TaxTMI 
TaxTMI 
TaxTMI 
2025 (2) TMI 236
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.... prejudicial to the interest of the revenue, is without jurisdiction and bad in law, and therefore, liable to be quashed. 2. That, without prejudice to above, on the facts and circumstances of the case, no proper opportunity was given to the appellant while passing the impugned revision order and therefore, it is not sustainable in law. 3. That the appellant reserves the right to add, alter or modify any ground of appeal." 2. Succinctly stated, the assessee which is engaged in the business of running a rice mill industry and trading/export of Iron ore fines, had filed its return of income for A.Y.2021-22 on 22.11.2022, declaring an income of Rs. 5,10,69,450/-. Subsequently, the case of the assessee was selected for "complete scrutiny" u/s. 143(2) of the Act. 3. Thereafter, the A.O. vide his order passed u/s. 143(3) r.w.s. 144B of the Act, dated 27.12.2022, determined the income of the assessee at Rs. 5,23,00,088/-. 4. The Pr. CIT after the culmination of the assessment proceedings called for the assessment records. It was observed by him that while for the assessee was required to deduct/collect Tax at Source of Rs. 1,50,47,809/- on payments of Rs. 67,13,17,723/-, but it had....
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....h disclosed the amount at Rs. Nil. The assessee based on the aforesaid details claimed that there was no instance of short deduction/short collection of tax at source during the subject year. Accordingly, the assessee drawing support from the aforesaid material requested the Pr. CIT that the proceedings initiated by him under Section 263 of the Act be dropped. 7. Ostensibly, the Pr. CIT observed that a perusal of the reply a/w. supporting documentary evidence/material that was filed by the assessee before him could only be verified at the AO's level and the matter required detailed verification and inquiry. Thereafter, the Pr. CIT by referring to "Explanation-2" of Section 263 of the Act, observed that as the A.O while framing the assessment had failed to conduct proper and correct inquiries, therefore, the same had rendered his order as erroneous in so far it was prejudicial to the interest of the revenue. Accordingly, the Pr. CIT set-aside the order passed by the A.O u/s. 143(3) of the Act, dated 27.12.22 to his file for detailed verification and afresh adjudication after providing an adequate opportunity of being heard and considering the submissions of the assessee. For the sa....
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....in the case of the assessee or any other person. **** **** **** **** **** **** 9. Considering the above legal provisions of the Act and the factual position of this case as emanating from the assessment order and case records as well as the judicial precedents as discussed above, I am of the considered opinion that the assessment order is erroneous in so far as it is prejudicial to the interests of revenue in view of Section 263 of the Income tax Act. Thus, the assessment order is held to be erroneous in so far as it is prejudicial to the interests of revenue. The said assessment order is hereby set-aside to the file of the AO with a direction to pass a fresh assessment order in a speaking manner after making all necessary enquiries required and after providing due and adequate opportunity of being heard to the assessee and after considering all the submissions, etc. made and counter-reply submitted by the assessee in a fair and judicious manner." 8. The assessee aggrieved with the order passed by the Pr. CIT under Section 263 of the Act, dated 12.12.2024 has carried the matter in appeal before us. 9. We have heard the Ld. Authorized Representatives of both the parties, peruse....
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....him as erroneous, which was, inter alia, a sine-qua-non for exercise of the revisional jurisdiction by him u/s. 263 of the Act, set-aside the same to the file of the A.O. for carrying out necessary verification. In other words, the Pr. CIT by aborting the very process of reasoning, based on which, the assessment order passed by the A.O u/s. 143(3) of the Act, dated 27.12.2022 on the aforesaid issue i.e. short deduction/short collection of tax at source was being held by him as erroneous, had, hushed through the matter and set-aside the same to the latter's file for carrying out detailed verification. Ostensibly, the Pr. CIT by not recording any observation that there was any short deduction/short collection of tax at source by the assessee which, thus, triggered the provisions of Section 40(a)(ia) of the Act, i.e a material fact that was lost sight of by the A.O while framing the assessment vide his order u/s. 143(3) of the Act, dated 27.12.2022, had, thus without carrying out the minimal inquiry and giving any specific reason for concluding that the assessment order was erroneous and prejudicial to the interest of the revenue, traversed beyond the jurisdiction that was vested with....
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....y order referred to in this sub-section and passed by the Assessing Officer 92[or the Transfer Pricing Officer, as the case may be,] had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the* Principal Commissioner or Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. Explanation 2.-For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer [or the Transfer Pricing Officer, as the case may be,] shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal [Chief Commissioner or Chief Commissioner or Principal] Commissioner or Commissioner,- (a) the order is passed without making inquiries or verification 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 de....
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....IT from "Explanation-2" to Section 263 of the Act, we are afraid that the same would not carry his case any further. The "Explanation 2" of Section 263 of the Act, inter alia, contemplates that it is only where in the opinion of the Pr. Chief Commissioner or Chief Commission or Principal Commissioner or Commissioner, the order is passed without making inquiry or verification which should have been made; or the order is passed allowing any relief without inquiring into the claim; the same shall be deemed to be erroneous so far it was prejudicial to the interests of the revenue. We are of a firm conviction that the "term" "in the opinion of Pr. CIT" as provided in "Explanation 2" to Section 263 of the Act pre-supposes the recording of an observation on his part after considering the documents/material /submission filed by the assessee in the course of the proceedings before him, based on which, he had formed an opinion that the order passed by the A.O is found to be erroneous in so far it is prejudicial to the interest of the revenue. The Pr. CIT, in our view, cannot without recording an observation after considering the documents/material/submissions filed by the assessee in the cou....
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....by the assessee in the course of the revisional proceedings before him, and, thus, arrive at a finding that as to whether or not the assessment order that was passed by him is found to be erroneous in so far it was prejudicial to the interest of the revenue. 17. We, thus, based on our aforesaid observations, are of a firm conviction, that as the Pr. CIT had failed to bring the proceedings initiated by him under Section 263 of the Act to a logical end, i.e. the assessment order passed by the A.O u/s. 143(3) of the Act, dated 27.12.2022 as per him was found to be erroneous in so far it was prejudicial to the interest of the revenue, and rather, had aborted in the mid-way the very process for arriving at the aforesaid view, thus, the same had resulted to setting-aside of the assessment order to the file of the A.O - for verifying as to whether or not the assessment order is found to be erroneous in so far it was prejudicial to the interest of the revenue, which is not found as per the mandate of Section 263 of the Act. Our aforesaid view is fortified by the order of the Hon'ble High Court of Delhi in the case of Pr. CIT Vs. Modicare Ltd., ITA No.759/2016, dated 14.09.2017, wherein th....