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2022 (9) TMI 1188 - AT - Income TaxRevision u/s 263 by CIT - Scope of the instructions issued by the CBDT - Exercise of power us/ 119 - additions had been made under the head “undisclosed investment in silver stock”, “undisclosed investment in stock”, “undisclosed sale” and “disallowance u/s.69A” - As submitted AO has followed the appraisal report issued by the Investigation Wing - HELD THAT:- Revenue has not been able to show as to which portion of the appraisal report, the Assessing officer has not complied with. Mere allegation that the AO has not followed the appraisal report would not hold water. Coming to the clause (c) of the Explanation 2 to Section 263, the order or direction or instruction, which is referred therein, are those issued by the CBDT u/s.119. A perusal of the said instruction shows that this is practically a search and seizure manual notification. It is an internal communication being guidelines for the notice of the Commissioner of Income tax, Range Head and the AO handling the assessment of search and seizure cases. This notification is not one which has been issued u/s.119 of the Income tax Act, 1961 Normally, when the Board issues any specific direction u/s.119, it is mentioned that such a direction of circular/order or notification is issued u/s.119. Thus, on this ground itself, the order passed u/s.263 is liable to annulled and we do so. Assessment order passed u/s.143(3) for the impugned assessment year has been subject matter of appeal before the ld CIT(A - In the order of the ld CIT(A), the issue of the stock valuation has already been considered. The ld CIT(A) has also taken cognizance of the fact that pages 2 to 37 of the assessment order is nothing but extract of the appraisal report. This being so, in view of the provisions of Explanation -1 (c) of Section 263 (1), as the order passed by the AO had been the subject matter of appeal filed after the 1st day of June, 1988, the powers of the Pr. CIT u/s.263(1) could extend only to such matters as had not been considered and decided in the appellate order. Both the issues proposed by the pr. CIT was subject matter and has been under the consideration of the ld CIT(A) and the Pr. CIT has also recognized that the ld CIT(A) has adjudicated the appeal and he has also passed his order on 14.10.2019 much before the show cause notice has been issued by the Pr. CIT. Thus, on this ground also, the order passed u/s.263 is unsustainable and same stands quashed. Appeal of assessee allowed.
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