TaxTMI 
TaxTMI 
2021 (10) TMI 1320
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....l as the reasons stated in the application and in the interest of justice, we condone the delay of 224 days in filing the present appeal and the appeal is heard on merits. 4. The assessee has raised following grounds of appeal:- 1. That the order passed by the Learned Pr. Commissioner of Income Tax-2, Bhubaneswar u/s 263 of the LT. Act, 1961 is excessive, arbitrary and bad in law. 2. That on the fact and circumstances of the case and in law, the revisionary proceeding u/s 263 of the LT.Act,1961 by the Learned Pr. Commissioner of Income Tax-2, Bhubaneswar merely on the basis of finding of the internal audit observations of the internal audit party is bad in law and required to be quashed. 3. That on the fact and circumstances of the case and in law, the revisionary proceeding u/s 263 of the IT.Act, 1961 is bad in law in absence of any new fact, information, corroborative evidence or materials being made available by the Learned Pr. Commissioner of Income Tax-2, Bhubaneswar, the impugned order u/s 263 of the Act be annulled and quashed. 4. That the appellant may add, alter, delete or modify any of the grounds at the time of hearing of the matter....
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....ent has not been provided by them. It is also not verified that whether the persons, who have given advance, were man of means to advance such a huge sum. Hence, the investment in immovable property of Rs. 50,90,400/- has been accepted by the AO without conducting due and proper enquiry. In view of the above, the assessment order passed u/s 143(3)/147 of the Income-tax Act,1961 dated 10.11.2016 appears to be erroneous in so far as it is prejudicial to the interest of revenue. Therefore, I propose to revise the assessment order passed under section 143(3)/147 dated 10.11.2016, for the Asstt. Year 2012-13 by invoking provision of section 263 of the I.T.Act,1961. However, before doing so, I deem it proper to allow the assessee an opportunity of being heard which is fixed at 11.30. A.M. on 29.01.2019- in my office at 2nd Floor, Aayakar Bhawan, Rajhaswa Vihar, Bhubaneswar. You may appear either in person or through your authorized representative to represent your case. If you so desire, you may file your written submission in this regard, which will be considered before passing any order. In case you fail to avail the opportunity of hearing, order will be passed on the....
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....ee before the Ld. PCIT at Page 2 of PB) . To support his contentions, ld. counsel for the assessee relied on the following case laws :- i) Nanda Kishore Agarwalla Vs. Pr.CIT, ITA No.212/CTK/2017, order dated 26.04.2018; ii) Surekha Builders & Developers Pvt. Ltd. Vs. Pr.CIT, ITA No.207/CTK/2018, order dated 17.07.2020; iii) Pr.CIT Vs. Delhi Airport Metro Express (P) Ltd., (2017) 398 ITR 8 (Del); . iv) Director of Income Tax Vs. Jyoti Foundation (2013) 357 ITR 388 (Del;); v) ITO Vs. DG Housing Projects ltd. (2012) 343 ITR 329; vi) Aditi Aggarwal Vs. Pr.CIT, ITA No.21/Chd/2021, order dated 20.09.2021; vii) Sh. Jaswinder Singh Vs. CIT-II, ITA No.690/Chd/2010, order dated 09.03.2012; viii) Shri Sunil Chhagan Bhaybhang Vs. Pr.CIT, ITA No.932/PUN/2016, order dated 07.03.2019; and ix) Raghunath Exporters Vs. Pr.CIT, ITA No.92/Kol/2017, order dated 10.11.2017. 10. It was also submitted by the ld. AR of the assessee that the AO allowed the claim on being satisfied with the explanation of assessee, on an enquiry made during the course of assessment proceedings. Thus, the decision of Ld. AO cannot be held t....
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....sessment and directing a fresh assessment. Explanation 1.-For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General or Principal Commissioner or Commissioner authorised by the Board in this behalf under section 120; (b) "record" shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Principal Commissioner or Commissioner; (c) where any order referred to in this sub-section ....
