TaxTMI 
TaxTMI 
2022 (11) TMI 449
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.... modify the original assessment passed by the learned assessing officer, on the facts and circumstance of the case 3. The learned Principal Commissioner of Income tax is not justified in passing an order under section 263 of the Act, as the order passed under section 143[3] r.w.s. 153D of the Act, was pursuant to proper enquiry by the learned assessing officer on the facts and circumstances of the case. 4. The learned Principal Commissioner of Income tax has passed an unsustainable order which is based purely on assumptions arid presumptions. The order is arbitrary and full of surmises, without considering the relevant material and considering irrelevant materials. Consequently, the order passed is a perverse order on the facts and circumstance of the case. 5. The learned Principal Commissioner of Income tax has grossly erred in revising the order passed by the learned Assessing officer without appreciating that there is no error, much less prejudicial to the interests of the Revenue to warrant a revision and therefore the order passed by the learned PCIT is ultra vires to the scope of Section 263 and requires to be cancelled on the facts and circumstance....
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....(4) of the IT Act, 1961, the assessee admitted an amount of Rs. 28,84,727/- as undisclosed income on account of cash payment for the construction of house for AY 2018-19. However, the admitted income of Rs.28,84,727/- was not declared in the return of income filed for AY 2018-19. During the assessment proceedings, the assessee submitted that the additional income admitted during search proceedings on account of cash expense had been declared as commission income under the head "Income from other sources" in the return of income filed. The AO accepted the admission and assessment order was passed. 2.3 In the return of income filed for AY 2018-19, an amount of Rs.67,24,595/- was declared as commission under the head "Income from other sources" including the admitted amount u/s. 132(4) of the Act. Examination of case records by the Ld.PCIT, revealed that, during assessment proceedings, no further details was enquired regarding the money admitted during the search. 2.4 Subsequently, notice u/s. 263 was issued to the assessee dated 05/01/2022 which is as under: "On examination of the assessment records, it is noticed that the assessment order passed u/s. 143(3) of the Inc....
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....-tax Act, 1961. This opportunity is being given to you to furnish your reply in respect of the impugned issue, either in person or through your Authorised Representative in this office on 18.01.2022 at 10.30 A.M. If you do not avail this opportunity, it will be presumed that you have nothing to say in the impugned matter and the issue will be decided on the basis of the facts available on records and on merits of the case." 2.5 Assessee in response to the above notice, furnished reply objecting the review proceedings vide letter dated 10/02/2022 by submitting as under: "The order passed U/ s. 143(3) dt. 24.12.19 is neither erroneous in law nor prejudicial to the interests of the revenue. The learned AO has passed the order and the additional commissioner has approved the same. Hence, there is application of mind by two assessing authorities. It may be noted that, the additional income declared during the search proceedings is duly offered in the return of income filed. The learned AO made the proposal to assess the income as declared during the search. In this regard, it was submitted that an additional income of Rs. 28,84,727/ - was offered in the statement re....
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.... declared in the return of income; however the AO failed to examine the source of cash expenses declared as commission in the return of income. In absence of source of cash expenses the same should have been treated as unexplained cash credit in the books of account and taxed under section 115BBE of Income Tax Act, which was not done. There is no change of opinion on the issue as claimed by the assessee as the assessing officer had not made any enquiries on the details of commission received such as source of the same, from whom the same is received, mode of receipt or services rendered by assessee for receipt of the same. Hence the contention of the assessee is not acceptable. 10. In view of the facts, it is held that the Assessment Order passed by the Assessing Officer is erroneous so far as it is pre-judicial to the interest of the Revenue as per the provisions of Clause (a) of Explanation (2) to the Section 263 of the Income Tax Act, 1961. The declaration of cash payment of Rs.28,84,727/- as commission income under the head 'Income from other sources' in the return of income filed require verification and proper enquiry by the assessing officer as to whether th....
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....dealt with identical issue relying on the decision of the Hon'ble Allahabad High Court in the case of CIT Vs. Dr. Ashok Kumar in ITA No. 192 of 2000, dated 06.08.2012. Hon'ble Delhi Tribunal has reproduced therein, list of decisions of the Co-ordinate Bench of the Tribunal, which has followed the decision of the Hon'ble Allahabad High Court in the case of CIT Vs. Dr. Ashok Kumar (supra) and held that an assessment order, which has been approved by the Joint Commissioner of Income Tax under Section 153D of the Act cannot be revised by the ld. Pr. CIT under Section 263 of the Act. 5.2 We have carefully considered the above decision. Hon'ble Allahabad High Court in the case of CIT Vs. Dr. Ashok Kumar(supra). In that decision, Hon'ble Allahabad High Court upheld the order of the Co-ordinate Bench, quashing the 263 order, wherein the Tribunal found that the assessee therein had sufficiently explained the retraction of his statement given on 12.12.1994 and that, the Ld.CIT could not point out as to whether, the Assessing Officer failed to work out the amount of concealed income correctly. Hon'ble High Court further held that, the Assessing Officer made the addition....
