TMI Blog2019 (8) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner exercising power u/s 263 brings on record to show that the order of the AO is erroneous, as the same was passed without application of mind or the AO had made an incorrect assessment of fact or incorrect application of law, but the same not being the case, and the CIT relying upon the reply and the documentary evidence submitted by the assessee granted partial relief, as such the order dated 09.02.2012 passed u/s 263 relegating back the matter to the AO as regards unsecured loans and creditors is unsustainable. Thus it is abundantly clear that the order passed by the AO was neither erroneous nor prejudicial to the interest of the Revenue. - Decided in favour of assessee. - Income Tax Appeal No. - 223 of 2013 - - - Dated:- 14-8-2019 - Bharati Sapru And Rohit Ranjan Agarwal JJ. For the Appellant : Suyash Agarwal,Rakesh Ranjan Agrawal For the Respondent : C.S.C. Income Tax,Gaurav Mahajan ORDER (PER HON'BLE ROHIT RANJAN AGARWAL,J.) 1. This appeal under Section 260 A of the Income Tax Act, 1961 (hereinafter called as 'Act') has been filed assail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer. 5. On 09.02.2012, the Commissioner Income Tax, Meerut passed an order, partly accepting the objection of the assessee as far as the investment in share capital was concerned but, as regards unsecured loans and creditors were concerned, the case of the assessee was relegated back to the Assessing Officer directing him to examine, call for requisite details, confirmations and examine them properly after affording assessee proper and reasonable opportunity to explain its case and verify the details with the help of documentary evidence. 6. The order passed by the Commissioner Income Tax, Meerut under Section 263 of the Act was challenged by the assessee before the Income Tax Appellate Tribunal (hereinafter called 'ITAT'). The ITAT dismissed the appeal of the assessee upholding the order passed by the Commissioner of Income Tax, Meerut. 7. Sri Suyash Agarwal, learned counsel appearing for the assessee/ appellant submitted that the Tribunal failed to consider that the Commissioner Income Tax was not justified in invoking the provisions of Section 263 of the Income Tax Act, as the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had rightly exercised his power mandated, under Section 263 and, it was only after giving due opportunity of hearing to the assessee that the assessment order was set aside to certain extent with direction to the Assessing Officer to verify the details. Sri Mahajan lastly submitted that the Tribunal, being the last fact finding Authority, and it was after appreciating the evidence and material on record, came to the conclusion that the matter required no interference in the order passed under Section 263 of the Act. He has relied upon the decision in cases of CIT vs. Anand Kumar Jain (2015) 231 Taxman 534 (Allahabad), Malabar Industrial Company vs. CIT (2000) 109 Taxman 66 (SC), Swarup Vegetable Products vs. CIT (1991) 54 Taxman 175 (Allahabad) and CIT vs. Bhagwan Das (2005) 142 Taxman 1 (Allahabad) . 13. We have heard counsel for the parties and perused the material on record. 14. As it is undisputed, that Assessing Officer after the case was selected for scrutiny had issued notice under Section 143(2) of the Act and also notice under Section 142(1) with 28 queries to the assessee, which was replied by him along with the documentary evidence, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay in CIT v. Gabriel India Ltd. [1993] 203 ITR 208 and the High Court of Gujarat in CIT v. Smt. Minalben S. Parikh [1995] 215 ITR 81/ 79 Taxman 184 treated loss of tax as prejudicial to the interests of the revenue. 8. Mr. Abraham relied on the judgment of the Division Bench of the High Court of Madras in Venkatakrishna Rice Co. v. CIT [1987] 163 ITR 129 interpreting 'prejudicial to the interests of the revenue'. The High Court held, In this context, it must be regarded as involving a conception of acts or orders which are subversive of the administration of revenue. There must be some grievous error in the Order passed by the ITO, which might set a bad trend or pattern for similar assessments, which on abroad reckoning, the Commissioner might think to be prejudicial to the interests of Revenue Administration . In our view, this interpretation is too narrow to merit acceptance. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the revenue. If due to an erroneous order of the ITO, the revenue is losing tax lawfully payable by a person, it will certainly be prejudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Assessing Officer as far as unsecured loans and creditors are concerned. The reliance placed by the counsel for the Department on the aforesaid judgment is of no help to him as he has failed to point out how the order of the Assessing Officer was erroneous insofar as it is prejudicial to the interest of the revenue. While the counsel for the assessee relying upon Para No. 10 of the said judgment submitted that the order passed by the assessing authority was not without application of mind, as the same was passed after the replying upon the documentary evidence submitted by the assessee. 16. Similarly, this Court in case of Anand Kumar Jain (supra) while interpreting the language of Section 263 had held that where the Assessing Officer passes an order without application of mind or an incorrect statement of fact or incorrect application of law, then the order so passed would be erroneous. But in the present case, Assessing Officer after issuing notice and raising certain queries to the assessee passed the assessment order which cannot be called as erroneous. 17. Reliance has also been placed on the judgment of Swaru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant part of the observations in this regard read as under (page 548 of 341 ITR): This is for the reason that if a query was raised during the course of scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer was reflected in the assessment order, that would not, by itself, lead to the conclusion that the order of the Assessing Officer called for interference and revision. 11. Further, the relevant observation made in Vodafone Essar South Ltd. (supra) in this regard reads as under (page 531 of 1 ITR-OL): The lack of any discussion on this cannot lead to the assumption that the Assessing Officer did not apply his mind. 12. Learned counsel for the Department could not place any other authority before this Court wherein any otherwise view has been taken. On the contrary, learned counsel for assessee has placed before us a decision of Bombay High Court in I ncome Tax Appeal No.296 of 2013 (CIT v. Fine Jewellery (India) Ltd.) [2015] 372 ITR 303/230 Taxman 641/55 taxmann.xom 514 (Bom.) decided on F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er raising 28 queries from the assessee, which was also replied by him along with the documentary evidence in regard to each of the query, thus the assessment order passed under Section 143(3) of the Act would not render the same as erroneous and prejudicial to the interest of Revenue, unless the Commissioner exercising power under Section 263 brings on record to show that the order of the Assessing Officer is erroneous, as the same was passed without application of mind or the Assessing Officer had made an incorrect assessment of fact or incorrect application of law, but the same not being the case, and the CIT relying upon the reply and the documentary evidence submitted by the assessee granted partial relief, as such the order dated 09.02.2012 passed under Section 263 relegating back the matter to the Assessing Officer as regards unsecured loans and creditors is unsustainable. 22. Having examined the matter at length on facts as well as on the law, we are of the considered opinion that in the present case, it is abundantly clear that the order passed by the Assessing Officer was neither erroneous nor prejudicial to the interest of the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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