TaxTMI 
TaxTMI 
2026 (2) TMI 141
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.... notice issued u/s 148 of the Act filed the return of income on 11.02.2017 declaring total loss of Rs. 56,21,416/-. The Assessing Officer completed the assessment on 30.12.2017 accepting the returned loss of Rs. 56,21,416/-. 4. Subsequently the Ld. PCIT observed that the assessment proceedings in this case were completed without making proper enquiries and verifications which was expected on the facts and in the circumstances of the case. He noted that the assessee in response to the questionnaire issued by the Assessing Officer filed a detailed submission and audited financial statements. As per Note 4 of the balance sheet, the assessee has three hotels namely 'Jupiter', 'Indraprashtha' and 'The Beach Goa' and the liability against 'The Beach Goa' has been shown at Rs. 16,74,59,962/- since last many years. The balancing figure of that liability has been shown under tangible asset in the asset side of the balance sheet for all the above 3 hotels combined. He observed from Note.18, 20, 22 & 23 of the P&L account that 'Income and expenditure statement, separated hotelwise' has been shown and there was 'nil' income shown against 'The Beach Goa'. Hence, he was of the opinion that th....
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....he Co-ordinate Bench of the Tribunal in the case of Shri Premraj Dhanraj Bafna vs. PCIT vide ITA No.317/PUN/2020 order dated 21.10.2022 for assessment year 2010-11 and in the case of Volkswagen India Pvt. Ltd. Vs. PCIT vide ITA Nos.147 & 148/PUN/2019 order dated 19.10.2023 for assessment years 2012-13 & 2013-14, he submitted that the Tribunal, following the above decisions has quashed the 263 proceedings initiated on the basis of proposal sent by the Assessing Officer. He submitted that the Tribunal in the case of Volkswagen India Pvt. Ltd. Vs. PCIT (supra) has distinguished the decision of Hon'ble Allahabad High Court in the case of CIT vs. Bhagat Shyam & Co. reported in (1991) 188 ITR 608 (Allahabad) and the decision of Hon'ble Calcutta High Court in the case of Smt. Sumitra Devi Khirwal vs. CIT reported in (1972) 84 ITR 26 (Cal) relied on by the Ld. DR and held that the 263 proceedings initiated on the basis of the proposal sent by the Assessing Officer is not in accordance with law. Referring to the decision of the Bangalore Bench of the Tribunal in the case of Bandigadi Chandrappashetty vs. ITO vide ITA Nos.772 & 773/Bang/2023 and ITA Nos.306 & 307/Bang/2025 order dated 23.07.....
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....the ground that the order passed by the Assessing Officer for assessment year 2014-15 is erroneous and prejudicial to the interests of the Revenue. The copy of the proposal sent by the Assessing Officer reads as under: 11. We find on the basis of this proposal, the Ld. PCIT issued the notice u/s 263 of the Act to the assessee on 03.03.2020 on these very issues except item number (v) above. After considering the submissions of the assessee he set aside the order passed by the Assessing Officer to his file for de novo assessment vide order dated 18.03.2020. It is the submission of the Ld. Counsel for the assessee that since the 263 proceedings were initiated on the basis of the proposal sent by the Assessing Officer, therefore, such 263 proceedings on the basis of the proposal by the Assessing Officer instead of verification of the records by the Ld. PCIT himself, renders the 263 proceedings invalid. 12. We find some force in the above arguments of the Ld. Counsel for the assessee. We find an identical issue had come up before the Co-ordinate Bench of the Tribunal in the case of Alfa Laval Lund AB vs. CIT (International Taxation) (supra). We find the Tribunal in that case has q....
