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2024 (5) TMI 648 - GAUHATI HIGH COURTRevision u/s 263 - suo moto revisional proceeding initiated - Assessment Order said to be erroneous and prejudicial to the interest of the revenue for non-disclosure as long-term profit in the computation sheet though the same is shown in the capital account, warranting exercise of revisional jurisdiction u/s 263 - HELD THAT:- Suo moto revisional proceeding was initiated simply on the basis of a proposal u/s 263 of the Act and there was no independent application of mind by the PCIT. From a plain reading of section 263 of the Act, it is clear that proceeding u/s 263 can be initiated only when the Commissioner on the basis of materials available on record called for by him, comes to a conclusion that the order passed by the assessing authority is erroneous in so far as the same is prejudicial to the interest of Revenue. Thus, the order has to be firstly erroneous and by virtue of the order being erroneous prejudice has been caused to the interests of the revenue. Both the conditions has to be satisfied. The satisfaction must be on the material available on the record called for by the Commissioner to satisfy him prima facie that the aforesaid two requisites are present and that 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 records called for and examined by such authority. In Baijnath Biswanath vs. State of Assam [1998 (7) TMI 678 - GAUHATI HIGH COURT] this Hon'ble Court held that the suo moto power of revision conferred on the Commissioner cannot be exercised mechanically or at the behest of some other authority other than on the own discretion of the assigned Officer. Commissioner is authorized to take any decision as he deems fit and is free to draw any interference from the facts available. The Commissioner, however, is to act on factual material and not on conjectures, assumptions and presumptions, else the decision will suffer from the vice of perversity. In the present case the learned Principal Commissioner of Income Tax has initiated the proceedings simply on the basis of the proposal of the subordinate authority and has not applied his mind after perusal of the records called for by him and thereby the very initiation of the proceeding in the instant case is illegal, without jurisdiction and not tenable in law. By no stretch of imagination, non-disclosure of the said amount in the computation sheet can be said to be prejudicial to the interest of revenue and no loss of revenue. Pertinent that, upon a pointed query being put to the learned counsel appearing on behalf of the Income Tax Department, as how non-disclosure of the aforesaid amount, which is, admittedly, long-term capital gain has caused prejudice to the revenue, he was unable to show that the same has caused prejudice to the revenue. The submission of the learned counsel, appearing on behalf of the Income Tax Department that the order is erroneous in so far as it is prejudicial to the interest of revenue in as much as the order was passed without making enquiries or verification which should have been made is totally fallacious. Thus, in the absence of any prejudice being caused to the revenue, wherein, the impugned proceedings initiated u/s 263 of the said act is wholly without jurisdiction, illegal and erroneous. Therefore, the same is bad-in-law. Hence the impugned ex-parte Order is unsustainable in law.
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