TMI Blog2016 (7) TMI 1496X X X X Extracts X X X X X X X X Extracts X X X X ..... law. - Decided in favour of assessee. - I.T.A No. 187(Asr)/2015 - - - Dated:- 25-7-2016 - SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER For The Appellant : Sh. Sudhir Sehgal, (Adv.) And Sh. A.K. Periwal (CA.) For The Respondent : Sh. Amalendu Nath Misra (DR.) ORDER PER T. S. KAPOOR (AM): This is an appeal filed by assessee against the order of learned CIT, Bathinda, passed u/s 263 of the Act, dated 18.02.2015, for Asst. Year: 2010-11. 2. At the outset, the learned AR submitted that learned CIT has wrongly assumed jurisdiction u/s 263 of the Act as Assessing Officer during the assessment proceedings had examined all the aspects including the aspect raised by learned CIT. He furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the order passed u/s 263 in this case should also be quashed. 3. The learned DR, on the other hand, heavily placed his reliance on the order of learned CIT. 4. We have heard the rival parties and have gone through the material placed on record. We find that the assessment in the present case was completed vide assessment order dated 25.03.2013 as is apparent from (PB pages 1 to 2) where a copy of assessment order is placed. The copy of audit objection as raised by Income Tax Officer, is placed at PB (page 23 to 24) wherein the Income Tax Officer (Audit) has raised the objection as under: Assessment in this case was completed under section 143(3) of the Income-tax Act, 1961 on 25-03-2013 at an income of ₹ 214450/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that the learned Commissioner in the show cause notice has raised the following objections: (i) From the perusal of records reveals that you have availed of CC limit and made payments of interest thereon. It has also been noticed that out of the interest bearing funds, as stated above, you have made interest free advances totaling to ₹ 2,36,00,000/- on different dates to M/s. Dashmesh Agro Industries from CC account. Accordingly, proportionate disallowance of interest was required to be made in view of the judgment of the Hon ble Punjab Haryana High Court delivered in the case of Abhishek Industries Ltd. Vs. CIT-I, Ludhiana, but the AO has failed to make such disallowances. Failure on the part of the then AO in maki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is respect is placed at (PB page-28). Therefore, from the above facts it is apparent that the Revenue Authorities first tried to reopen the case u/s 154, which on a replay filed by assessee were dropped and thereafter, the learned CIT took up the same issue by assuming jurisdiction u/s 263 of the Act. Moreover, we find that the proceedings u/s 263 has been initiated in view of the audit objection raised by Income Tax officer (Audit) which is not permissible as per the settled position of law. The Hon ble Chandigarh Bench in the case of Jaswinder Singh vs. CIT, in ITA No. 690/Chd/2010 has decided the similar issue and has quashed the order passed by learned CIT u/s 263 by holding as under: 20. We find that similar issue of exercise of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of one and the same audit objection. While exercising revisional jurisdiction, the revisional authority must bear in mind that the principles of natural justice do not permit the decision of a quasi-judicial authority, such as a Commissioner of Income-tax, to be influenced by any other authority. Thus, the Commissioner, in the present case, could not have initiated a suo motu revisional proceeding on the basis of the said audit report. Had, on the basis of the audit report, the Commissioner came to his own finding that the assessing authority, while making the assessment, or the authority empowered to rectify a turnover, which had escaped assessment, has acted without jurisdiction, revisional jurisdiction could have been exercised. Emph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n expenses incurred by the assessee and order passed by the Commissioner of Income Tax under section 263 of the Act directing the Assessing Officer to re-determine the income of the assessee by applying a rate other than the rate applied by the Assessing Officer, being without jurisdiction, is not tenable in law. We find no merit in the plea of the learned D.R. for the Revenue that the source of information in the present case was audit objection, but there was independent application of mind by the Commissioner of Income Tax. The provisions of section 263 of the Act are clear and absolute that the power is to be exercised by the Commissioner of Income Tax from the examination of the records of the proceedings under the Act. The explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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