TaxTMI 
TaxTMI 
2023 (9) TMI 1738
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....ered in light of Rule 18(6) of ITAT Rules. 4. Briefly stated, the facts of the case are that a search and seizure action was taken in the Khemka Group of cases on 14.01.2021 and the assessee was also covered by the search warrant. The assessee is in the business of trading in gold/bullion and providing loans on interest. 5. Return for the year was filed on 09.12.2021 declaring an income of Rs. 1,85,28,910/-. Return was selected for scrutiny assessment and accordingly, statutory notices were issued and served upon the assessee. 6. Returned income was assessed u/s 143(3) of the Act after making addition of Rs. 12,93,500/- and Rs. 2,56,55,636/ -. Assuming jurisdiction conferred upon him by provisions of section 263 of the Act, the PCIT issued a show cause notice which reads as under: "NOTICE FOR THE HEARING M/s/Mr/Ms Subject: Notice for Hearing in respect of Revision proceedings u/s 263 of the THE INCOME TAX ACT, 1961 - Assessment Year 2021-22. In this regard, a hearing in the matter is fixed on 19/01/2023 at 11 :30 AM. You are requested to attend in person or through an authorized representative to submit your representation, if any alongwith su....
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....our case for A.Y. 2021-22 is erroneous in so far as it is prejudicial to the interests of the revenue. Therefore, you are required to explain as to why proceedings under section 263 of the Income-tax Act, should not be initiated for revision of Assessment Order for A.Y. 2021-22. Further, you are required to show as to why cash expenditure and cash receipts discussed above should not be added as unexplained income. 7. You reply in this regard should reach this office by 19.01.2023 at 11:30 A.M. You may also personally or through AR attend to the hearing of the case. In case nothing is heard from you by 19.01.2023, then it will be presumed that you have nothing to say/submit in this matter and the matter will be decided on the basis of details available on record and merits of the issue, without any further opportunity to you. MALATHI R SRIDHARAN PCIT (Central) Delhi -1" 7. The PCIT was of the firm belief that cash of Rs. 3,64,93,000/- found at the premises of the assessee, at the time of search, was not recorded in the books of account of the assessee and the assessee has failed to prove the nature and source of acquisition of this cash. Therefore, the ....
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.... Rama Shanker Khemka, Mayank Khemka & M/s. Atma Ram Amar Nath 1,83,40,000 1,83,00,000 TOTAL 3,64,93,000 3,58,00,000 11. At Para 6.3, the Assessing Officer further observed that during post search investigation proceedings, the assessee explained the source of such cash as being generating from sale of inherited assets being gold jewellery and loose diamond which devolved upon him from his mother late Smt Shakuntala Devi Khemka. At para 6.4, the assessee refers to the issuance of notice requiring the assessee to explain the source of the said cash which was replied by the assessee as mentioned in Para 6.5 of the order. 12. All these categorical remarks by the Assessing Officer, in his assessment order, go on to show that a specific enquiry was made by the Assessing Officer in respect of the cash found at the time of search to which, specific reply was given by the assessee explaining the source of cash being long term capital gains on sale of jewellery. 13. Observation of the PCIT that the Assessing Officer has not made any enquiry is baseless. Further, the PCIT alleged that the documents referred to by the Assessing Officer and considered by him are not a....
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....ind that the expressions "erroneous", "erroneous assessment" and "erroneous judgment" have been defined in Black's Law Dictionary. According to the definition, "erroneous" means "involving error; deviating from the law". "Erroneous assessment" refers to an assessment that deviates from the law and is, therefore, invalid, and is a defect that is jurisdictional in its nature, and does not refer to the judgment of the Assessing Officer in fixing the amount of valuation of the property. Similarly, "erroneous judgment" means "one rendered according to course and 8 practice of court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal principles". 12. From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the....
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.... Revenue. An order can be said to be prejudicial to the interests of the Revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised. There must be material available on the 10 record called for by the Commissioner to satisfy him prima facie that the aforesaid two requisites are present. If not, he has no authority to initiate proceedings for revision. Exercise of power of suo motu revision under such circumstances will amount to arbitrary exercise of power. It is well-settled that when exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on record to satisfy it in that regard. If the action of the authority is challenged before the court it would be open to the courts to examine whether the relevant objective factors were available from the records called for and examined by such authority. The Income-tax Officer in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. A....
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....ling upon him to justify the genuineness of the gifts. The Respondent Assessee responded to the same by giving evidence of the communications received from his father and his sister i.e. the donors of the gifts along with the statement of their Bank accounts. On perusal, the Assessing Officer was satisfied about the creditworthiness/capacity of the donors, the source from where these funds have come and also the creditworthiness/ capacity of the donor. Once the Assessing Officer was satisfied with regard to the same, there was no further requirement on the part of the Assessing Officer to disclose his satisfaction in the Assessment Order passed thereon. Thus, this objection on the part of the Revenue cannot be accepted." 18. We find that the Hon'ble Delhi High Court in the case of CIT Vs Sunbeam Auto reported in 332 ITR 167 has held as held as under: "12. We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the CIT under s. 263 of the IT Act. As noted above, the submission of learned counsel for the Revenue was that while passin....