AI Drafter 
TaxTMI 
TaxTMI 
2025 (8) TMI 741
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....hat the AO had passed the assessment order dated 30.12.2016 without carrying out proper/adequate enquiry of certain alleged aspects of the matter. He failed to appreciate that the AO has considered the relevant aspects and the other aspects referred to by the Ld. Pr. CIT have no relevance. 3. That the findings given by the Ld. Pr. CIT in the impugned order dated 26.03.2019 overlooks the relevant facts and circumstances of the case and is based on facts and circumstances which are either irrelevant or non-existing rendering his order to be perverse and hence illegal and bad in law." A.Y. 2015-16 1. That the Ld. Pr. CIT erred in assuming jurisdiction under section 263 of the Act without fulfilling the jurisdictional pre-conditions under the said section. 2. That the Ld. Pr. CIT erred in holding that the AO had passed the assessment order dated 30.12.2016 without carrying out proper/adequate enquiry of certain alleged aspects of the matter. He failed to appreciate that the AO has considered the relevant aspects and the other aspects referred to by the Ld. Pr. CIT have no relevance. 3. That the findings given by the Ld. Pr. CIT in the impugn....
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....peal will also be applicable for the appeal for Assessment Year 2015-16; as the facts and circumstances for the two Assessment Years are similar. For AY. 2014-15, the Ld. AR for the assessee drew our attention to written submissions filed in the course of appellate proceedings in Income Tax Appellate Tribunal, the relevant portion of which is reproduced as under: - "MAY IT PLEASE YOUR HONOUR This is an appeal made against the order passed by Ld. Pr.CIT u/s 263 of the LTax Act, 1961 dated 26-03-2019 in which Ld. Commissioner had remanded back the original assessment order passed by the Ld. AO u/s 153A of the I.Tax Act, 1961 In reference to the above, it is submitted as follows: Ground No.1, 2 & 3 As regards, Ground No. 1 regarding non fulfillment of jurisdictional preconditions the appellant has to submit as follows A. The whole revision proceedings u/s 263 of the I. Tax Act 1961 was initiated b the Ld. Commissioner only on the behest of the A.O. It is a settled law that Pr.CIT must independently examine the records and apply his own mind to ascertain whether the order is erroneous and prejudicial to the interest of the ....
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....fore, this power is vested with the Pr. CIT/CIT to exercise revisional jurisdiction is only when he considers that the order passed by the AO is erroneous in so far as prejudicial to the interest of the revenue and that power cannot be usurped by the AO to trigger the revisional jurisdiction vested with the CIT as per the scheme of the Act which gives various power to various authorities to exercise and they have to exercise powers in their respective given sphere which is clearly ear ear-marked and spelled out by the statute. Here, we note that the AO who is empowered by the Act to assess a subject within a prescribed time period has first assessed the assessee and later after passage of time has taken up a proposal with the CIT to exercise his revisional jurisdiction cannot be countenanced for the simple reason that when in the first place the AO noticing that he failed to properly enquire before assessing the assessee within the time limit prescribed by the statute cannot be allowed to get fresh innings to reassess ' because it was his duty to enquire properly within the time limit prescribed by the statute. Therefore, the very invocation of revisional jurisdiction on t....
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....s such, its findings are not binding on him. Wherever there is a major deviation between the income estimated in the appraisal report and the income proposed to be assessed, however the matter should be discussed between the assessment wing and the investigation wing and the minutes of this meeting should be recorded. The AO should leave a detailed note in the order sheet of the MR in this regard. It must be noted that the appraisal report is open to scrutiny by audit along with the relevant assessment records in all search cases". [Prior approval necessary for assessment in cases of search or requisition. 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 153B, except with the prior approval of the Joint Commissioner.] In case of assessments u/s 153A provision for prior approval under section 153D has been made. Approval can only be made after thorough review of the JCIT/Add. CIT. A review of the provisions of Sec 153A, Sec 153D and procedure for assessment makes it clear that the asses....
