2022 (2) TMI 1491

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....he assessee filed its Return of Income Electronically on 17.10.2016 declaring total income of Rs. 4,52,68,500/- which was revised on 28.02.2018 showing same income. The return was selected for scrutiny through CASS. Accordingly, statutory notices were issued and served upon the assessee. 5. After perusing the details/documents and after making necessary enquiries, assessment was completed on 26.12.2018 at Rs. 4,55,45,110/-. Assuming the powers conferred upon him by provisions of section 263 of the Act, the PCIT issued notice u/s. 28.03.2021 which reads as under: 6. In light of the aforementioned reasons given by the ld. PCIT in his notice initiating proceedings u/s. 263 of the Act, let us now consider the notice issued u/s. 142(1) of the Act by the Assessing Officer during the course of scrutiny assessment proceedings. 7. Vide notice dated 10.10.2018, the Assessing Officer, inter alia, asked the assessee to furnish details of sundry creditors, trade payables, current liabilities alongwith complete postal address and PAN of such parties having outstanding balance of Rs. 5 lakhs or more with further details relating to interest payment and TDS thereon. This notice is placed ....

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....evenue-- recourse cannot be had to section 263(1) of the Act. The provision 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." 14. We find that 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. 15. We further find the Hon'ble Delhi High Court in the case of Vikas Polymer reported in 341 ITR 537 has held as under: "63. We are thus of the opinion that the provisions of s. 263 of the Act, when read as a composite whole make it incumbent upon the CIT before exercising revisional powers to : (i) call for and examine the record, and (ii) give the assessee an opportunity of being heard and thereafter to make or cause to be made such enquiry as he deems necessary. It is only on fulf....

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....de 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." 16. The Hon'ble Bombay High Court in the case of Gabriel India Ltd. 203 ITR 108 has held as under: "The power of suo motu revision under sub-section (1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue of the order being ....

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....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 requirement also must be fulfilled. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act there must be material before the Commissioner to consider that the order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We have already held what is erroneous. It must be an order which is not in accordance with the la....

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.... satisfy the ld. PCIT in a prima facie manner that the order is not only prejudicial to the interest of the Revenue but also erroneous in nature. If any of these factors is not satisfied, he cannot assume jurisdiction to initiate suo moto power of revision. 18. A perusal of the order of the PCIT framed u/s. 263 of the Act shows that it is solely based upon the letter dated 06.10.2020 sent by the Assessing Officer proposing for invoking proceedings u/s. 263 of the Act in the case of the assessee. In that very letter, the Assessing Officer has categorically stated at Para 8 as under: "The order passed by the Assessing Officer is erroneous, as proper enquiries to arrive at a logical conclusion in light of facts available on record could not be made". 19. The Hon'ble Bombay High Court in the case of Gabriel India Ltd. 203 ITR 108 has explained the meaning of "erroneous" as an order which is not in accordance with law, or which has been passed by the Income Tax Officer without making any enquiry in undue haste. 20. The Hon'ble Bombay High Court further explained the meaning of "Prejudiced" as "an order can be said to be prejudicial to the interest of the Revenu....

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.... also have the option to file your submission from the e-filing portal using the link: incometaxindiaefiling.gov.in Subject: Notice for hearing in respect of assessment proceedings u/s 263 the I.T. Act in the case of M/s Paramount Propbuild Pvt Ltd (AADCP5228P) for the A.Y 2016-17- regarding, On review of the assessment records in your case for the assessment year 2016-17 it reveals that the assessment order passed u/s 143(3) on 26.12.2018 by the then ACIT, Circle 19(2). New Delhi, the following issues were found. 2. On perusal of the record it shown that a survey was conducted in the case of assessee M/s Paramount Propbuild Pvt Ltd by the DDIT(Inv.)-III, Noida and the Survey Report was forwarded to this office vide which it was communicated that you have received loans from the paper/bogus companies namely M/s Sarvottam Securities Ltd and M/s Upaj Leasing & Finarice Pvt Ltd which were found as intermediaries of Sh. Himanshu Verma, during FY 2015-16 relevant to AY 2016 17. This fact has also been confirmed by Mr. Note: If digitally signed, the date of digital signature may be taken as date of document. CR BUILDING ITO, IP ESTATE, NEW ....