TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 1821
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.... of appeal raised by the assessee for AY 2014-15 are reproduced as under: "1. For that the grounds of appeal hereto are all without prejudice to each other. 2. For that on the fact and in circumstances of the case the order passed by the ld. Principal Commissioner of Income-tax (Central), Patna (here-in- after known as "the Pr. CIT") is bad on facts and in law interalia being based entirely on mere suspicion, surmises and conjectures. 3. For that on the fact and in circumstances of the case, the revision of order under section 263 of the Income-Tax Act, 1961 (hereinafter referred as "the Act") by Pr. CIT of the order of assessment passed by the. Ld. Deputy Commissioner of Income Tax, Central Circle - 2, Patna (hereinafter referred as "Ld. AO") under section 153A read with section 143(3) of the Act is in complete violation and disregard of the law and on facts also. 4. For that on the fact and in circumstances of the case the Pr. CIT was not justified in initiating proceedings u/s 263 of the Tax Act without appreciating the fact that the order passed by the ld. AO was neither erroneous nor prejudicial to interests of the revenue and therefore, the proceeding are bad in la....
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.... CIT has erred in adjudicating the issues without considering the facts that the details pertaining to the cash payment of Rs.40,000/- gathered vide register KK-03 from shop No. 14 and 15 was already sought by the Ld. Assessing Officer vide point no. 12 of the notice under the section 142(1) of the Act. 12. For that in the fact and in circumstances of the case the Pr. CIT has erred in adjudicating the issues without considering the facts that the details pertaining to the cash receipt and cash payment gathered vide NPT - 22 an NPT - 23 has already been enquired and verified by the Ld. Assessing Officer vide point 14 the notice under the section 142(1) of the Act. 13. For that on the facts and in circumstances of the case, the Ld. Pr. CIT erred reopening the proceeding under the section 263 of the Act on the grounds of lack of enquiry into the expenditure and payments of the assessee when the Assessee has already reported a profit of 6.59% of the total turnover more than the limit of 6% adjudicated by the Hon'ble High Court of Judicature at Patna in the case of Prasad Constructions and Company td. Vs. Commissioner of Income Tax. 14. For that on the facts and in circumst....
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...., 2024, passed by the PCIT (Central) Patna, by wrongly and illegally invoking the provisions of section 263 of the Act, is bad in law, illegal, ab initio void and the order is liable to be cancelled/set aside/quashed. 2. That on the Facts and on the circumstances of the case, the PCIT (Central) Patna, had failed to understand that since the assessment order had been framed under section 153A, after obtaining necessary approval from the Additional Commissioner of Income Tax (ACIT) under section 153D, such assessment order cannot be revised without revising the directions given by the ACIT under section 153D of the Act. Accordingly, following the principles as laid down by the Jurisdiction Tribunal at Patna, the order passed by the PCIT (Central) Patna, by wrongly and illegally invoking the provisions of section 263 of the Act, is bad in law, illegal, ab initio void and the order is liable to be cancelled I set aside/quashed. 3. Without prejudice to the aforesaid grounds, and that on the Facts and on the circumstances of the case, the PCIT (Central) Patna had erred in invoking the revisional power under section 263 without appreciating and considering that the AO while frami....
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....ttached to the notice u/s. 142(1) of the Act was also issued and duly served. Various details called for by the Ld. AO from time to time to which necessary compliance was made by the assessee to the satisfaction of the AO, who finally accepted the returned income as assessed income. 7. Thereafter, Ld. Pr. CIT vested with revisionary powers u/s. 263 of the Act called for the assessment records and after going through the details available in the assessment records prima facie came to a conclusion that the assessment order is erroneous in so far as prejudicial to the interest of revenue and issued a show cause notice u/s. 263 of the Act dated 15.06.2023 show causing the assessee to reply as to why the assessment order should not be treated as erroneous in so far as prejudicial to the interest of revenue as the AO has not examined the seized material before concluding the assessment. The show cause notice issued by the Ld. Pr. CIT runs in or around 40 pages which has been reproduced in para 3 of the impugned order. In the said show cause notice Ld. Pr. CIT gave reference to certain contract receipts, TDS deducted thereon, register marked as NPT-02, details about cash receipt from dif....
