TMI Blog2018 (11) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bombay in the case of CIT vs. Nirav Modi, [2016 (6) TMI 1004 - BOMBAY HIGH COURT] - Decided in favour of assessee. - ITA No. 3182/DEL/2016 - - - Dated:- 23-10-2018 - Shri N.K. Billaiya Accountant Member, And Shri N.K. Choudhary, Judicial Member For the Assessee : Shri Ronak Doshi, CA For the Revenue : Ms. Rachna Singh, CIT- DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, With this appeal, the assessee has challenged the correctness of the order of the ld. Pr. CIT, New Delhi 2 dated 31.03.2016 pertaining to assessment year 2011-12. 2. The sum and substance of the grievance of the assessee is that the PCIT erred in invoking the provisions of section 263 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] by holding that the assessee failed to place on record, during the assessment proceedings, any such documentary evidence of substantive nature, to justify the deduction u/s 80IA of the Act. 3. The representatives of both the sides were heard at length, the case records carefully perused and with the assistance of the ld. Counsel, we have considered the documentary evidences brought on record in the form of Paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as claimed deduction u/s 801A as reflected in the body of the assessment order. The DC IT Circle 5(1), New Delhi vide F. No. DCIT/Circle 5(2)/2015-16/714 dated 03.03.2016 has moved a proposal for invoking provision of section 263 of the I.T. Act, 1961 for the captioned A.Y. as the company had failed to place on assessment record all the supporting and relevant documents relating to the nature of business activities having been actually conducted during the F.y. 2010-11 relevant to A.Y. 2011-12. On account of non compliance and non submission of the documents asked for in this case from time to time vide notice u/s 142(1) of the I.T. Act dated 22.08.2013 issued in this case by the assessing officer and duly served upon the assessee. The company failed to adduce the supporting evidence as relevant to the deduction claimed u/s 80IA. In the return of income under the head taxes paid it has claimed credit for TDS of ₹ 8,78,93,767/- as Tax deducted at Source. The receipt of income under the corresponding provision of the I.T. Act, 1961 which were a subject matter of deduction of the TDS were not placed on record. Keeping all the above facts and the assessment record for the A.Y. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome. 12. The assessee filed a detailed reply and submitted the documents with reference to the aforesaid questionnaire on 05.09.2013. At point No. 19, details of deduction claimed from the taxable income were furnished alongwith the following Note on the Business: The Airport Authority of India ( AAI ), an organization working under the Ministry of Civil Aviation that manages most of the airports in India, and Delhi International Airport Pvt. Ltd (DIAL} entered into an Operation, Management and Development Agreement dated 4 April 2006 (the OMDA } whereby AAI has granted to DIAL the exclusive right and authority during the term of the OMDA to operate, maintain, develop, design, construct, upgrade, modernize, finance and manage the Indira Gandhi International Airport at New Delhi, India. Pursuant to the Concession Agreement dated 24 August 2009, DIAL granted Celebi Hava Servisi A.S ( Celebi ) the rights for up gradation, modernization, financing, operation, maintenance and management of the cargo terminal at the airport for a term of 25 years. Celebi was incorporated M/s Celebi Delhi Cargo Terminal Management India Private Limited (the Concessionaire) as a specia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Once again, the specific queries were replied in detail and once again a detailed note of the claim u/s 80IA of the Act was submitted and the same is exhibited at pages 110 120 of the paper book and Exhibit 133 of the paper book contains details of all the unbilled revenue were furnished. 19. From the above facts, it can be seen that not once, but three notices were issued by the Assessing Officer and in all the three replies, the assessee has furnished complete detail on the claim of deduction u/s 80IA of the Act alongwith detailed report in Form No. 10CCB. 20. The Revenue alleges that the assessment order is cryptic as the Assessing Officer has not given any clear finding on the claim of deduction u/s 80IA of the Act and, therefore, assessment order is erroneous and in so far as it is prejudicial to the interest of the Revenue. 21. The Hon'ble Bombay High Court in the case of Gabriel India Ltd 203 ITR 108 has held as under: The power of suo motu revision under subsection (1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mply because the Commissioner does not feel satisfied with the conclusion. It may be said in such a case that in the opinion of the Commissioner the order in question is prejudicial to the interests of the Revenue. But that by itself will not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, viz., that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the interests of the Revenue, then also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also must be fulfilled. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act there must be material before the Commissioner to consider that the order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble High Court of Gujarat in the case of CIT vs. Nirma Chemical Works Ltd. 309 ITR 67 has observed as under: if assessment order were to incorporate the reasons for upholding the claim made by an assessee, the result would be an epitome and not an assessment order. In this case, during the assessment proceedings for both the Assessment Years, the Assessing . A.Y. 2009-10 Officer issued a query memo to the assessee, calling upon him to justify the genuineness of the gifts. The Respondent-Assessee responded to the same by giving evidence of the communications received from his father and his sister i.e. the donors of the gifts along with the statement of their Bank accounts. On perusal, the Assessing Officer was satisfied about the creditworthiness/capacity of the donors, the source from where these funds have come and also the creditworthiness/capacity of the donor. Once the Assessing Officer was satisfied with regard to the same, there was no further requirement on the part of the Assessing Officer to disclose his satisfaction in the Assessment Order passed thereon. Thus, this objection on the part of the Revenue cannot be accepted. 