TMI Blog2020 (1) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 263. Therefore, we do not find any illegality in the action of Ld. Pr.CIT in exercising the said jurisdiction. Final directions of Ld. Pr.CIT to be erroneous to some extent. It is noted that there was blanket set-aside of the quantum assessment order overlooking the fact that the addition of ₹ 7.50 Lacs as made by Ld.AO in the quantum assessment order had already attained finality and there would be no occasion to revisit the same in revisional jurisdiction since the quantum assessment order could not be said to be prejudicial to the interest of the revenue, to that extent. AO is directed not to delve into the verification of loan of ₹ 7.50 Lacs stated to be obtained from M/s Reiva Sarees. Proceeding further, we are of the considered opinion that it was incumbent on the part of Ld. Pr.CIT to appreciate the assessee s submissions in the correct perspective. Pr. CIT, in the show-cause notice, has observed that unsecured loans obtained from certain entities remained to be verified. However, the loan obtained from Anuj Gems (wrongly referred to as Anju Gems) was only a brought forward loan which was repaid by the assessee during the year. Therefore, there coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25,00,000 2 Dharam Oberoi 9,00,000 3 Diyas Productions Private Limited 1,59,25,000 4 Reiva Sarees 7,50,000 3. The PCIT erred in concluding that the loan of ₹ 4,25,556/- taken from Suchitra Home Entertainment (I) Private Limited in the earlier year remained unverified. 4. The PCIT erred in concluding that the Assessing Officer has allowed the relief for TDS of ₹ 92,000/- without enquiring into the claim. 1.2 The learned Authorized Representative for Assessee (AR), at the outset, submitted written submissions in support of the appeal. On the other hand, Ld. CIT-DR drawing our attention to the orders of lower authorities, placed reliance on various judicial pronouncements to support the submissions that revisional jurisdiction u/s 263 were validly invoked since it was a case of lack of inquiry. We have care ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation-2 to Section 263 was found clearly applicable to the factual matrix. After referring to certain case laws as enumerated in the impugned order, Ld. Pr.CIT, set-aside the quantum assessment order and directed Ld.AO to pass fresh assessment order. The directions given be Ld. Pr. CIT could be extracted in the following manner: - 5. In view of the provisions of Section 263 of the Income Tax Act and also the ratio of the decisions as above, it is my considered view that the impugned order is erroneous and prejudicial to the interests of the revenue. The assessment order, is therefore, setaside and the Assessing officer is directed to pass fresh assessment order after giving assessee the opportunity of being heard as per act and law in terms. Aggrieved by aforesaid directions, the assessee is under further appeal before us challenging revisional jurisdiction u/s 263. 3. The Ld. Authorized Representative for Assessee (AR), in its written submissions, as placed on page nos. 1-5 of the paper book, has submitted that requisite details were already placed before Ld. AO during the course of regular assessment proceedings, which were duly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Pr.CIT, in our considered opinion, had valid reason to assume revisional jurisdiction u/s 263 since it was the only recourse available to revenue under law to seek revision of erroneous orders. 4.2 We find that as per the provisions of Section 263 of Income Tax Act, 1961, specified revenue authorities may call for and examine the record of any proceedings under the Act and may proceed to revise the same provided two conditions are satisfied-(i) the order of the assessing officer sought to be revised is erroneous; and (ii) it is prejudicial to the interest of the revenue. If one of the condition is absent i.e. if the order of the Incometax Officer is erroneous but is not prejudicial to the revenue or if it is not erroneous but it is prejudicial to the revenue - recourse cannot be had to Section 263 of the Act as held by Hon ble Supreme Court in Malabar Industrial Co. Ltd. V/s CIT [243 ITR 83 10/02/2000] noted by Hon ble Delhi High Court in CIT V/s Vikas Polymers [194 Taxman 57 16/08/2010]. 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' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 quasi-judicial controversies as it must in other spheres of human activity [Parashuram Pottery Works Co. Ltd. vs. ITO, (1977) 106 ITR 1 (SC)]. It was further observed as under: - From the aforesaid definitions as 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 erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualize 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 visualized where the Income-tax Officer while making an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest of the revenue, if in the opinion of appropriate authority-(1) the order was passed without making inquiries or verifications which should have been made; (ii) the order is passed allowing any relief without inquiring into the claim; (iii) the order is not in accordance with any direction or instructions etc. issued by the Board u/s 119; or (iv) the order was not in accordance with binding judicial precedent. 4.6 Applying the stated principles to the factual matrix and after going through the replies submitted by the assessee during the course of regular assessment proceedings, we concur with the submissions of Ld. CIT-DR that it was a case of lack of inquiry and there was no application of mind by Ld. AO on the issues which formed subject matter of revisional jurisdiction u/s 263. Therefore, we do not find any illegality in the action of Ld. Pr.CIT in exercising the said jurisdiction. 4.7 So far as the case laws being relied upon by Ld. AR is concerned, we find that the case law of Hon ble Bombay High Court in CIT V/s Fine Jewellery (I) Ltd. (ITA No.296 of 2013 dated 03/02/2015) deal with a situation wherein the assessment order was passe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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