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....ng to the following written submissions: "1. The AO's order has been passed after having been called for various details and AO having examined the details / documents / evidences and had applied his mind and has passed the order in such respect. Accordingly, the AO's order cannot be treated as "erroneous" and "prejudicial to the interest of revenue". Particularly, in the light of the fact that the AO had examined and there cannot be possible view on the material available with him. Indeed explanation 2 to sec 263 can also not be invoked since the AO had verified the relevant details / documents / evidences and hence there is no lack of enquiry in such respect. 2. The AO in the impugned order u/s 153A/ 143(3) for A.Ys 2014-15 to 2021-22 and u/s 143(3) for A.Y 2022-23 has been passed without mentioning of Document Identification No. (DIN) and hence the underlined order itself is bad in law and hence the subsequent order u/s 263 also cannot be held as valid in law. 3. The order u/s 153A having been passed after approval of Addl. CIT u/s 153D and Ld.PCIT cannot revise the impugned order without revising the approval u/s 153D and hence the Ld. PCIT's order is bad in law. 4. Ld ....
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....remises of the assessee certain amount of cash, gold and jewellery seized not enquired by the assessing officer by investigating the fact- Assessee pleading that assessing officer had made proper enquiries and passed the order thereafter only - Held, this being a question of fact and the material being before the assessing officer, the assessing officer made proper enquiries- Order not prejudicial to the interests of the Revenue- CIT not justified in canceling the order. g) In G.M. Mittal Stainless Steel (P) Ltd. (2003) 179 CTR (SC) 553 : (2003) 263 ITR 255 (SC) h) Usha Martin Industries Ltd. vs. DC (03) 86 ITD 261 -It was held by the Kolkata, I T A T, i) BLUE DART EXPRESS LTD. VS JC (00) 75 ITD 414 j) The Gujarat High Court rejected the Departmental reference in CIT vs. Mehsana District Co-op. Milk Producers Union Ltd. (2003) 184 CTR (Guj.) 608 : (2003) 263 ITR 645 (Guj.). In this connection reference may also kindly be made to the decision of Bombay High Court in the case of CIT v. Gabrial India Ltd. (1993) 203 ITR 108. k) The Supreme Court in Malabar Industrial Co. Ltd. vs. CIT (2000) 15 CTR (SC) 1: (2000) 243 ITR 83 (SC) has clearly laid down that section 263 makes ....
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....fter obtaining all the details and particulars, provisions of sec.263 were not at all applicable in this case. a) Rajiv Agnihotri v. CIT (09) 23 DTR 476 (Delhi - ITAT) b) Kulbir Singh v. AC (09) 24 DTR 421 (Agra TM) c) CIT v. Ashis Rajpal (09) 180 Taxmann 623 (Delhi)/(09) 23 DTR 266 (Del) d) S.L.P dismissed - CIT v. Bhagwan Gupta (09) 313 ITR 27 (St) e) CIT v. R. K. Construction Co. (09) 313 ITR 65 (Gujrat) f) Amrik Singh v. AC (10) 36 DTR 111 (Chd. - A Bench) g) Puranlal Agencies v. AC (10) 131 TTJ 78 (Nagpur Bench) h) Essar Inv. Ltd. v. DC (07) 16 SOT 119 (Mum.) n) Your kind attention, in this regard is also drawn to the principles enunciated in the following cases in accordance with which also and in view of the facts and circumstances as stated above in this case no valid proceedings u/s 263 legally lied in this case. a) CIT v. Anil Kumar Sharma (2011) 335 ITR 83 (Delhi) b) CIT v. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Delhi) Moreover, as stated above and in view of the facts and circumstances and in view of the decisions of different Courts of India including Apex Court and other Benches of I.T.A.T. it can be very well said that since the AO has taken on....
