TaxTMI 
TaxTMI 
2024 (5) TMI 732
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....xtracted for ready reference:- "........ 1. That we had received an order u/s 263 passed by Id Principal Commissioner of Income-tax, Central Circle, Patna on 26.03.2022. 2. That based upon our understanding of the matter, an appeal against the said order was filed with Hon'ble High Court of judicature at Patna. 3. That during the course of arguments, it transpired that the said order is appealable before Hon'ble Income Tax Appellate Tribunal, Patna Bench, Patna. Copy of the order passed by Hon'ble Patna High Court is enclosed as Annexure to this application. 4. That the petition was hence withdrawn and this present application is being made for condonation on the basis of directions contained in the said order which has been downloaded from the website of Hon'ble Patna High Court. ............................." 2.1. Thought the Revenue has opposed the request for condonation of delay, we on perusal of the petition, are convinced that the assessee was prevented for reasonable cause from filing these appeals in prescribed time limit. Accordingly, we condone the delay and admit the appeals for hearing on merits. ....
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....ice u/s 143(2) and 142(1) of the Act, submissions were made to the notices and questionnaires along with copies of return, computation of income and point-wise reply of the questionnaire issued by ld. Assessing Officer. All the submissions of the assessee on the relevant issues were duly considered and the returned income was accepted. The assessment order has been passed with the prior approval of JCIT, Central Range-1, Patna, vide letter dt. 27/12/2019. Thereafter, the ld. Pr. CIT, Central Patna, called for the assessment records and invoked the revisionary powers u/s 263 of the Act by issuing notice u/s 263 of the Act on 23/02/2022. 6. The ld. Pr. CIT issued a detailed show cause notice and has referred to various seized materials found during the course of search, reference to the statement of Shri Satyendra Kumar Sharma about various documents and books of account seized. The ld. Pr. CIT also referred to the statement of Shri Atul Kumar Agarwal, part time accountant of the assessee firm. Thereafter, reference has been made to various ledger accounts of the assessee company and the assessee was asked to give reply to the issues raised in the show cause notice because ld. Pr.....
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..... Aggrieved, the assessee is now in appeal before this Tribunal. 9. The ld. Sr. Counsel for the assessee referring to the detailed written submissions as well as the paper book, made multifold contentions which in brief are:- (i) When the assessment order has been framed u/s 153A of the Act after obtaining necessary approval from Additional Commissioner of Income-tax (ACIT) u/s 153D of the Act, such assessment cannot be revised without revising the directions of the ACIT given u/s 153D of the Act. (ii) The ld. Pr. CIT erred in invoking the revisionary powers without considering the fact that the ld. Assessing Officer has conducted detailed enquiry by issuing questionnaires to the assessee to which compliance has been made by the assessee by way of filing the details along with the copies of returns, pointwise replies addressing all the issues raised in the questionnaire issued u/s 142(1) of the Act. Therefore, once the ld. Assessing Officer has carried out sufficient enquiry and taken one of the possible views in the light of the settled judicial pronouncements, the ld. Pr. CIT cannot assume jurisdiction u/s 263 of the Act. (iii) Even on merits, the as....
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....o which necessary compliances were made and return was filed. However, the returned income as disclosed in the original return filed on 30/09/2015 was again shown as income in the return filed in compliance to notice u/ s 153A of the Act furnished on 02/12/2019. Thereafter the assessee was served with the statutory notices u/s 143(2) & 142(1) of the Act and various questions were raised in the notice u/s 142(1) of the Act as well as during the course of assessment proceedings. In the assessment order framed u/s 153A of the Act, the ld. Assessing Officer has mentioned that the details were filed along with the submissions as well as copies of returns, computation of income and point-wise reply. Further the assessment was completed after taking necessary approval u/s 153D of the Act from JCIT, Central, Range-1, Patna. Finally, the assessment for all the impugned assessment years for Assessment Year 2015-16 to 2018-19 were completed accepting the returned income filed by the assessee. Now, all the four assessment years evenly dt. 27/12/2019 are the subject matter of the revisionary proceedings invoked by the ld. Pr. CIT u/s 263 of the Act, wherein after referring to the seized materia....
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....rder shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (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 subsection (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." 13. A bare perusal of sub section-1 would reveal that powers of revision granted by section 263 to the learned Commissioner have four compartments. In the first place, the learned Commissioner may call for and examine the records of any proceedings under this Act. For calling of the record and examination, the learned Commissioner was not required to s....
