AI Drafter 
TaxTMI 
TaxTMI 
2025 (8) TMI 740
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.... in setting aside the assessment made vide order under section 143(3) dated 18/12/2019 and passing an order under section 263 of the Act on the grounds that the original 'assessment order passed under section 143(3) was erroneous and prejudicial to the interest of the revenue and directing AO to frame fresh assessment order (de novo) after giving reasonable opportunity of hearing to the appellants. The Learned Commissioner of Income Tax Bareilly has further failed to appreciate that the original assessment order was passed by the Assessing officer after considering all the issues mentioned in his show cause notice and after making due enquiries, and thus the case was not the one of lack of enquiry by the Assessing officer. The Id. Pr. CIT erred in law as well as on the facts of the case in wrongly setting aside the assessment order dated 18/12/2019 despite there being complete application of mind by the AO on the subjected issues and it was nothing but a case of change of opinion, based on which, assumption of jurisdiction u/s 263 is not permissible. The impugned order dated 23/03/2022 therefore, lacks valid jurisdiction u/s 263 of the Act and hence, the same kind....
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....ppellant and therefore the order made is illegal, invalid and, vitiated order Prayer - It is therefore prayed that, impugned order dated 23.3.2022 under section 263 of the Act be held to be without jurisdiction and, therefore be quashed and appeal of the appellant be allowed. The assessee's case does not fall within the mischief of section 263 and As such the order is bad in law and the same is liable to be cancelled. That the Appellant craves leave to amend alters, add or forego any of the above grounds." (B) In this case, the assessment order dated 18.12.2019 was passed under section 143(3) of the Act whereby the assessee's total income was determined at Rs. 95,73,830/-. In the assessment order, the following observation was recorded by the Assessing Officer: - "3. In the scrutiny, the point which was identified with regards to real estate business with high closing stock, higher turnover reported in service tax return as compared to ITR, Higher turnover reported in service tax return as compared to ITR, and large increase in unsecured loans during the year. On these points categorical explained was called from the assessee and the same has been subm....
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....bbra. 4 - 20 21 22 - 26 27 - 32 33 - 35 36 - 56 57 - 59 60 - 63 64 - 67 68 - 71 72 - 76 77 - 80 81 - 85 03. Copy of Notice issued u/s.143(2) of I.T. Act dt. 09.08.2018 issued by ACIT-1, Bareilly New. 85 - 88 04. Copy of Notices issued u/s.142(1) of I.T. Act dt. 13.10.2018, 06.09.2018 & 30.09.2018 alongwith Annexure issued by ACIT-1, Bareilly New. 89 - 98 05. Copy of Show Cause Notice dated 21.11.2019 issued by ACIT-1, Bareilly-News. 99 - 100 06. Copy of Replies as filed before ACIT-1, Bareilly. 101 - 106 (B.2.1) Further, a copy of order dated 09th July, 2013 of Hon'ble High Court of Delhi in the case of DIT v Jyoti Foundation in Income Tax Appeal No. 267/2013 was also filed from the assessee's side and reliance was placed on it by the Ld. Counsel for assessee. Moreover, a list of following case laws relied upon by Ld. Counsel for the assessee was also filed from the assessee's side: - (C) At the time of hearing before us, the Ld. Counsel for assessee submitted that the Assessing Officer had conducted all relevant inquiries. He drew our attention to the observation recorded by th....
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....properties and flats. During the year under consideration, the assessee company had one project under the name of Kings Court m Bareilly. The Books of accounts are regularly maintained by the assessee company and duly audited as per the statutory provisions contained in section 44AB of the Income Tax Act 1961. Each and every item of income and expenditure is duly vouched and verifiable. Further, the assessee was completed u/s 143(3) of the act by the assessing officer, after making due enquiries and examination by the assessing officer. It may also be appreciated that the main reasons for selection of the case under scrutiny were "Real Estate business with High Closing Stock", "Higher turnover in ITR as compared to Service Tax" and "Large increase in Unsecured Loans", and each and every reason was dealt with by the assessing officer during the course of the proceedings. It is further submitted that the assessee is making submission on legal grounds as well as the merits, which are dealt with at the later part of the reply. The assessee's case was selected for scrutiny and detailed questionnaires were issued to the assessee from time to time by the learned Assessin....
