2022 (4) TMI 1078

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....ional issue, however before proceeding for adjudication, it necessitates to reproduce effective ground/grounds challenged by the appellant assessee, as under; "GROUND NO.I 1. That the ex-parte revision order passed by the Learned Pr. Commissioner of Income Tax-1, Raipur ("the Ld. PCIT") under section 263 of the Income Tax Act, 1961 ("the Act") is highly unjustified, bad in law, without providing reasonable opportunity of being heard since the mandatory show cause notice was not served on the appellant against the principles of natural justice and not in accordance with the provisions of law. It is prayed that Revision order passed under section 263 of the Act may please be cancelled/set-aside on this ground alone." "GROUND NO.II 2. That the revision order passed by the LD. PCIT under section 263 of the Act is highly unjustified, bad in law, without jurisdiction & void ab initio since, the LD. PCIT has grossly erred in concluding that the Learned Assessing Officer ("the Ld. AO") has failed to carry out the necessary enquiries and investigation in relation to the issue which pertains to the material already on record. Hence, it is prayed that the order passed by the LD. PCIT ....

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....1/12/2018 with an assessed total income of Rs.43,60,750/- on account of dislodgment of interest expenditure u/s 57. 4.2 Post assessment, pursuant to audit objection, the assessment records were called and perused upon and after satisfying the veracity of the information passed on by the revenue audit team, Ld. PCIT by issue of show cause notice [for short "SCN"] invoked the revisionary powers vested in him by virtue of section 263(1) and in the absence of any submissions, figured out the assessment as erroneous and prejudicial to the interest of the revenue on the basis of available records, consequently by an order directed the Learned Assessing Officer [for short "AO"] to reframe the assessment after conducting proper enquiry about the shell company, which has advanced an unsecured loan of Rs.3,89,68,255/- to the appellant assessee. 4.3 Pending such direction before the Ld. AO, the appellant company objected the revisionary action undertaken by Ld. PCIT as perfunctory on two-fold counts on the grounds alleged at set in para 3 herein before. 5. After hearing to the rival contentions of both the parties; perused material placed on record and duly considered the facts of the ca....

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.... appellant made no compliance, consequently based on the records available with, the revisionary Placing reliance on the judgement of Hon'ble Supreme Court of India in the case of "Malabar Industries Co Ltd Vs CIT 243 ITR 83 (SC)", vide para 5 of the revisionary order held the order of assessment as erroneous so far as prejudicial to the interest of revenue is concern, for the reason of absence of enquiries into the threefold attributes of section 68 of the Act. 7. During the course of hearing, in support of contention, the Ld. AR taken us through relevant pages of paper book to impress that, the action of revisionary action wasn't warranted and placing reliance on judicial precedents supported the grounds raised, per contra, the Ld. departmental representative [for short "DR"] supported 263 revisionary order for failure to conduct enquiries in respect of creditor who declared as shell company and the information was well available in the public domain, which the Ld. AO failed to attend and consider while framing the assessment. 8. At this juncture, before going into the merits, we first deal with the legal ground raised by the appellant company and to hit the ball on the bails, ....

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.... natural justice, shall discretely be sufficient to hold the order being erroneous. Albeit the term prejudicial to the interests of the revenue is not at all defined in the Act, but is needs to be understood in its ordinary meaning and it is of wide import and is not confined to mere loss to an ex-chequer. 8.3 Having said so, where the revisionary proceedings are concluded entirely in concurrence of assessment proceedings and thereby betokening the mistake apparent on the face of the assessment order, where concluded finding of assessment remained untaxed, shall clearly validate the revisory action and jurisdiction u/s 263 for the protection loss of revenue to the ex-chequer, and not otherwise. On the other hand, assumption of revisionary jurisdiction in the absence of tangible material or at the bequest or dictate of any authority or party shall be extra-territorial and bad in law. 9. In the instant case, during the course of complete scrutiny assessment proceedings, as can be evinced from annexure to notice dt. 09/07/2018 issued u/s 142(1) of the Act, an explicit queries with respect to unsecured loan exceeding the ceiling of Rs.2.00Lakhs were raised, thereby calling upon the a....