TaxTMI 
TaxTMI 
2025 (2) TMI 1805
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....t may be raised at the time of hearing." 3. Brief Facts:- The assessee is engaged in the business of builders and developers. The assessee, for the year under consideration, filed its return of income on 17/10/2016, declaring total income of Rs. 4,04,84,280. In assessee's case, a survey action under section 133A of the Income Tax Act, 1961 ("the Act") was conducted on 22/09/2015. During the survey proceedings, the assessee had disclosed Rs. 2.20 crore as additional income. Thereafter, the assessment under section 143(3) of the Act was completed on 12/12/2018 and the income returned by the assessee was accepted by the Assessing Officer. 4. Subsequent to the passing of assessment order, during the course examination of record, it was found that there were certain issues which were not properly enquired into and verified by the Assessing Officer. Thus, the Assessing Officer, having noted the above facts, the Assessing Officer being ACIT, Amravati Circle, Amravati, submitted a proposal under section 263 of the Act in assessee's case through proper channel and the same was forwarded to the office of the concerned Jt. CIT, Amravati, who, agreeing with the contention of the Assessin....
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....the assessee furnished submissions, which are reproduced below:- "5. Submission of assessee In response, the Authorized Representative (AR) of the assessee filed a submission on 10.02.2021. The relevant parts of the submission are reproduced here under: "1. The assessment for AY 2016-17 is completed u/s.143(3) after scrutiny. In the scrutiny various information was called for along with a questioner to which assessee has given detailed explanation and replies. 2. The books of accounts are duly audited u/s.44AB. In profit and loss account the receipts amounting to Rs. 2.2 crores are shown as per statement in survey which was conducted on 22.09.2015. In the survey assessee has disclosed the amount of Rs. 9 crore as an additional income as a result of survey and also paid taxes as directed by the authorities at that time as detailed hereunder. "We, all the partners hereby further undertake that the additional income declared as a result of survey proceedings shall be shown over and above the normal profit declared in the returns of income to be filed for the FY 24-15 and FY 2015-16. The year-wise additional income declared as a result of su....
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....cation under Vivad se Vishwas is over. This request is made as some staff members of the office are suffering due to corona and because of this workload pressure is increased. Hence requested to give next date in March-2021." 6. The learned PCIT, after considering the submissions so furnished by the assessee, set aside the impugned assessment order passed by the Assessing Officer and the Assessing Officer was directed to re-assess the income of the assessee afresh after examining the relevant details and other issues and conduct proper and necessary enquiry by observing in detail which is relevant to quote herein below:- "Decision of the PCIT I have considered the submissions made by the assessee as well as the materials available on the records and after giving due consideration to the entire facts as well as circumstances of the case, I find that the contentions raised by the assessee in respect of show cause notice issued for invoking Section 263 of the Income Tax Act 1961, are not acceptable for the reasons discussed in subsequent paragraphs- 6.1 On perusal of the facts it is found that the assessee is a registered firm deriving income from busines....
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.... treatment of remaining cash of Rs. 3.56 crore received by the assessee and which should have been made by the AO. Accordingly, it has to be considered erroneous and prejudicial to the interest of revenue. 6.5 The above Explanation 2 to Section 263 of the Income Tax Act find favour in the various court decisions, which are enumerated below:- 6.6 The Hon'ble Apex Court, in The Malabar Industrial Co. Ltd. Vs. CIT (243 ITR 83) had on the scope of proceedings u/s 263 observed as under: "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 is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax." ....
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....report or information which may be supplied to him by the other officers of the department or on the basis of any information which he may obtain from any other source. The authority of the Commissioner to call for and examine the record on the basis of any information from any source or suo moto is purely an administrative matter. If after calling for and examining the records, the Commissioner considers that the order of the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue, then subsequent proceeding acquires quasi-judicial character. On comparison of sections 263 and 264 it would be seen that in section 264 the Commissioner may, either of his own motion or on an application by the assessee, call for the records of any proceeding under the Act. However, in section 263 the expression 'on his own motion' is absent. In the absence of such an expression and also in view of the fact that there is no restriction or limitation on the power of the Commissioner to call for and examine the record of any proceeding pursuant to the report given by the Assessing Officer or by other Departmental Officer, the Commissioner could validly call for....