23. The Hon'ble jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner, simply because according to him, the order should have been written more elaborately‟. Recourse cannot be taken to Section 263 to substitute the view of the Assessing Officer with that of the Commissioner. [See CIT vs Gabriel India Ltd (1993) 203 ITR 108(Bom)] (viii) The exercise of statutory power under Section 263 of the Act is dependent on existence of objective facts ascertained from prima facie material on record. The evaluation of such material should show that tax which was lawfully exigible was not imposed. [See Gabriel India Ltd (supra)] In the instant case, it was quite clear that after the assessee had filed his return on 31.10.2002, a notice under Section 143(2) of the Act was issued for the purposes of carrying out a scrutiny in respect of the return of income filed by the assessee. In the course of scrutiny, as indicated in the impugned judgment of the Tribunal, several communications were addressed by the assessee to the Assessing Officer whereby, the information, details and documents sought for, were adverted to and filed. The Tribunal in order to satisfy itself, as to whether the Assessing Officer had sought for details and carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no undue haste‟ in examining the material prior to the passing of the assessment order dated 24.03.2005. At least four letters dated 27.04.2004, 22.02.2005, 28.02.2005 and 18.03.2005 were addressed by the assessee to the Assessing Officer giving details, documents and information pertaining to various queries raised by the Assessing Officer. These have been examined by the Tribunal. We have no reason to believe that examination was less than exacting. Therefore, the conclusion of the Commissioner that there was lack of proper verification is unsustainable. 17. Further, the notice dated 11.05.2006 issued by the Commissioner before commencing the proceedings under Section 263 of the Act referred to four issues, the final order dated 18/19.01.2007 passed referred to nine issues, some of which obviously did not find mention in the earlier notice and hence resulted in the proceedings being vitiated as a result of the breach of the principles of natural justice. There is no requirement under Section 263 of the Act to issue a notice before embarking upon a revisionary proceedings. To that extent the submission of the learned counsel for the Revenue Mr Sanjeev Sabhar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of notice dated 11.05.2006. This was put to the learned counsel for the Revenue, who in response fairly conceded that there was nothing on record which would establish the contrary. It was, however, urged by the learned counsel for the Revenue Mr Sanjeev Sabharwal that the assessee would have his opportunity to give satisfactory replies to the discrepancies raised in the Revisional Order before the Assessing Officer and that such an opportunity would meet the requirements of the provision. We are afraid that that is not the position envisaged in law. If one were to permit correction of such a grievous error in the manner suggested it would tantamount to, in a manner of speaking, closing the stable doors after the horse has bolted. The assessments, unless reopened by paying faithful obeisance to statutory provisions and conditionalities provided therein, attain finality on their conclusion. The provisions of Section 263 mandate that an order for enhancing, or modifying the assessment, or cancelling the assessment and directing a fresh assessment can only be passed after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as is deem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such powers vested in the Revenue. 18. In view of our discussion above, we are of the opinion that impugned judgment passed by the Tribunal deserves to be sustained. The findings returned by the Tribunal are pure findings of fact. No substantial question of law has arisen for our consideration. Resultantly, the appeal is dismissed. No order as to cost. 24. In her written submission, the ld. DR drew our attention to the decision of the Hon'ble Gauhati High Court in the case of Jawahar Bhattacharjee 341 ITR 434 wherein the Hon'ble High Court has held as under: Non application of mind to relevant material or an incorrect assumption of facts or an incorrect application of law will satisfy the requirement order being erroneous. 25. In our considered view, this judgment is misplaced, in as much as, facts on record as mentioned elsewhere, clearly show that the Assessing Officer has not only applied his mind but has examined the issue of claim of deduction u/s 80IA by issuing three notices on the same point. 26. The ld. DR has further relied upon the decision of the Tribunal at Delhi in the case of NIIT 60 Taxmann.com 313 wherein it has been held as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quate that would not by itself give occasion to the Commissioner to pass orders under section 263 of the Act, merely because hp has a different opinion in the matter. It is only in cases of lack of inquiry that such a course of action would be open. In Gabriel India Ltd. [1993] 203 ITR 108 (Bom), law on this aspect was discussed in the following manner. 29. Considering the three notices issued by the Assessing Officer and considering the detailed submissions filed by the assessee in response to each notice, it can be safely concluded that the Assessing Officer did raise queries which were complied by the assessee. 30. Considering these facts in totality, it can be safely concluded that the Assessing Officer did raise queries which were complied by the assessee. It is a settled position of law that powers u/s 263 of the Act can be exercised by the Commissioner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and prejudicial to the interest of the Revenue. By 'erroneous' is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the Assessing Officer is erroneous and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
