TMI Blog2019 (1) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of the order dated 31.03.2018 passed by the Pr. CIT, therefore, the said order was not a valid order u/s 263 of the Act. Moreover, nowhere the ld. Pr. CIT mentioned in the said order that there was any relevant material before him for the year under consideration to substantiate that the AO had not applied his mind while framing the original assessment u/s 143(3) of the Act rather the ld. Pr. CIT acted only on the basis of the valuation report obtained by the AO for the assessment year 2015-16 on 15.12.2017. It cannot be said that the Pr. CIT came to the conclusion on the basis of the relevant record pertaining to the assessment order under consideration i.e. assessment year 2013-14 that the order passed by the AO was prejudicial to the interest of the revenue or it was erroneous. On the contrary, the AO applied his mind and did not accept the revised claim of the assessee and had taken a possible view. It is well settled that the provisions of Section 55A of the Act provides that the AO may refer the matter to DVO for valuation of the property. The use of the word “may” makes it discretionary so it is not mandatory. In this case, it appears that the AO was satisfied from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT. vii) Upholding the action of the successor AO for AY 2015-16 of accepting the valuation report of DVO in which the Land at Vasant Vihar was compared with the land at Safdarjung Enclave while determining the Fair Market Value as at 01.04.1981. viii) Enhancing the assessment by making an addition of ₹ 5021603/- to the valuation of land and building for capital gains by valuing land at ₹ 9994471/- and building at ₹ 2843976/- as on 01.04.1981 as against ₹ 13642650/- and ₹ 4217400/- respectively, valued by the Assessee based on a valuation report by a registered valuer. ix) Applying the Expl. 2 to Section 263 of the Act, 1961 for the relevant Assessment Year, although the same has been effective w.e.f. 01.06.2015. x) Making an Assessment Order in the above said case which power vest only with the Assessing Officer under the Income Tax Act. xi) Not referring the matter to the Assessing Officer to complete the proceedings in accordance with law after giving assessee an opportunity to appear before him. ( B) Without prejudice above, the order U/s 263 dated 31.03.2018 was passed in haste as no reasonable opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.4,74,54,720 5. The AO did not find merit in the above submissions of the assessee and observed that free hold charges of ₹ 8,23,600/- were well known to the assessee, much before the filing of the return of income which was originally filed on 30.07.2013 and the assessee could have included the same in the original return or subsequently in his revised return, however, the assessee failed to do the same. The AO rejected the claim of the assessee and assessed the income at ₹ 4,28,18,052/-. Thereafter, the successor AO made a proposal to the ld. Pr. CIT for remedial action u/s 263 of the Act. 6. The ld. Pr. CIT observed that during the assessment proceedings for the assessment year 2015-16, to ascertain the true value of the property, the matter was referred to the District Valuation Officer who submitted the report on 15.12.2017 which provided variance in the valuation of the report submitted by the assessee and on that basis an addition of ₹ 12,73,785/- was made for the assessment year 2015-16. The ld. Pr. CIT also observed that the assessee had sold basement and ground floor for ₹ 3.50 crores and second floor of ₹ 11.90 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2018 and assessed the income at ₹ 4,78,39,660/- after making addition of ₹ 50,21,603/-. It was submitted that only and only an Assessing Officer has powers to pass the assessment order under the relevant provisions of the Income Tax and to make an assessment or reassessment accordingly. Whereas in the present case, the ld. Pr. CIT had passed the assessment order and assessed the income of the assessee. It was stated that the assessment order passed by the ld. Pr. CIT was a non-jurisdictional assessment order and the department cannot take shelter of Section 292B of the Act, since it was not a mere mistake/defect or omission as the assessment order was not inconformity with or not in accordance to the intent and purpose of the Act. It was contended that the ld. Pr. CIT had treated the original order erroneous and made the assessment on the following basis: This fact that the value of property has been taken more than its value, was not available before the AO . However, the aforesaid finding was first time stated/recorded in the order of Pr. CIT and was completely absent in the showcause notice issued u/s 263 of the Act. Therefore, it was clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO thoroughly before allowing some part of the claim and disallowing the other. A reference was made to para 2.2 of the assessment order passed u/s 143(3) of the Act. It was contended that the AO had passed the speaking order after applying his mind on the valuation report submitted by the assessee and approved/upheld the same, as the AO had reproduced/mentioned the cost of land and structure in the body of the assessment order which was the same as given in the valuation report of the assessee. A reference was made to para 2.1 of the assessment order. It was contended that the assessment order passed by the AO could not have been treated as erroneous order or prejudicial to the interest of the revenue, when the AO had adopted one of two courses permissible in law. It was stated that even if, it is assumed that there was variation in the value adopted by the assessee for the asset and the fair market value of the asset, even then the law provides the discretionary power on the AO whether to refer the matter to valuation officer or not, depending upon his judgment on the given facts/matter. A reference was made to the provisions contended in Section 55A of the Act. It was contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how and started the proceedings very late as prima facie shown from the above stated events. It was further stated that the ld. Pr. CIT completed the proceedings without appreciating the real facts, solely on single aspect i.e. assessment order for the assessment year 2015-16 and majorly without giving sufficient opportunity to the assessee. Therefore, the impugned order passed by the ld. Pr. CIT deserves to be set aside. The reliance was placed on the following case laws: Vipul T. Joshi vs. DCIT (50 CCH 0032) [Ahd. Tribl] Antala Sanjay Kumar Ravji Bhai vs. CIT (135 ITD 0506) [Rajkot Trib] Roshan Lai Vegetable Products (P) Ltd. vs. ITO (51 SOT 0001) [Asr. Trib] Malabar Industrial Co. Ltd. vs. CIT (159 CTR 0001) [SC] CIT and Another vs. Saravana Developers (289 CTR 0550) [Karl] Indus Best Hospitality Realtors (P) Ltd. vs. PCIT (52 CCH 0565) [Mum Trib] CIT vs. Sunbeam Auto Ltd. {(2011) 332 ITR 0167}(Del) DIT vs. Jyoti Foundation {(2013.) 357 ITR 0388} (Del) CIT vs. ASHISH RAJPAL {(2010) 320 ITR 0674} (Del) CIT vs. Vikas Polymers {(2012) 341 ITR 0537} (Del) CIT vs. ANIL KUMAR SHARMA {(2011) 335 ITR 0083} (Del.) C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and submitted that as per the provisions contained in Explanation 2 to Section 263 of the Act inserted by the Finance Act 2015 w.e.f. 01.06.2015. The ld. Pr. CIT may invoke the provisions u/s 263 of the Act if the order was passed without making enquiries or verification which should have been made or the order had not been made in accordance with any order, direction or instruction issued by the CBDT or the order had not been passed in accordance with any decision which was prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. Therefore, the proceedings initiated by the ld. Pr. CIT were valid. The reliance was placed on the following case laws: Deniel Merchants Pvt. Ltd. Vs ITO in ITA No. 2396/2017, order dated 29.11.2017 (SC) Surva Jyoti Software Pvt. Ltd. Vs PCIT in ITA No. 2158/Del/2017 (ITAT Del.) Malabar Industrial Co. Ltd. Vs CIT (2000) 243 ITR 83 (SC) Rajmandir Estates (P.) Ltd. Vs PCIT (2016) 386 ITR 162 (Cal.) Shree manjunathesware Packing Products Camphor Works Vs CIT (19981) 231 ITR 53 (SC) CIT Vs Amitabh Bachhan 384 ITR 200 CIT Vs Ralson Indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtains to his appellate jurisdiction. The jurisdiction under section 263 can be exercised only when both the following conditions are satisfied (i) the order of the Assessing Officer should be erroneous, and (ii) it should be prejudicial to the interests of the Revenue. These conditions are conjunctive. An order of assessment passed by the Assessing Officer should not be interfered with only because another view is possible. The Commissioner, or for that matter, any other higher authority, may have supervisory jurisdiction over the Assessing Officer but it difficult to conceive that even the merits of the decision should be discussed and should be rendered by the higher authority, who is a supervisory authority. It is one thing to say that while making the orders of assessment the Assessing Officer should be bound by the statutory circulars issued by the CBDT but it is another thing to say that the assessing authority exercising quasi-judicial functions, keeping in view the scheme contained in the Act, would lose his independence to pass an independent order of assessment. When a statute provides for different hierarchies providing for forums in relation to passing of an orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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