TMI Blog2019 (12) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... is per incuriam has no precedential value. In the circumstances, we are of the considered opinion that ld. PCIT was justified in exercising the jurisdiction vested with him u/s.263 - Appeal filed by the assessee stands dismissed. - I.T.A. No. 1498/CHNY/2019 - - - Dated:- 11-12-2019 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER For the Appellant : Shri. G. Baskar, Advocate For the Respondent : Shri. A. Sundararajan, Addl. CIT. ORDER PER INTURI RAMA RAO, ACCOUNTANT MEMBER This is an appeal filed by the assessee directed against the order of the ld. Principal Commissioner of Income Tax-1, Madurai ( PCIT for short) dated 27.03.2019 for the Assessment Year (AY) 2014-2015 passed u/s.263 of the Income Tax Act, 1961 (in short the Act ) 2. The Assessee raised the following grounds of appeal: 1.1 The impugned order of the CIT u/s.263 is erroneous, opposed to law and facts and is liable to be cancelled. 1.2 The CIT erred in passing the order without application of mind and without adverting to the submissions made before him. 1.3 The CIT erred in invoking the provisions of Section 263 insofar as the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83.42 acres at Periakulam Village in Ramanathapuram Dist and against the total consideration of G10,92,74,700/-, assessee had disclosed purchase consideration of G3,18,76,896/-. This information stated to have been found consequent to the search and seizure operations in the case of M/s. DSF group to whom the said property was sold by the assessee and the said group had admitted receipt of on-money consideration before the Settlement Commission. Despite this specific information before the Assessing Officer, he had failed to consider the sources for on-money payment in the hands of appellant. 5. Therefore, ld. PCIT formed an opinion that the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue, accordingly issued show cause notice u/s.263 of the Act on 02.01.2019 calling upon the assessee to show cause why an order setting aside the assessment should not be passed. 6. In response to the show cause notice, the assessee filed detailed written submission on 14.01.2019 contending that assessment was taken up for limited scrutiny for the purpose of verifying the following items. a) Large other expenses claimed in the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Per contra, ld. Sr. Departmental Representative placing reliance on the orders of lower authorities submitted that Circulars gave liberty to the Assessing Officer to consider any other items which would come to his notice during the course of assessment proceedings. Thus, he submitted that the ld. PCIT was right in exercising the powers of revision. 9. We heard the rival submissions and perused the material on record. The only issue in the present appeal relates to the validity of power of revision exercised by the ld. PCIT u/s.263 of the Act. Admittedly, the assessment was completed by the Assessing Officer under limited scrutiny assessment in order to verify the following two items. a) Large other expenses claimed in the Profit and Loss account. b) Mismatch between income/receipt credited to profit and loss account considered under other heads of income and income from heads of income other than business of profession the Assessing Officer completed the assessment after due verification of these items. From the perusal of Sub Clause (d) of Clause 3 of the said CBDT Instruction No.20/2015, dated 29th December, 2015, the Assessing Officer is empowered to take u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unscrupulous assessee might endeavour to lessen the tax burden upon themselves by filing returns in the names of their wives and minor children. I must confess, I have some difficulty in appreciating that if the Scheme did not apply to minors; and ladies, how the rigors of enquiry and investigation was reduced in their case. It is well established that circulars of the Board issued in exercise of powers under section 119 have a binding effect and the revenue are bound to act upon them. It is not necessary to labour on that question, but the most question is whether the Scheme encompassed ladies and minors. I am clearly of the view that it did not. If it did not include them, any discussion on the binding character of the orders of the Board have no relevance. The Vice President Mr. Mathur took note of the fact that the scheme of the Board made a distinction between the adult male assessees and assessees who are ladies and minors. He rightly observed that the distinction was done because the Government found some unscrupulous assessees having huge income may be trying to reduce the rate of the tax applicable to them by showing the income in the names of ladies and minors to whom lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the ITO had made the assessment without enquiry and evidence and in undue haste. The situation in the instant case, is exactly similar. The filing of return, the equiry and assessments were all done on the same day. I am, therefore, firmly of the view that the enquiry, if at all there was any, was conducted in undue haste. If any enquiry worth the name was conducted, the attention of the Inspector and the ITO was not directed towards ascertainment of the core question, namely, when and from where did funds come and whether the case of the assessee in regard thereto was gullible. The enquiry not having directed towards that question, it was no equiry. The scheme did not liberalise matters for the assessee, who was a lady, wife of a trader. The assessment, thus, on the basis of such enquiry was clearly erroneous. 18. That brings us to the question of jurisdiction of the Commissioner under section 263 to cancel assessment and direct a fresh assessment. If the assessment is erroneous, it must toe presumed to be prejudicial to the interest of the revenue. The finding of the Commissioner in this case was that the order of the assessment was prejudicial to the interest of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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