TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 1720
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....roceeding under section 263 of the Income Tax Act without existence of the condition precedent for such initiation. (3) For that the Ld. Pr.CIT has erred in recording certain findings which are contrary to the assessment records. (4) For that the Ld. Pr.CIT has traveled beyond the allegations contained in the notice under section 263 while passing the impugned order and thus has exceeded the jurisdiction by not limiting to the allegation in the show cause notice and thereby violating the principles of equity and natural justice. (5) For that the Ld. Pr.CIT has erred in invoking powers under section 263 and passing the order holding the order of assessment u/s 143(3) dated 31/03/2022 to be erroneous in so far as prejudicial without pointing out which of the two phraseology used in section 263 is applicable to the Appellant's case. (6) For that the Ld. Pr.CIT has erred in raising issues on the seized material in the SCN which does not pertained/ belonging to the appellant's company. (7) For that the Ld. Pr.CIT has erred in not providing copy of appraisal report which was a relied upon document despite specific request made on 27/03/2024 & 28/03/2024. (8) For that th....
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....see has failed to file complete details along with supporting evidence and explanation in response to notice u/s 142(1). (19) For that the Ld. Pr.CIT has erred in passing the assessment order without raising queries or making enquiries and verification vis-a-vis the seized material. (20) For that the Ld. Pr.CIT has erred in holding that regular books of accounts were neither found during the course of search action nor properly produced by the assessee in course of post search enquiry. (21) For that the Ld. Pr.CIT has failed to appreciate that the books of accounts maintained on Tally was found and seized in course of search and are still lying with the department and thus, Explanation-2(a) is not applicable. (22) For that the Ld. Pr.CIT has erred in relying on some of the judicial precedents without confronting the appellant with the same. (23) For that the Ld. Pr.CIT has erred in relying on judicial precedents which are distinguishable on facts. (24) For that the Ld. Pr.CIT has erred in distinguishing the Judgments relied on by the appellant on flimsy ground. (25) For that the Ld. Pr.CIT has erred in not following the Judgments of the jurisdictional High Cour....
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.... notice under section 263 of the Act and the same issued on 26.03.2024 (copy placed at pages 97 to 120 of the paper book). Reply was given by the assessee stating that all the details mentioned in the show-cause notice were forming part of the notice issued under section 142(1) of the Act and the same have been duly examined by the ld. Assessing Officer. Ld. PCIT after considering the submissions filed by the assessee on 26.03.2024 and 28.03.2024 noted that they were repetitive in terms of submission of fact and the documents annexed to these replies were same/similar to the one submitted during the course of assessment proceedings. He observed that there was no explanation or new evidence available with the assessee for the non-cooperation during the search, post-search or assessment proceedings or for the deliberate delay in submission of replies. Ld. PCIT thereafter observed that nothing on record is available, which could show that there was any further correspondence or notice issued under section 133(6) of the Act related to third party verification/ confirmation and that whether any independent inquiry has been conducted by the ld. Assessing Officer. 5.Ld. PCIT also referre....
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....ate that the facts of the case relied upon, are different from the case under consideration in the present proceedings. In the case relied upon by the assessee, the Assessing Officer had made specific enquiry on the issue considered during assessment proceedings and nature of expenditure was explained by the assessee to him but in the instant case, the Assessing Officer failed to conduct any enquiry or verification. Finally, after making the detailed discussion as discussed above, ld. PCIT concluded the revisionary proceedings observing that there is no application of mind on the part of the ld. Assessing Officer, inasmuch as, the necessary verification on facts/inquiries, which should have been made, have not been made, making the order erroneous and prejudicial to the interest of revenue within the meaning of section 263 read with clause (a) of Explanation 2, which provides that the order is passed without making inquiries or verification, which should have been made. Accordingly, assessment orders passed under section 153A read with section 143(3) of the Act for A.Ys. 2017-18 to 2020-21 were set aside with a direction to pass fresh order after conducting proper inquiries includi....
