TaxTMI 
TaxTMI 
2024 (9) TMI 1821
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....the other appeals. 3. The original Grounds 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 t....
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....ere on record at the time of hearing. 11. 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 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 t....
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.... 5. The additional Grounds of appeal raised by the assessee in AY 2014-15 are reproduced as under: "1. That on the Facts and on the circumstances of the case, the dated 31st March, 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, ....
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....e on 12.02.2022 u/s. 153A of the Act on ITBA portal declaring income of Rs.1,24,21,610/- which was the same income as was declared in the original return filed u/s. 139 of the Act on 26.12.2015. Thereafter, detailed questionnaire attached 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 pag....
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.... enquiries and investigations into the claim of the assessee company and close examination of seized material available with him, after providing opportunity to the assessee also." 8. Ld. Counsel for the assessee vehemently argued referring 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 ....
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....91) 59 Taxman 568, 569-70 (Del) f) CIT vs. J. P. GOEL (2001) 161 TAXMANN.COM 400 (CAL) 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 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) 1....
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....will be erroneous and prejudicial to the interests of the Revenue." l) Guwahati High Court in the case of Smt. Lila Chowdhury Vs. CIT [2008] 167 Taxman 1 ( paras 13 & 14 ). m) In this connection your kind attention is drawn to the principles enunciated in the following cases and in view of the principles enunciated and in view of the fact that the assessment had been made after 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 ....
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....appreciating the fact AO has made detailed and necessary enquiries in respect of all the documents/ evidences so found during the impugned search proceedings u/s 132 (1) and after considering all such details / explanation/ evidences so furnished by appellant AO has taken a possible view in the matter. For illustration a) In A.Ys 2014-15, 2015-16, 2016-17, 2017-18 & 2018-19, Ld. AO has raised specific query regarding sundry creditors and indeed AO raised query vide notice u/s 142(1) dt. 25.1.2022 (at Q. No. 16) and also made enquiry in respect of purchases (at Q. No.4) of such notice. 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 w....
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....plain reading of the *- aforesaid Explanation that an Order passed on or before or after 1 st Day of June, 1988 by the A.O. shall include (/) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis 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 thi....
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.... case the original approval 25 ITA No3226- 3232.M.17 A.Y.2008 09 to 2014-15 was granted by Addl. CIT and this assessment order is cannot b< revise without approval of Add. CIT. iii) Dhariwal Industries Ltd. v. CIT [IT Appeal Nos. 1108 to 1113 (Pune) of 2014 dated 23-12-2016] 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. 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 No....
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....order u/s 263 of the Act since the same has been passed with the approval of the Addl. CIT u/s 153D of the Act. 22. Therefore, in the light of the above decisions, so far as the first limb of legal argument of the ld. Sr. Counsel for the assessee is concerned, we find merit that ld. Pr. CIT erred in assuming jurisdiction u/s 263 of the Act by revising order u/s 153A r.w.s. 143(3) of the Act without 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 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.........." [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 MEM....
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....n 143(3) after getting an approval of Jt. Commissioner under section 153D could not be revised under section263[2024] 162 taxmann.com 48 (Madhya Pradesh)HIGH COURT OF MADHYA PRADESH Principal Commissioner of Income-taxv.Prakhar Developers (P.) Ltd. ".........7.. Ms. Veena Mandlik, learned counsel for the appellant submits that the assessee made a cash payment for purchase of the land in violation of Rule 6DD(g) r/w 40A(3) of the Act as the land was held by him as stock in trade for the company, therefore, there was a prejudice to the interest of the Revenue. Hence, this appeal is liable to be admitted on the aforesaid proposed substantial questions of law. 07. Learned counsel for the appellant failed to answer the query made by this Court whether order passed by the Pune Bench in the case of RamamoorthyVasudevan (supra) was challenged before 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 b....
