TaxTMI 
TaxTMI 
2023 (11) TMI 392
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.... Pr. CIT is illegal, ab initio void & unsustainable as the same has been passed without giving any opportunity of hearing to assessee, contrary to mandatory requirement of law. Consequent revision order is illegal & is liable to be quashed/annulled. 2. The assessment order passed by AO is neither erroneous nor prejudicial to the interest of Revenue. Ld. Pr. CIT erred in invoking the provisions of section 263 and in setting aside the assessment order for fresh enquiry. Order passed without properly appreciating the facts & evidences. 3. On the facts and circumstances of the case, the Ld. Pr. CIT has erred both on facts and in law in ignoring the fact that the issue raised by him in notice u/s 263 was before the AO and as such the jurisdiction on this issue u/s 263 cannot be assumed by him. 4. On the facts and circumstances of the case, the order passed by the learned Pr. CIT assuming jurisdiction under section 263 is bad in law having been initiated at the instance of audit objection only. 5. On the facts and circumstances of the case, the learned Pr. CIT has erred both on facts and in law in ignoring the fact that the proceeding under Section 263 cannot be used for substitu....
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....er passed by Pr. CIT under section 263 of the Income Tax Act is unsustainable as power to revise can be invoked in the case of no/lack of enquiry, not in the case of inadequate enquiry. 7. On the facts and circumstances of the case, of the case, Pr. CIT has erred both on facts and in law in setting aside the issue of section 43CA to the file of the AO without properly appreciating the explanation of assessee given during the assessment proceedings brought on record to prove that there is no violation of provisions of section 43CA by the appellant. 8. Without prejudice to above grounds, on the facts and circumstances of the case and law, Ld. Pr. CIT erred in branding assessment order, as erroneous/prejudicial on an issue which itself was not covered by ambit of search assessment. Order passed u/s 263 is illegal and is liable to be quashed. 9. The appellant reserves the right to add, amend or modify any of the ground/s of appeal." AY 2016-17 1. "The order passed by Ld. Pr. CIT is illegal, ab initio void & unsustainable as the same has been passed without giving any opportunity of hearing to assessee, contrary to mandatory requirement of law. Consequent revision order is ille....
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....rejudicial to the interest of Revenue. Ld. Pr. CIT erred in invoking the provisions of section 263 and in setting aside the assessment order for fresh enquiry. Order passed without properly appreciating the facts & evidences. 3. On the facts and circumstances of the case, the Ld. Pr. CIT has erred both on facts and in law in ignoring the fact that the issue raised by him in notice u/s 263 was before the AO and as such the jurisdiction on this issue u/s 263 cannot be assumed by him. 4. On the facts and circumstances of the case, the order passed by the learned Pr. CIT assuming jurisdiction under section 263 is bad in law having been initiated at the instance of audit objection only. 5. On the facts and circumstances of the case, the learned Pr. CIT has erred both on facts and in law in ignoring the fact that the proceeding under Section 263 cannot be used for substituting opinion of the A.O. by that of the Pr. CIT. 6. On the facts and circumstances of the case, the order passed by Pr. CIT under section 263 of the Income Tax Act is unsustainable as power to revise can be invoked in the case of no/lack of enquiry, not in the case of inadequate enquiry. 7. On the facts and ci....
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....r consideration and to pass the assessment order afresh by giving adequate opportunity to the assessee. Order of Learned PCIT dated 31.03.2021 was challenged by the assessee before the Co-ordinate Bench of ITAT, Raipur in ITA No.41 to 44/RPR/2021. ITAT considering the facts of the case have restored the matter back to the files of Learned PCIT, since the response filed by the assessee was not recorded by the PCIT in the order under Section 263 of the Act, thus, without going into the merits and demerits of the issue identified by Learned PCIT for revision which was passed in hasty manner, without giving fair opportunity to the assessee, the issues raised in Section 263 order dated 31.03.2021 were restored back by the ITAT to the files of Learned PCIT. Learned PCIT has initiated the matter again, 'show caused' the assessee by issuing a notice dated 03.02.2022 to submit replies by 14.02.2022. In response to the notice issued, the assessee submitted replies vide letter dated 09.02.2022 and 25.02.2022, stating therein the reasons in the satisfaction note recorded by the Learned PCIT and assessee's submissions against such reasons. One more response was also made by assessee on 07.03.20....
