Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2019 (12) TMI 144

..... sh the fact that these submissions were not available in the case records and it is also not the allegations of Ld. Pr.CIT. Therefore, the aforesaid action u/s 263 could not be triggered only on the basis of mere apprehension / doubts. Another apprehension raised by Pr.CIT was the fact that order sheet entries were not properly maintained. However, we are not convinced with the reasoning / logic since the no fault could be found on the part of assessee with respect to maintenance of order sheet entries. The same was the responsibility of AO and the assessee could not be made to suffer and go through the entire exercise of assessment proceedings merely because there was certain lapse of this kind on the part of AO. Therefore, the exercise of jurisdiction on this basis could not be held to be justified. We find that the assessee was directed to file various details vide notice dated 15/06/2016, against which two replies were filed by the assessee and the same were subject matter of consideration by Ld. AO. After satisfying himself with the details furnished by the assessee, the assessment was framed. The Ld. Pr.CIT finding shortcomings in the verification made by AO, set-aside the or .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... /2010]. The Hon ble Supreme Court in Malabar Industrial Co. Ltd. V/s CIT (supra) has held that the phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue, unless the view taken by the Income-tax Officer is unsustainable in law. The said principal has been reiterated by Hon ble Court in its subsequent judgement titled as CIT V/s Max India Ltd. (295 ITR 282). Similar principal has been followed by jurisdictional High Court in Grasim Industries Ltd. V/s CIT (321 ITR 92). 1.2 The Hon ble Delhi High Court, CIT V/s Vikas Polymers (supra), further observed that as regards the scope and ambit of the expression "erroneous" .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... prejudicial to the interest of the revenue and that fresh determination of the case is warranted. There must be material to justify the Commissioner's finding that the order of the assessment was erroneous insofar as it was prejudicial to the interest of the revenue. 1.4 The Hon ble Delhi Court, in the cited decision, further observed that there is a fine though subtle distinction between "lack of inquiry" and "inadequate inquiry". It is only in cases of "lack of inquiry" that the Commissioner is empowered to exercise his revisional powers by calling for and examining the records of any proceedings under the Act and passing orders thereon. In Gabriel India Ltd. (supra), it was expressly observed: - "The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasijudicial controversies as it m .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ers available under another provision of the Act. In this regard, it must be specifically noticed that against an order of assessment, so far as the revenue is concerned, the power conferred under the Act is to reopen the concluded assessment under section 147 and/or to revise the assessment order under section 263. The scope of the power/jurisdiction under the different provisions of the Act would naturally be different. The power and jurisdiction of the revenue to deal with a concluded assessment, therefore, must be understood in the context of the provisions of the relevant sections. While doing so, it must also be borne in mind that the legislature had not vested in the revenue any specific power to question an order of assessment by means of an appeal. Regarding applicability of Section 263, what has to be seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudicial to the interest of the revenue is the basic pre-condition for exercise of jurisdiction under section 263. Both are twin conditions that have to be conjointly present. Once such satisfaction is reached, jurisdiction to exercise the power would be available subject to o .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ds were not available, ignoring that all information necessary for completion of assessment including books of accounts, bills, vouchers were produced before the Ld. AO in the asst. order and therefore, the assumption of jurisdiction by the Pr. CIT u/s 263 of the I.T. Act, 1961 was not valid and justified. 2. The learned Pr. CIT erred in setting aside the assessment framed u/s 143(3) of the I.Tax Act, 1961 on 03.12.2016, by relying upon the provisions of Sec. 263 of the I.Tax Act, 1961, without in any manner indicating as to how the assessment framed was erroneous and prejudicial to the interest of the revenue and therefore, the order u/s 263 dt. 19.03.2019 be held to be invalid and bad-in-law. 2.2 The assessment for year under consideration was framed by Ld. AO on 03/12/2016 accepting returned income of ₹ 17.82 Crores e-filed by the assessee on 30/11/2014. The assessment order is a short order which note that notice u/s 142(1) dated 15/06/2016 was issued along with questionnaire which was responded to by the assessee and details were furnished. Another observation in the order is that books of account along with bills and vouchers were produced which were subjected to test c .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... n-2 to Section 263, the order was deemed to be erroneous as well as prejudicial to the interest of the revenue. Finally, the assessment order was set aside and a direction was issued to redo the assessment de-novo after affording adequate opportunity to the assessee. Aggrieved, the assessee is under appeal before us. 3. We have heard and considered the submission made by respective representatives. We have also perused the material placed before us including questionnaire dated 15/06/2016 issued by Ld. AO during assessment proceedings and the assessee s response thereto. 4. Upon perusal of notice u/s 142(1) dated 15/06/2016 issued to the assessee during the course of original assessment proceedings, it could be seen that a detailed questionnaire was issued to the assessee asking him to submit the requisite details / documents under various heads etc. The said details were furnished by the assessee in couple of replies which are placed on page nos. 23 to 117 of the paper book. In one of the replies, the assessee has, inter-alia, explained its nature of business, details of projects undertaken by the assessee, along with details of bank accounts. In another reply, the assessee filed .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... two replies were filed by the assessee and the same were subject matter of consideration by Ld. AO. After satisfying himself with the details furnished by the assessee, the assessment was framed. The Ld. Pr.CIT finding shortcomings in the verification made by Ld. AO, set-aside the order and directed Ld. AO to framed assessment de-novo. However, as already noted by us, Ld. AO had appreciated the details submitted by the assessee and chose not to make any additions on the basis of details furnished by the assessee. Therefore, the order could not be branded as erroneous or prejudicial to the interest of the revenue simply because the revisional authority felt that further verifications should have been done in the matter and more aspects were to be considered while framing the assessment. If that be so, there would be no end to assessment proceedings and the matter would never attain finality. The Ld. Pr.CIT, in our opinion, could not be clothed with unbridled power to undo each and every assessment merely because, in his opinion, further verifications were required to be made unless it was shown that the order under consideration was not passed in accordance with law. 7. Therefore, k .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||