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....l to the interests of the revenue, for example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the ITO is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the revenue - Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC)".[Emphasis Supplied] 15. In the light of the provisions of section 263 of the Act and a settled position of law, powers u/s 263 of the Act can be exercised by the Pr. Commissioner/Commissioner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and also prejudicial to the interest of the Revenue. By 'erroneous' is meant contrary to law. Thus, this power cannot be exercised unless th....
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....termed to be erroneous simply because the CIT does not fee stratified with the conclusion. (viii) The CIT, before exercising his jurisdiction under s. 263 must have material on record to arrive at a satisfaction. (ix) If the AO has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation by a letter in writing and the AO allows the claim on being satisfied with the explanation of the assessee, the decision of the AO cannot be held to be erroneous simply because in his order he does not make an elaborate discussion in that regard." 17. Apart from above stated broader principles, one more principle needs to be added in view of the judgment of Hon'ble Delhi High Court in the case of ITO vs. D.G. Housing Projects Ltd. [2012] 343 ITR 329 (Delhi) that the ld. CIT has to examine and verify the issue himself and give a finding on merits and form an opinion on merits that the order passed by the AO is erroneous and prejudicial to the interest of the Revenue. Relevant extract is reproduced below: "In the present case, the findings recorded by the Tribunal are correct as the CIT has not gone....
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....oncerned, separate procedures have been laid down. Starting from Section 153A for assessments in the case of search or acquisition, Section 153B for time limit for completion of assessment u/s 153A, Section 153C for assessment of income of any other person and Section 153D i.e., prior approval necessary for assessment in case of search or acquisition. So far as Section 153D of the Act is concerned, the same reads as follows:- "153D. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of [sub-section (1) of] section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner:] 18.1. Now, on perusal of the above Section which states that a prior approval is necessary for assessment in case of assessment search or acquisition, it is specifically mentioned that no order of assessment or re-assessment shall be passed by an Assessing Officer below the rank of JCIT except with the prior approval of the Joint Commissioner. Before us, the ld. Counsel for the assessee sta....
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.... or assigned to, him under the orders or directions issued by the Board or by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General or Principal Commissioner or ' Commissioner authorised by the Board in this behalf under section 120. It may be noted that Order of assessment passed with the approval of JOT under section 153D of the I.T. Act, 1961 could not be revised under section 263 of the I.T. Act, 1961. The Ld. D.R. has, however, relied upon the Order of ITAT, Panaji Bench, but, has not explained whether the Judgment of Hon'ble Allahabad High Court in the case of Dr. Ashok Kumar (supra) or different Benches of the Tribunal have been considered in this case by the Panaji Bench. It is not decided in this case that assessment order cannot be revised without revising the approval under section 153D of the I.T. Act and Explanation 1 to section 263 of the I.T. Act has also not been considered. Therefore, this decision relied upon by the Ld. D.R. would not apply to this case. Further the Judgment in the case of Param Transport (P.) Ltd. (supra), of Hon'ble Chhattisgarh High Court (supra) is not with regard to approval obtai....
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.....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 the Lucknow Bench of the Tribunal in the case of MehtabAlam Vs. ACIT vide ITA Nos.288 to 294/Lkw/2014 order dated 18-11-2014 while deciding an identical issue has observed as under. 14.1 We find the Hyderabad Bench of the Tribunal in the case of CH. Krishna Murthy Vs. ACIT vide ITA No.766/Hyd/2012 order dated 13-02- 2015 following the decision of the Lucknow Bench of the Tribunal in the case of MehtabAlam (Supra) held that CIT is not justified in assuming jurisdiction u/s.263 when the order has been passed in terms of section 153D o....
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....eceiving approval u/s 153D of the Act, Ld. PCIT erred in revising order u/s 153A of the Act without first revising the order u/s 153D of the Act as which means that no defect has been observed by ld. Pr. CIT in approval u/s 153D of the Act. Thus the action of the ld. Pr. CIT assuming jurisdiction u/s 263 of the Act cannot be held to be tenable, the impugned proceedings deserves to be quashed on this grounds itself. 22.1. As regards the second limb of argument is concerned that detailed enquiry has been conducted and one of the view legally permissible has been taken, we, in view of the judgment in the case of Malabar Industrial Co. Ltd. vs. CIT (supra) and of Income-tax Officer v. D.G. Housing Projects Ltd. (supra) note that the assessments in question before us are search assessments. There is a separate procedure for carrying out the assessment for search cases. Though we have referred to the procedure in the preceding paragraphs, we will like to observe that prior to issuing of notice u/s 153A of the Act, complete seized material are available with the ld. Assessing Officer and a copy is also made available to the Senior Officer who has to grant the approval u/s 153D of the A....
