TaxTMI 
TaxTMI 
TaxTMI 
2022 (3) TMI 478
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.... u/s 153A of the Act were issued from AY 2013-14 to AY 2016-17 which were complied with by the assessee by filing returns of income for all the four assessment years. The AO, after issuing notices u/s 142(1) and 143(2) of the Act and after calling various details/information/explanation from the assessee by issuing detailed questionnaires during the assessment proceedings and taking into consideration the replies of the assessee, framed the assessments for all the four assessment years u/s 143(3) read with Section 153A of the Act. Thereafter ,the Ld. PCIT upon perusal of the assessment records came to the conclusion that the assessment orders passed by the AO u/s 143(3) read with Section 153A of the Act from AY 2013-14 to 2016-17 were erroneous in so far as prejudicial to the interest of the revenue as the AO has failed to take necessary action in examining the various issues and apply his mind properly. Accordingly, the Ld. PCIT issued show cause notices u/s 263 of the Act dated 03.03.2021 for all the four assessment years for various reasons as stated therein which according to Ld. PCIT were not enquired and examined by the AO. The years wise issues raised by the Ld. PCIT are as ....
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....non-attending students was substantially higher than the fee from regular students. The Ld. PCIT noted that fee of regular students was in the range of Rs. 17,000/- to 21,000/- whereas the fee for non-attending students ranged from Rs. 30,000/- to 49,000/-. The ld. PCIT on the basis of average fee collected from nonattending students came to the conclusion that total receipts for non-attending students for class class X & XII should be Rs. 1,74,12,300/-. The Ld. PCIT also observed that the assessee has suppressed the actual receipt of the trust and utilized the same for personal benefits such as investments in properties in the name of Trustees. According to Ld. PCIT, the sheet as per Tally Accounts of the trust were found from the digital data seized /impounded from the residential cum office premises of Shri Shankar Kumar at 2nd & 3rd Floor, Shivam Convent, New Bypass Road, Patna and from perusal of profit and loss account of assessee revealed total receipt of Rs. 23,30,66,033/- in AY 2016-17 whereas as per audit report ,the total receipts were only Rs. 14,56,33,557/- and thus there was a suppression of fee to the tune of Rs. 8,74,32,476/-. According to Ld. PCIT, these receipts h....
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....ns of the assessee which were filed in response to the questionnaires issued by the AO along with notices issued u/s 142(1) of the Act. The ld AR referred to the specific para in the questionnaires and the replies of the assessee in respect thereof in all four assessment years to explain that all these issues were examined and enquired by the AO by giving yearwise details. 5.1. In AY 2013-14, the Ld. A.R. drew our attention to the notice issued u/s 142(1) dated 14.09.2018 along with questionnaire copy whereof is placed in the PB at page 14 to 16. in which the AO has specifically called upon the assessee vide para 16 to file the name and address of the person from whom the loan was taken, mode of taking loan along with proof of identity, creditworthiness , genuineness qua the unsecured of Rs. 1,11,00,000/- and also the details of land purchased. The Ld. A.R. ,by referring to the written submission/reply filed in response to the questionnaire issued , submitted that vide para 16 the receipt of Rs. 1,11,00,000/- has been explained by the assessee by stating that the assessee has purchased plot ad measuring 1.16 acres from Shri Shankar Kumar , Smt. Neelu Devi at Gharichak for the purp....
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.....03.2013. Later on the agreement was cancelled and the advance given was refunded and remitted through RTGS on 16.07.2013 in PNB account by the seller. The ld counsel of the assessee argued that conclusion of the ld. PCIT that the assessee has not disclosed the credit of Rs. 1,06,27,500/- bereft of any truth as the account with PNB is duly shown in the books of account and produced before the AO. Similarly, the AO raised a specific query about the non disclosure of fee of Rs. 26,71,000/- vide para 18 of the questionnaire issued with the notice u/s 142(1) of the Act dated 14.09.2018 copy of which is placed at page no134 of the PB and the assessee replied the said query by submissions copy of which is placed at page no. 138 to 142 of PB. It was submitted before the AO that total number of students as per the books of accounts were matching with the CBSE records by furnishing school wise summary, school wise fee accounted in the books and proof of students appearing from the assessee schools which are matching with CBSE records which was accepted by the AO. Therefore the exercise of jurisdiction u/s 263 was not invalid as the AO has accepted the plea of the assessee on both the issues....