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.... Appellant vide letter dt. 10.2.2022 responded not only on purchases but also on sundry creditors (with name and address of such vendors). Such purchases itself have not been challenged by Ld. CIT question of invoking provisions of sec. 263 in respect of sundry creditors does not arise. Hence Ld. CIT's action in such respect is bad in law. b) In respect of unsecured loans in A.Ys 2016-17, 2017-18 & 2018-19, Ld AO had raised query vide notice u/s 142(1) dt. 25.1.2022 (at Q. No.14) and appellant vide its response dt. 10.2.2022 duly furnished all such details / evidences along with bank statement etc. Indeed majority part of such loan was repaid also and such fact was duly observed and recorded by AO in the order sheet. Hence Ld. CIT's action in such respect is bad in law. c) As regards the various seized documents [i.e. NPT-1 to NPT-27 and also MCT-02, MCT-04, MCT-05, MCT-11, MCT-15, MCT-1 Rs. 6 DKC-01 to 05 etc.] attention is drawn to following chart wherefrom it can be seen that Ld. AO has raised specific query in respect of such documents for such year and since PCIT's contention in such respect is without even conducting basic enquiries. Such documents and details are as fo....
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....er 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, this decision relied upon by the Ld. D.R. would not apply to this case. Further the Judgment in the case of Param Transport (P.) Ltd. (supra), of Hon'ble Chhattisgarh High Court (supra) is not with regard to approval obtained under section 153D of the I.T. Act because in this case it was held that revisional power under section 263 of the I.T. Act is applicable to assessments under search and seizure. However, it is not explained by the Ld. D.R. whether in this case the approval under secti....
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....roved by the Addl.CIT U/S.153D cannot be subjected to revise u/s.263 of the I.T. Act. 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. 14.1 We 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 Lucknow Bench of the Tribunal in the case of MehtabAlam (Supra) held that CIT is not justified in assuming jurisdiction u/s.263 when the order has been passed in terms of section 153D of the Act. 14.2 We find the Hyderabad Bench of the Tribunal in the case of M/s. Trinity Infra Ventures Ltd. (Supra) had an occasion to decide an identical issue and it held that the assessment order approved by the Addl. CIT U/S.153D cannot be subject to revision u/s.263 of the I.T. Act. iv. Trinity Infraventures Ltd. v. D....
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....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.........." [2024] 162 taxmann.com 664 (Patna - Trib.) IN THE ITAT, PATNA Gyan Infrabuild (P.) Ltd. v. Principal Commissioner of Income-tax SONJOY SARMA, JUDICIAL MEMBER AND DR. MANISH BORAD, ACCOUNTANT MEMBERIT APPEAL NOS. 175 TO 178 (PAT.) OF 2023[ASSESSMENT YEARS : 2015-16 TO 2018-19]MAY 13, 2024 Section 153D, read with section 263, of the Income-tax Act, 1961 - Search and seizure - Prior approval necessary for assessment (Revision) - Assessment years 2015-16 to 2018-19 - Whether when there is an approval under section 153D, revisionary power under section263 cannot be exercised - Held, yes - Whether even otherwise, without revising order under section 153D, and finding them to be erroneous and prejudicial to interest of revenue, revisionary powers cannot be invoked for assessment order framed under section 153A/143(3) after getting approval under section 153D - Held, yes[Para 32][In favour of assessee] Section263, read with sections153A and 143, of the Income-tax Act, 1961 - Revision - Of orders prejudicial to inter....
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....e the High Court or Supreme Court on the issue of jurisdiction under section263 of the Act. Learned counsel submits that she could not lay her hands any order / judgment passed by the High Court as well as by the Supreme Court on this issue. In the case of RamamoorthyVasudevan (supra), in a similar facts and circumstances, reliance has been placed on judgments delivered by the Pune Bench of Tribunal in the case of Dhariwal Industries Ltd. v. CIT [IT Appeal Nos.1108 to 1113/PUN/2014], Lucknow Bench in the case of MehtabAlam v. ACIT [IT Appeal Nos.288 to 294/Lkw/2014], Hyderabad Bench of the Tribunal in the case of CH. Krishna Murthy v. ACIT [IT Appeal No.766/Hyd/2012] and one of the judgment passed by the High Court of Judicature at Allahabad in the case of CIT v. Dr. Ashok Kumar [IT Appeal No.192 of 2000] and Hyderabad Bench of Tribunal in the case of Trinity Infra Ventures Ltd. v. DCIT [IT Appeal No.584/H/2015] and consistently held that once the order under Section 143(3) r/w section153A of the Act has been passed after taking prior approval of the ACIT under section 153D of the Act, then the jurisdiction under section263 of the Act cannot be invoked. Therefore, the view taken by....