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....ng the facts & evidences. iii. On the facts and circumstances of the case, the Ld. Pr. CIT has erred both on facts and in law in ignoring the fact that the issue raised by him in notice u/s 263 was before the AO and as such the jurisdiction on this issue u/s 263 cannot be assumed by him. iv. On the facts and circumstances of the case, the order passed by the learned Pr. CIT assuming jurisdiction under section 263 is bad in law having been initiated at the instance of audit objection only. v. On the facts and circumstances of the case, the learned Pr. CIT has erred both on facts and in law in ignoring the fact that the proceeding under Section 263 cannot be used for substituting opinion of the A.O. by that of the Pr. CIT. vi. On the facts and circumstances of the case, the order passed by Pr. CIT under section 263 of the Income Tax Act is unsustainable as power to revise can be invoked in the case of no/lack of enquiry, not in the case of inadequate enquiry. vii. On the facts and circumstances of the case, Pr. CIT has erred both on facts and in law in setting aside the issue of section 43CA to the file of the AO without properly appreciating the explanation of assessee giv....
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....e above referred seized cash in declaration made under Pradhan Mantri Gareeb Kalyan Yojna, 2016 (PMGKY, 2016). The appellant further explained that he has offered cash of Rs. 3,00,00,000/- for taxation under PMGKY, 2016 which includes cash of Rs. 1,50,51,980/- found during search u/s 132 conducted in the case of appellant on 25.07.2016. Except cash of Rs. 1,50,51,980/- which was seized no other documents and material has been found during the search operation. SUBMISSION: 5. As regards Ground No.1: 1.1 The Ld. PCIT has issued a notice u/s 263 of the Act on 03.02.2022 (refer page no. 2 to 5 of paper book) to submit details, documents and necessary evidences through e-mail on or before 14.02.2022. It was also mentioned in the notice that if you wish to appear personally or through your authorized representative, personal hearing may kindly be availed on 14.02.2022 at 11.30 A.M. in the office of the PCIT. 1.2. In response to the said notice written submission along with details, documents and necessary evidences were filed online on 09.02.2022 by the appellant. (Please refer page no. 6 to 7of paper book). 1.3 As there was no personal hearing was taken on 14.02.2022, online....
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.... audi alteram partem and the impugned revision order was thus passed in violation of the principles of natural justice as the Assessee had no opportunity on the ground which is ultimately decided against him". D. Assotech Realty Private Limited v/s National E-Assessment Centre Delhi & ANR [W.P. (C) 6183/2021 & CM APPL, 19582/20211: Wherein it was held by the Hon'ble High Court of Delhi that "Where a discretion is conferred upon a quasi-judicial authority whose decision has civil consequences, the word "may" which denotes discretion should be construed to mean a command. Consequently, the requirement of giving an assessee a reasonable opportunity of personal hearing is mandatory. It was further held that the classification made by the Respondent between the matters involving disputed questions of fact and law by way of the Circular dated 23rd November, 2020 is not legally sustainable." E. Bharat Aluminium Company Ltd v/s Union of India & ORS. Dt. on 14th January 2022 [W.P.(C) 14528/2021 & CM Appeal 45702/20211: Wherein it was held by the Hon'ble High Court of Delhi that "Consequently, this Court is of the opinion that an assessee has a vested right to personal hearin....
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....urse of hearing of assessment proceedings, the appellant has submitted documents of Sale agreement of property with M/s Adhiraj Developers, approved layout of the plots for residential purposes by the authority and copy of ledger account of M/s Adhiraj Developers (Advance Account under current liabilities head) through submission letter dated 05.12.2018 and 14.12.2018. (Refer page No. 118 & 119 of paper book). Copy of note sheet of Ld. AO is also enclosed herewith. (refer page no 121 of paper book). 2.3 It is also categorically mentioned by the Ld. AO in the assessment order (at page no. 2 of the order) that in response to the notices, the counsel and AR of the assessee furnished written submissions with supporting documents which were perused and placed on record. Various aspects of the case were discussed with AR 2.4 The Ld. PCIT in the order issued u/s 263 of the Income Tax Act, 1961 has reiterated the same issues noted and verified by the Ld. AO during the course of assessment. The Ld. PCIT has not brought forward any further incriminating evidence on record as to contend that the order passed by the Ld. AO is not as per the provisions of the Income Tax Act, 1961. The Ld. P....