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....res and the said company was doing construction of building and has shown building under construction to the tune of Rs. 4.05 lakhs which has been accepted by the AO. 5.5. The Ld. A.R. submitted that ,on the basis of the above facts and evidences, it is clear that the AO has examined and enquired all the issues as covered by the ld. PCIT in the order u/s 263 of the Act , the assumption of jurisdiction by the PCIT u/s 263 of the Act is not validly exercised which renders the revisionary proceedings as well as the consequent order as nullity and bad in law and may kindly be quashed. The Ld. A.R. argued that in order to exercise jurisdiction u/s 263 of the Act, the order passed by the AO has to be erroneous in so far as prejudicial to the interest of revenue meaning thereby that the twin conditions, namely assessment being erroneous as well as prejudicial to the interest of revenue, have to be satisfied otherwise recourse cannot be had to the provisions of section 263 of the Act to set aside the assessment by relying on the decision of Malabar Industrial Co vs. CIT 198 ITR 611(SC). The Ld. Counsel further argued the ld PCIT cannot exercise the jurisdiction u/s 263 of the Act where th....
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....kes the order unsustainable in the eyes of law. The Ld. A.R. contended that the provisions of section 263 of the Act cannot be invoked to conduct the fresh investigation by revising the assessment by relying on the decision of Hon'ble Delhi High Court in the case of CIT vs. Leisure Wear Exports Ltd. 46 DTR 97(Del) and the decision of Co-ordinate Bench of ITAT, Kolkata in the case of Boddhisatva Chattaopadyay vs. CIT in ITA No. 1314/Kol/2019. The Ld. A.R. submitted that the AO has taken a view after examining the details/explanations of assessee,then the Ld. PCIT cannot invoke the provision of section 263 of the Act to revise the assessment for a reason that a different view can be taken on the basis of the same record. The Ld. A.R. relied on a series of decisions to corroborate his arguments: i) CIT vs. Arvind Jewellers (2003) 259 ITR 502 (Guj) ii) CIT vs. Mehrotra Brothers 270 ITR 157 (MP) iii) CIT vs. Deepak Mittal 324 ITR 411 (P & H) iv) CIT vs. International Travel House, 194 Taxman 324 (Del). 5.6. The Ld. A.R. also referred to explanation (2) of Section 263 as inserted w.e.f. 01.06.2015 which conferred the PCIT specific power to revise the assessment where order is pa....
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....l these issues. The ld DR also referred to the explanation (2) of Section 263 as inserted w.e.f. 01.06.2015 which provides in clears words that the PCIT can revise the assessment if in his opinion the AO has not made the enquiry or not examined the issues which should have been made. The Ld. D.R. submitted that even in the set aside proceedings , the assessee would be free to present its case on all these issues. The Ld. D.R, therefore , prayed before the bench that the order of the PCIT may be upheld by dismissing the appeal of the assessee. 5. We have heard rival contentions and perused the facts on record carefully including the revisionary orders passed u/s 263 of the Act and various decisions cited before us. We note that a search action 132(1) of the Act was conducted on the assessee on 26.10.2016 and notices u/s 153A of the Act from AY 2013-14 to 2016-17 were issued which were complied with by the assessee by filing the returns of income for all the four assessment years. During the assessment proceedings, notices 142(1) of the Act along with questionnaires were issued calling for various details and explanation from the assessee on various issues which were replied by the ....
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....ramed by the AO in all the above four years were erroneous in so far as prejudicial to the interest of the revenue. It is settled law that in order to invoke the jurisdiction u/s 263 of the Act by the PCIT, the twin conditions i.e. the order has to be erroneous and prejudicial to the interest of the revenue, have to be satisfied. In case one of the condition is satisfied out of the two, even then the PCIT cannot invoke the jurisdiction u/s 263 of the Act to revise the assessment. It is also a settled law that the jurisdiction is not available to PCIT u/s 263 of the Act to revise the assessment on the issues merely because no reference or discussion has been made in the assessment order especially when the AO has called for details/explanations from the assessee on all the issues as proposed by PCIT in the order passed u/s 263 and assessee has responded the same by filing written submissions with details/evidences which are part of the assessment records. In other words, the revisionary jurisdiction is not available to the PCIT merely on the ground that AO sought reply from the assessee during assessment proceedings which furnished by the assessee with evidences and are available in....
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....onsidered the earlier decision passed by the Co-ordinate Bench in the case of Malabar Industrials Co. (supra). In the case of the assessee since the AO has taken one of the two possible view on all the issues after examining them during assessment proceedings to which the PCIT does not agree and therefore the revisionary proceedings cannot be justified and sustained. * In the case of CIT vs. Gabriel India Ltd. (supra) the Hon'ble Bombay High Court has held that in order to invoke the jurisdiction u/s 263(1) of the Act there must be material before the Commissioner to consider that the order passed by the ITO was erroneous insofar as prejudicial to the interest of the revenue. The Hon'ble court has held that an erroneous order must be an order which is not in accordance with the law or which has been passed by the AO in undue haste without making any enquiry. The Hon'ble Court has further held that the order is said to be prejudicial to the interest of revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realized or cannot be realized. The Hon'ble Court held that such a decision of Income Tax Officer cannot be held....