TMI Blog2010 (2) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer while framing the assessment order - if AO had taken a view permissible under the law and where two views are possible on that issue then the view of Assessing Officer even though not matching with the Learned Commissioner's views, Learned Commissioner would not be able to substitute his view by exercising powers under sec. 263. In the present case, there are no views expressed by the AO on the issues. The one of the issues which has been considered by the AO in respect of brokerage, which has been traveled in appeal before the Learned Commissioner, this cannot be taken up by the Learned Commissioner while exercising the powers under sec. 263 of the Act in view of clause (c) Explanation 1 appended to sec. 263. We modify the order of the Learned Commissioner to the extent and direct the Assessing Officer not to investigate the issue in respect of brokerage of Rs.11,52,195 - appeal of the assessee is partly allowed - I.T.A. No. 1980/Del/2009, - - - Dated:- 26-2-2010 - Rajpal Yadav, R.C. Sharma, JJ. Rajan Bhatia, CA for the Appellant Sanjiv Sharma, DR for the Respondent ORDER: Rajpal Yadav, Judicial Member 1. The assessee is in appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. General charges of Rs.11,20,500 have been claimed in the return and allowed without any verification. Commission on sales claimed at Rs.16,96,845 (included in the selling and distribution expenses debited at Rs.2,16,24,173) has been allowed without any verification". 4. In response to the show-cause notice, assessee has filed a written submissions vide letter dated 10.2.2009, copy of this reply is placed at pages 108 to 112 of the paper book. Learned CIT has gone through the reply of the assessee and on the strength of Hon'ble Delhi High Court's decision in the case of M/s. G.V. Enterprises vs. Additional CIT 99 ITR 373 has observed that Assessing Officer was supposed to conduct inquiries on the various aspects while framing scrutiny assessment but Assessing Officer remained passive on these issues. He set aside the assessment order and directed the Assessing Officer to frame a de novo assessment. 5. The learned counsel for the assessee while impugning the order of the Learned Commissioner submitted that first reason assigned by the Learned Commissioner for taking cognizance under sec. 263 is that Assessing Officer failed to investigate the international transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne and appreciate all those details. If he committed any fault then assessee cannot be punished. The learned counsel for the assessee also contended that Learned Commissioner has nowhere arrived on firm conclusion whether particular item has to be disallowed to the assessee. He should have recorded a firm finding and thereafter set aside the issue. In support of his contention, he relied upon the following decision: 1. CIT vs. Dault Ram Rawatmull (S.C.) 87 ITR 349; 2. Indore Malwa United Mills Ltd. vs. State of MP and Ors. (S.C) 60 ITR 41; 3. CIT vs. Chandan Wood Products (Hon'ble Madhya Pradesh High Court) 217 ITR 834; 4. CIT vs. Gabriel India Ltd. (Bombay High Court) 203 ITR 108; 5. CIT vs. Eicher Ltd. (Hon'ble Delhi High Court) 294 ITR 310 ; 6. CIT vs. Kelvinator of India Ltd. (Hon'ble Delhi High Court) 256 ITR 1 and 7. CIT vs. Ashish Rajpal (Hon'ble Delhi High Court) 180 Taxman 623. 6. Learned DR on the other hand submitted that threshold limit of Rs.5 crores provided in the Circular for verifying the international transaction with associate concerns is in respect of making a reference to the TPO under sec. 92CA of the Act. For the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue and if the A.O has adopted one of the courses permissible under law or where two views are possible and the A.O has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order, unless the view taken by the A.O is unsustainable under law. (vi) If while making the assessment, the A.O examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determine the income, the CIT, while exercising his power under s. 263 is not permitted to substitute his estimate of income in place of the income estimated by the A.O. (vii) The A.O exercises quasi-judicial power vested in his and if he exercises such power in accordance with law and arrives at a conclusion, such conclusion cannot be termed to be erroneous simply because the CIT does not feel satisfied with the conclusion. (viii) The CIT, before exercising his jurisdiction under s. 263 must have material on record to arrive at a satisfaction. (ix) If the A.O has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation by a letter in writing and the A.O allows the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous on the ground that in the circumstances of the case the Income-tax Officer should have made further inquiries before accepting the statements made by the assessee in his return. The reason is obvious. The position and function of the Income-tax Officer is very different from that of a civil court. The statement made in a pleading proved by the minimum amount of evidence may be adopted by a civil court in the absence of any rebuttal. The civil court is neutral. It simply gives decision on the basis of the pleading and evidence which comes before it. The Income-tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of the return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. It is because it is incumbent on the ITO to further investigate the facts stated in the return when circumstances would made such an inquiry prudent that the word "erroneous" in section 263 includes the failure to make such an enquiry. The order becomes erroneous because such an inquiry has not been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Authority held that assessee had failed to account for shortage of yarn and valuing the stock. Such a conclusion was arrived by the authority on placing its reliance on selective material and not considering the other evidence. In that background, the Hon'ble Court has held that assessing authority should have not recorded a finding on the basis of pick and choice of some registers. There is no such issue in the case in hands. Learned Commissioner has only set aside the issues and an opportunity would be available to the assessee in support of its claim. The next case laws relied upon by the assessee is in the case of Chandan Wood. This decision is of Hon'ble Madhya Pradesh High Court. In this case, the Learned Commissioner sought to revised the order of the Assessing Officer on the ground that signatures of the partner on the partnership deed was forged one. This opinion was formed on the basis of an expert report. This report was never supplied to the assessee inspite of requests made by the assessee. In that background, the ITAT has set aside the order of the Learned Commissioner and the order of the ITAT has been upheld by the Hon'ble High Court. There are no such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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