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TMI Blog2019 (2) TMI 1429X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of Paper Book in light of Rule 18(6) of ITAT Rules. Judicial decisions relied upon were carefully perused. 4. The ld. Representatives, in addition to their oral arguments, placed written synopsis for our consideration. 5. We have heard the rival submissions and have given thoughtful consideration to the orders of the authorities below and gone through the written synopsis placed on record by both the sides. 6. Facts on record show that the appellant company has been set up with the primary objective of undertaking upgradation, modernization, financing, operation, maintenance and management of Cargo Terminal. The appellant company entered into Concessionaire Agreement with Delhi International Airport Private Limited (DIAL) which gives right to operate, maintain, develop, modernize and manage the cargo terminal for the period till March 2034. 7. The return was electronically filed on 30.11.2012 after availing the deduction u/s 80IA. However, tax was paid on book profits. Thereafter, the case was selected for scrutiny and, accordingly, statutory notices were issued and served upon the assessee. Assessment order was framed u/s 143(3) of the Act vide order dated 05.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt of a report u/s 263 of the I.T. Act, 1961 dated 03.03.2016 on the above issue. The assessment framed u/s 143(3) being erroneous and prejudicial to the interest of revenue hence to be reviewed in accordance with provision of section 263 of the I.T. Act, 1961. In accordance with the section 263 of the Income Tax Act, 1961, I hereby require you to appear before the undersigned in Room No. 394, 3rd Floor, C.R. Building at 11 A.M. on 11.03.2016 and your reply on the issue on or before the said date. Yours faithfully (Pramod Kumar Gupta) Pr. Commissioner of Income Tax Delhi-2, New Delhi PRAMOD KUMAR GUPTA Pr. Commissioner of Income Tax Delhi-02, New Delhi" 9. In reply to the aforesaid notice, the assessee filed a detailed reply. The ld. PCIT was not convinced with the reply of the assessee and held that the assessment order dated 05.12.2014 framed u/s 143(3) of the Act was erroneous in so far as it was prejudicial to the interest of the Revenue and accordingly set aside the assessment with a direction to pass an order afresh after taking into account all relevant facts and after making necessary enquiries and verification. 10. The Hon'ble Supreme Court in Malabar Indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 special purpose company for the sole purpose of implementing the Concession Agreement. Pursuant to the Concession Agreement, Celebi is responsible to upgrade, modernize and finance the Cargo Terminal and operate, maintain and manage the Cargo Terminal (approximately 70,000 sq.mt area comprising of warehouses for handling export, import and perishable jcafgo) for a period of 25 y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Circlef5(2), New Delhi 14. This specific query was replied by the assessee vide submission dated 24.11.2014. 24th November, 2014 "The Deputy Commissioner of Income Tax, Circle 5(2). Room No. 390- B. 3rd Floor, Central Revenue Building IP, Estate New Delhi-110001 Dear Sir, Ref: Questionnaire u/s 143 (2) of the IT Act,1961 for the AY 2012-13 dated 15th Nov-14 This is in reference to above notice regarding assessment proceeding for AY 2012-13, we are herewith submitting the following: - 1. All the information required as per questionnaire issued with Notice u/s 142(1) dated 12th Sep- 14 has already been submitted. 2. The reason for large deduction under chapter VI-A is on account of availing the benefit u/s 80IA of the Income Tax Act 1961. In anticipation of similar performance during FY 2011-12 (AY 2012-13) as compared to FY 2010-11 we have deposited the advance tax in the month of Jun-11 and Sep-11, amounting to Rs. 1.31 cr and Rs. 1.49 cr respectively, but in view of the performance during the year the ratio of refund to TDS is high. We have not claimed the depreciation at higher rates / higher additional depreciation 3. At the time of filing of ITR the Form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to the courts to examine whether the relevant objective factors were available from the records called for and examined by such authority. The Income-tax Officer in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the Income- tax Officer on being satisfied with the explanation of the assessee. Such decision of the Income-tax Officer cannot be held to be "erroneous" simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an expenditure of capital nature. He simply asked the Income-tax Officer to re-examine the matter. That, in our opinion, is not permissible. Hence the provisions of section 263 of the Act were not applicable to the instant case and, therefore, the commissioner was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, that is, proceeds with 'undue haste'. [See Gee Vee Enterprises vs ACIT, Delhi-I & Ors. (1975) 99 ITR 375] (iv) The expression "prejudicial to the interest of the Revenue" while not to be confused with the loss of tax will certainly include an erroneous order which results in a person not paying tax which is lawfully payable to the Revenue. [See Malabar Industrial Co. Ltd. (supra)]. (v) Every loss of tax to the Revenue cannot be treated as being "prejudicial to the interest of the Revenue". For example, when the Assessing Officer takes recourse to one of the two courses possible in law or where there are two views possible and the Commissioner does not agree with the view taken by the Assessing Officer which has resulted in a loss. [See CIT vs Max India Ltd. (2007) 295 ITR 282 (SC)] (vi) There is no requirement of issuance of a notice before commencing proceedings under Section 263 of the Act. What is required is adherence to the principles of natural justice by granting to the assessee an opportunity of being heard before passing an order under Section 263. [See Electro House (supra)]. (vii) If the Assessing Officer acts in accordance with law his order canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rived at after examining the record which the assessee filed with the Assessing Officer during the course of scrutiny. The point to be noted is that on a perusal of the record the Tribunal observed, by reference to a general practice in vogue, that merely because the assessment order did not refer to the queries raised during the course of the scrutiny and the response of the assessee thereto, it could not be said that there was no enquiry and hence the assessment was erroneous and prejudicial to the interest of the Revenue. This observation of the Tribunal, according to us, deserves due weight, as in its vast experience it would have come across several such orders. 16. The fact that a query was raised during the course of scrutiny which was satisfactorily answered by the assessee but did not get reflected in the assessment order, would not by itself lead to a conclusion that there was no enquiry with respect to transactions carried out by the assessee. The fact that there was an enquiry can also be demonstrated with the help of the material available on record with the Assessing Officer. The material, to which a reference has been made in the impugned judgment, would show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than those to which reference has been made in the Commissioner's notice dated 11.05.2006. For this purpose, the learned counsel for the assessee sought to place reliance on the impugned judgment passed by the Tribunal, wherein this aspect of the matter has been discussed elaborately. In order to satisfy ourselves we called upon learned counsel for the Revenue Mr Sanjeev Sabharwal to place on record any communication, order or any other document which would show that the assessee had been given an opportunity to deal with those aspects which did not form part of the initial notice dated 11.05.2006, but were taken into account by the Commissioner while passing his order dated 18/19.01.2007. In this regard, the learned counsel for the Revenue placed on record order sheet entries of the proceedings conducted by the Commissioner. We have already extracted the order sheet entries commencing from 15.06.2005 to 28.06.2006. A perusal of those entries would clearly demonstrate that there is nothing on record which would show that the assessee was given an opportunity to respond to these discrepancies which formed part of the order-in-Revision dated 18/19.01.2007 but were not part of notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not effect the basic issue of assessment being carried out without adequate investigation. In the instant case the Order-in-Revision refers to issues and discrepancies which did not find mention in the initial notice dated 11.05.2006 and not to additional or supporting material as in the case of Rampyari Devi (supra). Therefore, to suggest that it would be sufficient compliance of the provisions of Section 263 of the Act, if an opportunity to respond to the discrepancies mentioned in the Order-in-Revision is given to the assessee in reassessment proceedings before the Assessing Officer, is according to us is completely untenable. It is the requirement of Section 263 of the Act that the assessee must have an opportunity of being heard in respect of those errors which the Commissioner proposes to revise. To accord an opportunity after setting aside the assessment order, would in our view not meet the mandate the Section 263 of the Act. If such an interpretation is accepted it would make light of the finality accorded to an assessment order which cannot be reopened unless due adherence is made to the conditionalities incorporated in the provisions of the Act in respect of such power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 22. 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. 23. 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 prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional pow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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