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....which should have been made; (b) The order is passed allowing any relief without inquiring into the claim; (c) The order has not been made in accordance with any order, direction or Instruction issued by the Board under section 119; or (d) The order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person." 2.7. As it can be seen from clause of the Explanation 2 to section 263 of the Income Tax Act, 1961 that an order passed by an Ld. AO can be considered to be erroneous if the Ld. AO passed an order without making inquiries or verification which should have been made. However in the case of the appellant the Ld. AO has already made all the requisite inquiries and necessary verification. There is no law for adequacy of inquiry to be made by the Ld. AO. The order can be erroneous if the assessing officer fails to apply the law rightly on the facts of the case. In the case of your appellant the Ld. AO has properly applied the laws of the Income Tax Act, 1961 and the contention of the Ld. PCIT is arbitrary. What may seem right to the Ld. A....
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....each and every assessee and will not lead to finality of the outcomes in legal proceedings. A literal reading of the explanation 2 of section 263 would mean that the Ld. PCIT has powers to revise any proceedings as he may deem fit without any material on record. However the intention of the Law in this case lies beyond what the literal meaning is. The intention in revisionary powers is to prevent actual loss to revenue and not arbitrary losses. Invoking provisions of Section 263 of the Income Tax Act, 1961 without a proper reasoning and setting aside the order of the Ld. AO is not tenable as per Law. 2.11. The revisionary powers under section 263 of the Act are given to the Commissioner of Income Tax when he finds the order of the Assessing Officer to be erroneous as well as prejudicial to the interest of the Revenue. In case the Commissioner of Income Tax finds the error in the order of the Assessing Officer, still prefers to direct him to make assessment de-novo, these two things contradict each other. If the Commissioner of Income Tax directs the Assessing Officer to make assessment after further enquiry, this act of the Commissioner of Income Tax would show that he is not sur....
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....mmissioner was that the Assessing Officer should have made further inquiries rather than accepting the explanation. Therefore, it cannot be said that it is a case of lack of inquiry" B. CIT. v. Gabriel India Ltd [[1993] 203 ITR 108 (Bombay)]; Wherein it was held by Hon'ble Bombay High Court, "If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. [See Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 (SC)]" C. PCIT Vs. Delhi Airport Metro Express Private Limited [ITA No.705/2017][(2017) 398 I....
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..... 263 of the Act, the conclusion that the order of the AO is erroneous and prejudicial to the interests of Revenue had to be preceded by some minimal inquiry. In fact, if the learned Principal CIT is of the view that the AO did not undertake any inquiry, it becomes incumbent on the learned Principal CIT to conduct such inquiry" [relevant para-2 at page no.200 & 201 of paper book]. E. Sh. Narayan Tatu Rane Vs. ITO, [I.T.A, No. 2690/2691/Mum/2016.dt 6.05.2016]: 20. Further, clause (a) of Explanation states that an order shall be deemed to be erroneous, if it has been passed without making enquiries or verification, which should have been made. In our considered view, this provision shall apply, if the order has been passed without making enquiries or verification which a reasonable and prudent officer shall have carried out in such cases, which means that the opinion formed by Ld Pr. CIT cannot be taken as final one, without scrutinising the nature of enquiry or verification carried out by the AO vis-à-vis its reasonableness in the facts and circumstances of the case. Hence, in our considered view, what is relevant for clause (a) of Explanation 2 to sec. 263 is whether the....
