TMI Blog2019 (8) TMI 1418X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s 263 by remanding back the matter to assessing authority on 25.3.2013, while the appeal was decided by CIT (A) on 5.6.2013. Thus, the order passed by the ITAT does not suffer from any irregularity and needs no interference. As far as the word record appearing in Clause (b) of Explanation-1 to Section 263 is concerned, it means the record available at the time of examination by the CIT and not any material or record available subsequent to his examination or exercise of power u/s 263. Thus, any order passed by the AO in the assessment proceedings after the remand by the CIT cannot be looked upon and the argument made by the counsel for the revenue for relying upon the fresh assessment order made on 7.3.2004 u/s 263/143(3) cannot be accepted in view of the above provision of law. In the present case, the Tribunal had recorded specific finding of fact that the assessing authority had examined each and every aspect of the case on which the remand order hinges, as such the remand order was not sustainable in the eyes of law. The revenue has failed to make any case for interference in the order of the ITAT, as the CIT had proceeded to remand the matter back to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) Whether the ITAT erred in law in allowing the appeal of the assessee ignoring the fact that there was a difference between the Gross Receipts as per 26AS and Gross Receipts declared by the assessee when the assessee did not furnish any reconciliation statement to explain the difference. 2. The case relates to the assessment year 2008-09. The assessee which is a Company, filed return of income on 27.9.2008 declaring income at ₹ 14,71,900/-. The said return was processed under Section 143(1) of the Act. The case of the Company was selected for scrutiny and notices under Section 143(2) and 142(1) were issued. The assessee produced the books of account and replied the various queries raised by the Assessing Officer. As the assessee had shown development expenses of ₹ 7,16,62,142/- in the profit and loss account, the A.O. found ₹ 1,20,000/- as excessive and disallowed the same, and added to the income of the assessee. The Order under Section 143(3) of the Act was passed by the assessing officer on 18.11.2010. 3. The assessee challenged the assessment order passed under Section143(3) of the Act by filing Appeal No.192/10 11 before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er assessment order has been passed by the assessing authority after remand, and Tribunal should not have set aside the same, but should have relegated the matter to assessing authority directing the assessee to appear before the same and produce books of account to verify the queries so raised. 8. Per contra, counsel for the assessee submitted that the assessment order dated 18.11.2010 was passed after notice under Sections 143(2) and 142(1) of the Act was issued to assessee raising various queries and the assessee had appeared before the Assessing Officer number of times and furnished books of account and replied. Further, the CIT in its show cause notice dated 6.2.2013 has accepted the fact that on examination of record, assessment order was passed after inquiry which according to him was not proper. Thus, proceedings under Section 263 of the Act cannot be invoked by the CIT when there is no material to hold that order was erroneous and pre-judicial to the interest of revenue and it would not be invoked to correct each and every type of mistake and error committed by A.O. He further relied upon paragraph nos.7 and 9 of judgment of the Apex Court in the case of Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r at this juncture since, we are only called upon to answer the Substantial Question of Law with regard to the assumption of jurisdiction of the Commissioner under Section 263 of the Act. The power under Section 263 of the Act is not exercisable under certain circumstances. In this regard, we refer to Section 263(1) explanation 1(c), which reads as follows: Revision of orders prejudicial to revenue 263(1)... (a) to (b) (c)Where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal [filed on or before or after the 1st day of June, 1988], the powers of the Commissioner under this Sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. 