TMI Blog2018 (3) TMI 1906X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction. The Hon'ble Delhi High Court in the case of New Delhi Television Ltd.[ 2013 (10) TMI 428 - DELHI HIGH COURT ] by referring to its earlier decision in the case of CIT vs Sunbeam Auto Ltd.,[ 2009 (9) TMI 633 - DELHI HIGH COURT ] noted the distinction between purported no verification by the Assessing Officer and incomplete or inadequate verification . The Hon'ble High Court emphasised the distinction between lack of inquiry and inadequate inquiry. According to it, if there was an inquiry, even inadequate, that would by itself not give an occasion for the Commissioner to invoke Sec. 263 of the Act merely because he has a difference of opinion in the matter. Insofar as the present case is concerned, in our considered opinion, even the charge of inadequate inquiry by the Commissioner is not based on his examination of the record of proceedings, but on his subjective analysis of the records called for by him subsequent to initiation of the proceedings u/s 263(1) of the Act. - Decided in favour of assessee. - ITA NO. 3389/MUM/2014 - - - Dated:- 12-3-2018 - SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER For the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account has been analyzed here but the cash summary prepared by the assessee in almost all the bank accounts have similar manipulation/omissions , without even attempting to point out what these manipulations/omissions are. 3. In brief, the relevant facts are that for Assessment Year 2009-10, assessee filed a return of income on 27.07.2009 declaring a total income of ₹ 5,04,98,760/-, which was subject to a scrutiny assessment u/s 143(3) of the Act vide order dated 08.06.2011. In the return of income, assessee had declared income from salaries and income from other sources. While completing the assessment, the Assessing Officer made two-fold additions; firstly, on account of the rateable value of the property for which no income had been declared by the assessee; and, secondly, deduction u/s 80G of the Act was restricted to ₹ 26,64,938/- instead of ₹ 28,00,000/- claimed by the assessee. In this manner, the total income was assessed at ₹ 5,06,96,820/- as against the returned income of ₹ 5,04,98,760/-. 4. Subsequently, the Commissioner has invoked his revisionary jurisdiction u/s 263 of the Act and set-aside the assessment order dated 08.06.2011 (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar ended 31.03.2006, 31.03.2007, 31.03.2008 and 31.03.2009 prepared by the assessee and that such statements were accepted by the Assessing Officer without examining their correctness since they were not on the record of the Department before the assessment proceedings were carried out by the Assessing Officer. On these lines, the Commissioner show-caused the assessee as to why the assessment order dated 08.06.2011 (supra) may not be considered as erroneous and prejudicial to the interests of the Revenue within the meaning of Sec. 263 of the Act. In the show-cause notice, operative part of which has been reproduced by the Commissioner in the order itself, the case made out by the Commissioner is that the purpose of making cash withdrawals and keeping the cash in hand and then re-depositing the same in the bank accounts for the year under consideration was not properly examined by the Assessing Officer. 6. In reply, assessee resisted the action of the Commissioner and reiterated that the entire explanation and material submitted by the assessee was properly considered by the Assessing Officer and the order passed u/s 143(3) of the Act on 08.06.2011 (supra) could not be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes that they were filed on 11.06.2012, which is after the completion of assessment and according to him, this would not justify the availability of opening cash balance of ₹ 37,54,000/- as on 01.04.2008. Further, the Commissioner has noted that his examination was confined to one of the bank accounts maintained with HDFC Bank and that if all the bank accounts were to be examined, it would show that the claimed opening cash balance with the assessee was incorrect. In this background, the Commissioner concluded as under :- 36. In view of the above, therefore, the assessment framed by the A.O has been done by him without making necessary inquiries so much so that he did not even bother to verify the mathematical accuracy of the cash summary/bank statements available to him and accepted the claim of the assessee which, as illustrated herein above was totally false and manipulated by resorting to backward calculations to justify the claim made and leaving certain transactions of cash deposits while including certain transactions of payment by cheques as cash withdrawals. Therefore the order of the A.O is conclusively found to be erroneous as well as prejudicial to the interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the bank accounts, full details of investments with the source of investments and, therefore, the deposits of ₹ 30,70,000/- made in the HDFC Bank during the year were appropriately explained. 