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Smt. Nirmala Devi Chordia Versus The CIT, Jaipur-1

2015 (6) TMI 365 - ITAT JAIPUR

Validity of revision u/s 263 - the assessment order passed by the AO u/s 147/148 set aside by ld. CIT holding it to be erroneous and prejudicial to the interest of Revenue - Held that:- The record that the assessee had already filed the return of income despite that she has been wrongly accused of not filing the same; this subjected the assessee to rigor of avoidable 148 proceedings. The record and submissions filed during the course of assessment proceedings did not in any manner indicate that .....

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of India) support assessee's contentions. We are of view that 263 proceedings cannot be invoked where reasonable inquiries are conducted with application of mind; there is conspicuous difference between the cases of lack of enquiry and perception about the level of enquiry. In this case it emerges that ld. CIT carried a different perception about the manner of enquiry which ought to have been conducted by the AO; however it is not 'sufficient to hold the assessment order as erroneous and thereb .....

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5 - R. P. Tolani, JM And T. R. Meena, AM,JJ. For the Appellant : Shri Siddharth Ranka, Adv. For the Respondent : Smt Rolee Agarwal, CIT-DR ORDER Per R P Tolani, JM. The assessee has filed an appeal challenging the validity of revision order passed u/s 263 dated 30-01-2015 passed by CIT, Jaipur 1. Sole ground the impugned order is assailed on the ground that the assessment order passed by the AO u/s 147/148 has been wrongly set aside by ld. CIT holding it to be erroneous and prejudicial to the in .....

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e u/s 148 was thus invalid being issued on wrong recording of reasons. However, to remain on safe side, the assessee requested to consider her original return as filed in response to notice u/s 148 of the Act. The original return was filed along with profit and loss account, balance sheet, capital account, details of shares sold by the assessee and computation of income with detailed annexure of disclosure about long term capital gains. In sums and substance, assessee claims to have filed all th .....

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, letters u/s 133(6) was also issued to the companies whose shares were transferred by the assessee for a consideration of ₹ 67,99,500/-. The reply verifying the transaction was received on 11-02-2014 and nothing adverse was found. The case was discussed and after discussion, the returned income as declared by the assessee at ₹ 11,31,647/- is accepted." 2.2 The ld. CIT- Jaipur 1, called for the record and issued a notice u/s 263 of the Act alleging that reassessment order was er .....

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te of acquisition so as to hold a view that the gains were Long term capital gain. 2.3 In reply to 263 notice, assessee filed detailed written submission duly supported by a plethora of case laws and along with copies of the documents filed before the AO. It was demonstrated that most of the information and papers were already filed along with return which ld. AO by an error has held to be not filed. During the course of reassessment proceedings also all the necessary enquiries were made which i .....

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ing. To satisfy ld. CIT, the assessee furnished some more documents which were pointed out by him. 2.4 The ld. CIT however, came to conclusion that the order passed by the AO was erroneous and prejudicial to the interest of Revenue and set aside the assessment back to the file of the AO to frame the same afresh after making proper enquiries by following observation. "4…….. it is evident from records as well as admission of the A/R during these proceedings that the assessment w .....

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enquired about the creditworthiness of Shri N.K. Gupta, the purchaser of shares for ₹ 67,99,500/- since the transaction was of unlisted equity shares and was off market transaction. It is a settled position of law that failure to make proper enquiries by AO, will make the assessment order erroneous as well as prejudicial to the interest of Revenue which can be revised u/s 263 of the Act. It is held by the Courts in various decisions that unlike the Civil Court which is neutral to give a de .....

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ced on the following case laws:- (i) Rampyari Devi Saraogi vs. CIT (SC) 67 ITR 84 (ii) Malabar Industrial Co. Ltd. vs. CIT (SC) 243 ITR 83 (iii) Swarup Vegetable Products Industries Ltd. vs. CIT (All.) 187 ITR 412. (iv) Gee Vee Enterprises vs. Addl. CIT & Ors (Del.) 99 ITR 375. (v) Rajalakshmi Mills Ltd. vs. ITO (ITAT, SB-Chennai) 121 ITD 343; 313 ITR (AT) 182 (vi) SRM Systems & Software (P) Ltd. vs. ACIT - 2010-TIOL-646-HC-MAD-IT 5. Considering all the facts and circumstances of the cas .....

