TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 1349
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....4 disclosing total income of Rs.32,12,660/-. Later notice u/s 143(2) of the Act was issued on 19/08/2015. The assessment was completed u/s 153A/143(3) of the Act on 30/03/2016, after taking prior approval of the Additional Commissioner of India, Central Range-1, Kolkata, u/s 153D of the Act, determining the total income of the assessee at Rs.32,12,660/-. 2.1.The ld. Pr. CIT issued a showcause notice u/s 263 of the Act, dt. 06/03/2018, proposing to revise the assessment order passed u/s 153A/143(3) of the Act on 30/03/2016, for the reason that, the assessee company had not justified, its claim of having incurred expenditure on account of (a) Business Development Expenses of Rs.18,89,250/- & (b) Business promotion expenses of Rs. 36,06,750/- and that the Assessing Officer in the assessment order dt. 30/03/2016 had not called for the details of expenditure under these head of account to verify the genuineness and nature of the expenses. After considering the reply of the assessee, the ld. Pr. CIT set aside the assessment order dt. 30/03/2016 to the file of the Assessing Officer, with a direction to the Assessing Officer to pass a fresh assessment order after examination and verificat....
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....f Income Tax u/s 153D of the Act and under such circumstances, keeping in view the wording of the Section, the legislative intent and the CBDT Circular on the matter, the ld. Pr. CIT, cannot revise the assessment order passed with such prior statutory approval, without revising the order of approval u/s 153D of the Act. He submitted that this is not a case where no enquiry has been conducted and it is not for the ld. Pr. CIT, to substitute his view as to the extent of enquiry and investigation, to that of the Assessing Officer. He prayed that as the assessment order in this case was passed after obtaining approval u/s 153D of the Act and as such approval has not been set aside or held to be bad in law by any authority, the ld. Pr. CIT has no power to exercise his jurisdiction u/s 263 of the Act for revising the assessment order passed u/s 153A/143(3) of the Act dt. 30/03/2016 and hence such order is void ab initio in law. 5.The ld. D/R, on the other hand, opposed the contentions of the assessee and submitted that this is a case where the assessee is in the business of granting loans and advances. The assessee is engaged in the business of money lending and earning interest therefr....
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....of Income Tax Hyderabad reported in 2013 (3) TMI 359 - ITAT Hyderabad, has held as follows:- "23. At this stage, one has to remember, the settled position of law is, for invoking jurisdiction u/s 263 of the Act, two conditions have to be satisfied cumulatively. Firstly, order must be erroneous and secondly it must be prejudicial to the interests of revenue. In absence Ch. Krishna Murt hy of any one of the two conditions, the power conferred u/s 263 cannot be exercised. On a perusal of the assessment order as a whole, specifically, para 17, it is very much evident that Assessing Officer was conscious about the fact that Barium Division was having outstanding liability of the advance given by Chrome Division at the time of demerger. He was also aware of the fact that outstanding liability was converted as advance given to assessee against which shares of newly formed company i.e. VBCPL were allotted to assessee and his associates. Therefore, it is clear from the assessment order that Assessing Officer has examined the issue of conversion of the outstanding liability of Barium Division to advance in the name of assessee through journal entries as well as allotment of shares against ....
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....ntioned in the body of the assessment order itself." Thus, from the aforesaid facts it becomes clear, the Assessing Officer while exercising power u/s 153A has to pass the assessment order as per the approval granted by addl. CIT u/s 153D. In these circumstances, Assessing Officer having examined the issue and applied his mind to the facts and having passed the order in terms with the directions of the Range Head as per the statutory provisions contained u/s 153D, the assessment order cannot be held to be erroneous. In fact ld. CIT has blamed the range head for the directions given by him while approving the draft assessment order. Therefore, if at all, there is any error, it is in the order of the range head and not in the assessment order. Without revising the directions of addl. CIT, assessment order could not be revised. 24.Furthermore, it is clear from the discussions made by ld. CIT, the reasons on which range head i.e. Addl. CIT disapproved treating the advance as deemed dividend u/s 2(22)(e) is because it is converted as advance in the name of assessee merely through book entries and actually no money was advanced to assessee and secondly the company i.e. VCPL was not h....
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....terfering in the approval given by Addl. CIT for framing assessment order and there will be no case for setting aside the assessment order. Therefore, considered in the aforesaid perspective when it is a fact on record that both the addl. CIT while granting approval u/s 153D as well as Assessing Officer in course of assessment proceeding have examined the issue of deemed dividend u/s 2(22)(e) of the Act at the hands of assessee in relation to the advance shown in his name in the books of M/s VCPL and the view taken by Assessing Officer as well as addl. CIT can be considered as one of the possible views, assessment order cannot be treated as erroneous. More so, when assessment order has been passed in terms with section 153D of the Act and ld. CIT has not revised the directions of addl. CIT. In these circumstances, as one of the conditions of section 263 is not satisfied, the impugned order passed u/s 263 is not valid. Accordingly, we set aside the impugned order of learned CIT and restored the assessment order passed. 25.As we have held the revision order to be invalid for the reasons stated above, the other issues raised by assessee in the grounds of appeal relating to the absen....
