TaxTMI 
TaxTMI 
2022 (7) TMI 1422
X X X X Extracts X X X X
X X X X Extracts X X X X
....e interest of the revenue", which is contrary to fact, on the facts and circumstances of the case. 4. The learned PCIT is not justified in law in holding that the order passed by the Assessing officer is bad in law, without appreciating that there was no error in the order passed, much less prejudicial to the interest of revenue, on the facts and circumstances of the case. 5. The learned PCIT was not justified in appreciating that the provisions of section 263 of the Act shall be attracted only when the order is both erroneous and prejudicial to the interest of revenue and since the order passed under section 143(3) of the Act was not erroneous, much less prejudicial, the invoking of section 263 was not warranted, on the facts and circumstances of the case. 6. The learned PCIT was not justified in stating that the assessing officer has not made enquiry, when the details of cash on hand, along with the denomination deposited were explained in great detail and the inference that there was a lack of enquiry or inadequate enquiry, was contrary to fact, on the facts and circumstances of the case. 7. The learned PCIT was not justified in stating that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s deposited and carry out necessary investigation in accordance with law and CBDT guidelines. The Assessing Officer should have analysed the bank account and trend of cash receipts and ascertained the cash in hand as on 8.11.16 after examination of books, specially the cash book. The Assessing Officer has not done so. The Assessing Officer has not conducted necessary inquiries and has not made the additions required as per law. The assessee failed to furnish a satisfactory explanation regarding the source of cash deposited in the bank accounts and this amount remained unexplained, but no such addition has been made in the assessment order. 4. As discussed above, the assessee society has deposited cash during the demonetisation period in its bank accounts, in SBNs. In such cases, it was for the assessee to establish that the SBNs (Specified Bank Notes) deposited in the bank accounts were out of receipts prior to demonetisation. As the assessee has not established this, an adverse inference is naturally drawn that these SBNs were received after demonetisation. The SBNs were not legal tender after demonetisation. The Government guidelines allowed certain bodies like hospitals....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ficer has made enquiry as required under section 142(1) of the act and the explanation offered was accepted as being true and correct. Thus, there was no instance of inadequate enquiry by the assessing officer and the revision proceedings were not called for. Thus the AO passed the order on appreciation of the submissions and clarification offered by the assessee in respect of the source of cash deposited as being out of receipts from its members. 9. The ld AR submitted that the PCIT is restrained from revising assessment in a routine manner based on his only belief that the order was erroneous and prejudicial to the interests of the revenue on the difference of opinion and where there are two opinions possible, it is beyond the scope of revision. The revision of assessment cannot be made on the mere non-mentioning or inference of any particular issue in the assessment order. The AO is not required to mention each and every detail and revision cannot be made on the sole reason that certain point has not been discussed at length or it does not find specific mention. He drew our attention to the details submitted before the AO relating to cash deposits as listed below:- (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he case through e-proceeding. The undersigned has issued notice /letter under section 129 due to abolishing of ITO, ward-2, Gadag post. In response to notice u/s 142(1) the assessee to furnish information relating to cash receipts, cash deposits and withdrawals in the format prescribed and the assessee filed some of the information through e-proceeding. Since the assessee has deposited cash in SBNs during demonetization period, letters under section 133(6) of the I.T. Act, 1961 were also issued to the banks calling for account extract for the period 1.4.2015 to 31.3.2017 as well as copies of pay in slips for the cash deposit in SBNs during demonetization period. Accordingly, banks information received is placed on record after due verification. The assessee have submitted all the details on 06.06.2019, 21.07.19 & 13.12.2019 and also filed proforma report along with details of SBNs bankwise/branchwise which were deposited during demonetization period. It was found that the assessee has deposited cash amounting to Rs. 1,61,59,405 with Corporation Bank, Bank of India, Bank of Maharashtra, during 10.11.2016 to 30.12.2016. The assessee have filed details of denomination of SBNs deposite....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Supreme Court in Malabar Industrial Co. Ltd.'s case (supra) and it was held that the phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer and every loss of revenue as a consequence of the order of the Assessing Officer cannot be treated as prejudicial to the interest of revenue. It was further held that where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, the order passed by the Assessing Officer cannot be treated as erroneous order prejudicial to the interest of the revenue. The principles laid down in the aforesaid decision were reiterated by the Supreme Court in 'CIT (Central) v. Max India Ltd.' [2008] 166 Taxman 188/[2007] 295 ITR 282 and recently in 'Ultratech Cement Ltd. v. State of Rajasthan [2020] 117 taxmann.com 807 (SC). 7. The Tribunal has found that the Assessing Officer on meticulous appreciation of evidence on record has allowed depreciation on intangible assets and the Commissioner of Income-tax (Appeals) while passing the order under section 263 of the Act has held that the enquiry....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut has shown appetite for inquiry and verifications. The AO has passed after making due enquiries issues involved impliedly after due application of mind. Therefore, the Explanation 2 to section 263 of the Act do not, in our view, thwart the assessment process in the facts and the context of the case. Consequently, we find that the foundation for exercise of revisional jurisdiction is sorely missing in the present case." 17. In the facts and circumstances of the present case, it cannot be said that the AO did not carry out enquiry or verification which ought to have been done. The adverse inference drawn by the PCIT from the documents are debatable as the PCIT has out brought any material on record to substantiate his adverse inference. The Bombay High Court in the case of Grasim Industries Ltd. v. CIT (2010) 321 ITR 92 (Bom) has considered the scope of revision proceedings initiated u/s. 263 of the Act and held as under:- "'Section 263 of the Income-tax Act, 1961 empowers the Commissioner to call for and examine the record of any proceedings under the Act and, if he considers that any order passed therein, by the Assessing Officer is erroneous in so far as it is pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the conclusion that no addition is warranted towards the cash deposited by the assessee during the demonetization period. On the other hand, the PCIT has arrived at a view that the cash was deposited out of SBN received post demonetization and proper enquiries ought to have been made by the AO which is clearly a difference of opinion which cannot be a reason for revision u/s. 263 of the Act. 19. The Bombay High Court in the case of Gabriel India Ltd. (1993) 203 ITR 108 has explained as to when an order can be termed as erroneous as follows:- "From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an income tax officer acting in accordance with the law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order, unless the decision is held to be erroneous. Cases may be visualised where the Income tax officer while making an assessment ex....