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....ired. The Hon'ble High Court of Delhi in the case of Income-tax Officer v. D.G. Housing Projects Ltd. reported in [2012] 343 ITR 329 has held that "in cases of wrong opinion or finding on merits, the CIT has to come to the conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under Section 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because the order passed is not sustainable in law and the said finding must be recorded. CIT cannot remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous." Further the Hon'ble Apex Court in its judgment in the case of CIT vs. Electro House reported in 82 ITR 824, had held that "the CIT before reaching his decision and not before commencing his enquiry is to give the assessee an opportunity of being heard and make or cause to make such enquiry as he deems necessary". We note that in the instant case the learned PCIT before reaching his decision that the documents found, belongs to the assessee had made no enquiry whatsoever. Thus learned PCIT failed to appreciate that before he could have....
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.... assessment order cannot be held to be valid and tenable in the eyes of law and thus the impugned proceedings u/s 263 of the Act, deserves to be quashed. 27. So far as the merits of the case is concerned, we, taking strength of the judgment of the Hon'ble Delhi High Court in the case of Income-tax Officer v. D.G. Housing Projects Ltd. (supra), find that the ld. Pr. CIT has merely referred to the seized material but has not made any further enquiry about the correctness of such documents, as to whether they belong to the assessee, or pertain to the year under consideration. 28. We find that the learned PCIT in his show cause notice has referred to documents which even does not pertains to AY 2014-15 or 2015-16 but had been prepared thereafter and as such, it is evident that the order passed by ld PCIT apparently are without application of mind. The ld. Counsel for the assessee has referred to GIB-11 Page 8 which is in handwriting of Shri. Satyendra Kumar Sharma, is not a document for the AY 2015-16 or even AY 2016-17. In fact, there was no supporting evidence available for such figures and thus had no relevance at all in the eye of law for the assessment year either for AY 201....
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....rs. Khatiza S. Oomerbhoy vs. ITO ii. 100 ITD 441 (Kol) Al-Haz Amir Hasan Properties Pvt. Ltd. vs. Asst. CIT iii. 203 ITR 108 (Bom) CIT vs. Gabriel India Ltd iv. 171 ITR 141 (MP) CIT vs. Ratlam Coal Ash Co 31.1. We also find that learned CIT has erred in holding the assessment order as erroneous, a condition precedent and that the fact for holding the order was erroneous he has not made any enquiry whatsoever but proceeded on the basis of his own opinion. Where more than one view is possible, the order cannot be said to be erroneous as has been held by the Apex Court in the case of Malabar Industrial Co. Ltd. vs. CIT (supra). That same income cannot be taxed twice over, as held in the case of Smt. Tara Devi Aggarwal vs. CIT reported in 88 ITR 323, where an income has not been earned and is not assessable merely because the assessee wants it to be assessed in his or her hands in order to assist someone else who would have been assessed to a larger amount, an assessment so made will be erroneous and prejudicial to the revenue. In the instant case we find that the learned PCIT has not considered the order of assessment made in the case of Shri Satyendra Ku....
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....of the ld. Pr. CIT contains various mistakes as the documents referred are not for the assessment year in dispute and some of the documents are not belonging to the assessee. 33. Thus, in view of our discussion (supra) and our examination of the facts, as the order of the Assessing Officer is neither erroneous nor prejudicial to the interest of revenue, there was no scope for the ld. Pr. CIT to revisit the order of the ld. Assessing Officer. Therefore, the impugned order u/s 263 of the Act is quashed and assessment order framed u/s 153A/143(3) of the Act dt. 26/03/2022, is restored. The effective grounds raised by the assessee are hereby allowed for Assessment Year 2015-16. As discussed earlier, our decision for Assessment Year 2015-16 quashing the order u/s 263 of the Act is applicable mutatis mutandis to the appeals of the assessee for Assessment Year 2016-17 to 2018-19. 34. In the result, all the appeals of the assessee for Assessment Year 2015-16 to 2018-19 are allowed. Order pronounced in the Court on 13th May, 2024 at Kolkata. ============= Document 1 List of dates with sequence or events Sl. No. Date of event Events Paper Book Page No. reference ....