22. The above explanation makes it clear that when the appeal is pending before the Commissioner, the exercise of jurisdiction under Section 263 of the Act is barred. The Commissioner in the order dated 14.03.2012 states that the appeal pertains to the claim made by the assessee under Section 54 of the Act and it has got n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 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 February 3, 2015, wherein also Bombay High Court, following its earlier decision in Idea Cellular Ltd. Vs. Dy. CIT [2008] 301 ITR 407 (Bom.) has taken a similar view and said as under (page 307 of 372 ITR): ...if a query is raised during assessment proceedings and responded to by the assessee, the mere fact that it is not dealt with in the Assessment Order would not lead to a conclusion that no mind had been applied to it. 12. Similarly in the case of CIT vs. Mahendra Kumar Bansal, 2008(297)ITR 99 (Alld), this Court held that merely because the income tax officer had not written lengthy o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 263 of the Act is not sustainable, as according to him definition of expression record as per Clause (b) of Explanation to Section 263 of the Act includes all the records relating to Section 263 proceedings available at the time of examination by the CIT only, and not in subsequent order or fresh order passed thereafter under Section 263/143(3) of the Act, which could justify the proceedings under Section 263 carried out by the CIT. 14. We heard Sri Shubham Agarwal, learned counsel for the Department, Sri Suyash Agarwal, learned counsel for the respondent-assessee and have perused the record. 15. The revenue in this appeal has tried to establish that ITAT was not correct in setting aside the order passed by the Commissioner under Section 263 of the Act, on the ground, that assessee had not furnished entire details regarding the contracts, which was cancelled and also the A.O. not looking into the provisions of Section 40(a)(i-a) of the Act whereby such expenses on which the T.D.S. was liable to be deducted, but was not actually deducted were required to be disallowed and added back under the said provisions of the Act. 16. On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. 19. Similar view has been taken by the Bombay High Court in the case of Commissioner of Income Tax vs. Development Credit Bank Ltd., 323 ITR 83(SC), relevant paragraph of the same is extracted below: Held, dismissing the appeal, that there was no basis or justification for the Commissioner to invoke the provisions of Section 263. The Assessing Officer after making an enquiry and eliciting a response from the assessee came to the conclusion that the assessee was entitled to depreciation on the value of securities held on the trading account. The Commissioner could not have treated this findings to be erroneous or to be prejudicial to the interests of the Revenue. The observation of the Commissioner that the Assessing Officer had arrived at a finding without conducting an enquiry was erroneous, since an enquiry was specifically held with reference to which a disclosure of details was called for by the Assessing Officer and furnished by the Assessing Officer and fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stified in setting aside the order passed by the Commissioner of Income-tax under Section 263. 22. The Division Bench of this Court in the case of J.P.Srivastava Sons vs. CIT, 111 ITR 326 (Alld) had taken a similar view. The relevant paragraph is extracted hereunder: We are of opinion that the approach of the Commissioner is erroneous. The failure of the Income-tax Officer to deal with the claim of the assessee in the assessment order may be an error, but an erroneous order by itself is not enough to give jurisdiction to the Commissioner to revise it under Section 33B. It must further be shown that the order was prejudicial to the interests of the revenue. It is not each and every order passed by the Income-tax Officer which can be revised under Section 33B. Section 33B contemplates a notice to the assessee. In response to the notice the assessee may show to the Commissioner that the order sought to be revised is not prejudicial to the interests of the revenue. In that event, the Commissioner would have no jurisdiction to take any further action. He would be competent to take action only if he rejects the ple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed jurisdiction under Section 263 of the Act by remanding back the matter to assessing authority on 25.3.2013, while the appeal was decided by CIT (A) on 5.6.2013. Thus, the order passed by the ITAT does not suffer from any irregularity and needs no interference. 26. As far as the word record appearing in Clause (b) of Explanation-1 to Section 263 is concerned, it means the record available at the time of examination by the Commissioner of Income Tax and not any material or record available subsequent to his examination or exercise of power under Section 263. Thus, any order passed by the AO in the assessment proceedings after the remand by the CIT cannot be looked upon and the argument made by the counsel for the revenue for relying upon the fresh assessment order made on 7.3.2004 under Section 263/143(3) of the Act cannot be accepted in view of the above provision of law. 27. In the present case, the Tribunal had recorded specific finding of fact that the assessing authority had examined each and every aspect of the case on which the remand order hinges, as such the remand order was not sustainable in the eyes of law. 28. Considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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