TMI Blog2019 (11) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... ous' it 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 AO has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Records which were examined by the ld. PCIT, had it been examined by due application of mind, the ld. PCIT would. have known that CCD pertaining to Assessment Year 2013-14 i.e., the immediately preceding Assessment Year and only on conversion, the entries have been made in the share capital and share premium account. The other decisions relied upon by the ld.. DR are misplaced and need no separate adjudication. Considering all supported by a vortex of evidences, examined and analysed by the Assessing Officer during the course of assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es raised by the ld. PCIT were duly replied by the assessee. 4. After considering the submissions of the assessee, the ld. PCIT concluded that the Assessing Officer has failed to apply his mind and has not examined the receipt of share premium thereby making the assessment order erroneous and prejudicial to the interest of the Revenue and accordingly, the ld. PCIT set aside the assessment order and directed the Assessing Officer to pass fresh assessment order after making proper enquiries/verifications. 5. Before us, the ld. counsel for the assessee vehemently submitted that the ld. PCIT has wrongly assumed jurisdiction u/s 263 of the Act. It is the say of the counsel that during the course of assessment proceedings, the Assessing Officer has raised specific queries to which the assessee had replied, specifically supported with documentary evidences and therefore, it cannot be said that the Assessing Officer has not made any enquiry on the impugned issue. The ld. counsel for the assessee further stated that the ld. PCIT has grossly erred in treating the entire increase in share capital for the year under consideration. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year, give complete names and addresses of applicants on shares alongwith PAN, file a copy of ledger account alongwith documents filed with ROC. 11. Reply of the assessee is placed at page 15 which shows the details of documents filed with reply. Vide notice dated 01.08.2016, the Assessing Officer further asked the assessee to furnish proof that the debenture money has been received in F.Y.2012-13 and valuation report of shares to justify premium amount. 12. Reply to this query is placed at page 139 of the paper book wherein the assessee has furnished complete details of debentures justifying that they were taken in F.Y. 2012-13 supported by copy of valuation report of shares justifying he premium of conversion on which basis CCD being converted into shares in Assessment Year 2014- 15, the year under consideration. 13. This entire exercise of the Assessing Officer can be seen reflected in the body of the assessment order itself. A conspectus reading of the assessment order vis a vis the issues raised by the ld. PCIT would show that the ld. PCIT has assumed jurisdiction on the ground that no proper enquiries were conducted by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of sale of land and about the validity of the assessee's claim of deduction under section 54F of the Act. Learned counsel for the Revenue however submitted that these inquiries were confined to the claim of deduction under section 54F of the Act in the context of fulfilling conditions contained therein and may possibly have no relevance to the question whether the sale of land gave rise to a long term capital gain. Looking to the tenor of queries by the Assessing Office and details . A.Y. 2009-10 supplied by the assessee, we are unable to accept such a condition. In that view of the matter, the observation of the Tribunal that the Assessing Officer having made inquiries and when two views are possible, revisional powers could. not be exercised, called for no interference. Since with respect to computation and assertions of other aspects of deduction under section 54Fofthe Act, the Tribunal has remanded the proceedings, nothing stated in this order would. affect either side in considerations of such claim. 7. No question of law arises. Tax Appeals are dismissed. 16. The Hon'ble Supreme Court in M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs that any order passed therein by the AO is erroneous insofar as it is prejudicial to the interest of the Revenue, he may after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. The twin requirements of the section are manifestly for a purpose. Merely because the CIT considers on examination of the record that the order has been erroneously passed so as to prejudice the interest of the Revenue will not suffice. The assessee must be called, his explanation sought for and examined by the CIT and thereafter if the CIT still feels that the order is erroneous and prejudicial to the interest of the Revenue, the CIT may pass revisional orders. If, on the other hand, the CIT is satisfied, after hearing the assessee, that the orders are not erroneous and prejudicial to the interest of the Revenue, he may choose not to exercise his power of revision. This is for the reason that if a query is raised during the course of scrutiny by the AO, which was answered to the satisfaction of the AO, but neither the query nor the answer were ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is erroneous; (ii) by virtue of the order being erroneous prejudice has been caused to the interests of the Revenue. It has, therefore, to be considered firstly as to when an order can be said to be erroneous. We find that the expressions erroneous , erroneous assessment and erroneous judgment have been defined in Black's Law Dictionary. According to the definition, erroneous means involving error; deviating from the law . Erroneous assessment refers to an assessment that deviates from the law and is, therefore, invalid, and is a defect that is jurisdictional in its nature, and does not refer to the judgment of the Assessing Officer in fixing the amount of valuation of the property. Similarly, erroneous judgment means one rendered according to course and practice of court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal principles . 12. From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s prejudicial to the interests of the Revenue. We have already held. what is erroneous. It must be an order which is not in accordance with the law or which has been passed by the Income-tax Officer without making any enquiry in undue haste. We have also held. as to what is prejudicial to the interests of the Revenue. An order can be said to be prejudicial to the interests of the Revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised. There must be material available on the record called for by the Commissioner to satisfy him prima facie that the aforesaid two requisites are present. If not, he has no authority to initiate proceedings for revision. Exercise of power of suo motu revision under such circumstances will amount to arbitrary exercise of power. It is well-settled that when exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on record to satisfy it in that regard. If the action of the authority is challenged before the court it would. be open to the courts to exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only on conversion, the entries have been made in the share capital and share premium account. 22. The other decisions relied upon by the ld.. DR are misplaced and need no separate adjudication. 23. Considering the facts of the case in hand, in totality, in the light of judicial decisions discussed hereinabove, supported by a vortex of evidences, examined and analysed by the Assessing Officer during the course of assessment proceedings, further supported by thorough investigations/enquiries made by the Assessing Officer during the assessment proceedings, we are of the considered view that there remains nothing for the ld. PCIT to assume jurisdiction u/s 263 of the Act to say that the assessment order is not only erroneous but prejudicial to the interest of the revenue. We are of the considered view that the ld. PCIT has wrongly assumed jurisdiction u/s 263 of the Act, hence his combined order for all the A.Ys deserves to be set aside. We, accordingly, set aside the order of the ld. PCIT and restore that of the Assessing Officer. We order accordingly. 24. In the result, the appeal of the assessee in ITA No. 3846/DEL ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