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....ax Appeal No. 177 with Tax Appeal No.178 of 2016, wherein the Hon'ble Gujarat High Court was seized with the following substantial question of law:- "Whether the Tribunal is right in law and on facts in upholding the order passed by the CIT under section 263 of the Act on merits and still storing the issue of allowability of deduction under section 54 of the Act to the file of Assessing Officer even though the working of allowability of deduction under section 54F is available in the order under section 263 which is not disputed by the assessee before ITAT." 16. And the Hon'ble High Court, after considering the facts, held as under:- "6. It can thus be seen that though final order of assessment was silent on this aspect, the Assessing Officer had carried out inquiries about the nature of sale of land and about the validity of the assessee's claim of deduction under section 54F of the Act. Learned counsel for the Revenue however submitted that these inquiries were confined to the claim of deduction under section 54F of the Act in the context of fulfilling conditions contained therein and may possibly have no relevance to the question whether the sale....
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.... called, his explanation sought for and examined by the CIT and thereafter if the CIT still feels that the order is erroneous and prejudicial to the interest of the Revenue, the CIT may pass revisional orders. If, on the other hand, the CIT is satisfied, after hearing the assessee, that the orders are not erroneous and prejudicial to the interest of the Revenue, he may choose not to exercise his power of revision. This is for the reason that if a query is raised during the course of scrutiny by the AO, which was answered to the satisfaction of the AO, but neither the query nor the answer were reflected in the assessment order, this would not by itself lead to the conclusion that the order of the AO called for interference and revision. In the instant case, for example, the CIT has observed in the order passed by him that the assessee has not filed certain documents on the record at the time of assessment. Assuming it to be so, in our opinion, this does not justify the conclusion arrived at by the CIT that the AO had shirked his responsibility of examining and investigating the case. More so, in view of the fact that the assessee explained that the capital investment made by the par....
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....he assessee and the complete details were filed by the assessee and the ld.AO accepted the claim of the assessee regarding source of investment in the immovable property as the assessee received sale consideration from sale of land from eight different persons. List of persons as per the sale deeds as a proof of amount received from the eight different parties are as under :- 19. Further these facts which were available before the assessing officer during the course of scrutiny assessment proceedings itself and were also placed before the Ld. Pr. CIT during proceedings u/s 263 of the Act, however, no new enquiry was conducted by Ld. Pr. CIT, in this regard at its own motion as required in the provisions of section 263 of the Act. Thus, this is a case where adequate enquiry was conducted by the assessing officer with application of mind. In our considered view, it was not open for Ld. Pr. CIT to order for a fresh enquiry, without conducting the basic enquiry at its own end to come to a conclusion that there was inadequate enquiry by the AO. For the proposition that such enquiry as deemed necessary should be conducted by the Revisionary Authority before recording the finding that ....
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.... wrong opinion or finding on the merits, the Commissioner of Income-tax has to come to the conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under section 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because the order passed is not sustainable in law and the said finding must be recorded. The Commissioner of Income-tax cannot remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but not lack of enquiry, again the Commissioner of Income-tax must give and record a finding that the order/inquiry made is erroneous. This can happen if an enquiry and verification is conducted by the Commissioner of Income-tax and he is able to establish and show the error or mistake made by the Assessing Officer, making the order unsustainable in law. In some cases possibly though rarely, the Commissioner of Income-tax can-also show and establish that the facts on record or inferences drawn from facts on record per se justified and mandated further enquiry or investigation but the Assessing Office....
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....eous and prejudicial to the interest of Revenue. The impugned order deserves to be quashed in light of the judgment of Hon'ble Apex Court in the case of Malabar Industrial Co. Ltd. vs. Commissioner of Income Tax, (supra), Max India Ltd (supra) and Green World Corporation (supra) and also the decision of Coordinate Bench Mumbai in the case of ITO vs. Shri Narayan Tatu Rane in ITANo.2690 & 2691/Mum/2016 dated 06.05.2016 and the judgment of Hon'ble Delhi High Court in the case of D.G. Housing Projects Ltd.(supra). In the instant case Ld. Pr. CIT failed to show that both conditions exists i.e. neither it has been proved that order is erroneous nor it has been proved to be prejudicial to the interest of revenue. We thus find merit in the contentions of the assessee that the revisionary order passed by the Ld. Pr. CIT in the years under appeal i.e. A.Y. 2013-14 is beyond the scope of section 263 and hence not valid. Thus the action of the Ld. Pr. CIT is contrary to the ratio laid down by binding precedence. We, therefore, quash the impugned order and decide in favour of the assessee. All the grounds raised in this appeal by the assessee are allowed and the assessment order u/s 14....