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....n. However, while computing the assessment, ld. Assessing Officer has made other additions for the unrecorded cash payments and disallowance and deduction under section 80IA of the Act. Therefore, it cannot be said that the assessment has been completed without making proper inquiries or no inquiries. He also submitted that the draft assessment orders were sent to the ld. JCIT for granting approval under section 153D of the Act and the same was granted on 31.03.2022, which itself proves that the detailed inquiry conducted by the ld. Assessing Officer has culminated into an assessment order and that the ld. JCIT, who also keeps a continuous track of the search and seizure assessment cases and after examining the assessment record and the draft order had accorded approval u/s. 153(1) of the Act pursuant to which final assessment order has been passed. He further submitted that ld. PCIT has not revoked the order under section 153D of the Act failing which the revisionary proceeding carried out by the ld. PCIT deserves to be quashed. 9.On the other hand, ld. D.R. apart from supporting the detailed order of ld. PCIT also filed written submission running into 42 pages in support of his ....
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....; (vii) CIT -vs.- Precision Finance (P) Ltd. [1994] 208 ITR 465; (viii) Duggal & Co. -vs.- CIT [1996] 220 ITR 456; (ix) CIT -vs.- Anand Kumar Jain 370 ITR 140 (Allahabad); (x) Malabar Ind. Co. Ltd. 243 ITR 83 (SC); (xi) Tara Devi Agarwal -vs.- CIT 88 ITR 323 (SC); (xii) CIT -vs.- South India Shipping Corporation 233 ITR 546 (Mad.) 11.Further reference was also made to various documents furnished in the paper book running into 426 pages and the following index highlights the documents furnished by the ld. D.R. INDEX S. no. Description Page no. 01 Written submission 1 to 42 02 Case gist- ANN-C1 1 to 4 03 Case gist- ANN-C2 5 to 10 04 Case gist-ANN-C3 11 to 17 05 Online service of order- ANN-1 18 to 24 06 Proposal for revision of order u/s 263-ANN-2 25 to 26 07 Form no.36 -ANN-3 27 to 44 08 Show cause notice- ANN-4 45 to 249 09 Reply of assessee- ANN-5 250 to 256 10 Reply of Notice u/s 142(1)- ANN-6 257 11 Reply of notice u/s 142(1)- ANN-7 258 to 284 12 Reply of notice u/s 142(1) -ANN-8 285 to 319 13 Reply of assessee-ANN-9 321 to 351 14 Order sheet details-ANN-10 352 to 354 15 Statement on oath of Sri Janardan Prasad u/s....
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....signed to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of 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,....
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....263 of the Act: "There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. 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 principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer 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 Commissioner 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. It has been held by this Court that where a sum not earned....
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....under law or where two views are possible and the AO has taken one view with which the CIT does not agree. If cannot be treated as an erroneous order, unless the view taken by the AO is unsustainable under law (vi) If while making the assessment, the AO examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determine the income, the CIT, while exercising his power under s 263 is not permitted to substitute his estimate of income in place of the income estimated by the AO. (vii) The AO exercises quasi-judicial power vested in his and if he exercises such power in accordance with law and arrive at a conclusion, such conclusion cannot be termed to be erroneous simply because the CIT does not fee stratified with the conclusion. (viii) The CIT, before exercising his jurisdiction under s. 263 must have material on record to arrive at a satisfaction. (ix) If the AO has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation by a letter in writing and the AO allows the claim on being satisfied with the explanation of the assessee, the decision of the AO can....
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....oneous or not." 19.In the light of the above details of Hon'ble Apex Court and Hon'ble High Courts, before us, Ld. Counsel for the assessee also mentioned about the recent decision of this Tribunal in the case of M/s. Gyan Infrabuild Pvt. Ltd. [2024] 162 taxmann.com 664 wherein also verbatim similar issue came up for consideration and Ld. CIT(A) invoked section 263 of the Act by setting aside the assessment orders framed u/s. 153A r.w.s. 143(3) of the Act without revoking the order of granting approval u/s. 153D of the Act. We find that the ratio laid down by this Tribunal in the case of Gyan Infrabuild Pvt. Ltd. (supra) has subsequently been followed in another decision of this Tribunal in the case of Nalanda Engicon Pvt. Ltd. Vs. DCIT, ITA No. 322 to 326/Pat/2024 dated 02.09.2024 wherein this Tribunal on observing that the AO having conducted sufficient and detailed enquiry about each of the seized documents and proper replies were furnished by the assessee to the satisfaction of the AO and Ld. AO took one of the plausible view provided under the Act, and held that Ld. Pr. CIT erred in assuming jurisdiction for carrying out the revisionary proceeding u/s. 263 of the Act and the....