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....entre Trust v. CIT(E) [ITA 238/Kol/2121 dt. 18.7.2022] [Calcutta High Court] ii) CIT v. Brandix Mauritius Holding Ltd. (2023) 293 Taxman 385 (Delhi High Court) 456 ITR 34 (Del) iii) Texmo Precision Castings UK Ltd. v. CIT (Int. Tax) 138 taxmann.com 566 (Madras High Court) iv) Ashok Commercial Enterprises v. ACIT [W.P. No. 2595 of 2021, Bombay High Court] v) Linde India Ltd. v. DCIT-ITA 319/Kol/2023 [Kol ITAT] Hence it may be held accordingly. In such respect attention is drawn to the following judgments in which it was held that if the underlying order is bad in law then the subsequent revision order cannot be held as valid and in such respect reliance is placed on the following judgments : a) PCIT V. Badal Praksh Jindal (ITA 879/10 of 2003 dt. 2.3.2003) (Orissa High Court) b) Classical Flour and Food Processing Pvt Ltd v. CIT (ITA 764 -766/K/ 14 dt. 5.4.2017) (ITAT Kolkata) c) Twins Steel Pvt. Ltd. v. CIT (ITA 1356/k/13 dt. 9.8.2019)( ITAT Kol) d) Keshab Narayan Banerjee v. CIT( 1999) 238 ITR 694 (Kol) e) Supersonic Technologies Pvt. Ltd. v. PCIT (ITA 2269/Del/ 2017 dt. 10.12.2018) f) Charvuja Marmo India Pvt. Ltd. v. PCIT (ITA 4748/Del/ 19 dt. 31.12.19) ....
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....e quashed as it has been issued without revising the order of approval u/s. 153D of the Act granted to AO by Ld. Joint Commissioner of Income Tax and fourthly, the legal ground that the assessment order u/s. 153A read with 143(3) of the Act do not bear DIN and, therefore, the assessment orders are itself bad in law and, therefore, they cannot be the subject matter of the revisionary proceeding. Now, as far as fourth issue raised by the assessee regarding invalidity of the assessment orders for non-quoting of DIN, we find that the assessee has mainly placed reliance on the judgment of Hon'ble jurisdictional High Court in the case of Tata Medical Centre Trust v. CIT(E) [ITA 238/Kol/2121 dt. 18.7.2022] [Calcutta High Court] wherein Hon'ble jurisdictional High Court has affirmed the view of this Tribunal quashing the revisionary proceeding for want of DIN on impugned order. But the operation of the said judgment has recently been stayed by the Hon'ble Apex Court vide order dated 23.07.2024 passed in the SLP No. 27852/2024 and, therefore, at this stage judgment of Hon'ble Calcutta High Court in the case of Tata Medical Centre Trust (supra) cannot be followed as right precedence. Therefo....
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....r 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 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 eff....
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....)has laid down following ratio with regard to provisions of section 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 unsustainabl....
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.... the Revenue and if the AO has adopted one of the courses permissible 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 sati....
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.... further enquiry to verify and find out whether the order passed is erroneous or not." 18. In the light of the above judicial precedence and ratios laid down by Hon'ble Supreme Court, we would first like to go through the facts as to what culminated during the course of assessment proceedings carried out after issuance of notice u/s. 153A of the Act. Now admittedly, all he seized materials were in the possession of Ld. AO and a copy of the same/details were also made available to the Joint Commissioner of Income Tax who has to finally grant the approval u/s. 153D of the Act. Now, we find that after the assessee having filed the return of income u/s. 153A of the Act on 12.02.2022 for AY 201415, ld. AO issued notice u/s. 142(1) of the Act and a questionnaire was attached to it in the form of an annexure placed at page 2 to 5 of the paper book and the same is reproduced below for necessary reference: 19. We further notice that in compliance to the notice u/s. 142(1) of the Act assessee had replied on 25.03.2022 and the said reply is for each of the question/query raised in the questionnaire attached to notice u/s. 142(1) of the Act and the reply submitted by the assessee placed at ....