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ee Shri Siddharth Ranka, Advocate vehemently contends that notice u/s 263 of the Act and the ld. CIT order dated 30-01-2015 are devoid of any merits and unjustified as they do not conform to the provisions of Section 263 inasmuch as:- (i) 148 assessment itself was based on wrong reasons that the assessee has not filed the return of income whereas the same was already on the record of the AO. It shows that the Department before issuing notice u/s 148 of the Act did not bother to verify a very cru .....

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the relevant statement i.e. profit and loss account, capital account, balance sheet and has filed all the relevant details asked for by ld. AO. The order passed by the AO clearly reflects that the same has been passed after due verification, enquiries including issuance of statutory letters u/s 133(6) along with confirmation of details with a clear finding of ld. AO that no adverse material was found in this behalf. (iv) The gains were long term in nature which is clearly evident from the dates .....

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t the manner of enquiry. If the AO's order and record reflects that reasonable inquiries were conducted , the order cannot be held as erroneous and prejudicial to the interest of Revenue merely because ld. CIT holds another plausible view about the manner of inquiry. Reliance is placed as under:- (1) Malabar Industrial Co. Ltd. vs. CIT, 243 ITR 83 (SC) (2) CIT vs. Max. India Ltd., 295 ITR 282 (SC) The Hon'ble Rajasthan High Court in following case has clearly held that jurisdiction u/s 2 .....

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ot;The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in the matters or orders which are already concluded. The power u/s 263 can be exercised only when the order is erroneous and due to this, prejudice has been caused to the interests of the Revenue. The order cannot be branded as erroneous by the Commissioner because according to him the order should have been written more elaborately. The Court observed that when ITO has exercise the quasi judici .....

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he case of CIT vs. Sun Beam Auto Ltd. (2011) 332 ITR 167 wherein the Hon'ble Bench observed as under:- "If there is some enquiry by the AO in the original proceedings even if inadequate that cannot be clothe the Commissioner with jurisdiction u/s 263 merely because he can form another opinion. Ld. counsel for the assessee is right in his submission that one has to keep in mind the distinction between the 'lack of enquiry' and 'inadequate enquiry". If there was any inqui .....

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his desire for further inquiries, in such case ld. CIT has duty to verify those documents and come to conclusion. It is pleaded that assessee submitted copious documents before ld. CIT(A) on each and every suspicion raised. 2.8 The ld. AR of the assessee also placed decision of ITAT Jaipur Bench in the case of M/s. Motisons Jewellers vs. CIT (ITA No. 280/JP/2014 for the assessment year 2009-10 dated 19-02-2015) giving reference of para 2.17 of its order as under:- "2.17 Apropos the inflate .....

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eof. The ld. CIT while passing the order u/s 263 of the Act has not referred to any other mistake. In consideration of the foregoing facts, we are of the view that the order passed by the AO is neither erroneous nor prejudicial to the interest of Revenue. We may add that Hon'ble Delhi High Court in the cases of CIT vs. Sunbeam Auto and CIT vs. DLF (supra) has held that revision proceedings cannot be initiated to make roving enquiries. There is no prescribed proforma of an assessment order in .....

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i High Court in the case of CIT vs. Vikas Polymers (2010) 236 CTR 476 held that if the CIT is of the view that the some documents ought to have been placed on record by the AO. which are produced by the assessee before CIT, in that case the ld. CIT himself should decide the matter on the material made available. In this case if in the perception of ld CIT some documents were not placed on record they were forthwith supplied by the assessee. Consequently, no case is made out for setting the asses .....

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of the case, we are of the view that impugned assessment order is neither erroneous nor prejudicial to the interest of Revenue which is upheld. Hence, order passed u/s 263 of the Act by ld. CIT is quashed". It is vehemently contends that the notice and 263 order are untenable and bad in law, besides series of events indicate the harassment faced by a leady assessee. 2.9 Ld. DR Ms. Rolee Agrawal supported the order of ld. CIT and contends that various documents filed by the assessee before .....

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osure of the facts along with return of income during assessment proceedings. The crisps recitals in the assessment order demonstrate that the AO has undertaken proper enquiries, verification and applied her mind before passing the order. Besides the ld. CIT cannot shy away from verifying the documents furnished by the assessee on his queries. This amounts to abdication from statutory obligation as held by Hon'ble Delhi High Court in Vikas Polymers (supra) 2.11 We have heard the rival conten .....

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