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....ted by the approval granted by ld. JCIT u/s. 153D of the Act which still remains intact as Ld. PCIT has not revised the said order. 32. Now, once adequate enquiry has been conducted and a permissible view has been taken by the AO no room is left for the Ld. Pr. CIT to give direction to re-conduct the enquiry in the manner he deems fit. The revisionary powers cannot be extended to direct the AO to again enquire/examine the issue which have already been examined in detailed and a plausible view has been taken. It is for the Ld. Pr. CIT to carry out independent enquiry to bring certain material on record to prove that Ld. AO has not examined those issues and that the order is erroneous and prejudicial to the interest of revenue. Perusal of the impugned order clearly indicates that no such independent enquiry has been conducted and just for the sake of brief reply filed by the assessee to show cause notice, Ld. Pr. CIT had come to the conclusion of setting aside the assessment order. 33. Though the assessee has referred and relied upon plethora of decisions, we would like to take note of two decisions which are squarely applicable on the facts of the instant case. The first one i....
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....t of Shri Satyendra Kumar Sharma, who is working as Director of the assessee company, and other employees, mainly, Mrs. Muskan Pandey, Shri Hulas Pandey, Shri Atul Kumar Agarwal etc,. Subsequent to search, notice u/s 153A of the Act were issued to the assessee company to which necessary compliances were made and return was filed. However, the returned income as disclosed in the original return filed on 30/09/2015 was again shown as income in the return filed in compliance to notice u/ s 153A of the Act furnished on 02/12/2019. Thereafter the assessee was served with the statutory notices u/s 143(2) & 142(1) of the Act and various questions were raised in the notice u/s 142(1) of the Act as well as during the course of assessment proceedings. In the assessment order framed u/s 153A of the Act, the ld. Assessing Officer has mentioned that the details were filed along with the submissions as well as copies of returns, computation of 10 I.T.A. No. 175 to 178/Pat/2023 Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited income and point-wise reply. Further the assessment was completed after taking necessary approval u/s 153D of the Act from JCIT, Central, Range-1, Patna. ....
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....d passed by the Assessing Officer had been the subject matter of 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." 13.A bare perusal of sub section-1 would ....
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.... natural justice or without application of mind. The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer 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 Commissioner 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. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the revenue - Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC)". [Emphasis Supplied] 15. In the light of the provisions of section 263 of the Act and a settled position of law, powe....
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.... not permitted to substitute his estimate of income in place of the income estimated by the AO. (vii) The AO exercises quasi-judicial power vested in his and if he exercises such power in accordance with law and arrive at a conclusion, such conclusion cannot be termed to be erroneous simply because the CIT does not fee stratified with the conclusion. (viii) The CIT, before exercising his jurisdiction under s. 263 must have material on record to arrive at a satisfaction. (ix) If the AO has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation by a letter in writing and the AO allows the claim on being satisfied with the explanation of the assessee, the decision of the AO cannot be held to be erroneous simply because in his order he does not make an elaborate discussion in that regard." 17.Apart from above stated broader principles, one more principle needs to be added in view of the judgment of Hon'ble Delhi High Court in the case of ITO vs. D.G. Housing Projects Ltd. [2012] 343 ITR 329 (Delhi) that the ld. CIT has to examine and verify the issue himself and give a finding on merits and form an o....
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.... and unless the approval given u/s 153D of the Act has also been held to be erroneous and prejudicial to the interest of the revenue. Now, under Chapter 14 of the procedure for assessment, so far as the assessments relating to search cases are concerned, separate procedures have been laid down. Starting from Section 153A for assessments in the case of search or acquisition, Section 153B for time limit for completion of assessment u/s 153A, Section 153C for assessment of income of any other person and Section 153D i.e., prior approval necessary for assessment in case of search or acquisition. So far as Section 153D of the Act is concerned, the same reads as follows:- "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 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner:]" 18.1. Now, on perusal of the above Section which states that a prior approval is necessary for assessment in case of assessment search or acquisition, it ....