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....l Credit Invest P. Ltd. Vs. PCIT, [I.T.A. No. 2519/DEL/2019, dt. 19.09.2019] (refer page no. 211 to 222 of paper book) The relevant extracts of the case law are presented as under for your ready reference: "We further note that Explanation to section 263 of the Act does not change the scope of section 263 of the Act, the Mumbai Tribunal in the case of Narayan Tatu Rane vs. ITO reported in 70 taxmann.com 227 has also held that in a case where learned Pr. CIT has not brought any material on record by making enquiries or verifications to substantiate his inference, the learned PCIT is not justified in holding that the impugned assessment order was erroneous. The relevant portion of the decision is as under:- "21. In the instant case, as noticed earlier, the AO has accepted the explanations of the assessee, since there is no fool proof evidence to link the assessee with the document and MIs RNS Infrastructure Ltd, from whose hands it was seized, also did not implicate the assessee. Thus, the assessee has been expected to prove a negative fact, which is humanely not possible. No other corroborative material was available with the department to show that the explanations given by....
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....ment order. The AO had issued detailed questionnaire raising various issues which were also replied by the assessee from time to time. The assessee had also appeared personally and filed the detailed replies to all the queries raised and books of accounts were also produced. We also find that even on the issues on which the addition had been made by AO in the assessment order are subject matter of 263 proceedings, which by no means can be regarded as erroneous or prejudicial to the interest of revenue. The PCIT has failed to specify as to how and on what ground the assessment order is erroneous and/or which part of the CBOT instructions were not adhered to by the AO. Merely not recording the satisfaction, the AO on the records does not make the assessment order erroneous and prejudicial to the interest of revenue, as is decided in the various judicial pronouncements by various courts" [relevant para-3 at page no.230 of paper book]. I. SURESH CHAND SURANA vs. ACIT [ITA No.: 25/RPR/20211: [(2021)63CCH0568(Ryp. Trib.)](refer page no. 234 to 239 of paper book) Wherein it was held by the coordinated Bench that "It is trite that where the AO has taken a view which is possible and pla....
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....assessment of income u/s 43CA of the Act and that the Id. AO had not accepted the same. This is evident from the detailed reply given by the Id. AO to the Revenue Audit Party vide his letter dated 22.11.2019 (refer page no.129 of paper Book). We find that the Id. PCIT had invoked revision jurisdiction u/s 263 of the Act on the very same point of under assessment u/s 43CA of the Act. Hence, it could be safely concluded that the revision proceedings has been invoked by the Id. PCIT u/s 263 of the Act based on audit objection, which is nothing but borrowed satisfaction. Hence, the said revision proceedings u/s 263 of the Act needs to be construed as bad in law. 4.4 The appellant relies on the following judicial pronouncements in support of his case: A. GRASIM INDUSTRIES LTD. (Successor to Aditya Birla Nuvo Ltd.) vs. PRINCIPAL COMMISSIONER OF INCOME TAX (2021) 62 CCH 0148 MumTrib Gabriel India Ltd reported in 203 ITR 108 (Bom) Nirav Modi reported in 390 ITR 292 (Bom). (refer page no, 240 to 251 of paper book) It is also pertinent to note that the Special Leave Petition (SLP) preferred by the Revenue before the Hon'ble Supreme Court against the judgement of Nirav Modi was di....
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....he right to transfer the plots i.e. the appellant did not transfer the right to transfer of such plots to M/s Adhiraj developers. This sale agreement has already been submitted before the Ld. AO during the assessment proceedings and no adverse inference was drawn from it by the Ld. AO. It can be clearly seen from the above submissions of the appellant that part consideration of Rs. 10,00,000/- has been received by the appellant on or before the date of agreement from M/s Adhiraj developers. On analysis of the provisions of Section 43CA of the Income Tax Act, 1961 it can be clearly seen that the appellant has complied with the respective provisions. The appellant had entered into a sale agreement for transfer of plots, the appellant had received part consideration in any mode other than cash, the agreement fixed the value of consideration, the amount of Rs. 10,00,000/- has been received before the date of agreement and the date of agreement and the date of registration of the plots are not the same. On compliance of the above conditions as per the provisions of sub-section (3) and subsection (4) of Section 43CA of the Income tax Act, 1961, the full value of consideration, for the pu....
