TaxTMI 
TaxTMI 
2025 (6) TMI 222
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....entury India Ltd. The return was accepted under Section 143(1). Thereafter, the assessment of the assessee was reopened on the ground that originally assessee has purchased 200 shares of M/s Sarathi Dealers Pvt. Ltd. This company was amalgamated with M/s Twenty First Century India Ltd., rather four companies were amalgamated in M/s Twenty First Century India Ltd. The assessee got 38 shares of M/s Twenty First Century India Ltd. as against one share of M/s Sarathi Dealers Ltd. Therefore, 200 shares held by the assessee of M/s Sarathi Dealers Ltd. were converted into 7600 shares of M/s Twenty First Century India Ltd. These shares were sold by the assessee during this year and alleged Long Term Capital Gain earned by him has been claimed as exempt under Section 10(38) of the Income Tax Act. The AO was of the view that he has received information from DDIT (Investigation) Unit 4(1) Kolkata that M/s Twenty First Century India Ltd. is a paper company and was used to provide bogus Long Term Capital Gain. It is controlled by Shri Anil Khemka, whose statement was recorded by the Investigation Wing, Kolkata during their investigation. On the basis of this information, ld. AO has recorded the....
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.... has shown the exempted Long Term Capital Gain Rs. 23,62,760/- only. 11. In response to that, the assessee has stated that due to clerical mistake, Zero was automatically taken by the system which was not removed by the staff of the C.A. and the mistake was now corrected while filing the return in response to notice u/s 148. 12. The assessee was asked to submit an affidavit in this regard alongwith the copy of ITR and computation for the A.Y. 2010-11 in which the original investment was surrendered for taxation. 13. On 16.05.2019, Shri Subhash Jain, CA appeared and filed the copy of ITR alongwith computation for the A.Y. 2010-11 and affidavit from the assessee regarding typographical mistake regarding return filed by the assessee for the A.Y. 2012-13. 14. The reply filed by the assessee is duly perused. After perusal, no adverse inference has been drawn. Therefore, returned income of the assessee at Rs. 7,64,060/- is accepted. Assessed. Issue requisite documents. Sd/- (Rajesh Gupta) Income Tax Officer Ward 2(5), Ludhiana 4. The ld. CIT harboured a belief that AO has not investigated the issue properly and therefore, his or....
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.... oath u/s 131 of the Act on 15.05.2019, he has not confronted the assessee with the statement given by Sh. Ashok Kumar Kayan, Proprietor of M/s Ashok Kumar Kayan, who had categorically admitted that he had provided bogus Long Term Capital Gain to a large number of clients through a syndicate of brokers and Entry Operators. Failure of the AO in not doing so has rendered the assessment erroneous as much as prejudicial to the interest of the revenue as the claim made has been allowed as such. 6.1 Under the aforesaid circumstances, the order of the A.O. is erroneous as the AO did not enquire/verify about the complete details and documentary evidences and also is prejudicial to the interest of the revenue being the claim of deduction u/s 10(38) of the Act, remained unexplained and escaped for taxation. Detailed and deep enquiries were required to be made on the issue discussed above before accepting claim of the assessee. In this regard, it is worthwhile to refer to provisions of Explanation 2 to Section 263(1) of the Income Tax Act, 1961 according to which an order passed by the A.O. shall be deemed to be erroneous in so far as it is prejudicial to the interest of revenue for ....
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....justified in invoking provisions of section 263 because order passed as such by Assessing Officer was erroneous as well as prejudicial to the interest of the revenue. Similar view has been taken by the Hon'ble Madras High Court in the case of K.A. Ramswamy Chettiar & Anr Vs. CIT 220 ITR 657 (Mad.). 6.5 Moreover, the facts of the case are squarely covered by Explanation 2 of Sec.263, which is inserted w.e.f. 01.06.2015 as under:- 1. The order is passed without making inquiries or verification which should have been made. 2. The order is passed allowing any relief without inquiring into the claim. 3. The order has not been made in accordance with any order, direction or instruction issued by the board u/s 119 or 4. 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. Hence, keeping in view the above discussed facts of the case and the various judicial pronouncements and in light of the lapses on the part of the A.O., I hold the assessment order dated 20.05.2019 for the A.Y. ....
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.... any appeal filed on or before or after the 1st day of June, 1988, the powers of the 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. (2) No order 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 sub-section (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." 6. A bare perusal of the sub section-1 would reveal that powers of revision granted ....
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....s judgments relevant for judging the action of the CIT taken u/s 263. The ITAT in the case of Mrs. Khatiza S. Oomerbhoy Vs. ITO, Mumbai, 101 TTJ 1095, analyzed in detail various authoritative pronouncements including the decision of Hon'ble Supreme Court in the case of Malabar Industries 243 ITR 83 and has propounded the following broader principle to judge the action of CIT taken under section 263. (i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated as prejudicial to the interests of the Revenue and if the AO has adopted one of the courses permissible under law or w....