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....asis of the directions issued by the Joint Commissioner under section 144A; (if) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General or Principal Commissioner or ' Commissioner authorised by the Board in this behalf under section 120. It may be noted that Order of assessment passed with the approval of JOT under section 153D of the I.T. Act, 1961 could not be revised under section 263 of the I.T. Act, 1961. The Ld. D.R. has, however, relied upon the Order of ITAT, Panaji Bench, but, has not explained whether the Judgment of Hon'ble Allahabad High Court in the case of Dr. Ashok Kumar (supra) or different Benches of the Tribunal have been considered in this case by the Panaji Bench. It is not decided in this case that assessment order cannot be revised without revising the approval under section 153D of the I.T. Act and Explanation 1 to section 263 of the I.T. Act has also not been considered. Therefore, thi....
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....3-12-2016] "9. Referring to the decision of the Hyderabad Bench of the Tribunal in the case of M/s. Trinity Infra Ventures Ltd. Vs. DCIT vide ITA Nos. 584 to 589/H/2015 order dated 04-12- 2015 for A.Yrs. 2005- 06 to 2010-11 he submitted that the Tribunal in the said decision, following various decisions including the decision of Hon'ble Allahabad High Court in the case of CIT Vs. Dr. Ashok Kumar vide Income Tax Appeal No. 192/2000 order dated 06-08-2012, has held that assessment order approved by the Addl.CIT U/S.153D cannot be subjected to revise u/s.263 of the I.T. Act." 12. We have considered the rival arguments made by both the sides, perused the orders of the AO and the Ld.CIT and the paper book filed on behalf of the assessee. 14.We find merit in the above submission of the Ld. Counsel for the assessee. We find the Lucknow Bench of the Tribunal in the case of MehtabAlam Vs. ACIT vide ITA Nos.288 to 294/Lkw/2014 order dated 18-11-2014 while deciding an identical issue has observed as under. 14.1We find the Hyderabad Bench of the Tribunal in the case of CH. Krishna Murthy Vs. ACIT vide ITA No.766/Hyd/2012 order dated 13-02-2015 following the decision of the Luck....
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....considering that prior approval already accorded to ld. Assessing Officer u/s 153D of the Act and secondly when orders u/s 153A of the Act has been passed after receiving approval u/s 153D of the Act, Ld. PCIT erred in revising order u/s 153A of the Act without first revising the order u/s 153D of the Act as which means that no defect has been observed by ld. Pr. CIT in approval u/s 153D of the Act. Thus the action of the ld. Pr. CIT assuming jurisdiction u/s 263 of the Act cannot be held to be tenable, the impugned proceedings deserves to be quashed on this grounds itself. 22.1. As regards the second limb of argument is concerned that detailed enquiry has been conducted and one of the view legally permissible has been taken, we, in view of the judgment in the case of Malabar Industrial Co. Ltd. vs. CIT (supra) and of Income-tax Officer v. D.G. Housing Projects Ltd. (supra) note that the assessments in question before us are search assessments. There is a separate procedure for carrying out the assessment for search cases. Though we have referred to the procedure in the preceding paragraphs, we will like to observe that prior to issuing of notice u/s 153A of the Act, complete se....
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....s required to carry out necessary enquiry in support of his assumption that the documents belongs to the assessee or that the ld. Assessing Officer has not enquired. The Hon'ble High Court of Delhi in the case of Income-tax Officer v. D.G. Housing Projects Ltd. reported in [2012] 343 ITR 329 has held that "in cases of wrong opinion or finding on merits, the CIT has to come to the conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under Section 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because the order passed is not sustainable in law and the said finding must be recorded. CIT cannot remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous."Further the Hon'ble Apex Court in its judgment in the case of CIT vs. Electro House reported in 82 ITR 824, had held that "the CIT before reaching his decision and not before commencing his enquiry is to give the assessee an opportunity of being heard and make or cause to make such enquiry as he deems necessary". We note that in the instant case the learned PCIT before reaching ....
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....en made in the hands of Shri Satyendra Kumar Sharma, and thus one of the limbs of Section 263 of the Act is not fulfilled andrevision of the assessment order cannot be held to be valid and tenable in the eyes of law and thus the impugned proceedings u/s 263 of the Act, deserves to be quashed. 27.So far as the merits of the case is concerned, we, taking strength of the judgment of the Hon'ble Delhi High Court in the case of Income-tax Officer v. D.G. Housing Projects Ltd. (supra), find that the ld. Pr. CIT has merely referred to the seized material but has not made any further enquiry about the correctness of such documents, as to whether they belong to the assessee, or pertain to the year under consideration. 28.We find that the learned PCIT in his show cause notice has referred to documents which even does not pertains to AY 2014-15 or 2015-16 but had been prepared thereafter and as such, it is evident that the order passed by ld PCIT apparently are without application of mind. The ld. Counsel for the assessee has referred to GIB-11 Page 8 which is in handwriting of Shri. Satyendra Kumar Sharma, is not a document for the AY 2015-16 or even AY 2016-17. Infact, there was no su....