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....itions vide 142(1) notice, but the fact remains that during the course of the assessment proceedings and hearings taken place before the Ld. A.O., the assessee submitted all such information and documents, which were necessary and were duly considered before passing the impugned assessment order. After examining and verifying the evidences/details vis-a-vis the queries made in notice u/s 142(1) of the Act, and after hearing the assessee on various dates, the Ld. Assessing officer as an adjudicator passed the assessment order u/s. 143(3) of the Act, assessing the total income as is evidenced from the assessment order. Your Honour will appreciate that it is within the province and jurisdiction of the Assessing officer to decide which points he wants to take up for enquiry and to what extent and, as such, it is a law that the Learned Commissioner of Income Tax cannot interfere with the same and even if Learned Commissioner has such results of enquiries, the resultant order cannot be subjected to revision proceeding. On the facts of the instant case, it would not be out of the context to state that the impugned scrutiny assessment was not lacking any information, search result....
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....he assessee is placed on the following: Supreme Court in the case of Green world Corporation - [2009] 181 Taxman 111 (SC) "43. As such, considering all the facts of the case and legal position emanating from the aforesaid judicial pronouncements, we are of the considered opinion from the assessment in the present case was made by the Assessing Officer after making proper and adequate enquiries as required in the facts of the case and since the claim of the assessee for deduction w/s 80-IA was allowed by her on proper application of mind to the detailed submissions made on behalf of the assessee as well as the other relevant material including the findings of the survey, there was no error in her order as alleged by the learned CIT. On the other hand, the learned CIT held the said assessment to be erroneous mainly on the basis of surmises and conjectures without there being any material to support and substantiate the same and he having virtually reviewed the assessment order passed by the Assessing Officer applying his mind again to the entire material available on record and by making fresh enquiry brushing aside totally the examination made by the Assessing Offi....
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....of the Commissioner that the orders of the Income-tax Officer are erroneous and prejudicial to the interest of the Revenue are based merely on suspicion and surmises in the absence of any enquiry having been made by him. 7. In the income-tax assessments, all questions boil down to this, whether income has been properly determined and whether the correct rate of tax has been applied. The Commissioner does not say that the income was higher or that it was assessed on a wrong entity or at a low rate or that any exemption was wrongly allowed. In the absence of such a finding, the assessment orders cannot be said to be erroneous and prejudicial to the interest of the Revenue. 8. For the above reasons, we are not inclined to direct the Tribunal to state the case on any question proposed by the Revenue. The applications are, therefore, dismissed, but there will be no order as to costs." Supreme Court in the case of PCIT vs. Shree Gayatri Associates - [2019] 106 taxmann.com 31 (SC) Where Commissioner passed a revisional order making addition to assessee's income under section 69A in respect of on-money receipts, however, said order was set aside by Tribu....
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....to reach the public treasury and if it does not reach on account of some mistake of law or fact committed by the assessing officer, the Commissioner of income tax can cancel that order and require the concerned assessing officer to pass a fresh order in accordance with law after holding a detailed enquiry. But when enquiry in fact has been conducted and the assessing officer has reached a particular conclusion, though reference to such enquiries has not been made in the order of assessment, but the same is apparent from record of proceedings, in the present case, without anything to say how and why the enquiry conducted by the assessing officer was not in accordance with law, the invocation of jurisdiction by the Commissioner of income tax was unsustainable. As the exercise of jurisdiction by the Commissioner of income tax is founded on no material liable to be set aside. Jurisdiction under section 263 cannot be invoked for making short enquiries or to go into the process of assessment again and again really merely on the basis that more enquiry or to have been filed conducted to find something. 16. The finding of the tribunal the income tax officer has passed the assessin....
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....assessee's explanations' are rejected and additions/disallowances are made. As already observed, we have examined the records of the case and find that the AO had made full inquiries before accepting the claim of the AO (assessee) qua the amount of Rs. 10 lacs on account of discrepancy in stock. Not only this, he has even gone a step further and appended an office note with the assessment order to explain why the addition for allegation discrepancy in stock was not being made. In the absence of any suggestion by the CIT as to how the inquiry was not proper, we are unable to uphold the action taken by him under Section 263 of the Act." Delhi High Court in the case of CIT v. Vodafone Essar South Ltd. - [2012] 28 taxmann.com 273 (Delhi) "10. This Court is conscious that an earlier bench of this Court in CIT Vs. Sunbeam Auto Ltd, (2011) 332 ITR 167, had held that if there is some enquiry by the A.O. in the original proceedings even if inadequate that cannot clothe the Commissioner with jurisdiction under Section 263 merely because he can form another opinion. It was emphasized here that the notice and questionnaire given to the assessee which were duly replied, we....