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.... of income by a sum of Rs. 19.5 crores on account of dividend on such units. The firm findings given by the Commissioner for inclusion of the said income of Rs. 2.10 crores and Rs. 19.5 crores were, therefore, cancelled and the order of the Commissioner in relation to those two items was modified to the extent that the Commissioner had rightly held that the order of the Assessing Officer was erroneous and prejudicial to the interests of the revenue as the same was passed without making proper and necessary inquiries in relation to the aforesaid two points and consequently, the order of the Commissioner directing the Assessing Officer to make fresh assessment after proper investigation and after giving due opportunity to the assessee in relation to the aforesaid two items, was upheld." 6.8 Rajmandir Estates Private Limited V. Principal Commissioner of Income Tax' - 2016 (5) TMI 801-CALCUTTA HIGH COURT- The High Court held that lack of enquiry, where enquiry is necessary, can be treated as prejudicial to the interest of the Revenue so as to justify revisional jurisdiction. It was for non inquiry, the validity of action under Section 263 was held justified in a case of no....
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....uiry said to be made. It simply refers the explanation green by the assessee and nothing beyond that" 6.11 The Hon'ble ITAT Ahmedabad Bench in the case of M/s. Sonalank Investment Trading Pvt. Ltd. Vs. CIT, (ITA No. 1343/AM/2011) and relied on following observations: "An assessment order can be erroneous either in law or in fact. An assessment order can be an erroneous one when prima facie a claim is allowed which according to the learned CIT was against the provisions of law. An assessment order can be held as prejudicial to the interest of the revenue if in the opinion of the learned CIT the inquiry was not adequate or no inquiry at all has been made. We may like to mention that the assessing officer is not only an adjudicator but also an investigator. The assessing officer cannot remain a passive spectator while dealing with a return of income filed by the tax payer. If on the face of the return it is apparent that an inquiry is required: then it is expected from the assessing officer to conduct an investigation so as to ascertain correctness of the return filed as also the income declared therein. It is his duty to ascertain the truth of the facts stated i....
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....e the completion of the reassessment." 7. Before us, the learned Authorised Representative relied on the disclosure letter dated 29/09/2015, vide Page-1 to 4 of the Paper Book placed on record, runs as follows:- "To The Dy. C.I.T., Amravati Circle, Amravati Sir, Sub: Survey proceedings u/s 133A of the I.T. Act 1961 conducted on 22/09/2015 Kindly refer to the above. The survey proceedings u/s 133A of the I.T. Act 1961 is conducted in our case on 22/09/2015. During the course of survey proceedings, documents have been impounded by the department. Certain discrepancies were found on account of cash receipts and out of books expenses incurred for providing extra amenities to purchasers. Considering the various aspects and irregularities found in the books of accounts, the details of which have been explained in the statement of Shri Manohar Dhalumal Sadhwani, recorded u/s 131 of the I.T. Act 1961, we, all the partners of the firm M/s Cityland Associates, Amravati, jointly agree to disclose the following income in the hands of the partnership firm M/s Cityland Associates, Amravati which was not declared in the returns of ....
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.... the assessee has voluntarily disclosed the additional income as a result of the survey proceedings u/s 133A of the I.T. Act 1961 to purchase peace of mind and has cooperated in the survey proceedings as well as post survey proceedings. We have already undertaken to offer above additional income over and above the regular income shown in the returns of income filed as well as returns to be filed for AY 2015-16 and AY 2016-17. We have also undertaken to pay full amount of tax without any further claim or litigation. It is with an understanding that penalty proceedings will not be initiated or imposed for any of the assessment years involved. Submitted on 29/09/2015. Sd/- Shri Manohar Dhalumal Sadhwani (Partner) Sd/- Shri Ghanshyam Basarmal Pinjani (Partner) Sd/- Shri Deepak Bhagwandas Dhamecha (Partner) Sd/- Shri Mukesh Chetandas Harwani (Partner) Sd/- Shri Shankar Gurbomal Harwani (Partner) Sd/- Shri Sanjay Premchand Harwani (Partner) Sd/- Shri Subhash Nanakram Talda (Partner) Sd/- Shri Manoj Nandlal Bharani (Partner) Sd/- Shri Shashi Prataprai Chhatwani (Partner)" 8. The learned ....