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TMI Blog2019 (12) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... IT failed to properly appreciate the detailed submissions that there could be no prejudice to the interest of revenue if the AC had not travelled beyond the scope of the limited scrutiny for which the return was selected. 2.2 The CIT erred in summarily brushing aside the fact that the assessment was pending for limited scrutiny by holding that it was a mere procedural matter. 2.3 The CIT erred in holding that the AC ought to have acted upon a new issue, which can be initiated only under completely different proceedings u/s 153C in the pending assessment proceedings. 2.4 In any event, the CIT failed to note that proceedings u/s 153C r.w.s. 153A were actually initiated on 28.11.2016 and on being objected to by the Asssessee, the AC withdrew the same before the assessment was completed. 2.5 The CIT erred in referring to section 153C which is not at all applicable to this year. 2.6 The CIT erred in holding that the Assessing Officer did not conduct necessary enquiries and verifications, which is contrary to the records. 3. The CIT erred in relying on cases that are totally distinguishable on facts and has failed to appreciate the submissions of the Appellant in the proper p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under other heads of income and income from heads of income other than business of profession''. The assessment was completed by the Assessing Officer after due verification of those items and therefore the assessment order cannot be said to be erroneous and prejudicial to the interests of the Revenue. However, the ld. PCIT opined that Assessing Officer ought to have considered the information received from the Deputy Commissioner of Income tax, Central Circle-1, Madurai on 18.09.2015 during the course of pendency of scrutiny assessment proceedings. Non consideration of this information rendered the assessment order erroneous and prejudicial to the interests of the Revenue, accordingly set aside the assessment with direction to the Assessing Officer to redo the assessment after considering the information received from the Deputy Commissioner of Income tax as well as after giving an opportunity of hearing to the assessee. Accordingly, he set aside the assessment order vide order dated 27.03.2019. 7. Being aggrieved by the order of the ld. PCIT, the assessee is in appeal before us. It is contented that assessment was completed based on limited scrutiny and the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is potential escapement of income exceeding G5 lakhs for non metro and G 10 lakhs in the case of metro. In the present case, admittedly, the Assessing Officer was in receipt of information from the Deputy Commissioner of Income tax, Central Circle-1, Madurai vide letter dated 18.09.2015 stating that assessee had paid on money consideration at the time of purchase of land located in Periakulam Village in Ramanathapuram Dist to M/s. DSF group. Undisputedly, this information forms part of record has material bearing in the assessment of the tax liability of the assessee. Therefore, considering exception clause carved in Sub Clause (d) of Clause 3 of the said CBDT Instruction, the Assessing Officer should have sought permission from the ld. PCIT to enquire into this issue of assessability of payment of on-money consideration at the time of purchase of land. There is no gain saying that non enquiry of an issue renders an assessment order erroneous and prejudicial to the interests of the Revenue, if the procedure followed by the Assessing Officer to bring in lesser revenue than some other procedure, the order passed by the Assessing Officer would obviously be erroneous and pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to confirm whether ladies and minors were benamidars of some other assessees whose income was taxable at higher rate of tax. Was that done? Certainly not. Having missed the central point, the Tribunal fell into a grievous error in holding that the assessment had to be completed within the period of grace. Not to complete it within that period would be denying to a lady or minor assessee to the benefit of the scheme. I regret, the majority conclusion of the Tribunal is fallacious. The law in regard to assessment was not modified so far as ladies and minors were concerned. In the course of mass communication whenever a return was filed by a lady or a minor, it could have been accepted, but could not have been disposed of in terms of the scheme. It should have been treated as an original assessment proceeding- with all the rigors in regard to initial capital investment. No correction or amelioration of the procedure in their case was envisaged. These assessments had to be completed in terms of section 143(3) and where it was prejudicial to the revenue the Commissioner would be fully justified in setting aside such assessments. In fact, in the course of mass communication if a return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that she was a benamidar. But if he had done so, he would have laid himself open to the charge that the dice had been loaded against the assessee, the Commissioner, therefore, rightly only ordered further investigation into the claim of the assessee upon this finding if the funds had been provided by the assessee's husband, the income would be taxable in his hands over which a higher rate of tax may have been applicable. In that situation, the order of assessment of the wife, would be per se prejudicial to the revenue. It does no need much argument to convince that if the procedure adopted by an ITO brings in lesser revenue than some other procedure, the order would obviously be prejudicial to the revenue. If that is so, the order of assessment is prejudicial to the revenue. It cannot be doubted that the Commissioner would then have the jurisdiction to act in terms of section 263 and order cancellation of the previous assessment and direct fresh assessment. Reliance placed by the learned senior standing counsel in this regard in Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 is well placed. The Supreme Court in that case observed that: " . . . Even where an income has not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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