has not been examined by the Assessing Officer. Therefore, he justifies the order passed by the Principal Commissioner of Income-tax in revisionary jurisdiction, which has been confirmed by the Income-tax Appellate Tribunal, and contended that the impugned order dated November 13, 2019 in annexure 7, having been passed by the Appellate Tribunal with due application of mind, it cannot be said that the same suffers from any irregularity or illegality or there is any error apparent on the face of the record so as to cause interference of this court in the present appeal. 5. This court heard Mr. S. Ray, learned counsel for the appellant and Mr. S. S. Mohapatra, learned senior standing counsel appearing for the Income-tax Department. Pleadings having been exchanged between the parties and with the consent of the learned counsel for the parties, this appeal is being disposed of finally at the stage of admission. 6. On the basis of the ....
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.... (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 Principal Commissioner or 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 Principal Commissioner or 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. Explanation 2.-For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if in the opinion of the Principal Commissioner or Com missioner,- (a) the order is passed without making inquiries or verification which should have been made ; (b) the order is passed allowing any relief without inquiring into the claim ; (c) the order has not been made in accordance with any order, direction or instruction i....
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.... 1965 SC 871, Banwarilal Agarwalla v. State of Bihar, AIR 1961 SC 849 and Narayan Rao v. State of Andhra Pradesh, AIR 1957 SC 737. 10. In Smt. Sahodara Devi v. Government of India, AIR 1971 SC 1599, the apex court held normally, the word "may" is used to grant a discretion and not to indicate a mandatory direction. 11. In N. Nagendra Rao and Co. v. State of Andhra Pradesh AIR 1994 SC 2663, the word "may" confers discretion. 12. In Shri Rangaswami, the Textile Commissioner v. Sagar Textile Mills (P.) Ltd., AIR 1977 SC 1516, the apex court held the word "may" is capable of meaning "must" or "shall" in the light of the context and that where a discretion is conferred upon a public authority coupled with an obligation, the word "may" which denotes discretion should be construed to mean a command. 13. So applying the meanings attached, "may" implied to section 263 of the Income-tax Act mentioned above, the power has been vested with the Principal Commissioner, who may call for the records and may, after giving the assessee an opportunity of being heard, pass the order. Using of word in the present context "may" is capable of meaning "must" or "shall" where a discretion is co....
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....isdiction to proceed under section 34, the notice as prescribed in that section is a condition precedent. But no such notice is contemplated by section 33B. The jurisdiction of the Commissioner to proceed under section 33B is not dependent on the fulfilment of any condition precedent. All that he is required to do before reaching his decision and not before commencing the enquiry, he must give the assessee an opportunity of being heard and make or cause to make such enquiry as he deems necessary. Therefore, the prerequisites for compliance of this provision under section 33B is compliance of principles of natural justice. 17. Relying upon the judgments in Gita Devi Aggarwal (supra) and Electro House (supra), the apex court in Amitabh Bachchan (supra), while considering section 263 of the Income-tax Act, 1961 as amended in 2019, came to hold as follows (page 210 of 384 ITR) : ". . . . In fact, section 263 has been understood not to require any specific show-cause notice to be served on the assessee. Rather, what is required under the said provision is an opportunity of hearing to the assessee. The two requirements are different : the first would comprehend a prior notice....