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2016 (3) TMI 645

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..... of the Act. Further, the CIT has not formed any opinion and he has cancelled the order of AO by directing to redo the assessment afresh after giving assessee a reasonable opportunity of being heard. Being so, we are of the opinion that the Ld. CIT is justified in invoking the jurisdiction u/s.263 of the Act. Since we have confirmed the invoking of jurisdiction u/s.263 of the Act, there is no finding by CIT on merit; whatever grievance of assessee on merit of issue raised by the CIT, to be considered by AO while framing assessment and AO shall not influence by anyway by the observation of CIT in his order. - Decided against assessee - I.T.A.No.1729/Mds. /2015 - - - Dated:- 10-2-2016 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER For The Appellant : Mr.V.Jagadisan,C.A For The Respondent : Mr.Devendra,CIT, D.R ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER: This appeal is filed by the Assessee is directed against the order of the Learned Commissioner of Income Tax-I, Madurai dated 30.03.2015 pertaining to the assessment year 2010-11. The assessee also filed a Stay Petition (S.P) seeking stay of operation of the order of the .....

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..... is to be deducted if PAN is furnished to the Assessee by the Transporter and hence no TDS was deducted by Assessee on transport charges paid in III IV Quarter. According to A.R, these details were made available to the Assessing Officer (at the time of hearing on 17.3.2015) and also before the CIT in proceedings under section 263. According to the A.R., no particulars were prescribed under section 194C (7) and hence CIT is not correct in assuming jurisdiction on a stated default which is not there and the CIT did not refer to default under section 194 C (7) in the show cause notice and cannot therefore pass any order thereon in proceedings under section 263. According to him, the CIT has also not identified what are prescribed under section 194 C (7) and how Assessee is in default. According to A.R., it is on record that, the Assessee filed Form No.26Q acknowledgement for Ql, Q2, Q3 and Q4 for Financial Year 2009-10. (Assessment Year 2010-11) . He submitted that the Assessee filed Form No 26Q for III IV quarter in respect of other items on which TDS was effected (other than Transport charges) and the requirement to disclose items in Form No.26Q on which no TDS was effected ca .....

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..... any deviation from the standard or course of right, truth, justice or accuracy, which is not intentional. A mistake is an error committed under a misapprehension of misconception of the nature of a case. An error may be from the absence of knowledge, a mistake is from insufficient or false observation. Blunder is a practical error of a peculiarly gross or awkward kind, committed through glaring ignorance, heedlessness, or awkwardness. An error may be overlooked or atoned for, a mistake may be rectified, but the shame or ridicule which is occasioned by a blunder, who can counteract. Strictly speaking, Hallucination is an illusion of the perception, a phantasm of the imagination. The one comes of disordered vision, the other of discarded imagination. It is extended in medical science to matters of sensation, whether there is no corresponding cause to produce it. In its ordinary use it denotes an unaccountable error in judgement or fact, especially in one remarkable otherwise for accurate information and right decision. It is exceptional error or mistake in those otherwise not likely to be deceived. 5. In order to ascertain whether an order sought to be revised under Section 263 i .....

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..... icked up for scrutiny. The Assessing Officer is therefore, required to act fairly while accepting or rejecting the claim of the assessee in cases of scrutiny assessments. He should be fair not only to the assessee but also to the Public Exchequer. The Assessing Officer has got to protect, on one hand, the interest of the assessee in the sense that he is not subjected to any amount of tax in excess of what is legitimately due from him, and on the other hand, he has a duty to protect the interests of the revenue and to see that no one dodged the revenue and escaped without paying the legitimate tax. The Assessing Officer is not expected to put blinkers on his eyes and mechanically accept what the assessee claims before him. It is his duty to ascertain the truth of the facts stated and the genuineness of the claims made in the return when the circumstances of the case are such as to provoke inquiry. Arbitrariness in either accepting or rejecting the claim has no place. The order passed by the Assessing Officer becomes erroneous because an enquiry has not been made or genuineness of the claim has not been examined where the inquiries ought to have been made and the genuineness of the c .....

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..... s can always be corrected either at the instance of the assessee, if the assessee is prejudiced or at the instance of the Commissioner, if the revenue is prejudiced. While making an assessment, the ITO has a varied role to play. He is the investigator, prosecutor as well as adjudicator. As an adjudicator he is an arbitrator between the revenue and the taxpayer and he has to be fair to both. His duty to act fairly requires that when he enquires into a substantial matter like the present one, he must record a finding on the relevant issue giving, howsoever briefly, his reasons therefor. In S.N. Mukherjee v. Union of India AIR 1990 SC 1984, it has been observed by the Hon'ble Supreme Court that Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi-judicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision are of no less significance. These considerations show that the recording of reasons by an administr .....

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..... rity must indicate the reasons for an adverse order. We find no reason why the same view should not be taken when an order is against the interests of the revenue. As a matter of fact such orders are prejudicial to the interests of both the parties, because even the assessee is deprived of the benefit of a positive finding in his favour, though he may have sufficiently established his case. 9. In view of the foregoing, it can safely be said that an order passed by the Assessing Officer becomes erroneous and prejudicial to the interests of the Revenue under Section 263 in the following cases: (i) The order sought to be revised contains error of reasoning or of law or of fact on the face of it. (ii) The order sought to be revised proceeds on incorrect assumption of facts or incorrect application of law. In the same category fall orders passed without applying the principles of natural justice or without application of mind. (iii) The order passed by the Assessing Officer is a stereotype order which simply accepts what the assessee has stated in his return or where he fails to make the requisite enquiries or examine the genuineness of the claim which is called for in the c .....

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