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....tion at the end of the AO and the replies submitted by the assessee on multiple occasions to the satisfaction of the AO are clearly evident from the paper book filed for each of the years separately. 23. We find that for AY 2015-16 after filing of the return u/s. 153A of the Act Ld. AO issued notice u/s. 142(1) of the Act on 25.01.2022 running into eight pages containing 16 questions and various details have been called for which, inter alia, includes the details referred in the show cause notice issued by Ld. Pr. CIT in the impugned order. A second notice was issued on 04.02.2022 by Ld. AO which is running into 50 pages and in the said notice, Ld. AO has extracted/attached copies of all the seized material including loose papers and other financial transactions appearing in the seized records. The assessee duly replied to this notice firstly on 10.02.2022 and another reply on 25.02.2022 which is running into 88 pages placed in the paper book and perusal of the same indicates that each and every query raised by the Ld. AO has been addressed with and with this explanation assessee has been able to establish that the transactions referred in the seized material are duly entered in t....
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....by the assessee indicating that the transactions mentioned therein are duly entered in the regular books of account. 30. Now, on perusal of all the above details for each of the assessment years it remains an undisputed fact that each of the seized material has been examined by the Ld. AO and the assessee has been asked to reply about each of the transaction appearing in the seized material and the replies given by the assessee are not mere formality but they are exhaustive replies giving explanation about each transaction. The audited financial statement for each of the impugned years along with the books of account were produced before the ld. AO and he after verifying these details has examined the replies filed by the assessee and has completed the assessment proceedings. It has consistently been held that each and every details called for and examined by the Ld. AO cannot form part of the assessment order and only those issues on which ld. AO intends to make the addition appears in the assessment order. The order sheet available in the records gives an insight of the assessment proceeding carried out by the Ld. AO. In the instant case, notice issued u/s. 142(1) of the Act are....
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.... applicable on the facts of the instant case. The first one is the judgment of Hon'ble jurisdictional High Court in the case of CIT Vs. J. P. Goel (2001) 161 Taxmann.com 400 and the brief synopsis of the said judgment and the ratio laid down therein is as under: "Commissioner noticing order passed by the assessing officer prejudicial to the interests of Revenue since the assessing officer had not fully verified the facts - Commissioner noticing that there being a search at the premises of the assessee certain amount of cash, gold and jewellery seized not enquired by the assessing officer by investigating the fact- Assessee pleading that assessing officer had made proper enquiries and passed the order thereafter only - Held, this being a question of fact and the material being before the assessing officer, the assessing officer made proper enquiries- Order not prejudicial to the interests of the Revenue- CIT not justified in cancelling the order. 34. We also notice that in the recent decision of this tribunal in the case of Gyan Infrabuild (P) Ltd.(supra) the facts are almost identical because in the case of Gyan Infrabuild (P) Ltd.(supra) also search was carried out and Ld. AO ....
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....al u/s 153D of the Act from JCIT, Central, Range-1, Patna. Finally, the assessment for all the impugned assessment years for Assessment Year 2015-16 to 2018-19 were completed accepting the returned income filed by the assessee. Now, all the four assessment years evenly dt. 27/12/2019 are the subject matter of the revisionary proceedings invoked by the ld. Pr. CIT u/s 263 of the Act, wherein after referring to the seized material and other discussions, all these four assessments have been held to be erroneous and prejudicial to the interest of the revenue. 12. The assumption of jurisdiction u/s 263 of the Act holding the assessment order as erroneous and prejudicial to the interest of the revenue is in challenge before us. As Section 263 of the Act has a direct bearing on the controversy, therefore, it is pertinent to take note of this section. It reads as under:- "263(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and afte....
