TaxTMI 
TaxTMI 
2016 (8) TMI 1565
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....s however have been dealt with separately for each assessment year. A consolidated order has been passed for the sake of brevity. ITA No. 813/PN/2014 (A.Y. 2008-09) : 3. The assessee in ITA No.813/PN/2014 has raised the following Grounds of Appeal :- "1) On the facts and circumstances of the case and in law the action taken by Ld. CIT-V, Pune under S. 263(1) of the Act and order passed dt. 28-3-2014 is contrary to law and facts. The order is unsustainable in law and it be quashed. 2) On the facts and circumstances of the case and in law and in view of the fact that the similar matter was in appeal before CIT(A)-V, Pune and therefore the provisions of S. 263(1)(c) squarely applied. No action was then possible u/s 263 of the Act. The order u/s 263(1) passed by CIT be quashed. 3) On the facts and circumstances of the case and in law the assessment order which merged into appeal order of the CIT(A) could not be termed as erroneous as well as prejudicial to the interests of Revenue. Also under S. 263 the Ld. CIT is not supposed to direct fishing and roving enquiries by issuing directions to A. O. The CIT is expected to exercise his powers within the bounds of law. The order pa....
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....set-aside has been carried in appeal before the CIT(A) and the CIT(A) passed appellate order on 27.07.2012 with certain reliefs granted to the assessee. The Department also filed second appeal before the ITAT, Pune against the aforesaid order of CIT(A). In view of the same, it was argued that the issues being similar, Explanation (C) to section 263 will be applicable which prohibits revision under section 263 in such cases. As regards income credited towards written back amount, the assessee quoted the provisions of section 41(1) of the Act and submitted that assessee in this case has unilaterally admitted the cessation or remission of liability to the extent of Rs. 2,40,04,153/- which was accepted by the CIT(A). It was further stated before the Commissioner that there was no failure on the part of the Assessing Officer in making enquiries since the assessment was completed on unilateral write back of liabilities by Assessee and thus beyond the income written back, no inquiry was plausible and called for. It was also stated that it could not be said that enquiry was inadequate as complete details were provided to the Assessing Officer. Therefore, the proposed action is not permissi....
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.... is vitiated in law. Consequently, the order framed under section 263 of the Act dated 28.03.2014 requires to be set-aside. 10. The Ld. Departmental Representative (DR) for the Revenue, on the other hand, relied upon the order of the Commissioner and submitted that in the absence of requisite enquiry on the pertinent issues as pointed out in the order of the Commissioner, the action of the Commissioner under section 263 was in accordance with law and justified. 11. We have carefully considered the rival submissions. Section 263 of the Income-tax Act, 1961 (the "Act") confers the power upon the Commissioner to call for and examine the records of a proceeding under the Act and revise any order if he considers the same to be erroneous and prejudicial to the interests of the revenue. The Commissioner can take recourse to revision under Section 263 where the assessment order is erroneous as well as prejudicial to the interest of revenue. The twin conditions are required to be satisfied simultaneously. The Commissioner in the present case has purported to act in exercise of power under section 263 and thereby has sought to set aside the reassessment order of the assessing officer passe....
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....s under statutory duty to peddle roving enquiries to explore the possibility of escapement on every other item that may possibly give rise to some chargeable income in the hands of an assessee in the garb of assessment of 'other income' without there being any relevant material in the possession of the AO in this regard. 12.3 Section 147 provides that the AO may also assess or reassess 'other income' which comes to his notice subsequently in the course of proceedings in addition to the escaped income for which the assessment was reopened. Thus the text of S. 147 i.e. 'comes to his notice' unmistakably suggests passive nature of authority available with the AO to assess 'other income' too along with escaped income for which the case was reopened. Ostensibly, unlike a regular assessment, S. 147 does not comprehend a pro-active probe of generic nature and random enquiries into all aspects of the assessment per se. In ordinary parlance, witch hunting is not intended. Thus the exercise of jurisdiction to include 'other income' can not be stretched to hold fishing and roving enquiries without some probable cause that assessee has omitted or failed to disclose such 'other income'. To rei....
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.... a point of finality on all legal proceedings. Needless to say, the discretion given to the Commissioner is required to be exercised in a judicious manner. On facts, We notice that the Commissioner has merely entertained strong suspicion on the bona-fide of trading results owing to huge losses and observed that in the absence of income reported on account of credit towards write back of certain amounts under section 41(1), the assessee has declared trading losses on a substantial turnover which ought not to have been accepted without embarking upon a detailed enquiry. The show-cause action of the Commissioner under section 263 seeking to upset the reassessment order is thus clearly actuated in the realm of such suspicion. In other words, as per the Commissioner, the Assessing Officer while framing the assessment in a proceeding under S. 147 ought to unleash fishing and roving enquiry to ascertain the correctness of reported loss which were already stood concluded earlier and was not under reference in the recorded reasons. As noted earlier, indulging in roving enquiry under S. 147 on unconnected issues is a case of overreaching of powers which is not permissible in law. The Assessi....
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....-visited by the Commissioner in view of section 263(1)(c) of the Act. Thus, in view of section 263(1)(c) of the Act, the action of Commissioner on the same issue is outside the pale of its competence and thus bad in law on this score also. 14. In the light of aforesaid discussion, we find that the action of the Commissioner is without authority of law and therefore cannot be sustained. In consequence, the order passed under section 263 for assessment year 200809 dated 28.03.2014 is set-aside and quashed. 15. In the result, the appeal of the assessee in ITA No.813/PN/2014 relating to assessment year 2008-09 is allowed. ITA No. 814/PN/2014 (A.Y. 2009-10) : 16. For the relevant assessment year 2009-10, the Commissioner invoked his revisionary power under section 263 against the order passed by the Assessing Officer under section 143(3) of the Act dated 16.12.2011 on the ground as noted in the show-cause notice issued for this purpose as under :- "It is seen that during the course of assessment proceedings that assessee has write off amount of Rs. 1,17,39,724/- and written back of Rs. 62,00,313/- and the net effect of Rs. 55,39,411/- (Rs. 1,17,39,724.00 - 62,00,313.00) has been ....