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....CIT has misunderstood the facts of the case and the contention. of the Ld. PCIT is incorrect. On the facts of the case, the Section 53A of the Transfer of Property Act, 1882, is not applicable on the appellant. The sale agreement executed on 17th August 2012 with M/s Adhiraj developers does not mention anything about the possessions of immovable properties and about right to transfer the Immovable properties. Section 53A requires registration of those agreements/deeds where the possession of the immovable property has been transferred to the transferee or where the transferee was already in possession of the said immovable property which is beyond the facts of the case of the appellant considering that possession was not even a question in the said Agreement. The Ld. PCIT has without proper analysis of the section has leaned into the literal interpretation of the section without any application of mind on the practicality of such section in the case of the appellant. The registration for the transfer of the immovable property has been duly made in favour of the various parties as per the directions and instructions of M/s Adhiraj Developers. The appellant has made the registration ....
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....6- 17 on 17.01.2017. That time limit for issue of notice u/s 143(2) of the Act was expired for assessment years i.e. AYS. 2011-12 to 2014-15 before the date of search date 25.07.2016 except for AYS 2015-16, 2016-17 & 2017-18. All the assessment years from AY 2011-12 to 2014-15 are concluded and non-abated assessments. The AO cannot reopen the assessments u/s 153A of the Act for AYS 2011-12 to 2014-15 as there are no incriminating materials seized /found during the course of search operation relating to these years. With respect to AY 2015-16, the return u/s 139 was filed 30.03.2016 and last date for issuing notice u/s 143(2) of the Act for this return was 30.09.2016 although falling after the date of search i.e. 25.07.2016, no notice u/s 143(2) was issued on or before the due i.e. 30.09.2016. Notices u/s 143(2) read with section 153A for Assessment years 2011-12 to 2015-16 were issued after the regular due dates u/s 143(2) of the Act. It is only on the basis of records and documents filed on subsequent search by issue of notice u/s 153A of the Act additions are proposed to be made u/s 263 proceedings by the Id. PCIT. Therefore, in our opinion, all the assessment years from 2011-12 ....
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....r evidence that were not already available before the Ld. AO and Ld. Pr. CIT. The additional grounds of appeal merely involve interpretation of the provisions of the Income Tax Act, 1961, which the Hon'ble Tribunal is otherwise competent to do, in view of the principles laid down by the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. CIT (1998) 229 ITR 383 (SC). Before Ground No. 1, the following additional grounds may kindly be allowed to be added. Additional Grounds of Appeal: 1. That, the combined Search Assessment Order framed under section 153A EW.S 143(3) of the Act for AY 2011-12 to 2016-17 and under section 143(3) of the Act for AY 2017-18, on the strength of purported approval granted by the Ld. JCIT, Range-Central u/s 153D of the Act, is void ab-initio, invalid, illegal and bad in law hence, deserves to be quashed since, the mandatory prior approval granted is no approval in the eyes of law as the same has been accorded on presumption and without application of mind. That the entire assessment made in the case of the appellant is null and void as approval granted under section 153D is mechanical in nature and without any application ....
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....n 143(3) for A.Y. 2017-18 may please be quashed and cancelled. It was the submission of Learned AR that the order of Learned PCIT under Section 263(3) dated 31.03.2022 was therefore, illegal, bad in law, and without Jurisdiction as the original combined assessment order passed by the Learned AO itself is void-ab-initio which is based on non-est approval u/s 153D of the Act. A copy of approval under Section 153D of the Act is furnished along with the application for additional ground raised by the assessee. The additional ground submitted by the assessee was with the contentions that since the issue raised is purely a legal contention raised by the assessee therefore, the Tribunal is otherwise competent to decide such issues at this stage in view of principles laid down by Hon'ble Supreme Court in the case of National Thermal Power Corporation vs. CIT (1998) 229 ITR 383 (SC). In the present case though, the additional contentions are raised by assessee by way of additional ground, which were never raised before the lower authorities, but, since the admission of the same is incumbent upon us under the settled position of law as accorded by Hon'ble Apex Court in the case of NTPC (Supr....