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....be excluded." 13. A bare perusal of sub section-1 would reveal that powers of revision granted by section 263 to the learned Commissioner have four compartments. In the first place, the learned Commissioner may call for and examine the records of any proceedings under this Act. For calling of the record and examination, the learned Commissioner was not required to show any reason. It is a part of his administrative control to call for the records and examine them. The second feature would come when he will judge an order passed by an Assessing Officer on culmination of any proceedings or during the pendency of those proceedings. On an analysis of the record and of the order passed by the Assessing Officer, he formed an opinion that such an order is erroneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The learned Commissioner would issue a show cause notice pointing out the reasons for the formation of his belief that action u/s 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assess....
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.... section 263 of the Act and a settled position of law, powers u/s 263 of the Act can be exercised by the Pr. Commissioner/Commissioner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and also prejudicial to the interest of the Revenue. By 'erroneous' is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. 16. 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 followin....
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....the issue himself and give a finding on merits and form an opinion on merits that the order passed by the AO is erroneous and prejudicial to the interest of the Revenue. Relevant extract is reproduced below: "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 Officer 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 order passed by the Assessing Officer was erroneous. He came to the conclusion and finding that the Assessing Officer had examined the said aspect and accepted the respondent's computation figures but he had reservations. The CIT in the order has recorded that the consideration receivable was examined by the Assessing Officer but was not properly examined and therefore the assessment order is "erroneous". The said finding will be correct, if the CIT had examined and verified the said transaction himself and given a finding....
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....r assessment in case of assessment search or acquisition, it is specifically mentioned that no order of assessment or re-assessment shall be passed by an Assessing Officer below the rank of JCIT except with the prior approval of the Joint Commissioner. Before us, the ld. Counsel for the assessee stated that for the search assessment cases whatever seized material are found belonging/pertaining to the assessee, a copy of complete set is also kept with the authority who has to provide the approval of the assessment or re-assessment. He also stated that during the course of assessment proceedings, the ld. Assessing Officer has to update about the proceedings to his senior who has to finally grant the approval u/s 153D of the Act. Even after preparation of the draft assessment order, the same is sent to the ld.Joint Commissioner and he/she after thorough examination of the seized materialvis-à-vis the draft assessment order prepared by the ld. Assessing Officer and after being satisfied with the correctness of such draft assessment order or in case required can suggest certain changes in the said assessment order finally grants approval. Only after receiving such approval u/s 15....
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....63 of the I.T. Act has also not been considered. Therefore, this decision relied upon by the Ld. D.R. would not apply to this case. Further the Judgment in the case of Param Transport (P.) Ltd. (supra), of Hon'ble Chhattisgarh High Court (supra) is not with regard to approval obtained under section 153D of the I.T. Act because in this case it was held that revisional power under section 263 of the I.T. Act is applicable to assessments under search and seizure. However, it is not explained by the Ld. D.R. whether in this case the approval under section 153D have been revised by the Learned PCIT. It may also be noted that it is well settled Law that if two views are possible, then the view which is in favour of the assessee should be made applicable. We rely upon Judgment of Hon'ble Supreme Court in the case of CITv. Vegetable Products Ltd. R9731 88 ITR 192. It may also be noted here that the Hon'ble Allahabad High Court is one of the jurisdictional High Court of Delhi Bench, therefore, preference shall have to be given to the Judgment of the Hon'ble Allahabad High Court as reproduced above. In the totality of the facts and circumstances of the case and following the ....
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....Hyd/2012 order dated 13-022015 following the decision of the Lucknow Bench of the Tribunal in the case of MehtabAlam (Supra) held that CIT is not justified in assuming jurisdiction u/s.263 when the order has been passed in terms of section 153D of the Act. 14.2 We find the Hyderabad Bench of the Tribunal in the case of M/s. Trinity Infra Ventures Ltd. (Supra) had an occasion to decide an identical issue and it held that the assessment order approved by the Addl. CIT U/S.153D cannot be subject to revision u/s.263 of the I.T. Act." iv. Trinity Infraventures Ltd. v. Dy. CIT [IT Appeal Nos. 584-589 (Hyd.) of 2015, dated 4-12-2015] "5.4. The Ld. Counsel for the assessee has further submitted that the assessment under section 143(3) read with section 153C was passed after getting approval of 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 Luck....
