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TMI Blog2011 (9) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order under s. 253 of the Act kindly be quashed." 2.2 The learned CIT issued a notice under s. 263 dt. 1st Nov., 2010 in which the learned CIT mentioned that the assessment order passed under s. 143(3) is erroneous and prejudicial to the interest of Revenue on account of following reasons : "As per schedule of the balance sheet, sundry creditors being agriculturists has been shown at Rs. 19,65,614 but no verification/enquiry in this regard has been made. Even names and addresses of the farmers have not been taken on record." 2.3 In response to the show-cause notice, the assessee filed the written submissions which are available at pp. 1 and 2 of the order of the learned CIT. The submissions given before the learned CIT are summarized as under : 1. The business of the assessee is Kachcha Adatiya and the assessee sell the crops of the farmers in Krishi Upaj Mandi yard in auction. The highest bidders purchase the goods in auction. The sale Parchi is issued after auction and weighing of the crops. Whenever the traders make payment during the sight period, Kachcha Adatiya makes the payments to the farmers. Hence, during this sight period, there is always outstanding payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This suspicion can be verified only if the farmers are identifiable. For identifying them other details such as their complete residential address etc. are required. But these details have admittedly been not furnished even though they were specifically asked by AO in the course of hearing and they have been now submitted before me and are enclosed herewith for verification. This makes the assessment order passed by AO erroneous in the sense that it is prejudicial to the interest of Revenue. The amount involved is large and therefore, the chances of findings out bogus creditors are more. Therefore, the assessment order dt. 18th March, 2009 is set aside to be made afresh after following and directions given above and properly verifying the claim of the assessee." 2.5 Before us, the learned Authorised Representative has filed the written submissions along with paper book containing 39 pages. The learned Authorised Representative has submitted that the learned CIT can assume jurisdiction under s. 263 if twin conditions of the order being erroneous and prejudicial to the interest of the Revenue are satisfied. If the view taken by the AO is one of the possible views then learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mental Representative submitted that assessee has not been able to bring on record any evidence that the issues raised by the learned CIT were examined at all by the AO or any investigation worth its name was conducted by him while passing the order under s. 143(3) of the Act. In case no enquiry has been conducted by the AO then the learned CIT can assume jurisdictionunder s. 263 of the Act. For this proposition, the learned Departmental Representative placed following reliance : 1. Gee Vee Enterprises v. Addl. CIT [1975] 99 ITR 375 (Delhi); 2.9 During the course of proceedings before us, the learned Departmental Representative also stated that the details which have now been filed or filed before the learned CIT were not given before the AO. The detailed addresses and nature of transactions resulting into trade creditors were not given. 2.10 We have heard both the parties. Vide order-sheet entry dt. 12th Feb., 2009, the assessee was asked by the AO to file the details of trade creditors which are shown in the names of agriculturists. The assessee was also asked to give the complete names and addresses of these persons. The assessee filed reply vide letter dt. 10th March, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed CIT is not warranted. It will be useful to reproduce the headnote from this decision : "Provisions of s. 263 when read as a composite whole make it incumbent upon the CIT before exercising revisional powers to : (i) call for and examine the record, and (ii) give the assessee and opportunity of being heard and thereafter to make or cause to be made such enquiry as he deems necessary. It is only on fulfilment of these twin conditions that the CIT may pass an order exercising his power of revision. Minutely examined, the provisions of the section envisage that the CIT may call for the records and if he prima facie considers that any order passed therein by the AO 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 enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. The twin requirements of the section are manifestly for a purpose. Merely because the CIT considers on examination of the record that the order has been erroneously passed so as to prejudice the interest of the Revenue will not suffice. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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