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....dicial to the interest of the revenue. We draw support from the following judicial pronouncements: i. 100 ITD 173 (Mum) Mrs. Khatiza S. Oomerbhoy vs. ITO ii. 100 ITD 441 (Kol) Al-Haz Amir Hasan Properties Pvt. Ltd. vs. Asst. CIT iii. 203 ITR 108 (Bom) CIT vs. Gabriel India Ltd iv. 171 ITR 141 (MP) CIT vs. Ratlam Coal Ash Co 31.1. We also find that learned CIT has erred in holding the assessment order as erroneous, a condition precedent and that the fact for holding the order was erroneous he has not made any enquiry whatsoever but proceeded on the basis of his own opinion. Where more than one view is possible, the order cannot be said to be erroneous as has been held by the Apex Court in the case of Malabar Industrial Co. Ltd. vs. CIT (supra).That same income cannot be taxed twice over, as held in the case of Smt. Tara Devi Aggarwal vs. CIT reported in 88 ITR 323, where an income has not been earned and is not assessable merely because the assessee wants it to be assessed in his or her hands in order to assist someone else who would have been assessed to a larger amount, an assessment so made will be erroneous and prejudicial to the revenue. In the instant case we find....
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....ould tantamount to double addition. f) that the finding on merit of the ld. Pr. CIT contains various mistakes as the documents referred are not for the assessment year in dispute and some of the documents are not belonging to the assessee." 33. Thus, in view of our discussion(supra)and our examination of the facts, as the order of the Assessing Officer is neither erroneous nor prejudicial to the interest of revenue, there was no scope for the ld. Pr. CIT to revisit the order of the ld. Assessing Officer. Therefore, the impugned order u/s 263 of the Act is quashed and assessment order framed u/s 153A/143(3) of the Act dt. 26/03/2022, is restored. The effective grounds raised by the assessee are hereby allowed for Assessment Year 2015-16. As discussed earlier, our decision for Assessment Year 2015-16 quashing the order u/s 263 of the Act is applicable mutatis mutandis to the appeals of the assessee for Assessment Year 2016-17 to 2018-19." 35. Respectfully following the decisions cited supra particularly placing reliance on the recent decision of this Tribunal in the case of Gyan Infrabuild (P) Ltd.(supra), we find that Ld. Pr. CIT erred in assuming jurisdiction u/s. 263 of t....
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....ercise has been carried out by the ld. Assessing Officer for the remaining years. Now when the search was conducted at the assessee's premises on 29.10.2020, various documents were found and seized. Copies of seized material were available with the ld. Assessing Officer as well as the authority competent to grant approval under section 153D of the Act. Now the ld. Assessing Officer after having received the income tax return in compliance to notice under section 153A of the Act has selected the same for scrutiny by issuing and validly serving notice u/s.143(2) and u/s. 142(1) of the Act on 20.01.2022 and has asked the assessee to furnish the reply to various questions mentioned in the questionnaire attached to the notice under section 142(1) of the Act. The copy of the notice under section 142(1) of the Act dated 20.01.2022 is placed at pages no. 1 to 96 of the paper book and perusal of the same indicates that ld. Assessing Officer has asked for various details as well as the explanation to the seized material marked as PKS and GCPL along with the numbers attached to the seized document. The ld. Assessing Officer has also referred to all the seized material marked JPNM. In all, ld.....
