TaxTMI 
TaxTMI 
2021 (10) TMI 1320
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....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 with the leave of the Hon'ble ITAT. 5. Brief facts of the case as culle....
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....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 basis of facts available in record. Yours faithfully, Sd/- (Subrat Mishra) Pr. Commissioner of Income-tax-2, Bhubaneswar 7. In the above referred show cause notice it was alleged that the....
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.... 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 to be erroneous. 11. Per Contra, ld. Departmental Representative (DR) took us through the finding of ld. Pr. CIT and submitted that Pr.CIT has rightly set aside the assessment framed by the AO as the persons who have given the advance to the assessee were not man of means to advance such a ....
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....tant 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 and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Principal Commissioner or Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. Explanati....
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....sing 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 of land gave rise to a long term capital gain. Looking to the tenor of queries by the Assessing Office and details . A.Y. 2009-10 supplied by the assessee, we are unable to accept such a condition. In that view of the matter, the observation of the Tribunal that the Assessing Officer having made inquiries and when two views are possible, revisional powers could not be exercised, called for no interferen....
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....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 partners, which had been called into question by the CIT was duly reflected in the respective assessments of the partners Shri Kailash Khandelwal who were I.T. assessees and the unsecured loan taken from M/s Stutee Chit & Finance (P) Ltd. was duly reflected in the assessment order of the said chit fund which was also an assessee." 64. Since in the instant case the A.O after considering the various submissions made by the assess....
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....essing 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 the AO is erroneous or prejudicial to the interest of revenue, we rely on the decision of the Tribunal in the case of Surekha Builders & Developers Pvt. Ltd. Vs. Pr.CIT, ITA No.207/CTK/2018, order dated 17.07.2020, wherein the Tribunal has observed that the enquiry should have been conducted by the revisional authority himself to record the findings that the assessment order was erroneous or prejudicial to the interest of revenue. The fi....
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.... 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 Officer had erroneously not undertaken the same. However, the said finding must be clear, unambiguous and not debatable. The matter cannot be remitted for a fresh decision to the Assessing Officer to conduct further enquiries without a finding that the order is erroneous. Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under section 263 of the Act. In such matters, to remand the matter/issue to the As....
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....e 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 143(3) of the Act dated 07.03.2016 is restored. 21. We also observe that though the copies of sale deeds were not filed before the AO at the time of assessment proceedings, however, the details of the name of persons and the amount along with confirmations were filed and the same are true and correct vis-à-vis the copies of sale deeds placed before us. Therefore, it cannot be said that there was no enquiry on the part of the AO. Even it is not a case of inadequate enquiry al....