8. Another aspect which has been agitated by the learned representative is that the Commissioner has sought to justify invoking of Sec. 263 of the Act based on the material which pertains to other years whereas Sec. 263 of the Act requires that the Commissioner is to confine himself to the record of the proceedings before him , which does not justify his examination of the record of other assessment years. In this context, the learned representative referred to the material placed at pages 1 to 135 of the Paper Book, which has been considered by the Assessing Officer, such material being the notices issued u/s 142(1) of the Act, replies of the assessee thereto as also the copies of the bank statements of the three banks for the period 01.04.2005 to 31.03.2009, etc. 9. On the other hand, the ld. DR has supported the order of the Commissioner by placing reliance thereon. The emphasis of the ld. DR is that the discussion by the Commissioner brings out that the assessment order wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been judicially noticed, invoking of Sec. 263 of the Act cannot be with a view to starting any fishing and roving inquiries, especially in matters or orders which otherwise have attained finality. In the instant case, though the Commissioner has made a lengthy order in coming to conclude that the assessment order dated 08.06.2011 (supra) is erroneous insofar as it is prejudicial to the interests of the Revenue, but in sum and substance, the basis of his decision is that the Assessing Officer finalised the assessment without making necessary inquiries in the context of the cash summary/bank statements relied upon by the assessee to explain the availability of cash in hand for justifying the cash deposits made in the bank account. At this point, we may to touch upon the meaning of the expression record which is contained in Clause (b) of Explanation-1 to Sec. 263(1) of the Act. In terms thereof, the expression record is meant to include all records relating to any proceedings under this Act available at the time of examination by the Commissioner. We are referring to this for the reason that an argument has been set-up before us by the appellant that in the course of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer avers that source of deposits of ₹ 30,70,000/- are fully verified with documentary evidence during the course of assessment proceedings. It is requested that no remedial action is required in view of the above explanation . Similarly, the Addl. Commissioner of Income-tax, Range-26 vide his communication dated 05.07.2012 to the Commissioner of Income-tax-26, Mumbai based on the report of the Assessing Officer dated 26.06.2012 opined that assessee s claim that the cash deposits were out of earlier cash withdrawals can be accepted on the basis of the statements furnished. We are only pointing out the aforesaid to bring out the contrary perceptions by the Assessing Officer (post finalisation of assessment) while communicating with the Commissioner with respect to the issue of cash deposits in the bank account. While the communication dated 03.01.2013 is based on the premise that no explanation/enquiry had been made by the A.O regarding AIR information that the assessee had cash deposits aggregating to ₹ 30,70,000 during the previous year, into his saving bank account , the earlier communication of the Assessing Officer brings out that the source of deposits were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. At the relevant time of initiation of Sec. 263 of the Act, what was available on record were the communication of the Assessing Officer dated 03.01.2013 seeking remedial action u/s 263 of the Act and this too was contradictory to the earlier communication of the Assessing Officer dated 26.06.2012, which we have referred in the earlier part of this order. Such examination of the record, in our view, even prima facie, would not establish the fulfilment of the twin conditions contained in Sec. 263(1) of the Act. Therefore, in our view, the initiation of proceedings by the Commissioner u/s 263(1) of the Act is legally infirm and beyond jurisdiction. 13. At this stage, we may also refer to a plea set-up by the assessee based on the decision of our co-ordinate Bench in the case of Ashok Kumar Shivpuri, ITA No. 631/Mum/2014 dated 07.11.2014. In this case, the Tribunal found that the Commissioner invoked Sec. 263 of the Act based on a proposal received from the Assessing Officer. The Tribunal found it inconsistent with the requirement of Sec. 263(1) of the Act and held that the initiation of proceedings u/s 263 of the Act was bad-in-law. The aforesaid proposition also supports t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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