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....1 The other relevant point to be noted is that CIT set aside the assessment order on the basis of incorrect reasons. As pointed out by the learned counsel, there was no material found during search about suppression of receipts for a.y. 1991-92 to 1994-95 nor the learned D.R. Was able to point out any such material which might have been ignored by the AO while framing the assessment and thus the vary basis for passing the impugned order goes away. The CIT also failed to point out as to why the AO failed to work out the amount of concealed income correctly, rather the AO had made the additions on estimate basis for all the assessment years though there was no seized material indicating suppression of receipts for these assessment years and for a.y. 1995-96 the material found at the time of search had been analysed after necessary enquiries and assessment had been framed accordingly. 5.2 In the last it is also relevant fact that the AO was fully alive about the facts of the case and that is why he got necessary approval of Addl. Commissioner before completing the assessment orders for all the assessment years and once that is not disputed by the Revenue than the CIT would no....
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.... after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including,- (i) an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment; or (ii) an order modifying the order under section 92CA; or (iii) an order cancelling the order under section 92CA and directing a fresh order under the said section . 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 or the Transfer Pricing Officer, as the case may be, 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 or the Transfer Pricing Officer, as the case m....
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.... (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation.-In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. 5.4 On a plain reading of the section, we do not find any fetters on the powers of Ld.PCIT/CIT for revising any order passed by the Ld.AO, except as provided in Explanation 1(c) of the section. However, the argument of the assessee is that, powers granted to the PCIT and CIT u/s 263 becomes otiose if the authority below the rank of PCIT/ CIT i.e Joint Commissioner of Income tax, has approved the order u/s 153D of the Act. The Ld.Ar is making out an argument that, if the lower authority, u/s 153D, has approved the....
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.... the Commissioner of Income Tax to pass orders under Section 263 of the Act. He is supposed to examine the records produced before him to arrive at a conclusion whether the assessment order passed by the AO suffers from infirmities and needs to be revised under Section 263 of the Act. The parameters which are laid down in Section 263 of the Act need to be fulfilled in exercising such a discretion. It is the Commissioner who has to satisfy himself, on the basis of available records, that in a given case the conditions stipulated under Section 263 of the Act are satisfied. In arriving at this conclusion, he is not to be controlled even by a higher authority. Likewise, the higher authority is not to interfere with the independence of his unfettered discretion which is statutorily conferred upon the Commissioner." 5.7 Thus, even the authority above PCIT and CIT cannot deprive the powers of the revision and thus there is no reason that lower authority exercising powers granted to it can prevent the PCIT or the CIT to exercise revisionary powers. Therefore, it is apparent that none of the lower authorities or even a superior authority cannot put spokes in exercising the power of the P....
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....e Act is hampered. Provisions of Section 263 of the Act give unfettered right to the Commissioner of Income Tax to revise any order passed by the Assessing Officer. Whatever was to be excluded by the law has already been provided under that Section and the only exception are the issues 'decided and considered' in the appellate orders. Therefore, the reasoning of the arguments advanced by the Ld. AR on this line also fails and we dismiss the same. Accordingly this ground raised by the assessee stands dismissed. 6. Coming to the merits of the case, the Ld.AR submitted that, in the statement recorded u/s. 132(4), assessee had admitted an amount of Rs.28,84,727/- as undisclosed income on account of cash payment for construction of house during the relevant year. 7. It is submitted that the said amount was declared in the statement u/s. 132(4) without verifying the seized material. But subsequently, upon verification of the seized materials, it was noticed that an amount of Rs. 4 Lakhs was considered twice while arriving at the additional income while recording the statement u/s. 132(4). The Ld.AR submitted that, it was therefore, after reducing the said amount of Rs. 4....
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....d material numbered as A/MSFIPL/02 it is noticed that payment of Rs. 4,00,000 paid to Mahabala is recorded twice in page no. 9 & 4. Thus I have reduced the said sum from total additional income estimated and declared Rs. 24,84,727 as my additional income for Assessment year 2018-19. Computation of income is enclosed herewith. As could be noticed therefrom the income of Rs. 24,84,727 is included in the income of Rs. 67,98,656 declared under the head Income from Other Sources." 7.5 The reply of the assessee is considered. The assessee has pointed out that Rs. 4,00,000 paid to Mahabala has been considered twice and hence the unaccounted investment is Rs. 24,84,727. The assessee has also stated that he has offered the additional income admitted of Rs. 24,84,727 as income under the head Other sources. The claim of the assessee is verified and the same is in order. In view of the above the investment of Rs. 24,84,727 in the construction of residence at Pandeshwara is assessed as the income of the assessee. Penalty proceedings u/s 271AAB is initiated on this issue." 9. The Ld.AR thus submitted that, necessary verification was carried out by the Ld.AO, during the asses....
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....R 108] and the High Court of Gujarat in Commissioner of Income-tax Vs. Smt. Minalben S. Parikh [215 ITR 81] treated loss of tax as prejudicial to the interests of the revenue. Mr. Abaraham relied on the judgment of the Division Bench of the High Court of Madras in Venkatakrishna Rice Company Vs. Commissioner of Income-tax [163 ITR 129] interpreting prejudicial to the interests of the revenue. The High Court held, In this context, it must be regarded as involving a conception of acts or orders which are subversive of the administration of revenue. There must be some grievous error in the Order passed by the Income-tax Officer, which might set a bad trend or pattern for similar assessments, which on a broad reckoning, the Commissioner might think to be prejudicial to the interests of Revenue Administration. In our view this interpretation is too narrow to merit acceptance. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income-tax Officer, the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the r....