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....een completed after making certain addition and, therefore, the view taken by the ld. Assessing Officer is one of the views permissible under the law. We draw support from the judgment of the Hon'ble Apex Court in the case of Malabar Industrial Co. Ltd. (supra). 24.We note that Ld. PCIT has observed in the impugned order that ld. Assessing Officer should have further raised the queries after receiving the reply to notice under section 142(1) of the Act. We, however, are of the view that when a detailed query has been raised and a satisfactory reply has been received, ld. Assessing Officer, who is an Officer having quasi-judicial authority, has taken one of the legally permissible views then only in case, he is not satisfied, he could have raised further query. Each and every detailed discussion by the ld. Assessing Officer cannot form part of the assessment order and for this we draw inference from the judgment of Hon'ble Bombay High Court in the case of CIT Vs. Gabriel India Ltd. 203 ITR 108 (Bom.), wherein the Hon'ble Court has held that ITO's order could not be held to be erroneous simply because in his order, he did not make an elaborate discussion. Therefore, placing reliance....
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.... question such a view and we must uphold the validity of revision order, for the recording of that view alone, it would result in a situation that the Commissioner can de facto exercise unfettered powers to subject any order to revision proceedings. To exercise such a revision power, if that proposition is to be upheld, will mean that virtually any order can be subjected to revision proceedings; all that will be necessary is the recording of the Commissioner's view that "the order is passed without making inquiries or verification which should have been made". Such an approach will be clearly incongruous. The legal position is fairly well settled that when a public authority has the power to do something in aid of enforcement of a right of a citizen, it is imperative upon him to exercise such powers when circumstances so justify or warrant. Even if the words used in the statute are prima facie enabling, the courts will readily infer a duty to exercise a power which is invested in aid of enforcement of a right--public or private--of a citizen. [L Hirday Naran Vs Income Tax Officer [(1970) 78 ITR 26 (SC)]. As a corollary to this legal position, when a public authority has the pow....
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.... and where one has any reasons to doubt the correctness of a claim made in the income tax return, probe into the matter deeper in detail. He need not look at everything with suspicion and Assessment year: 2014-15 investigate each and every claim made in the income tax return; a reasonable prima facie scrutiny of all the claims will be in order, and then take a call, in the light of his expert knowledge and experience, which areas, if at all any, required to be critically examined by a thorough probe. While it is true that an Assessing Officer is not only an adjudicator but also an investigator and he cannot remain passive in the face of a return which is apparently in order but calls for further inquiry but, as observed by Hon'ble Delhi High Court in the case of Gee Vee Enterprises Vs ACIT [(1195) 99 ITR 375 (Del)], "it is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. (Emphasis, by underlining, supplied by us). It is, therefore, obvious that when the circumstances are not such as to provoke an inquiry, he need not put every proposition to the test and probe everything stated in the income ....
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....course of action for the Assessing Officer, is not what he should have done in the ideal circumstances, but what an Assessing Officer, in the course of his performance of his duties as an Assessing Officer should, as a prudent, judicious or reasonable public servant, reasonably do bonafide in a real-life situation. It is also important to bear in mind the fact that lack of bonafides or unreasonableness in conduct cannot be inferred on mere suspicion; there have to be some strong indicators in direction, or there has to be a specific failure in doing what a prudent, judicious and responsible officer would have done in the normal course of his work in the similar circumstances. On a similar note, a coordinate bench of the Assessment year: 2014-15 Tribunal, in the case of Narayan T Rane vs ITO [(2016) 70 taxmann.com 227 (Mum)] has observed as follows: 20. Clause (a) of Explanation states that an order shall be deemed to be erroneous, if it has been passed without making enquiries or verification, which should have been made. In our considered view, this provision shall apply, if the order has been passed without making enquiries or verification which a reasonable and prudent office....
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....me or disallowance of expenditure or any other adverse action would have been warranted. Clearly, in such cases, no prejudice is caused to the legitimate interests of the revenue. No interference will be, as such, justified in such a situation. That leaves us with the third possibility, and that is when the Commissioner is satisfied that the necessary inquiries are not made and necessary verifications are not done, and that, in the absence of this exercise by the Assessing Officer, a conclusive finding is not possible one way or the other. That is perhaps the situation in which, in our humble understanding, the Commissioner, in the Assessment year: 2014-15 exercise of his powers under section 263, can set aside an order, for lack of proper inquiry or verification, and ask the Assessing Officer to conduct such inquiries or verifications afresh. 26.Now going through the above judgment and also taking note of the relevant provision of Explanation 2, sub-clause (a) of section 263 of the Act and also taking note of the judgment of the Hon'ble Delhi High Court in the case of DG Housing (supra), we find that ld. PCIT before setting aside the assessment order holding it as erroneous in s....