TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 291
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....on 27.12.2017 was erroneous and prejudicial to the interest of Revenue. PCIT thereafter issued a show-cause notice u/s 263 of the Act on 24.02.2021. Subsequently another notice dated 03.03.2021 was issued to the assessee u/s 263 of the Act and the assessee was asked to show cause as to why the assessment order passed by the AO u/s 143(3) not be set aside in terms of provisions of s. 263 of the Act. 4. In response to the show-cause notice assessee inter alia objected to the initiation of proceedings u/s 263 of the Act and on the merits submitted that during the assessment proceedings various questions were raised by the AO on the issue of short term capital gain and after receiving the reply of the assessee and on being satisfied with the explanations offered by the assessee, AO passed assessment order u/s 143(3) of the Act without making any adjustment to the total income. On the merits of the computation of short term capital gain, assessee filed the necessary details before PCIT and for the reasons stated therein it was submitted that the provision of Section 263 of the Act were not applicable. 5. The PCIT did not accept the contentions of the Assessee. He thereafter vide order....
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.... 8. Before us, the Ld. A.R. submitted that in the present case the pre-requisite conditions specified u/s 263 of the Act for invoking the revisionary proceedings were not satisfied and therefore the proceedings initiated u/s 263 of the Act lacks jurisdiction and are bad in law. He submitted that u/s 263 of the Act, the Ld. CIT/PCIT can revise an order passed by the AO only on the satisfaction of twin conditions namely (i) the order is erroneous and (ii) it is prejudicial to the interest of Revenue. If one of them is absent i.e. if either the order of the Revenue is erroneous but is not prejudicial to the interest of the Revenue or if it is not erroneous but is prejudicial to the interest of Revenue - recourse cannot be had to Sec.263(1). He further submitted that the error envisaged by Sec.263 is not one which depends on possibility or guesswork but it should be an actual error either of facts or of law. He further submitted that when two views are possible and the AO has taken one view with which the Ld. CIT/PCIT does not agree, the order of the AO cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the AO is unsustainable i....
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....PCIT thereafter issued two notices u/s 263, one on 20.4.2021 and the other on 1.3.2021, to which the assessee made the submissions. The submissions of the assessee were not found acceptable to PCIT. He thereafter set aside the order passed by AO u/s 143(3) of the Act dated 27.12.2017 and directed the AO to make afresh assessment after considering the observations of Pr. CIT in his order. 12. Learned AR submitted that notices issued by PCIT to be bad in law. He submitted that assessee received two notices from Learned PCIT u/s 263 of the Act. He pointed to the first notice dated 24.02.2021 which is placed at Page 111 of the paper book and pointing to the aforesaid notice, he submitted that notice was general in nature which only fixed the appointment for hearing on 01.03.2021 and it was vague in terms of the provisions contained in Section 263 of the Act as no cause of action has been disclosed in the notice. He pointed to the notice wherein the assessee was directed to "produce supporting documents/ information in support of the issues involved as mentioned below" but there was no detail about the issue for which the assessee was required to file the information. He submitted that....
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....essment order passed by the AO u/s 143(3) to be erroneous and prejudicial to the interest of Revenue. He submitted that the summary of the reasons which led the PCIT to conclude that the assessment order passed u/s 143(3) being erroneous and prejudicial to the interest of the Revenue are as under: (i). AO had failed to conduct any field enquiry and/or third party verification to examine the genuineness of the short term capital gain offered by the assessee at 15% u/s 111A of the Act. (ii) The shares of K. D. Trend Wear Ltd. was purchased offline. (iii) DCIT, Circle-1, Faridabad had conducted enquiries during the course of assessment proceedings in the case of Shri Ankit Aggrawal, son of the assessee, where it was found that at the given address of K. D. Trendwear Ltd. no company could be located. (iv) The fundamentals of K. D. Trendwear Ltd. did not justify the movement of its price in the stock exchange. Further, the scrip was delisted in December 2017 as the company had opted for voluntary delisting. Thus according to PCIT, K. D. Trendwear Ltd. was apparently a penny stock. (v). The order passed by AO was a cryptic and non-speaking order. 15. Learned AR pointed to the ....
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....contrary extensive inquires were made by the AO and thereafter the order was passed by AO. He submitted that the case of the assessee is not that of non inquiry or lack of inquiry by AO. He therefore submitted that the ratio of the aforesaid decision and other decisions relied upon by PCIT are not applicable to the facts of the assessee. He therefore submitted that the order of PCIT be set aside. 18. Learned DR on the other hand took us to the observations of PCIT in the order passed u/s 263 of the Act and submitted that considering the observations made by PCIT, the order of the AO was a fit case for invocation of provisions of Section 263 and PCIT had rightly set aside the order of AO. She thus supported the order of PCIT. 19. We have heard the rival submissions and perused the materials available on record. The issue in the present case is about the invoking of provisions of Section 263 by Ld. PCIT. Section 263(1) of the Act, the powers under which Learned PCIT has assumed power for revision reads as under : "(1) The Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner may call for and examine the record of any proceeding under thi....
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.... details contained therein. The paper book filed by the assessee reveals that in response to the notice issued by AO, assessee had made submissions on various dates namely on 1.9.2017, 5.12.2017, 13.12.2017, 18.12.2017 and on 21.12.2017. On the aforesaid dates, assessee had inter alia filed the computation of capital gains, details from whom the shares were purchased, their PAN numbers, copies of purchase bills, copies of bank account evidencing payment to sellers, contract note for sale of shares, PAN number and SEBI registration number of the broker, copy of the DMAT account, copy of notice for listing of shares by BSE ledger account in the books of sellers, bank account evidencing payment to sellers, contract note for sale of shares. It is also a fact that the purchasing of shares being off market was also informed to the AO and the complete details from whom they were purchased by the Assessee was also furnished to the AO. The AO after examining the aforesaid details and on being satisfied with the queries raised, had accepted the contentions of the assessee and had made no addition on that count. In view of the aforesaid facts, we are of the view that AO had applied his mind t....