TMI Blog2014 (11) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... inion on the merits of the issues - all the orders passed u/s 263 of the Act is to be set aside – Decided in favour of assessee. - ITA Nos. 2766-2767-2768-and 2769/Del/2013 - - - Dated:- 30-10-2014 - Shri H. S. Sidhu, JM And Shri J. Sudhakar Reddy, AM,JJ. For the Appellant : Shri Salil Kapoor Sh.Vikas Jain, Adv. For the Respondent : Sh. Vivek Wadekar, CIT, DR ORDER Per J. Sudhakar Reddy, Accountant Member All these appeals are filed by the assessee pertaining to different AYs and are directed against the order of the Ld.CIT (Central), Kanpur u/s 263 of the Act on 15th March, 2013. 2. The conclusions of Ld.CIT(A) are as follows. 7. The assessee has, in his response, also claimed that the amount mentioned on the reverse may be quoted by the brokers. This. however, again does not hold water a there is no such mention of the amount being charged being difference from what has been authenticated by Shri Rakesh Batta on the reverse of these papers. It is thus be seen that the A.O. while framing the assessment order without any basis, documents being found either during the course of search or being submitted during the course of assessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of being heard. 3. Aggrieved the assessee is in appeal before us on the following grounds. 1. That the notice issued under Section 263 of the Income Tax Act, 1961, and the order passed under said Section are illegal, bad in law and without jurisdiction. 2. That the notice by the CIT under Section 263 does not show that the Assessing Officer committed any error in passing the assessment order under Section 153A r.w.s. 143 (3). Therefore, the jurisdiction assumed by the CIT under Section 263 is illegal and without jurisdiction and is liable to be quashed. 3. That the order passed under Section 153A1143 (3) by the Assessing Officer is neither erroneous nor prejudicial to the interest of Revenue and as such the order passed by the CIT order under Section 263 in cancelling the assessment is illegal and bad in law. 4. That the CIT has failed to appreciate that all the issues referred in his order under Section 263 have been duly considered and the view taken by the Assessing Officer is a possible view. All necessary enquires/investigations relating to all the issues referred in the order of the CIT under Section 263 were made and partly accepted by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld.CIT, DR on behalf of the Revenue. 5. On a careful consideration of the facts and circumstances of the case and on perusal of papers on record and orders of authorities below, case laws cited, we hold as follows. 6. The Delhi B Bench of the Tribunal in ITA nos. 2340 to 2346/Del/2013 in the case of M/s R.B. Enterprises vs. CIT for the AYs 2003-04 to 2009-10 and in ITA 5085 to 5092/Del/13 vide order dt. 31st March, 2014 admittedly considered the very same issue of whether the AO has committed an error which is prejudicial to the interest of Revenue in his order passed u/s 143(3), by allowing a rebate of 35%, after taking into consideration the arguments of the assessee and also considering that there is a definite possibility for some negotiations in the final settlement of rates etc., while working out the sale proceeds out of books of accounts. The assessments of the present assessee as well as the assessments in the case of M/s R.B. Enterprises are based on the same material facts. The Ld.CIT(A) has passed a similar order u/s 263 of the Act in the case of M/s R.B. Enterprises. The Tribunal in the case of M/s R.B. Enterprises in order dt. 31.3.2014, quashed the order u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l issue traveled to the Learned CIT(Appeals). Learned CIT(Appeals) may hold; (a) that estimation of the Assessing Officer at 65% of the total amount as suppressed sales is justified; (b) no suppressed sales is to be estimated because, it is not flowing from the seized material; (c) Learned CIT(Appeals) may estimate that it is only 50% of the total amount computed; (d) Learned CIT(Appeals) may form an opinion that it should be 100%. In that eventuality, the powers, co-terminus with that of Assessing Officer vested in the Learned CIT(Appeals) may be exercised and Learned CIT(Appeals) can issue notice for enhancement of income. The other scenario could be that Learned Commissioner has taken cognizance under sec. 263 of the Act. He has set aside the assessment order and remitted the issue to the Assessing Officer for considering as to why a rebate of 35% has been allowed to the assessee as expenditure while quantifying the suppressed sales Ld Assessing Officer after hearing the assessee may deny this rebate and made the addition, but in the appeals pending before the Learned CIT(Appeals) may be partly allowed. In that situation, the contradictory opinion and decisions would come. The o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer had erroneously not undertaken the same. However, the said finding must be clear, unambiguous and not debatable. The matter cannot be remitted for a fresh decision to the Assessing Officer to conduct further enquiries without a finding that the order is erroneous. Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under Section 263 of the Act. In such matters, to remand the matter/issue to the Assessing Officer would imply and mean the CIT has not examined and decided whether or not the order is erroneous but has directed the Assessing Officer to decide the aspect/question. 7. This distinction must be kept in mind by the CIT while exercising jurisdiction under Section 263 of the Act and in the absence of the finding that the order is erroneous and prejudicial to the interest of Revenue, exercise of jurisdiction under the said section is not sustainable. In most cases of alleged inadequate investigation , it will be difficult to hold that the order of the Assessing Officer, who had conducted enquiries and had acted as an investigator, is erroneous, without CIT conducting verification/inquiry. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT(Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision but there cannot be two parallel proceedings on one common issue. A bare perusal of the above would reveal that an appeal filed by an assessee after due compliance of others provisions e.g. limitation 249(3); payment of taxes on returned income 259(4), the Learned CIT(Appeals) has to decide the appeal on merit. She cannot return any appeal undecided or cannot say that it is dismissed being infructuous. The moment a valid appeal is filed before Learned CIT(Appeals) then it would be construed that any issue raised in the appeal would become subject matter as contemplated in explanation C to section 263. After filing of a valid appeal and Learned CIT(Appeals) had issued notice for enhancement then even if assessee withdraw its appeal, the notice would remain live and would not become infructuous, because Learned CIT(Appeals) had opted to exercise her power under sec. 251(1) which is co-terminus with that of Assessing Officer. This procedure can easily take care of revenue s apprehension. Thus, there cannot be two parallel p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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