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....y be inferred that lack of enquiry/ no enquiry is different from adequate enquiry and it is only in case of no enquiry by the Assessing Officer that Pr. CIT/CIT can exercise jurisdiction u/s 263 of the Act and not in case where the Assessing Officer has made enquiries as seems appropriate in the facts and circumstances of the case. There can also exist differing opinions in a matter since it is a proceeding involving the application of mind and judgment on the part of the assessing officer. When the Assessing Officer takes one of the two views permissible in law and which the Commissioner does not agree with and which results 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. Where two views are possible and the AO adopts one view with which the CIT does not agree the order cannot deemed to be erroneous or prejudicial to the interest of the Revenue even if there is a loss of the revenue. Supreme Court in the case of PCIT vs. V. Dhana Reddy & Co. - [2018] 100 taxmann.com 358 (SC) Where High Court upheld Tribunal's o....
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....enue. Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 (SC) and in Smt. Tara Devi v CIT [1973] 88 ITR 323 (SC). CIT Vs Max India Ltd (2007] 295 ITR 282 (SC) 213 CTR 266 (SC) I. In our view at the relevant time two views were possible on the word "profits" in the proviso to Section 80HHC(3). It is true that vide the 2005 amendment the law has been clarified with retrospective effect by insertion of the word "loss" in the new proviso. We express no opinion on the scope of the said amendment of 2005. Suffice it to state that in this particular case when the order of the Commissioner was passed under Section 263 of the Income Tax Act, 1961, two views on the said word "profits" existed. In our view the matter is squarely covered by the judgment of this Court in the case of Malabar Industrial Co. Ltd. y. CIT reported in (2000) 243 ITR 83; as also by the judgment of the Calcutta High Court in the case of Russell Proverties P. Ltd. v, A. Chowdhury, Addl. CIT . 2. At this stage we may clarify that under paragraph 10 of the judgment in the case of Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 this Court has taken the view that the phrase judicial to the interes....
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....rder of the AO was not in accordance with law, to term it as erroneous. It is also the principle of law, now well accepted, that an order passed by the AO cannot be set aside for making roving inquiry without pointing out any error in his order. The Commissioner has to specifically demonstrate that the order of the AO is erroneous. The power of revision is not meant to be exercised for the purpose of directing the AO to hold another investigation without describing as to how the order of the AO is erroneous, From this it also follows that where the assessment order has been passed by the AO after taking into account the assessee"'s submissions and documents furnished by him and no material whatsoever has been brought on record by the Commissioner which showed that there was any discrepancy or falsity in evidences furnished by the assessee, the order of the AO cannot be set aside for making deep inquiry only on the presumption and assumption that something new may come out. For making a valid order under Section 263 it is essential that the Commissioner has to record an express finding to the effect that order passed by the AO is erroneous which has caused loss....
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....rmed as a result of these enquiries and verification of the materials is something which is in exclusive domain of the Assessing officer, and it is held in many cases that even if Commissioner does not agree with the results of such enquiries, the resultant order cannot be subjected to revision proceedings. For this, we rely on the decision of Kolkata Bench of Tribunal in the case of Smt. Juthika Kar vs. ITO {I.T.A. No.1128/Kol/2009, wherein it has been held as under Here is a case in which sufficient enquiries were conducted. As learned brother has rightly noted, the Assessing officer called for specific details, confirmations and even copies of bills. It could not, therefore, be said that sufficient enquiries were not conducted. However, what is opinion formed as a result of these enquiries is something which is in exclusive domain of the Assessing officer, and even if Commissioner has such results of enquiries, the resultant order cannot be subjected to revision proceedings. The conclusions arrived at as a result of enquiries cannot be tinkered with in the revision proceedings. The conclusions being drawn up as a result of enquiry is a highly subjective exercise and as ....
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....e passed the assessment order. Therefore, it is not a case on inadequate scrutiny, for that we rely on the judgment of Hon'ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del), wherein it was held that: "if there was any inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under section 263 of the Income-tax Act, 1961, merely because he has a different opinion in the matter. It is only in cases of lack of inquiry that such a course of action would be open." On the same facts we also rely on the judgment of the Kolkata Bench of this Tribunal in the case of Chroma Business Ltd. vs. DCIT 82 TTJ 540 (Cal). Further our view is fortified by the decision of the Hon'ble Delhi High Court in the case of CIT vs. Vikas Polymers 341 ITR 537 (Del). Relevant part of the observation in this regard reads as under: "This is for the reason that if a query is raised during the course of scrutiny by the Assessing officer which was answered to the satisfaction of the Assessing officer but neither the query nor the answer was reflected in the assessment order that would not by itsel....
