TaxTMI 
TaxTMI 
2024 (12) TMI 805
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.... u/s 263 is bad in law and therefore the action of ld. PCIT is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the order passed u/s 263 and holding the order passed u/s 143(3) dated as not erroneous and prejudicial to the interest of revenue. 2. The assessee craves his right to add, amend, or alter any of the ground on or before the hearing." 3. The brief fact as culled out from the records is that a survey action u/s 133A of the Income Tax Act, 1961 was carried out on 06.02.2019 at the business premises of M/s Laxminath Infrastructure Pvt. Ltd. Churu. During the survey proceedings, various documents were found and the same was impounded as per annexure prepared during survey. The assessee e-filed his return of income on 30.08.2019, declaring total income at Rs. 45,06,840/-. During the year under consideration, the assessee has shown income from salary, house property and other source being interest from saving bank account, FDR and income declared during the survey. The case of the assessee company was selected for scrutiny by issuing notice u/s 143(2) of the Income tax Act, 1961 on 29.09.2020 and the same was....
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.... the survey. This in turn has resulted in passing of an erroneous order by the AO in the case due to non-application of mind to relevant material, an incorrect assumption of facts and an incorrect application of mind to the law which is prejudicial to the interest of the revenue. Hence liable for revision under section 263 of the Act. She also relies on Apex Court decision in the case of Malabar Industrial Limited vs. CIT 243 ITR which reads as follows:- "....An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principle of natural justice or without application of mind." Thus, she hold that she has examined the facts available on record and have observed the position of law, the error caused by the Assessing Officer resulting in prejudice to Revenue as has been detailed in the Show Cause Notice issued to the assessee. On examination of order of the Assessing Officer makes it clear to her that ld. AO did not take a conscious decision regarding special tax u/s 115BBE on undisclosed money u/s 69A of Rs. 40,00,000/-. As this issue is not se....
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....in view of buying the piece and assured him that it will be treated income of the current year. So Assessee appellant surrendered 40 lacs as income of the current year and subsequently deposited advance tax. Learned ITO completed the scrutiny case and accepted Return Income after detailed inquiry and imposed normal tax slab on the income as per return. After audit objection revision proceedings u/s 263 of the IT Act, learned CIT Principal set aside the assessment order without disturbing the assessment and directed AO to change the special tax u/s 115 BBE of Income tax act. With the above brief facts, the grounds of appeal are discussed hereunder: GROUNDS OF APPEAL: Ground No. (1) In the facts and circumstances of the case and law, Ld. PCIT has erred in holding the order passed u/s 143(3) dated 21.09.2021 as erroneous and prejudicial to the interest of revenue. The order passed u/s 263 is bad in law and therefore the action of Ld. PCIT is illegal, unjustified, arbitrary, and against the facts of the case. Relief may please be granted by quashing the order passed u/s 263 and holding the order passed u/s 143(3)_ dated 21.09.2021 as not err....
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....dependent view of Principal CIT but it is borrowed from the C&AG, Thus the action u/s 263 is based on the audit objection - Therefore, the revision order of the PCIT is quashed. That in the case of Ganga Acrowools Limited vs Pricipal commissioner of Income - Tax in ITA no. 196/CHD/2021 on 31.03.2022 held by THE INCOME-TAX APPELLATE TRIBUNAL CHANDIGARH "A" BENCH that The commissioner cannot exercise its power under section 263 only on the basis of audit objections and replies filed by the assessee for the audit objection are also a part of the assessment records. That in the case of Alfa Laval AB (India) Ltd. V. CIT (IT/TP), [ITA No. 1284/Pun/2017, dt.2-11-2021] held that The process of of revision initiates only when the commissioner calls for and examine the record of any proceedings under this Act and consider that any order passed by the AO is erroneous and prejudicial to the interest of revenue. The AO recommending a revision to the commissioner has no statutory sanction. Since in the instant case revisionary order suffered from jurisdictional defect, the revision order was quashed. That it is proved itself from the order of the Ld. PCIT(Central) that....
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....r the reasons mentioned above the same was admitted as the income of the year under consideration. If ld. PCIT is treating this as a special tax rate case which can be said as difference of opinion and difference of opinion cannot be the basis of revisionary power. That in our case there was no suggestion by the survey team income surrendered by the assessee is unexplained investment or unexplained expenditure as well as learned AO accepted the return income. It is held in the case of Arun Enterprises v. Pr. CIT (2024) 193 TR (A) 573 (Del.Trib) : 2023 Tax Pub (DT) 1835 (Del-Trib) held that Amount was surrendered by assessee in order to buy peace of mind in case any discrepancy was found in the books of account but the fact of the matter is that neither AO nor Pr. CIT brought anything on record to show that there was unexplained investment or unexplained expenditure was found during the course of survey proceedings. With these facts, it could be safely concluded that surrender could be said to have been offered to cover up the discrepancies in respect of likely disallowances of claims/bogus expenses/cash payments bogus purchases relating to business income....
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....operate, he will be free from any further litigation and it will provide a mental peace to the assessee. Accordingly, the assessee declared the income during the survey proceedings to buy the mental peace to avoid litigation and the amount the income declared during the survey proceedings was also not found fault while filling the return of income by the assessee. Thus, the Assessing Officer after scrutinizing the return submission so called for assessed the income was considered as regular and current year income of the assessee. Thus, when the Assessing Officer has applied his mind and assessed the income by taking plausible view of the matter, ld. PCIT cannot change the view taken by the ld. AO and that too to resolve the internal audit objection. 9. Per contra, the ld. DR relied upon the order of ld. PCIT which is passed after considering the submission of the assessee. The order of the PCIT is based on the detailed finding recorded in the order of ld. PCIT. The ld. DR also argued that the assessee admitted the income which is additional income and separately offered in addition to the regular income offered by the assessee. Therefore ld. DR heavily relied upon the order of ....
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....IT we note that the allegation made is to justify the audit objection raised even the ld PCIT stated that he has no hesitation in holding that the AO has not examined the issue in question properly but he failed point where the ld. AO has called for the details and based on the details called for he has taken a view based on the record produced before him which merely there is audit objection the order passed after examination of the issue cannot be taken again. To drive home to this contention we take support on a decision of apex court in the case of Parashuram Pottery Works Co. Ltd Vs ITO [ 1977] 106 ITR 1 "At the same time, we have to bear in mind that the policy of law is 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". On the second issue we note that the ld. PCIT is trying to justify the claim of the assessee with the net profit rate and the expenses incurred by the assessee and merely based on the contention that the ld. PCIT is not in agree....
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....appellate jurisdiction. The Commissioner does not sit in appeal." 8. The bench also noted from the order of the PCIT that the reasons for taking the proceeding u/s. 263 is not an independent view of the ld. PCIT but it is borrowed from the audit memo issued by the C&AG. Thus, it is undisputed that the action u/s. 263 based on the audit objection and it has been held in various case law cited by the ld. AR of the assessee holding that proceedings u/s. 263 at the instance of Revenue Audit is impermissible. The ld. AR of the assessee has relied upon the decision in the case of M/s. Grasim Industries Ltd., in ITA no. 1964/Mum/2019 wherein the co-ordinate bench while dealing with the similar set of facts held that- "9. We hold that a possible view has been taken by the ld AO in the matter and merely because the ld PCIT is of a different view on the same issue, he cannot resort to invoke revision proceedings u/s 263 of the Act. This is only a case wherein the ld PCIT is trying to substitute his view in lieu of a possible view already taken by the ld AO on the impugned issue on the allowability of LTCL. Reliance in this regard is placed on the decisions of Hon'ble Jurisd....