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.... YEAR 2017-18]MAY 31, 2021 D. Document Identification Number (DIN) was missing /not quoted in order u/s 153C/ 143 and 143(3). It is in respect of the impugned order u/s 153A having been issued / passed without Document Identification No. (DIN) and as such following the judgment of Jurisdictional High Court impugned order is bad in law and it may be held accordingly. In this connection, it is humbly submitted that the AO is obliged to mention the DIN on the body of the impugned order in terms of CBDT Circular No. 19/2019 dt. 14.8.2019 that the AO is obliged to mention the DIN on the body of the impugned order so passed u/s 153A and hence impugned order is to be treated as bad in law. In this connection reliance is also placed on following judgments including that of Jurisdictional Tribunal and High Court and the same are as follows : - i) Tata Medical Centre 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) ....
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....CIT and also stated that when the details were called for by Ld. Pr. CIT through show cause notice assessee had given a very brief reply not dealing with each of the issues referred in the show cause notice. Ld. DR also submitted that Ld. AO has passed a brief order and nothing has been discussed in the assessment order even though the same being the assessment carried out based on search action on the assessee and that various incriminating material as found and seized by the department. 11. We have heard rival contentions and perused the material and records placed before us. In the instant appeals for AYs 2014-15 to 2021-22 the common grievance of the assessee is firstly that Ld. Pr. CIT erred in holding the assessment order is erroneous and prejudicial to the interest of revenue, secondly, that Ld. Pr. CIT erred in invoking Explanation to sec. 263 of the Act even when the AO had made a detailed and adequate enquiry, thirdly, that the show cause notice u/s. 263 of the Act deserves to be 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 assessme....
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.... 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 after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) 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 Ch....
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....s 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 assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. He may set aside the order and direct the Assessing Officer to pass a fresh order. At this stage, before considering the multi-fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the ld. Pr. CIT taken u/s 263. 14. Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC)has laid down following ratio with regard to provisions of section 263 of the Act: "There can be no doubt that the p....
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.... 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 following broader principle to judge the action of CIT taken under section 263: "(i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated as prejudicial to the interests of the Revenue and if the AO has adopted one of the courses permissible under la....
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....he 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 on merits. As held above, a distinction must be drawn in the cases where the Assessing Officer does not conduct an enquiry; as lack of enquiry by itself renders the order being erroneous and prejudicial to the interest of the Revenue and cases where the Assessing Officer conducts enquiry but finding recorded is erroneous and which is also prejudicial to the interest of the Revenue. In latter cases, the CIT has to examine the order of the Assessing Officer on merits or the decision taken by the Assessing Officer on merits and then hold and form an opinion on merits that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. In the second set of cases, CIT cannot direct the Assessing Officer to conduct further enquiry to verify and find out whethe....
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.... that detailed enquiry having been conducted by the AO to which reply has been furnished along with the evidence and explanation, and Ld. AO after due application of mind and acting within the four corners of law has adopted one of the courses permissible in law and was satisfied with the submissions of the assessee and has completed the assessment proceeding and, therefore, it no where emerges that no enquiry or inadequate enquiry has been conducted by the AO. Now, once the AO has conducted detailed/adequate/requisite enquiry and has also taken note of all the seized material in the questionnaire attached to notice u/s. 142(1) of the Act and have also received the reply the next course of action of the AO is to approach i.e. Joint Commissioner of Income Tax for approval u/s. 153D of the Act. Now, ld. Jt. Commissioner who is briefed about the assessment proceeding stage by stage has also examined the draft assessment order vis-à-vis seized material and have granted the approval u/s. 153D of the Act and subsequent thereto the assessment order has been passed on 30.03.2022. As far as remaining assessment years are concerned the course of action at the end of the AO and the rep....