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.... without having revised the approval/decision of the Addl. CIT u/s 153D of the Act. The impugned order has been passed u/s 263 of the Act without having revising the approval taken by the Ld. AO from the Ld. Addl. CIT. The same has been decided in the following judgments In Mumbai Bench of ITAT in Surendra L. Hiranandani Mumbai vs Pr Cit Cen 1 Mumbai on 14 Februa 2018 Para 25 "We find that assessment order u/s.143 r.w.s.153A of the Act was passed after getting approval of ACIT as per provisions of section 153D of the Act. We find that the order u/s.143A r.w.s. 153 of the Act cannot revise without revising the approval of ACIT. We find that as per the decision of Hon'ble Allahabad High Court in the case of CIT Vs. Dr. Ashok Kumar in LT. Appeal No.192 of 2000 wherein it is held that the assessment order approved by the 23 ITA No3226-3232.M.17 A.Y.2008-09 to 201415 ACIT u/s.153D of the Act cannot subject to revision u/s.263 of the Act. The learned DR could not file any evidence to show that such permission was revised by ACIT in present case, therefore, CIT cannot revise the order passed by AO u/s.153 of the Act. As per section 153A of the Act." ....
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....T. Act." In the jurisdictional ITAT Bench in Mehtab Alam Kanpur vs Asst. CIT Kanpur "We have also examined the judgment of the Hon'ble jurisdictional High Court in the case of CIT us. Dr. Ashok Kumar (supra) on an issue whether the assessment order was passed with the approval of the Addl. CIT and their Lordships have held that the Assessing Officer was fully alive about the facts of the case and that is why he got necessary approval of the Addl. CIT before completing the assessment orders for all the assessment years and once that is not disputed by the Revenue, then the Id. Commissioner of Income-tax would not be justified in interfering in the approval according by the Addl. CIT for framing the assessment order and thus there was no case for setting aside the assessment order for the assessment years in question." Patna Bench of ITAT in G an Infrabuild Private Limited vs Principal Commissioner of Income-tax Central Patna "Thus, in the light of the settled judicial precedents referred supra and on our examination of the facts of the case including the enquiries conducted by the Id. Assessing Officer regarding the carried out during the impu....
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....Addl. CIT under section 153D of the I.T. Act and therefore such an assessment cannot be revised without revising the directions of the Addl. CIT under section 153D of the I.T. Act. The Ld. Counsel for the assessee, has relied upon the decisions of this Tribunal in the case of Ch. Krishna Murthy vs. ACIT, C.C.3, Hyderabad in ITA.No.766/Hyd/2012 dated 13.02.2015 and also the decision of Lucknow Bench of ITAT in the case of Mehtab Alam 288/Luck/2014 dated 18.11.2014 in support of this contention. He has also placed reliance upon the decision of Hon'ble Allahabad High Court in the case of CIT vs. Dr. Ashok Kumar in LT. Appeal No. 192 of 2000 wherein it has been held that the assessment order approved by the Addl. CIT under section 153D, cannot be subjected to revision under section 263of the I.T. Act. In view of the above decision also, we hold that the revision order under section 263 of the I.T. Act is not sustainable. Accordingly, we allow the grounds of the assessee." Again, Hyderabad Bench of ITAT in H. Krishna Murth v. ACIT IT Appeal No.766 (Hyd.) of 2012, dated 13-2-2015 - "Therefore, considered in the aforesaid perspective when it is a fact on record that ....
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....assessee. However, this report was never presented to the assessee for rebuttal. Additionally, the Pr.CIT referred to a SEBI Show Cause Notice (SCN) dated 01-03-2018, which was issued to various entities allegedly involved in the said nexus. Despite this reference, the SCN did not mention the assessee or the companies to which the shares were sold. Yet, the Pr.CIT did not provide an opportunity for the assessee to address the relevance of this SCN to their case. These procedural lapses violate the principle of natural justice, which mandates to have the right to be heard and respond to all evidence considered against them. The failure to confront these crucial reports and notices deprived the appellant of a fair opportunity to contest the allegations on which the Pr.CIT's order under section 263 was based. In conclusion, it is evident that the appellant was not afforded a proper opportunity to rebut the evidence forming the basis of the order. This lack of procedural fairness undermines the validity of the conclusions drawn in the order under section 263. Further, it has been decided in the Hon'ble Bench of ITAT Deputy Commissioner of Income ....
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....aid that the order was passed without conducting necessary enquiries also it has been held by Hon'ble Kolkata Bench of the ITAT in Satish Kumar Lakhmani vs Principal Commissioner of Income Tax-10, Kolkata and Hill Queen Investment (P.) Ltd. vs Principal Commissioner of Income Tax, Kolkata. Thus, when necessary approval has been granted which was not challenged by the Ld. Pr. CIT (Central), Kanpur thus, any order passed in violation of proper opportunity of being heard, without disturbing the approval of Ld. Addl. CIT Central and initiated on the behest of AO without independent application of mind relying on unrelated reports and orders without confronting the same with the appellant such assessment order is jurisdiction and should be quashed." (A.2.1) The Ld. AR for the assessee further submitted at the time of hearing, that the assessment was completed with the approval of the Range Head. The Ld. AR for the assessee drew our attention to written submissions forming part of the paper book; wherein mention has been made of order of Hon'ble Allahabad High Court in the case of M/s. Dr. Ashok Kumar (in Appeal No. 192 of 2000, Appeal No. 163 of 2008, Appeal No. 413 of 2....