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.... under section 263 of the I.T. Act. In view of the above decision also, we hold that the revision order under section 263 of the I.T. Act is not sustainable. Accordingly, we allow the grounds of the assessee". 27. Hon'ble Tribunal in case of Dhariwal Industries Ltd v. CIT in ITA Nos. 1108-1113/Pn/2014 dated 23.12.2016 wherein, the Hon'ble Tribunal held as under: 9.Referring to the decision of the Hyderabad Bench of the Tribunal in the case of M/s. Trinity Infra Ventures Ltd. Vs. DCIT vide ITA Nos. 584 to 589/H/2015 order dated 04-12- 2015 for A.Yrs. 2005- 06 to 2010-11 he submitted that the Tribunal in the said decision, following various decisions including the decision of Hon'ble Allahabad High Court in the case of CIT Vs. Dr. Ashok Kumar vide Income Tax Appeal No.192/2000 order dated 06-08-2012, has held that assessment order approved by the Addl.CIT u/s.153D cannot be subjected to revise u/s.263 of the I.T. Act. 12. We have considered the rival arguments made by both the sides, perused the orders of the AO and the Ld.CIT and the paper book filed on behalf of the assessee. 14. We find merit in the above submission of the Ld. Counsel for the assessee. We find ....
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....unal in the case of Mehtab Alam v. ACIT vide ITA Nos. 288 to 294/Lkw/2014 order dated 18-11-2014 while deciding an identical issue has observed as under: "31. Besides other judgments were also referred by the assessee in this regard and we have also carefully examined the same and we find that similar views were expressed by various judicial authorities. 32. We have also examined the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Dr. Ashok Kumar (supra) on an issue whether the assessment order was passed with the approval of the Addl. CIT and their Lordships have held that the Assessing Officer was fully alive about the fads of the case and that is why he got necessary approval of the Addl. CIT before completing the assessment orders for all the assessment years and once that is not disputed by the Revenue, then the Id. Commissioner of Income-tax would not be justified in interfering in the approval according by the Addl. CIT for framing the assessment order and than there was no case for setting aside the assessment order for the assessment years in question." 14.1We find the Hyderabad Bench of the Tribunal in the case of CH. Krishna Murthy v. ACIT v....
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....e, we have no other alternative but to hold that the revision order passed u/s 263 of the Act by the ld. Pr. CIT is bad in law for the reason that the order of statutory approval passed u/s 153D of the Act, based on which the order u/s 153A r.w.s. 143(3) of the Act, dt. 30/03/2016, was passed, was not revised and is a valid and legal order. 11.Even otherwise, in this case, we find that the ld. Pr. CIT, without making any enquiries on his own, in a mechanical manner has set aside the matter to the file of the Assessing Officer for fresh adjudication. Such general restoration of the matter to the file of the Assessing Officer, without the ld. Pr. CIT making any enquiry by himself or forming any opinion on the issue, is not permitted in law. This is not a case where there is no enquiry. As per the ld. Pr. CIT, this is a case of inadequate enquiry. The legal position on this issue has been settled by various Courts of law. The relevant case-law are provided as under:- *J.L. Morrison (India) Ltd. (2014) 366 ITR 593 (Cal.) Section 4, read with Section 263, of the Income-tax Act, 1961 - Income - Chargeable as - Assessment year 2006-07 - Assessee entered into an agreement with a Germa....
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....amining as to whether expenditure incurred by assessee in replacement of dyes and tools was to be treated as revenue expenditure or not and on being satisfied with assessee's explanation, he accepted same, it could be said to be a case of lack of inquiry - Held, no - Whether further, on facts and law, view taken by Assessing Officer was one of possible views and, therefore, assessment order passed by Assessing Officer could not be held to be prejudicial to interest of revenue - Held, yes - Whether, therefore, Tribunal was justified in setting aside order of Commissioner - Held, yes *Chroma Business Ltd. v. DCIT (2004) 82 TTJ 540 (Cal.) Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue - Assessment year 1997-98 - Whether where Assessing Officer, before completing assessment and allowing loss in share transactions, had called for details of share transactions and had discussed with assessee but had passed a brief assessment order without recording therein facts and discussion, that fact did not empower Commissioner to invoke jurisdiction under section 263 - Held, yes *CIT vs. Vikas Polymers (2012) 341 ITR 537 (Del.) Sectio....
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.... was there on record and said material was considered by ITO and a particular view was taken, mere fact that different view could be taken, should not have been basis for an action under section 263 - Held, yes - Whether Commissioner was unjustified in arriving at a conclusion that order passed by ITO was erroneous and prejudicial to interest of revenue - Held, yes *CIT vs. Krishna Capbox (P.) Ltd. (2015) 372 ITR 310 (All.) Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue (erroneous order) - Assessment year 2008-09 - Assessee filed its return - Case was selected for scrutiny and statutory notice was issued - Assessing Officer made certain queries, which were replied by assessee and after inquiry, being satisfied in respect to queries replied by assessee, Assessing Officer accepted declared income and passed assessment order - Commissioner, however, issued a notice under section 263 on ground that Assessing Officer had not made inquiry on certain aspects and accepted version of assessee without making any inquiry or verification, which was substantially prejudicial to revenue - Accordingly, he partly set aside assessment - Tribun....