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....2(1) of the Act issued to which reply has been furnished on 11.03.2022 followed by other two notices u/s. 142(1) dated 04.02.2022 and 18.02.2022 running into 52 pages and the same were duly replied addressing each of the questions and enclosing all relevant details with the reply dated 25.02.2022. 27. For AY 2019-20, ld. AO carried out the scrutiny proceeding post search issuing notice u/s. 142(1) calling for various details to which reply was furnished on 25.03.2022 and notices were also issued u/s. 142(1) on 04.02.2022 and 18.02.2022 to which reply was filed on 25.02.2022 and 05.03.2022 running into almost 100 pages. 28. For AY 2020-21, in the proceeding u/s. 153A r.w.s. 143(3) of the Act, notice u/s. 142(1) of the Act issued on 25.01.2022 was followed by another notice on 04.02.2022 running into 50 pages to which two separate replies were filed on 25.03.2022 which are running into 118 pages. 29. Lastly, for AY 2021-22, also notices u/s. 142(1) of the Act were issued on 25.01.2022, 06.02.2022 and 18.02.2022 to which replies were furnished on 05.03.2022 and 25.03.2022 and in these replies explanation about each of the seized material has been given by the assessee indicat....
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....ness of the assessment order is further supported 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 ....
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....ny were also recorded and this mainly included the statement 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 approv....
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....he 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, National Tax Tribunal, the High Court or the Supreme Court. Explanation- In computing the period of limitation for the purposes of subsection (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 th....
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....ion 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 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 [1....
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....he 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 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 o....
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....ed revisionary proceedings are not valid in the eyes of law because only the order framed u/s 153A of the Act has been held to be erroneous and prejudicial to the interest of the revenue but the same cannot be held to be justified until 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-sect....
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....evident from the plain reading of the *- aforesaid Explanation that an Order passed on or before or after 1 st Day of June, 1988 by the A.O. shall include (/) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis 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 ....
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....that in the instant case the original approval 25 ITA No3226-3232.M.17 A.Y.2008 09 to 2014-15 was granted by Addl. CIT and this assessment order is cannot b< revise without approval of Add. CIT." iii) Dhariwal Industries Ltd. v. CIT [IT Appeal Nos. 1108 to 1113 (Pune) of 2014 dated 23-12-2016] "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 ....
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.... the approval of the Addl. CIT u/s 153D of the Act. 22. Therefore, in the light of the above decisions, so far as the first limb of legal argument of the ld. Sr. Counsel for the assessee is concerned, we find merit that ld. Pr. CIT erred in assuming jurisdiction u/s 263 of the Act by revising order u/s 153A r.w.s. 143(3) of the Act without 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....
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....amines the seized material with the draft assessment order framed by the ld. Assessing Officer and after being satisfied, either suggests necessary changes or he accords the approval after which, the ld. Assessing Officer passes the final assessment order. 24. We also observe that learned PCIT u/s 263 of the Act before initiating the revisionary proceedings was 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 th....
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....missible view and made addition in the hands of the person, he was of thebelieve, to be subjected to addition. Therefore, the ld. Counsel for the assessee succeeds on the second plea that ld. Pr. CIT erred in assuming jurisdiction in the given case where enquiry has been conducted and the order of the ld. Assessing Officer is not prejudicial to the interest of the revenueas huge additions have been 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 ....
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.... 31. We find that the learned PCIT has failed to appreciate that the learned AO in given circumstances had framed the assessment with proper application of mind by making necessary enquiry and examining the seized material which in ld. Assessing Officer's view were belonging to the assessee and thus learned PCIT had acted without jurisdiction in setting aside the order of the ld AO and holding the same as erroneous being prejudicial 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 Indu....
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....lly dealing with the details in his possession, for the issues raised in the show cause notice u/s 263 of the Act. e) that when the Assessing Officer, based on his observations and examination of records had made addition in the hands of another assessee, the ld. Pr. CIT without revising the assessment order of other assessee, which has been framed by the same Assessing Officer cannot revise the assessment order in the case of the assessee and directing to make the additions as the same would 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 rais....