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....R/2019 17.09.2021 (ITAT RAIPUR). AM: 2011-12 TO 2015-161: wherein the approval granted by the JCIT was identical to the approval granted in the case of the present assessee, held as under: Respectfully following the decisions of coordinate benches in Sanjay Duggal & others (supra) and Archpharma Labs & Arch Impex P Ltd (supra), we find convincing force in the submissions of the assessee that the approval granted by JCIT suffer from non-application of mind and depends on presumption of proper performance of duty by A.O. such per functionary approval under section 153D cannot termed as legitimate. The consequential assessment orders based on non-est approval under section 153D, thus are void-ab-initio on this ground alone. C. Pr. CIT v/s Subodh Aqrawal [ITA No. 86 of 2022 Dtd 12.12.2022 (Allahabad HC)I: It was concluded in by the Hon'ble High Court as follows: "The approval of draft assessment order being an in-built protection against any arbitrary or unjust exercise of power by the Assessing Officer, cannot be said to be a mechanical exercise, without application of independent mind by the Approving Authority on the material placed before it and the reasoning given in t....
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.... the records of 38 cases in one day to apply independent mind to appraise the material before the Approving Authority. The conclusion drawn by the Tribunal that it was a mechanical exercise of power, therefore, cannot be said to be perverse or contrary to the material on record. D. Pr. CIT v. Sapna Gupta in I.T. Appeal No.88 of 2022 (Date of Judgment: 12.12.2022) 2023 147 Taxmann.com 288 (Allahabad HC), wherein the similar findings were offered by the Hon'ble High Court of Allahabad as in the case of Subodh Agrawal (supra) and held as under. The conclusion drawn by the Tribunal that it was a mechanical exercise of power, therefore, cannot be said to be perverse or contrary to the material on record, As the facts are admitted before us, the questions of law framed on the factual issues related to the findings recorded by the Assessing Officer are not open to agitate within the scope of the present appeals being in the nature of second appeal. No substantial question of law arises for consideration before us. The Appeals are dismissed being devoid of merit. E. Pr. CIT v. Siddarth Gupta in I.T. Appeal Nos. 90 of 2022 (Date of Judgment: 12.12.2022) (2023) 147 Taxmann.com 305 ....
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....263 of the Act. 2.4. When the order passed by the AO u/s 153A/143(3) dated 21.12.2018 was in itself non-est, therefore, the same could not have revised by the Pr. CIT u/s 263 of the Act, 2.5. The appellant relies on the following judicial pronouncements in support of his case, are made available for your kind consideration: A. Maruti Clean Coal and Power Lt. vs PCIT 66 CCH 0221 ITA No. 55/RPR/2021 Date of order 31.12.20221: wherein held as under: 29. On the basis of our aforesaid observations, we herein conclude that as the order of reassessment under Sec. 143(3) r.w.s 147, dated 30.12.2018 in itself had been passed on the basis of invalid assumption of jurisdiction by the AO, therefore, as claimed by the assessee and, rightly so, the same could not have been revised by the Pr. CIT under Sec. 263 of the Act. Accordingly, we herein quash the order passed by the Pr. CIT under Sec. 263 of the Act, dated 27.03.2021 for want of valid assumption of jurisdiction. As we have quashed the impugned order passed by the Pr. CIT under Sec, 263 of the Act, dated 27.03.2021 on account of invalid assumption of jurisdiction, therefore, we refrain from adverting to and therein adjudicating th....
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....had not been dealt with by the Tribunal. The Tribunal decided that the assessment was barred by time and consequently, all subsequent proceedings by way of appeal before the Commissioner (Appeals) and the Tribunal would lose effect and would become in fructuous. The Tribunal also refused to make reference under section 256(1). On a reference application under section 256(2): In view of above submission, it is humbly requested before your honours to allow the appeal and oblige. 13. In response to, the additional grounds challenging the validity of the order u/s 153A/143(3), picked-up for revisionary proceedings u/s 263, on account of mechanical approval u/s 253D without any application of mind, Ld. CIT DR has submitted that on perusal of assessment records and the report of the DCIT (Central-1), Raipur, wherein the fact pertaining to submission of draft order by the Ld. AO to Ld. JCIT on 15/12/2018 was discussed and it is also clarified that the approval u/s 153D dated 20/12/2018 was granted after due deliberations between the Range head and AO, therefore, the submissions of the assessee dated 19/12/2018 were also duly considered while issuing the approval u/s 153D. Copies of cor....
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....nt year wherein no incriminating material was found during the course of search applying recent verdict of the Hon'ble Supreme Court in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 116 CCH 0307 ISCC has held as under: 11. As per the provisions of Section 153A, in case of a search under Section 132 or requisition under Section 132A, the AO gets the jurisdiction to assess or reassess the 'total income' in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under Section 132 or making of requisition under Section 132A, as the case may be, shall abate. As per sub-section (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under t....
