TMI Blog2017 (12) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... ces we find merit in the contentions of the assessee that the revision order passed by the Ld.PCIT for the year under consideration is beyond the scope of section 263 and hence not valid. In the circumstances we set-aside the order of the Ld.PCIT and allow the grounds of the assessee. - ITA No. 2155/MUM/2017 - - - Dated:- 20-12-2017 - Shri C. N. Prasad, Hon'ble Judicial Member And Shri Rajesh Kumar, Hon'ble Accountant Member Assessee by : Shri Rajeev Khandelwal Shri Nagin Parekh Department by : Shri Alok John ORDER Per C. N. Prasad ( JM ) 1. This appeal is filed by the assessee against the order of the Ld.PCIT 22, Mumbai dated 06.03.2017 passed u/s. 263 of the Act for the Assessment Year 2013-14. 2. In this appeal the assessee has raised the following grounds: - (i) The Principal Commissioner of Income-tax-22, Mumbai (hereinafter referred to as the Ld.PCIT) erred in framing an ex-parte order dated 06.03.2017 u/s. 263 of the Act to set aside the order of the Assistant Commissioner of Income-tax 22(1), Mumbai, (hereinafter referred to as the Assessing Officer) by holding that the order of the Assessing Officer is prejudicial to the interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a correct conclusion. The Learned Counsel for the assessee further submits that by letter dated 08.08.2016 once again it was intimated to the Ld.PCIT that the photocopy of proceedings sheet of the assessment is required to obtain from the Assessing Officer and sought for adjournment of the proceedings. The Learned Counsel for the assessee further submits that on the very same day once again assessee had written a letter to the Assessing Officer requesting for a photocopy of the proceedings sheet of the assessment when the matter fixed for hearing on 22.08.2016 by the Ld.PCIT, it was once again submitted that photocopy of the proceedings sheet of assessment is need to be obtained from the Assessing Officer so as to submit reply by the assessee establishing the fact that the Assessing Officer has called for the details, verified all the details submitted on all the issues and has applied his mind and arrived at a correct conclusion in completing the assessment. Similar plea was made on 08.09.2016 before the Ld.PCIT. Learned Counsel for the assessee submitted that the Ld.PCIT however passed order u/s. 263 of the Act on 06.03.2017 holding that Assessment Order dated 16.10.2015 pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished to the Assessing Officer in the course of Assessment Proceedings and these were examined by the Assessing Officer and no disallowance was made towards purchases. Similarly Learned Counsel for the assessee referring to the letter furnished before the Assessing Officer submits that the details in respect of site expenses, Membership Subscription, Staff welfare, Travelling and conveyance, entrainment expenses etc., were furnished in the course of Assessment Proceedings and they were examined by the Assessing Officer and no disallowance was made. Referring to Page Nos. 35 to 39 of the Paper Book submits that the details were furnished in respect of Labour charges to the Assessing Officer, referring to Page Nos. 232 to 238, 239 to 241 submits that details were furnished in respect of loan obtained from John Galt Zinga Technologies by the assessee before Assessing Officer and this was also examined by the Assessing Officer and no addition/disallowance was made, referring to Page Nos. 67,72 to 75, and 128 to 148 counsel submits that these are the details furnished in respect of bad debts written off by the assessee and these details were examined by the Assessing Officer in the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der on 19.08.2016 deleting the additions/disallowances made by the Assessing Officer and this order is also available to the Ld.PCIT when Ld.PCIT passed order u/s.263 of the Act on 06.03.2017. Learned Counsel for the assessee submits that the Ld.PCIT has taken note of only the Assessment Order passed for the Assessment Year 2012-13 but ignored the order passed by the Ld.CIT(A) for the Assessment Year 2012-13 dated 19.08.2016 where the additions/disallowances were deleted by the Ld.CIT(A). 8. Ld.DR vehemently supported the order of the Ld.PCIT in invoking the provisions the Section 263 of the Act and holding that the Assessment Order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Ld.DR further submits that the assessee failed to bring to the notice of the Ld.PCIT that the Assessing Officer was approached for the proceedings of the order sheet of the assessment and such order sheet was never furnished by the Assessing Officer. 9. We have heard the rival submissions, perused the orders of the authorities below. In the course of hearing of this appeal, on a query from the Bench as to whether the original record of assessment is availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is prejudicial to the interest of the Revenue within the provisions of section 263 of the I.T. Act, 1961. 