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....ing Officer. He also submitted that the PCIT, in exercise of his jurisdiction under section 263 of Income Tax Act should not have gone beyond the lines of investigation suggested in the Appraisal Report because the Appraisal Report was approved by an officer of the rank of the PCIT. He also submitted that the issue on which moreover, he submitted that the show cause notice dated 1.3.2018 of SEBI on which the Ld. PCIT placed heavy reliance was not available before the Assessing Officer at the relevant time and, therefore, the assessment order cannot be said to be erroneous or prejudicial to the interest of Revenue, if, the material relied upon by the Ld. PCIT was not available with the Assessing Officer during the assessment proceedings. It was also pointed out by the Ld. AR that the above show cause notice dated 01.03.2018 of SEBI was not even in existence at the time when assessment order dated 30.12.2016 was passed. He took us through voluminous paper book to drive home the point that the Assessing Officer did make necessary inquiries even on the issues which are subject matter of order under section 263 of the Act. (B.1) The Ld. AR for the assessee placed reliance on the case....
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....nt order is passed (show cause notice of SEBI), is patently irrelevant. It is well-settled that when an order has been passed on the basis of irrelevant consideration, the order is to be held as perverse and unsustainable. The order passed by the Assessing Officer cannot be held to be erroneous on the basis of materials that came to surface subsequent to passing of the assessment order. Although, the Ld. PCIT states that show cause notice dated 01.03.2018 of SEBI was available in Public Domain on the internet, any materials indicating inquiry or adverse finding of SEBI was never brought to the notice of the Assessing Officer during the assessment proceedings. In paragraph no. 6.2 of the impugned order under section 263 of the Act, the Ld. PCIT has stated that whether the inquiry should have been made are actually made by AO or not; is primarily a question of fact. The Ld. PCIT has further observed and implicitly hinted that the Assessing Officer did not make inquiries should have been done. The fact that the assessment proceedings were under the monitoring of Range Head and the assessment order was approved by the Range Head, raises strong presumption that even the Range Head was s....
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....Paints (Overseas) Ltd 150 Taxmann.com 108 (SC) that no addition can be made in respect of the issues on which no incriminating material has been found during search under section 132 of the Act in the case of the assessee. Thus, impugned order of Ld. PCIT passed under section 132 of the Act is clearly inconsistent with this well settled principle laid down by Hon'ble Supreme Court. (2.1.2) In the case of CIT v Max India Limited (2007) 295 ITR 282 (SC): it was held that when the Assessing Officer takes one of the two view permissible in law and which the Commissioner does not agree with and which resulted in a loss of Revenue, it cannot be treated as erroneous order prejudicial to the interest of Revenue, unless the view taken by the Assessing Officer is completely unsustainable in law. In the case of Malabar Industrial Co. Ltd (2000) 243 ITR 83: it was held by Hon'ble Supreme Court that the Commissioner has to be satisfied of two conditions cumulatively, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interest of the Revenue. If one of the absent, Hon'ble Supreme Court held, i.e.....
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....ss of assessment again and again merely on basis that more enquiry ought to have been conducted to find to find something. Hon'ble Rajasthan High Court held in the case of CIT vs Mangilal Didwani 286 ITR 126 (Raj) that whether Assessing Officer has made proper enquiry with due application of kind or not, is not the domain of the CIT to judge and further held that the fact that the Assessing Officer has made enquiries is sufficient itself. In the case of CIT vs Arvind Jewellers, 259 ITR 502 (Guj): Hon'ble Gujarat High Court held merely because the Assessing Officer had taken a particular view with which the Commissioner did not agree cannot form the basis for an action under section 263 of the Act. The Hon'ble Gujarat High Court applied the principles laid down by the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd (supra). In the case of Ratlam Coal Ash co. v CIT 171 ITR 141 (MP): it was held that the order under section 263 of the Act could not be made when the assessee had furnished requisite information and Assessing Officer completed the assessment after considering the facts. In the case of CIT vs Associated Food Produ....