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....n held there is a distinction between "lack of inquiry" and "inadequate inquiry", if there was any inquiry even inadequate, that would not itself give right or occasion to the Commissioner to pass order u/s 263 of the Act merely because he has different opinion in the matter. Further reliance is placed on the decision of Hon'ble High Court of Delhi in the case of CIT vs Hindustan Marketing & Advertising Co. Ltd. Reported in 341 ITR 180 (Del) wherein it has been held that the revisional powers of the Commissioner u/s 263 of the Act are limited and when assessment has been framed after inquiry and there is no error in the order, then the order cannot be revised on the ground that inquiry should have been more detailed or elaborate. Hon'ble Delhi High Court in the case of Ashish Rajpal - [2009] 320 ITR 674 - order pronounced on 14.05.2009 - HEAD NOTE - "Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue - Assessment year 2002-03 - Whether merely because an assessment order does not refer to queries raised by Assessing Officer during course of scrutiny and response of assessee thereto, it can be said that there has be....
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....) Ltd. (supra) cited by the Ld. AR clearly supports the view that Explanation-2 to sec. 263 of the Act will not be of any assistance to the plea of the revenue unless the facts and circumstances set out there in exists in a given case." Hon'ble Bombay High Court in the case of CIT vs Gabriel India Ltd held that: "11. The power of suo motu revision under sub-s. (1) of s. 263 is in the nature of supervisory Jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue of the order being erroneous prejudice has been caused to the interest of the Revenue. It has, therefore, to be considered firstly as to when an order can be said to be erroneous. An order cannot be termed as erroneous unless it is not in accordance with law. If an ITO acting in accordance with law makes certain assessment, the same cannot be branded as erroneous by the Commissioner simply because according to him the order should have been written more elaborately. This section does not visualise a case of sub....
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....n that regard. Casa Builders Pvt.Ltd. vs PCIT-6 ITAT, Mumbai held that: "11. The phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erroneous order passed by the AO. Every loss of revenue as a consequence of an order of AO cannot be treated as prejudicial 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 CiT 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. An order of assessment passed by the ITO without making necessary enquiries on certain important points connected with the assessment would be erroneous and prejudicial to the interests of the Revenue When the ITO is expected to make an enquiry of a particular item of income and he does not make an enquiry as expected, that would be a ground for the CIT to interfere with the order passed by the ITO since such an order passed by the ITO is erroneous and prejudicial to the interests of Revenu....
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....E MENTIONED LEGAL CHALLENGE, we would also like to furnish point wise response to your Honour on the basis of merit as well. The same is as under: 1. POCM Method justification and working: The detailed working for the Percentage Completion method was provided during assessment on 08.12.2019 in a detailed reply in which the method was explained in Point No. 1. 2. Comparison chart of sale consideration with market value of properties sold during the year The assessee company has made sale of three flats during the year under assessment and the details of the same are as under: The evidence in the form of sale deeds being too voluminous in size were not able to be uploaded on the e-filing portal due to limitation of size of file allowed to be uploaded with submissions since compression of file size disturbed the clarity of the document to be compressed greatly and hence the same were produced before the assessing officer physically. The assessing officer had made due examination of all the documents and then framed his assessment accordingly. Further, no property has been sold for a consideration less than the market value and hence the provisions o....
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.... 229024953 The above loans were taken purely for the purpose of business and for further working in the business exclusively. The Confirmations, ITR and bank statements of the lenders which transacted during the year under consideration were duly produced before the assessing officer during the course of the proceedings and the same details are being furnished to your Honour for your perusal and ready reference as well. Each and every transaction was through banking channels only. The assessing officer in this case did not feel the need to make third party queries on this point since the evidences produced before the assessing officer during the course of the assessment proceedings were satisfactory, genuine and conclusive of the fact that the submissions given by the assessee were true and correct and were supported by the necessary documentary evidences and the assessee had duly discharged the onus u/s 68 of the Income Tax Act, 1961. Your Honour will appreciate that the assessing officer had duly issued detailed notice to the assessee calling for details, compliance of which was made to the assessing officer. The assessing officer had duly applied his m....
