TaxTMI 
TaxTMI 
2023 (11) TMI 794
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....ernment grants in the year under consideration also, which were taxable, but taken as capital receipt in the computation of total income. On the basis of a reference made by the AO, through proper channel, the ld. PCIT issued the above show cause notice and thereafter passed the order u/s. 263 setting aside the assessment order and directing the AO to frame the assessment afresh after conducting enquiries and verification. Aggrieved thereby, the assessee has come up in appeal before the Tribunal. 3. We have heard the rival submissions and gone through the relevant material on record. The ld. PCIT issued show cause notice dated 29-05-2018, which is reproduced as under: "Sub : Show cause notice u/s. 263 - A.Yrs. 2012-13 and 2013-14 - reg. Please refer to the above. 02. During the course of assessment proceedings of A.Yr.2014- 15, it was observed that you had credited an amount of Rs. 405.68 crores and Rs. 38.36 crores respectively as 'Government Grant - Capital' and 'Government Grant - Revenue' under the head 'Other Income' being an amortization of deferred income. In your statement of computation of income for the year, this amount has been deducted cla....
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....use notice, divulging that the grants received by the assessee in such year were wrongly taken as capital receipt and the further fact that similar grants were received in earlier years as well, including the year under consideration. In sub-para 3 of para 4 of his show cause notice, the ld. Pr. CIT referred to the AO's report and then recorded that: "The AO has recorded that during the course of assessment proceedings this issue was not properly dealt with and the assessment order is erroneous in so far as it is prejudicial to the interest of the Revenue". In last para of the show cause notice, he records that: "In view of the facts noted above, the order passed by the Assessing Officer for A.Yrs. 2012-13 and 2013-14 .... is erroneous and prejudicial to the interest of the revenue". Thus, it is apparent from the entire show cause notice that the initiation of revision is premised only on the report submitted by the AO requesting for the revision of the assessment order. During an earlier hearing, the ld. DR was directed to produce the said report of the AO forming part of the show cause notice. The ld. DR produced the file in original containing the AO's letter dated 22-03-2018 re....
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....ued show cause notice on 29-05-2018 seeking to revise the assessment order. But for the AO's report, there is not even a slightest utterance or remotest clue to the effect that the ld. PCIT called for and examined any record of the proceeding for the year and then on the basis of such an examination considered the assessment order erroneous and prejudicial to the interest of the revenue. Au contraire, he specifically mentioned in the show cause notice that the AO reported about the issue of grant not having been properly dealt with during the course of assessment proceedings rendering the assessment order amenable to revision. It goes without saying that if some lacunae is left in the assessment order, which comes to the notice of the AO, he has ample power to take corrective measures either by way of rectification u/s. 154 or revision u/s. 147. Insofar as the revision u/s. 263 is concerned, it is the sole prerogative of the Pr. CIT, who needs to take suo motu action on calling for and examining the record of any proceedings under this Act and on the basis of such examination considering the assessment order erroneous and prejudicial to the interest of the Revenue. It is evident fr....
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....ent relied by the ld. DR is CIT Vs. Bhagat Shyam & Co. (1991) 188 ITR 608 (Allahabad). In that case also, the assessee contended that the ITO placed certain information or material before the Commissioner and hence, the revision u/s. 263 was not justified. Repelling such a contention, the Hon'ble High Court held that: "There is no bar to the ITO bringing that material to the notice of the Commissioner. What cannot, however, be denied is that the Commissioner must apply his mind to the material placed before him and satisfy himself that it is a case where he ought to exercise his revisional power". Again, it is manifest that there is no bar on the AO placing certain information or material before the CIT justifying the invocation of power u/s. 263, but ultimately, it is the CIT who must apply his independent mind to such material and satisfy that the revision is warranted. What should follow from the examination of material, including that placed by the AO, is the independent satisfaction of the CIT, after due application of mind, that the assessment order was erroneous and prejudicial to the interest of the Revenue requiring revision. If such satisfaction of the CIT, which is cruci....