TMI Blog2014 (12) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee - non conducting of proper enquiry renders the order of the assessment erroneous and prejudicial to the interest of the Revenue – thus, the action of CIT is justified and does not call for any interference – the order is upheld – Decided against assessee. - I.T.A. No. 3375 /Del/2013 - - - Dated:- 4-4-2013 - Shri U. B. S. Bedi And Shri T. S. Kapoor,JJ. For the Petitioner : Shri Sunil Jain FCA For the Respondent : Shri Keyur Patel, Sr. DR ORDER Per U. B. S. Bedi, Judicial Member: This appeal of the assessee is directed against the order passed by Ld. CIT, Meerut u/s 263, dated 25.03.2013 relevant to assessment year 2008-09 whereby assessee has challenged invoking the provisions of Section 263 and setting aside the assessment framed on 05.10.2013 u/s 143(3) by making various observations and by giving certain directions while making fresh assessment. 2. The facts indicate that the assessment order u/s 143(3) was passed on 05.10.2013 by ACIT Circle-2, Meerut. On examination of records by CIT, it was found that the assessment was done without proper inquiry in so far as discussed in the subsequent paras. 3. Accordingly, notice u/s 263 was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is beyond dispute that u/s 263, the Commissioner does have the power to set aside the assessment order and send this mater for a fresh assessment if he is satisfied that further enquiry is necessary, and that the order of the A.O. is prejudicial to the interest of the Revenue. In Swarup Vegetable Products Industries Ltd. Vs CIT (1991) 187 ITR 412, 415-416 (Alld.) similarly, the action of the Commissioner was upheld by Hon'ble High Court. In the facts of Umashankar Rice Mill Vs CIT, 187 ITR 638-39 (Ori.), the Tribunal was held justified in upholding the revisional order of the Commissioner which was passed by the Commissioner who felt that there should be a further enquiry. Further reliance was placed by CIT on the following case law: i) Jagdish Kumar Gulati Vs CIT, 269 ITR 71 (All.) ii) Gee Vee Enterprises Vs Addl. CIT, 99 ITR 375 (Del.) iii) Rampyari Devi Saraogi Vs CIT, 67 ITR 84 (S.C.) iv) Duggal Co. Vs CIT 220 ITR 456 (Del.) v) CIT Vs Pushpa Devi, 164 ITR 639 vi) CIT Vs Smt. Rambha Devi, 164 ITR 658 vii) CIT Vs Belal Nisha, 171 ITR 643 viii) CIT Vs Smt. Kaushalya Devi, 171 ITR 686 (Pat.) ix) CIT Vs Bibi Khodaija Khatoon, 171 ITR (Sh.N.) ii ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., while relying upon the order of Ld. CIT has pleaded for confirmation of the impugned order and it was strongly pleaded that all the points mentioned in the show cause notice issued by CIT while invoking provisions of Section 263 have not at all been touched upon or discussed by the A.O. while passing the assessment order. So, it has rightly been observed by CIT that proper inquiry has not been conducted before passing the assessment order. Therefore, invoking of powers u/s 263 is fully justified and the matter has justly been restored to the A.O. for consideration, after examining and conducting proper inquiry on the points raised in the order. Therefore, it was pleaded for confirmation of the impugned order. 8. We have heard both the sides, considered the material on record as well as case law cited by rival sides. Before going into legal and factual aspects, we feel it just and appropriate to reproduce the operative and relevant portion of the assessment order u/s 143(3) dated 05.10.2010, which is as under:- Return of income in this case was filed at the income of ₹ 9,84,680/- on 29.09.2008. The same was processed u/s 143(1) of I.T. Act on 11.03.2010. The case has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Addition as discussed above ₹ 19,508/- Income from other sources ₹ 3,184/- ₹ 21,99,079/- Less: Depreciation u/s VIA Rs.10,33,798/- Gross total income Rs.11,65,281/- Less: Deduction under Chapter VIA ₹ 1,12,596/- Total income Rs.10,52,685/- Round off to: Rs.10,52,690/- Assessed u/s 143(3) at the income of ₹ 10,52,690/-. Issue notice of demand and challan. Charge interest as per law. Inform accordingly. 9. From the above reproduced effective portion of the assessment order, it is amply clear that none of the points raised by CIT, while invoking the provision of Section 263, and detailed in the show cause notice, have been enquired into, touched upon, discussed or considered before passing the assessment order. 10. There is an authoritative pronouncement of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. CIT (2000) 243 ITR 83, wherein it was held as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Officer to further investigate the facts stated in the return, when circumstances would make such an inquiry product and the word erroneous in section 263 of the I. T. Act, 1961, includes the failure to make such an enquiry. The order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts state therein are assumed to be correct. 10.3 The Hon ble Allahabad High Court in the case of Swarup Vegetable Products Industries Ltd. vs. CIT 187 ITR 412 has observed as under: It is beyond dispute that, under section 263 of the Income-tax Act, 1961, the Commissioner has power to set aside the assessment order and send the matter for fresh assessment if he is satisfied that further enquiry is necessary and that the order of Income-0tax Officer is prejudicial to the interests of the Revenue. 10.4 The Hon'ble Madras High Court in the case of Express Newspapers Pvt. Ltd. vs CIT 255 ITR 137 has held as under: The Commissioner has the discretion to set aside the assessment in while or in part. The exercise of that discretion is not to be ordinarily interfered with unless the facts show th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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