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.... sub-section (1) of Section 142 of the Income Tax Act, 1961 Sir/ Madam/ M/s, In connection with the assessment for the assessment year 2014-15 you are required to: a) Furnish or cause to be furnished on or before 01/03/2022 at 11:00 AM the accounts and documents specified overleaf. b) Furnish and verified in the prescribed manner under Rule 14 of I.T. Rules 1962 the information called for as per annexure and on the points or matters specified therein on or before 01/03/2022 at 11:00 AM. c) The above mentioned evidence/information is to be furnished online electronically in 'E-Proceeding' facility through your account in 'e-filing' website of Income Tax Department. d) Para(s) (a) to (c) are applicable if you have an account in e-filing website of Income Tax Department. Till such an account is created by you, assessment proceedings shall be carried out either through your e-mail account or manually (if e-mailis not available) e) In cases where order has to be passed under section 153A/153C of the Income Tax Act, 1961 read with section 143(3), assessment proceedings would be conducted manually. Yours faithfully, AVLOKITA ASHOK DCIT/ACIT CEN CIR2,PAT Document....
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.... this undisclosed income and the entries of the said income in the seized documents/books of a/cs, if any. (b) Submit with documentary evidence the application of this undisclosed income and the recording of the same in the seized documents/books of a/cs, if any. (c) Give the matching accounting entry passed in your regular books of accounts to show increase in asset or decrease in liability due to the disclosure of income vis-a- vis in the Balance sheet and corresponding entries in P&L account and trading account for the year. (d) Computation of income to show how this disclosed income has been reflected in return of income furnished for each year separately. (e) Submit documentary evidence of payment of tax on the disclosed income. 10. Give details of assessment history in your case for the above mentioned year as per the following proforma enclosing the copy of last order received which may be, 143(1),143(3), 154, 147, appellate orders etc. AY. Latest order passed by AO Appellate orders passed 11. Search and Seizure operations under Section 132 were conducted on M/s Nalanda Engicon Pvt. Ltd. Group on 29/10/2020. In relation of the above, kindly establish you....
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....it is clear that the company has made expenses of Rs. 8,26,46,443/- during the , F.Y. 2013-14 was neither found during the search and seizure nor submitted by the assessee company during the post search enquiries despite being given ample opportunities. In absence of books of accounts it was hard to ascertain whether the expenses made by the company are taken into account or not. You are further requested to explain with corroborative documents and evidence regarding the expense of Rs. 825,46,443/-, failing which it will be treated as unexplained expenditure u/s. 69C of the Income Tax Act, 1961 for the A.Y. 2014-15 and added back to your total income AVLOKITA ASHOK DCIT/ACIT CEN CIR2.PAT (In case the document is digitally signed please refer Digital Signature al the bullum of the paye) Document 5 6. With Respect to Point No. 6 The details of Unsecured loan accepted during year under Consideration are attached herewith ithe the spaecified format as required. Annexure IV 7. With Respect to Point No. 7 There is no Capital Introduction during the relevant year. E. With Respect to Point No. 8 The Extract of the Profit & Loss Statement and related schedules....
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....is fact is also required to be noted here that in the business of Govt. Contractor where payments (receipt for the company) are dependent upon the availability of Fund with the corresponding authority of State Government. Normally, in the state like Bihar Authority always face fund crunch. Due to delayed realization of finds the company has no option left with it but to hold the payment of the creditors and manage day to day the operating expenses. Further, the Govt. Authority expect from the contractor to invest minimum 25% of the value of work during the implementation of the contract. It would be only possible for the company by arranging borrowings or purchase the material from the supplier on Credit Basis. It is reiterated here that due the time lag in release of payment the trade payables were outstanding. This was/is the main reason of outstanding balance of Trade Payable. Although, considering the above facts it would not be prudent and justified to treat the trade payables as unexplained credit u/s 68 of the Income Tax Act 1961. 14 With respect to Point No. 14 All these entries appearing in the seized documents are related to business transactions of the assess....