10. As could be seen from the above, if the contention of the assessee that as per letter dated 27.07.2016 and 08.09.2016 the Assessing Officer has called for and verified all the details submitted to him and has applied his mind and arrived at a correct conclusion in framing the assessment accepting the claim of the assessee. This contention of the assessee was negated by the Ld.PCIT stating that it cannot be accepted in the absence of details of verification/examination of the nature and genuineness of the expenses/claims made by the assessee is placed on record. We failed to understand as to on what basis the Ld.PCIT arrived at this conclusion especially in the absence of the original record. It is an admitted fact that the original assessment record is not traceable and not available and therefore the record was reconstructed with the information furnished by the assessee after completion of assessment. Without examination the quarries raised by the assessee in the course of Assessment Proceedings and the information furnished by the assessee in respect of all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout jurisdiction. 13. In the case on hand it is an admitted fact that the original record is not traceable. Record was reconstructed partially based on which conclusion was arrived at, that the Assessment Order is erroneous and prejudicial to the interest of the Revenue. There was no complete record before the Ld.PCIT for examination and to arrive the satisfaction of the Assessment Order being erroneous and prejudicial to the interest of the Revenue. The Ld.PCIT rested his decision only on the Assessment Order for Assessment Year 2012-13 where he noticed that the Assessing Officer had rejected the books and made some disallowance. However, during the current Assessment Year since the Assessing Officer did not make any such disallowance the Ld.PCIT is of the view that the Assessment Order passed by the Assessing Officer for Assessment Year 2013-14 is erroneous and prejudicial to the interest of the Revenue. 14. In the case of Vinay Pratap Thacker v. CIT (supra), it has been held that revision u/s. 263 is not possible on a borrowed satisfaction. While holding so it was observed as under: 22. We have heard the contentions of both the parties and have also perused the mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t covered by the decisions cited by him. 25. We also have to accept the arguments of the AR with respect of applicability of section 50C on lease hold properties, because, this is an undisputed fact that the impugned property was a leased property, even though, it is a long lease, but the title of the same shall always remain with the actual owner, in the present case, BMA. Though the issue is squarely covered by the cited decisions, but going by the submissions of the DR that it is a case of deemed ownership, itself creates a doubt that whether there has to be an application of section 50C or not. This doubt, in our considered opinion is fatal to invocation of provisions of section 263, because provision of section 263 cannot be invoked where the issue becomes debatable, because if the issue is debatable it goes out of the scope of administration provisions but would fall in the realm of judicial provisions, which is not the purpose and context of section 263, which, in our opinion is to deal only on two realms simultaneously, i.e. whether the order passed by the AO is erroneous in so far as it is prejudicial to the interest of revenue. 26. In the instant case, the CIT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be passed is the prerogative of the Assessing Officer. 8. The order of the Assessing Officer may be brief and cryptic but that by itself is not sufficient reason to hold that the assessment order is erroneous and prejudicial to the interest of revenue. It is for the Commissioner to point out as to what error was committed by the Assessing Officer in taking a particular view. In the case in hand, the Commissioner of Income Tax has failed to point out error in the assessment order. For invoking revisionary powers, the Commissioner of Income Tax has to exercise his own discretion and judgment. Here the Commissioner of Income Tax has invoked the provisions of section 263 at the mere suggestion of the Dy. Commissioner of Income Tax, without exercising his own discretion and judgment. 9. The Mumbai Bench of the Tribunal in the case of Vinay Pratap Thacker Vs. Commissioner of Income Tax (supra) has set aside the order of Commissioner of Income Tax passed u/s. 263 on the ground that the Commissioner of Income Tax had not used his own discretion and judgment in assuming the revisional jurisdiction.. 10. In view of the fact that the Commissioner of Income Tax has invoked t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T [301 ITR 407] has taken a view that: if a query is raised during the Assessment Proceedings and responded to by the assessee, the mere fact that it is not dealt with in the Assessment Order would not lead to a conclusion that no mind had been applied to it. 19. The Hon'ble Delhi High Court in the case of PCIT v. Delhi Airport Metro Express Pvt. Ltd. (supra) has categorically held that for the purpose of exercising jurisdiction u/s. 263 of the Act and reaching a conclusion that the order is erroneous and prejudicial to the interest of the Revenue the Ld.PCIT has to undertake some minimal enquiry if the Ld.PCIT is of the view that Assessing Officer had not undertaken any enquiry it becomes incumbent on the Ld.PCIT to conduct such enquiry. In the case on hand we find that the Ld.PCIT has merely relied on the order of the Assessing Officer for the preceding Assessment Year and also observing that there were no enquiries made by the Assessing Officer for the current assessment year, came to the conclusion the Assessment Order passed is erroneous and prejudicial to the interest of the Revenue. In the instant case the Ld.PCIT ignored or rather not examined at all in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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