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....rve that prior to issuing of notice u/s 153A of the Act, complete seized material are available with the ld. Assessing Officer and a copy is also made available to the Senior Officer who has to grant the approval u/s 153D of the Act. Under the search assessment, the assessee has to be confronted with all the seized material belonging to the assessee. In the instant case there were certain documents which were owned by Shri Satyendra Kumar Sharma, in the statement recorded on oath where, he has categorically stated that these documents belong to him and were maintained by him and on the basis of such documents, additions have been made in the hands of Shri Satyendra Kumar Sharma also. Now, reference has been made to the very same set of documents which have been owned by Shri Satyendra Kumar Sharma and the ld. Pr. CIT has observed that the ld. Assessing Officer ought to have conducted enquiry about these documents. We fail to find any merit in such action of the ld. Pr. CIT because the seized materials available with the ld. Assessing Officer which belonged to the assessee company have been examined, queries have been raised by issuing questionnaire. Detailed reply has been received....
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....y". We note that in the instant case the learned PCIT before reaching his decision that the documents found, belongs to the assessee had made no enquiry whatsoever. Thus learned PCIT failed to appreciate that before he could have considered the assessment order to be erroneous and prejudicial to the interest of the revenue, he ought to have brought material on record to show that the documents belongs to the assessee and not by merely referring to those very documents which already stood examined by the ld. Assessing Officer and considering the statement of Shri Satyendra Kumar Sharma, for coming to the conclusion that the documents cannot be said to be belonging to the assessee. 25. We observe that in the case of Ramji Dayawala & Sons Pvt. Ltd. vs. Invest Import, AIR 1981 SC 2085, the Hon'ble Apex Court has held that if the truth of the facts stated in a document is in issue, mere proof of the handwriting and execution of the document would not furnish evidence of the truth of the facts or contents of the document. The truth or otherwise of the facts or contents so stated would have to be proved by admissible evidence i.e. by the evidence of those persons who can vouchsafe ....
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....ot a document for the AY 2015-16 or even AY 2016-17. Infact, there was no supporting evidence available for such figures and thus had no relevance at all in the eye of law for the assessment year either for AY 2015-16 or for AY 201617. 29. We note that the Learned CIT has committed a factual error observing at page 19 of his order, that the LD ACIT has committed an error by not examining the discrepancies pointed out by the DDIT(Inv) in his notice date 18.05.2018 in respect of the transactions with M/s Broadson Commodities Pvt Ltd. 30. However, it is an admitted fact that the Learned ACIT had duly examined each of the allegations stated in the notice under section 263 as is evident from the notice of the Learned ACIT issued under section 142(1) of the Act dated 11-112019, a copy thereof is placed at pages24-27 of the PB-I for the assessment year 2015-16. In fact in respect of all the allegation regarding the alleged discrepancy in respect of the transaction with M/s Broadson Commodities Pvt Ltd at item number 19, the AO had called for the assessee' explanation which was in respect of the advances made to M/s Broadson Commodities Pvt. Ltd. The assessee in response to said ....
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.... will be erroneous and prejudicial to the revenue. In the instant case we find that the learned PCIT has not considered the order of assessment made in the case of Shri Satyendra Kumar Sharma, on the ground that the said documents did not belong to him but it belongs to the assessee. But ld. Pr. CIT has taken no action to cancel/revise the said assessments made in the case of Shri Satyendra Kumar Sharma. 32. 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 ld. Assessing Officer regarding the transactions carried out during the impugned year as well as examining the seized material, and then getting necessary approval u/s 153D of the Act and also observing that the ld. Pr. CIT did not make any specific enquiry prior to assuming jurisdiction, find the impugned revisionary proceedings as bad in law and deserves to be quashed on account of the following:- "a) that when there is an approval u/s 153D of the Act, it has been held consistently by the Hon'ble Courts (referred supra) that revisionary power u/s 263 of the Act cannot be exercised. b) even otherwise, without rev....