TMI Blog2014 (2) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... er, in the present case, the satisfaction was of the ITO (Tech.) who proposed action under s. 263 of the Act, but not of the learned CIT. Therefore, issuance of notice under s. 263 of the Act on the basis of the proposal made by the ITO was void ab initio; We, therefore, set aside the same. - Decided in favour of assessee - IT Appeal No. 350 (JP.) of 2013 - - - Dated:- 28-2-2014 - HARI OM MARATHA, JUDICIAL MEMBER AND N.K. Saini, ACCOUNTANT MEMBER Mahendra Gargieya for the Appellant. Subhash Chandra for the Respondent. ORDER N.K. Saini, Accountant Member - This is an appeal by the assessee against the order dated 5th March, 2013 of learned CIT, Kota. The following grounds have been raised in this appeal : 1. The impugned order passed under s. 263 of the Act by the learned CIT, Kota, is barred by limitation and hence, kindly be quashed. 2. The learned CIT, Kota erred in law as well as on the fact of the case in invoking the provisions of s. 263 of the Act. Therefore, the impugned order under s. 263 of the Act kindly be quashed. 3. The learned CIT, Kota erred in law as well as on the fact of the case in assuming jurisdiction under s. 263 of the Act by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Shri Sunil Kumar Gupta ₹ 90,000 5. Shri Ashok Kumar Agarwal ₹ 1,00,000 Though the statements of the above-mentioned creditors were recorded by the AO and copies of bank accounts have been obtained but it was found that before transferring the amount in assessee's bank account, similar amount has been deposited in cash within 2-3 days before by these creditors, therefore, creditworthiness of these creditors not proved. The AO was expected to make concrete inquiries about source of cash deposit before finalizing the case keeping in view the fact which is vital to determine the creditworthiness of these creditors. 4. On receipt of proposal under s. 263 of the Act from the ITO, Ward 3, Sawai Madhopur, a notice under s. 263 of the Act dt. 9th Jan., 2013 was issued to the assessee, who vide written submission submitted on 22nd Jan., 2013 as under : The creditworthiness and genuineness of all transactions relating to all the fresh credits narrated in your show-cause notice was duly examined by the learned AO during the course of assessment proceedings as is evident from the details of un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR (Del) 476 : [2010] 47 DTR (Del) 348 : [2010] 194 Taxman 57 (Del)-If a query is raised during the course of scrutiny by the AO, which was answered to the satisfaction of the AO, but neither the query nor the answer was reflected in the assessment order, this would not by itself lead to the conclusion that the order of the AO called for interference and revision. CIT v. Sunbeam Auto Ltd. [2009] 227 CTR (Del) 133 : [2009] 31 DTR (Del) 1-If there is an enquiry, even inadequate, that would not by itself give occasion to the CIT to pass order under s. 263. Antala Sanjaykumar Ravjibhai v. CIT [2012] 148 TTJ (Rajkot) 121 : [2012] 74 DTR (Rajkot)(Trib) 228 : [2012] 135 ITD 506 (Rajkot)-The provisions of the s. 263 does not visualize a case of substitution of the judgment of CIT for that of ITO where ITO in exercise of its quasi-judicial powers while making an assessment examines the accounts, makes enquiry, applies his mind to the facts and circumstances of the case and determines the income by either accepting or making changes in accounts. Such order cannot be called as erroneous. Looking to the above facts and circumstances of the case it is requested your Honour to please dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Revenue. It was emphasized that the condition precedent for issuance of notice under s. 263 of the Act is that the CIT is to call record for examination of any proceedings under this Act before forming his opinion that the assessment order passed by the AO was erroneous so far as it was prejudicial to the interest of the Revenue. However, in the present case, as evident from paras 2 and 3 of the impugned order, the learned CIT initiated the proceedings under s. 263 of the Act by not calling and examining the records and on the proposal moved by the AO to revise the assessment order dt. 29th Oct., 2010 passed under s. 143(3) of the Act, which was against the plain language of s. 263 of the Act because the suggestion of the AO cannot be a basis for revision of the assessment order. Reliance was placed on the following case laws : (1) Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83/109 Taxman 66 (SC) (2) CIT v. Max India Ltd. [2007] 295 ITR 282/[2008] 166 Taxman 188 (SC) (3) CIT v. Padam Singh Chouhan [2008] 215 CTR (Raj) 303 (4) Aravali Trading Co. v. ITO [2010] 187 Taxman 338 (Raj.) (5) Labh Chand Bohra v. ITO [2010] 189 Taxman 141 (Raj.); (6) Kanhaial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as issued only on receipt of the proposal under s. 263 of the Act from the ITO, Ward-1(2), Kota and the assessee explained, vide written submission which has been reproduced in para 4 of the impugned order, each and every objection raised by the ITO, Ward-2, Sawai Madhopur. It is well-settled that the learned CIT while exercising the revisionary powers under s. 263 of the Act may call for and examine the records of any proceedings and thereafter if he considers that any order passed therein is erroneous insofar as it is prejudicial to the interest of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. Therefore, before taking any action, learned CIT himself shall apply his mind after examining the record of any proceedings and his satisfaction is must. However, in the present case, the satisfaction was of the ITO (Tech.) who proposed action under s. 263 of the Act, but not of the learned CIT. Therefore, issuance of notice under s. 263 of the Act on the basis of the proposal made by the ITO was void ab initio; We, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
