TMI Blog2021 (5) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... VICE-PRESIDENT Assessee is in appeal before the Tribunal against order of the ld.Pr.CIT-7, Ahmedabad dated 30.3.2019 passed under section 263 of the Income Tax Act, 1961 for the Asstt.Year 2014-15. 2. Sole grievance of the assessee is that the ld.Pr.CIT has erred in taking cognizance under section 263 of the Act and thereby setting aside the assessment order dated 27.12.2016 passed under section 143(3) of the Act. The ld.Pr.CIT has erred in directing the AO to pass a fresh assessment. 3. Brief facts of the case are that the assessee has filed its return of income on 24.11.2014 declaring total income at ₹ 10,71,190/-. The case of the assessee was selected for scrutiny assessment and assessment order was passed on 27.12.2016 whereby income of the assessee was determined at ₹ 11,96,180/-. The ld.Commissioner perused the assessment record and formed an opinion that the assessment order is erroneous as well as prejudicial to the interest of Revenue because according to him, the ld.AO has not conducted a proper inquiry with regard to the land development expenditure. Therefore, he issued a show cause notice under section 263 of the Act; copy of such notice is availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered before passing the order. Sd/- (RAJKUMAR LACHHIRAMAKA Pr. Commissioner of Income Tax - 7, Ahmedabad 4. In response to the show cause notice, the assessee has filed detailed written submissions. Copy has been placed on page no.8 to 13 of the paper book. The ld.Commissioner was not satisfied with the explanation of the assessee, and he set aside the assessment order. Brief finding recorded by him in para-5 6 reads as under: 5. During the course of the hearing on 29/03/2019 (for 263 proceedings), the assessee has submitted copies of agreements and also the details of payments made to different persons concerning this expenditure of ₹ 21,46,5007-. Since these details were not available with the Assessing Officer at the time of the assessment proceedings, it would be in the fitness of things that the said order of the A.O. is set aside to this limited issue and he is directed to make necessary enquiries regarding the genuineness of such expenses. In this regard, the A.O. may also summon these persons (who have allegedly received the payment) and ask them to produce evidences as to their living in that property and also as to why different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer is erroneous in so far as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. [Explanation.- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Incometax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) record shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice pointing out the reasons for the formation of his belief that action u/s 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. At this stage, before considering the multi-fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the CIT taken u/s 263. The ITAT in the case of Mrs. Khatiza S. Oomerbhoy Vs. ITO, Mumbai, 101 TTJ 1095, analyzed in detail various authoritative pronouncements including the decision of Hon ble Supreme Court in the case of Malabar Industries 243 ITR 83 and has propounded the following broader principle to judge the action of CIT taken under section 263. (i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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