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....econd. In other words, the kicking in point for invoking jurisdiction u/s 263 is calling for and examining the record of any proceedings under the Act by the CIT leading him to consider the assessment order erroneous etc. A communication from the AO is not `the record of any proceedings under this Act'. To put it simply, the consideration that the assessment order is erroneous and prejudicial to the interests of the revenue should flow from and be the consequence of his examination of the record of proceedings. If such a consideration is not preceded by the examination of record of the proceedings under the Act, the condition for revision does not get magnetized. 5. It is trite that a power which vests exclusively in one authority, can't be invoked or cause to be invoked by another, either directly or indirectly. Section 263 of the Act confers power on the CIT to revise an assessment order, subject to certain conditions. Instantly, we are confronted with a situation in which the revision was initiated on the basis of the AO sending a proposal to the CIT and not on the CIT suo motu calling for and examining the record of the assessment proceedings and thereafter considering....
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....ere placed before him (CIT) and he acted thereon' for revising the assessment order. As opposed to that, we are dealing with a situation in which the AO sent a proposal to the ld. Pr. CIT for revision and acting on the same, the latter issued show cause notice for revising the assessment order. Even in that case, the Hon'ble High Court emphatically observed that: "All that the section requires is that before issuing a notice u/s.33B he must call for all relevant papers and documents, examine them and then issue the notice if he is satisfied that the interests of the revenue have suffered" (emphasis supplied by us). It is clear from the ratio of the judgment that the personal satisfaction of the CIT is paramount for revision. This satisfaction may be based on any relevant papers and documents, including the viewpoint of the AO. But, if the satisfaction of the CIT is missing and the notice u/s.263 is based simply on the proposal sent by the AO, then it cannot be said that the twin conditions of examining the record of any proceedings under this Act and thereafter satisfying that the assessment order was erroneous and prejudicial to the interest of the Revenue, are satisfied. ....
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....So far as the decisions relied on by the Ld. CIT(DR) are concerned, these decisions in our opinion are distinguishable and not applicable to the facts of the present case. In the case of JP Morgan Chase Bank N.A vs. CIT (International Taxation) (supra) although the decision of the Pune Bench of the Tribunal was cited by the assessee, however, the Tribunal has neither distinguished nor passed any comments regarding the said decision. Similarly, in the case of Stewarts & Lloyds of India Ltd. vs. CIT (supra) which was passed on 02.03.2016, the decision of the Pune Bench of the Tribunal was not available at that time. Further, the Tribunal in the said decision has simply mentioned that there is no prohibition u/s 263 of the Act for the CIT to act on the basis of the proposal by the Assessing Officer and the CIT can initiate action u/s 263 only suo motu. However, the Pune Bench of the Tribunal in the case of Alfa Laval Lund AB vs. CIT (International Taxation) (supra) has passed a detailed speaking order regarding the power and duty of the CIT u/s 263 of the Act. Further, in the case of Volkswagen India Pvt. Ltd. Vs. PCIT (supra), the Pune Bench of the Tribunal after considering its earl....
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....d proforma is submitted herewith for A.Y. 2013-14 5. Yours faithfully, Dohmprasady Submitted. ( Vishnu Prasad H ) Asstt. Commissioner of Income-tax Circle-1, Nashik Encl : Case record in 1 vol. de Document 3 GOVERNMENT OF INDIA INCOME TAX DEPARTMENT OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, NASHIK. KENDRIYA RAJASWA BHAWAN, GADKARI CHOWK, OLD AGRA ROAD, NASHIK PHONE/FAX: 0253 2583816 Email Id: [email protected] NO.NSK/ACIT/CIR.1/263/HSSPL/2019-20/653 Date: 23/08/2019 अपर / रायà¥à¤•à¥à¤¤ आयकर आयà¥à¤•à¥à¤¤ Yor-1. "If?To सं. To, The Commissioner of Income Tax-I, Nashik. { Submitted through Jt. CIT, Range-1, Nashik 3, 3 AUG 2019 Office of the Addl./Jt. C.I.T. Range-1, Nashik Sir, Sub : Proposal u/s. 263 in the case of M/s Hotel Sai Siddhi Pvt Ltd Durgesh Residency Apartment, Anandwalli, Gangapur Road, Nashik for A.Y. 2014-15, (PAN : AABCH4310G)- reg .- Kindly refer to the above. 02. Please find enclosed herewith proposal for review u/s.263 of the Income Tax Act, 1961 In the case of M/s Hotel Sai Siddhi Pvt. Lt....