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....07.06.2023) and at pages from 1 to 42 of paper book (dated 16.12.2024). Further, it is found that the detailed submissions made by the assessee before the Ld. PCIT in the course of proceedings under section 263 of the Act have been acknowledged by the Ld. PCIT in his impugned order dated 23.03.2022 at paragraph no. 3 but the Ld. PCIT failed to consider the submissions made by the assessee and also failed to pass a speaking order on why the submissions made by the assessee were not considered satisfactory. (C.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 as under: - 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 t....
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.... Ganpat Ram Bishnoi 152 Taxman 242 (Raj): it was held that jurisdiction under section 263 of the Act cannot be invoked for making enquiries or to go into process 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....
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....how the inquiry was not roper, we are unable to uphold the action taken by him under section 263 of the Act. Another fact which deserves mention in this case is that in response to the show cause notice, the assessee had raised a legal issue pointing out that the assessment in its case had been made under effective monitoring of the Commissioner of Income-tax and had been finalized with his approval. As already observed, the Commissioner of Income-tax has not bothered to examine the specific objections raised by the assessee in its reply in the impugned order and the Tribunal has rejected the same summarily by observing that the objections were not supported by any material. Both the authorities have failed to take the trouble of even referring to the assessment record. (C.2.1) In view of the foregoing, and having regard to the submissions made by the assessee during proceedings under section 263 of the Act, and earlier during assessment proceedings; and with deference and respect for case laws relied upon by Ld. Counsel for the assessee (mentioned in earlier in this order in foregoing paragraph no. (B.2.1); it is held that the Ld. PCIT failed to make a case for action under sec....
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.... OF REVISION - NOT VALID -INCOME- TAX ACT, 1961, s.263. Unless the basis of revision satisfying the twin conditions, namely, assessment order erroneous and prejudicial to the interests of the Revenue, are pointed out by the Commissioner in invoking section 263 of the Income-tax Act, 1961, the assessee is entitled to raise the question of jurisdiction. Assumption of revisional jurisdiction can be justified only on the basis of materials indicating the order of assessment as erroneous and prejudicial to the interests of the Revenue. The assessee had borrowed secured loans by issue of redeemable non-convertible debentures to the tune of Rs. 60 crores, but utilized the loans towards Investment in shares. The assessee claimed interest and finance charges to the extent of Rs.4.46 crores to pay interest on the debentures issued. Alleging that the Assessing Officer had not considered the provisions of section 14A of the Act in the proper perspective and tat the interest claimed by the assessee was not related to the funds deployed in activities from which income had been shown during the year, the assessment was revised. The Tribunal pointed out that the asscosce had Document 2 o....
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....eduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has a different opinion in the matter. It is only in cases of "lack of inquiry" that such a course of action would be open. Income Tax Officer v. Dg. Housing Projects Ltd. ITA No.179/2011 - HC of Delhi - Dt. of order 1.3.2012 343 ITR 329(Delhi) In the present case, the findings recorded by the Tribunal are correct as the CIT has not gone into and has not given any reason for observing that the order passed by the Assessing Officer was erroneous. The finding recorded by the CIT is that "order passed by the Assessing Office may be erroneous". The CIT had doubts about the valuation and sale consideration received but the CIT should have examined the said aspect himself and given a finding that the ....
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....ired or deeper or further scrutiny should be undertaken. In cases where there is inadequate enquiry but not lack of enquiry, the Commissioner must record a finding that the order/inquiry made is erroneous. This can happen if an enquiry and verification is conducted by the Commissioner and he is able to establish and show the error or mistake made by the Assessing Officer, making the order unsustainable in law. An order of remit cannot be passed by the Commissioner to ask the Assessing Officer to decide whether the order was erroneous. Held, dismissing he appeal, that inquiries were certainly conducted by the Assessing Officer. It was not a case of no inquiry. The order under section 263 itself recorded that the Director felt that the inquiries were not sufficient and further inquiries or details should have been called for. The inquiry should have been conducted by the Director himself to record the finding that the assessment order was erroneous. He should not have set aside the order and directed the Assessing Officer to conduct the inquiry. Document 5 CIT v. Vikas Polymers (2010) 194 Taxman 57 (Delhi)(HC) Mere lack of inquiry by Assessing Officer is not sufficient for rev....