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....th the search and requisition under Sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and subsection (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (....
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....ning to A.Y. 2014-15 was found during the search proceedings, therefore, it was the submission that under such circumstances, the case of the assessee is squarely covered by judgment of Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. (supra), thus no addition could be made for the said assessment year. 18. Learned CIT-D.R. against this contention of the assessee has submitted that such contentions should not have been raised at this stage when the said contention was not raised by the assessee before the Learned PCIT or at the time of assessment proceedings, therefore, the order of Learned PCIT cannot be invalidated on this count. 19. We have heard the rival contentions and perused the material available on record. On perusal of the order of Assessing Officer dated 21.12.2018 nothing is apparent or emanating pertaining to incriminating material in the relevant AY 2014-15, therefore, in absence of information pertaining to incriminating material on record, we are unable to comprehend that whether there was any incriminating material pertaining to A.Y. 2014-15, unearthed during the search proceedings or not. Under such circumstances, such a contention of the assess....
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....ial for the un-abated assessment year 2014-15. 21. Pertaining to the remaining regular grounds of appeal, Ld. AR submitted that the Ld. PCIT has not provided fair opportunity of being heard to the assessee while directing the Assessing officer by setting aside the assessment order to read-judicate the case of the assessee afresh. Since the PCIT has accepted return submissions of the assessee dated 09/02/2022, 25/02/2022 and 07/03/2022, has duly reproduced the entire submission of the assessee and has duly recorded his observations after considering such replies of the assessee. Ld. PCIT has examined the assessment records and has found that the needful enquiries pertaining to transaction of sale of plots of land, for which the consideration was less than the value adopted by the stamp duty authority, covered by the provisions of sections 43CA of Income Tax Act, 1961, were not conducted by the Ld. AO, therefore, it is incumbent upon him to take-up the issue according to explanation 2 of section 263 of the Act (introduced w.e.f. 01/06/2015) applicable to the AY under consideration i.e., AY 2014-15 to 2017-18. It is further observed by the Ld. PCIT that no agreement was executed betw....
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....under the situation wherein there was an alleged violation of provisions of section 80AC of the IT Act, wherein it is mandated that the return of income was supposed to be filed on or before the due date specified u/s 139(1), whereas as observed by the Ld PCIT, in the present case the assessee has filed the return on 08-08-2018 for the AY 2017-18 i.e., after the date specified u/s 139(1). There were also certain other violations on the part of the assessee as recorded by the Ld. PCIT, whereby the assessee's claim u/s 80-IA was found to be not in accordance with the provisions of law or with compliance of the procedure laid down in the law. The objections of the assessee that Ld. PCIT has not exercised independent application of mind and all the short comings noted in the notice u/s 263 were picked up from the audit objection, therefore, such an action of the Ld. PCIT in assuming jurisdiction conferred upon him within the provisions of section 263 was bad in law, which in turn makes the order passed u/s 263 void, is not acceptable, since the PCIT has perused the case records of the assessee for the relevant AY, may be after the issue has been raised under the audit objection but sti....
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.... opinion that there is no substance in the additional ground raised by the assessee which constitutes that the revision proceedings u/s 263 are bad in law since the same is based on borrowed satisfaction i.e., audit objection and not with independent application of mind by the Ld. PCIT. Consequently, additional ground raised by the assessee is rejected." 23. On perusal of the order of Ld. PCIT, after thoughtfully considering the submissions of the parties, material available on record and case laws referred to by the Ld. Counsels. Admittedly, the questions and aspects pertaining to the transactions of Sale of plots by the assessee were validly raised by the Ld. PCIT, though the information qua the transactions were called for by the Ld. AO and duly submitted by the assessee but the necessary enquiries w.r.t. section 43CA were not conducted by the Ld. AO leads to hold the assessment order erroneous and accordingly prejudicial to the interest of revenue. The assessee's contention that proper opportunity of hearing was not granted cannot not accepted while 3 responses by the assessee were considered by the Ld PCIT, and the issue is remitted back to the files of AO for fresh adjudicat....