TMI Blog2015 (12) TMI 1510X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of legal principles.In the result, in our opinion, the Commissioner lacked jurisdiction to issue the impugned notice. When the question is the very foundation of the notice and jurisdiction of the Commissioner to exercise such powers, the question of relegating the petitioner to alternative remedy or to permit the Commissioner to complete the proceedings and thereafter to direct the petitioner to take appeal route does not arise. - Decided in favour of assessee. - Special Civil Application No. 3434 of 2015 - - - Dated:- 21-12-2015 - Akil Kureshi And Mohinder Pal, JJ. For the Appellant : Mr RK Patel, Adv. with Mr BD Karia, Mr Darshan R Patel and Dr Sunil Mittal For the Respondent : Mr MR Bhatt, Sr Adv. with Mrs Mauna M Bhatt, Adv JUDGMENT ( Per : Honourable Mr. Justice Akil Kureshi ) 1. This petition is filed by the assessee challenging a notice dated 11.02.2015, as at Annexure-I to the petition, issued by the Commissioner of Income Tax initiating revisional proceedings under section 263 of the income-tax Act, 1961 ( the Act for short) for assessment years 2008-09 to 2012-13. Brief facts are as under: 2. Petitioner is a Company registered under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge of the assessee is the additions made by the assessing officer on the basis of the gross profit rate for all the years. At that stage, the Commissioner issued the impugned notice dated 11.2.2015. Since the contents of the notice are crucial, we may record the entire notice which reads as under: Date: 11.02.2015 To, J.M.C.Projects (India) Ltd. A-104, Shapath-IV, Opp.Karnavati Club, S.G.Highway, Ahmedabad. Sub: Notice for proceedings u/s.263 in your case for Assessment Years 2008-09 to 2012-13. Please refer to above. 2. In your case, Search u/s.132 of the Income-tax Act, 1961 was conducted on 17.11.2011. Thereafter, assessments were completed u/s.143(3) read with section 153A of the Act by the Deputy Commissioner, Central Circle-1(1), Ahmedabad on 29.03.2014. 3. From the perusal of records, it is found that you have claimed that some sub-contracts were executed for you by various persons from the Assessment Years 2008-09 to 2012-13. Detailed inquiries were made in respect of various parties by the AO and it was found that the transactions claimed in the name of total 176 subcontractors were non-verifiable. The AO further o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the law. It was, therefore, not open for the Commissioner to revise such orders. (iii) Assessee's appeals were pending before the CIT (Appeals) and were being heard, where the main issue is the additions made by the assessing officer, which is also subject-matter of the notice for revision issued by the Commissioner. At that stage, therefore, it was not open for the Commissioner to exercise such revisional powers. 6. Counsel for the petitioner relied on various decisions of this Court and other Courts. It is, however, not necessary to refer to all, except the following: (i) In case of Commissioner of Income-tax v. Smt. Minalben S.Parikh reported in (1995) 79 Taxman 184, in which it was observed as under: 12. From the aforesaid, it can well be said that the wellsettled principle in considering the question whether an order is prejudicial to the interests of the Revenue or not is to address oneself whether the legitimate to revenue due to the exchequer has been realised or not or can be realised or not if the order, under consideration are allowed to stand. For arriving at this conclusion, it becomes necessary and relevant to consider whether the income in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as prejudicial to the interests of the revenue, for example, when an Incometax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the Income-tax Officer is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the revenue. Rampyari Devi Saraogi v. Commissioner of Income-tax, (1968) 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal v. CIT,(1973) 88 ITR 323 (SC) 7. On the other hand, learned counsel Mr.M.R.Bhatt for the Revenue resisted the petition contending that, at this stage where the Commissioner has merely issued a notice, scrutiny by the Court would be extremely limited to finding out whether the exercise of jurisdictional power is justified or not. The Commissioner has in the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner does not dispute this aspect of the matter. Though in the impugned notice there is no such clear-cut admission to detailed assertion made by the petitioner in the petition backed by materials on record, there is no denial in the reply filed by the Commissioner. We would, therefore, proceed on the basis that against the proposed addition of ₹ 105.36 crore suggested by the Commissioner in the imugned notice, the assessing officer under the same heads for the assessment years in question had made addition of ₹ 123 crore to the income of the assessee. The crucial question, therefore, arises whether revisional powers under section 263 of the Act can be exercised. As held by the Supreme Court in the case of Malabar Industrial Co. Ltd. (supra), powers under section 263 of the Act would be available when an order of assessment is shown to be erroneous and prejudicial to the interests of the revenue. In other words, both the conditions, namely, that the order of assessment is erroneous and that is also prejudicial to the interests of the revenue must exist to give jurisdiction to the Commissioner to take an order of assessment in revision. 10. In the case of Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned notice, is adopted, the additions would stand the test of law. In other words, the Commissioner desires that the order of assessment should be better written and flaws, if any, be ironed out. In our opinion, powers under section 263 of the Act are not meant for improving an order of assessment. As long as the income is assessed and tax as per the law levied, the order cannot be stated to be prejudicial to the interests of the revenue and, therefore, not revisable. 15. There is one more reason why we cannot share the apprehension of the revenue. When an order of assessment is framed and certain additions made resulting to levying of tax, two situations may arise. The assessee may accept such assessment and so far as the tax levied is concerned it would achieve finality. If the assessee is aggrieved by the order of assessment, he has a right to appeal to the appellate Commissioner under section 246 of the Act. Section 251 of the Act lays down the powers of appellate Commissioner. Sub-section (1) thereof provides, inter alia, that the Commissioner, while disposing of an appeal against the order of assessment, shall have the power to confirm, reduce and enhance or annul the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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