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.... the assessee. 16 ACIT v. Technip Italy Spa (2006) 150 Taxman 13 (Delhi) (Trib) The error envisaged by Section 263 is not one that depends on possibility or guess work, but it should actually be an error either of fact or of law. 17 Antala Sanjaykumar Ravjibhai v. CIT (2012) 135 ITD 506 (Rajkot) (Trib) Section 263 does not visualize a case of substitution of judgment of Commissioner for that of the Assessing Officer, unless the decision is held to be erroneous. 18 Vijay Kumar Megotia v. CIT (2010) 3 ITR (T) 760 (Pat.) (Trib) When the Assessing Officer has specifically mentioned in the order that books of accounts along with purchase/sales, invoices, ledgers, bank accounts were examined, verified and test checked, setting aside by Commissioner, in absence of any finding that Assessing Officer's order is factually incorrect, and not justified. 19 Roshan Lal Vegetable Products (P) Ltd., Income-tax Officer Appeal No.6(ASR) of 2010 A.Year: 2006-07 Section 263 of the Income-tax Act, 1961 - Revision - Off orders prejudicial to interest of revenue - Assessment year 2006-07 - Whether where Assessing Officer havina avaminal naturist The court held that the assessee had p....
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.... promotion and brand building. The expenditure incurred by the assessee was not on creating any enduring benefit [ an asset but was rather helping the assessee in augmenting its sales and resultantly its profit. Even if it was presumed that the building of brand image was giving advantage of enduring benefit to the assessee, still it would be on revenue account as there was no creation of a tangible or intangible asset of enduring nature to the assessce. The expenses had not resulted in any kind of addition or augmentation of any profit- making asset. Thus the view taken by the Document 7 Assessing Officer was prima facie correct ' and, therefore, there was no reason to hold that such an order was erroneous or prejudicial to the interests of the Revenue. Thus the order of the Commissioner was to be cancelled. Amrit Singh v. ITO (2003) 127 In these cases, it was held that assessment framed under section 143(3) cannot be revised on n that desired inquiry was not made. Taxman (Mag.)(Chd.) (Tribunal) Baljees v. ACIT (2003) 127 Taxman 150 (Mag.)(Chd.) (Tribunal) Ratlam Coal Ash Co. v. CIT 171 ITR 141 (MP) REVISION - ORDER OF REVISION BY COMMISSIONER ON THE GROUND T....
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....balance-sheet and tax audit report. The auditors had reported that full quantitative details were maintained by the assessee for the entire manufacturing done. The raw materials. Document 8 finished goods, packing material and consumable stores were valued at market rice. On a perusal of the records, the Commissioner of Income-tax formed the opinion that the assessment order passed by the Assessing Officer was erroneous and prejudicial to the interests of the Revenue as the Assessing Officer had not conducted sufficient enquiry/scrutiny/ verification and had accepted the return filed by the assessee as such. He set aside the order. On appeal to the Tribunal : Held, per K.P. T. Thangal (Vice President) and B.L. Chhibber (Accountant Member): (U.B.S. Bedi (Judicial Member) (dissenting), that it was clear that the Assessing Officer had not only gone through the books of account which were verified up to the date of raid, he had also taken into consideration the tax audit report. The tax audit report can only be up to the end of the assessment year. The Assessing Officer had noted that the accounts were quantitatively supported. Therefore, the observation of the Commissioner of I....
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....fe and Brij Bhushan Agarwal v. CIT (Agra) 2 SOT 811 (2005) transactions both in case of donors as well as creditors and, therefore, assessment order, though may be cryptic, was neither erroneous nor prejudicial to interest of revenue - Held, yes - Whether Commissioner was not justified in setting aside assessment order by invoking his power vested by provision of section 263 - Held, yes. Order u/s 143(3) completed in a haste. No jurisdiction u/s 263 26 CIT v. Associated Food Products P. Ltd. 280 ITR 377 (MP) Goyal Family Trust v. CIT 171 ITR 698 (Alld) Merely because the AO's order is brief and cryptic that itself would not be a case for revision. 27 28 Hari Iron Trading Co. v. Commissioner of Income- tax - 263 ITR 437 A bare perusal of the aforesaid provision shows that the Commissioner can exercise powers under sub-section (1) of section 263 of the Act only after examining "the record of any proceedings under the Act". The expression "record" has also been defined in clause (b) of the Explanation so as to Include the Commissioner. Thus, it is not only the assessment order but the entire record which has to be examined before arriving at a conclusi....