TMI Blog2021 (9) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... the same would not lead to a conclusion that the orders passed in earlier years would require revision unless it was shown that the order was erroneous as well as prejudicial to the interest of the revenue. In the present case, we find that the issue was duly considered by Ld. AO after considering assessee s detailed submissions. The view could not be said to be unsustainable view and it was one of the possible view - we find that the subject matter of proposed revision was already deliberated upon by Ld. AO and a possible was taken in the matter - assessment order could not be subjected to revision u/s 263 and the action of Ld. Pr.CIT in invoking jurisdiction u/s 263 could not be sustained - Decided in favour of assessee. - I.T.A. No. 578/Mum/2021 - - - Dated:- 1-9-2021 - Hon ble Shri Mahavir Singh, VP And Hon ble Shri Manoj Kumar Aggarwal, AM For the Assessee : Shri Nimesh Vora, Ld. AR For the Revenue : Shri Vinay Sinha, Ld. CIT-DR ORDER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1.1 As per the provisions of Section 263 of Income Tax Act, 1961, the revenue authorities namely Pr. Commissioner of Income Tax / Commissioner of Income Tax is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 differently or more elaborately. The Section does not visualize the substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is not in accordance with law. 1.3 Further, any and every erroneous order cannot be the subject matter of revision because the second requirement also must be fulfilled. There must be material on record to show that tax which was lawfully leviable has not been imposed as held in Gabriel India Ltd.(supra). However, the expression prejudicial to the interest of the revenue , as held by the Supreme Court in the Malabar Industrial Co. Ltd. case, is not an expression of art and is not defined in the Act and, therefore, must be understood in its ordinary meaning. It is of wide import and is not confined to the loss of tax as held in various judicial pronouncements. At the same time, the words prejudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 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 assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting exercise of revisional power in a situation where two views are possible would really amount to conferring some kind of an appellate power in the revisional authority. This is a course of action that must be desisted from. 1.6 The Hon ble Bombay High Court in Moil Ltd. Vs. CIT [81 Taxmann.com 420] observed that if a query is raised during the assessment proceedings which was responded to by the assessee, the mere fact that the query was not dealt with in the assessment order then it would not lead to a conclusion that no mind has been applied to it and the Assessing Officer is not expected to raise more queries, if he was satisfied about the admissibility of claim on the basis of the material and the details supplied. 1.7 An Explanation-2 has been inserted by Finance Act 2015 in Section 263 with effect from 01/06/2015 to declare that order shall be deemed to be erroneous in so far as it is prejudicial to the interest 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f jetties, making investment etc. 2.2 The material facts are that an assessment for the year under consideration was framed by Ld. AO u/s 143(3) r.w.s. 147 of the Act on 31/12/2018. The original return of income filed by the assessee was already scrutinized u/s 143(3) on 28/04/2015. However, the case was reopened for various reasons. One of the reasons to reopen the assessment, as enumerated in para-3 of assessment order, was as follows: - 7. Para 8 It is observed from the record that assessee company had not routed the interest of ₹ 30,94,61,521/- received on the refund of Income Tax income from assets given on lease of ₹ 24,97,13,828/- through P L A/c, though, this income is offered to tax under income computed under normal provision of the Act. However, in view of decision of Hon'ble ITAT in the case of M/s. Avada Trading Company Ltd (100 ITO 131), interest granted to the assessee under section 244A is assessable in the year in which refund is actually received by the assessee. 2.3 During reassessment proceedings, the assessee submitted that lease rental had two parts viz. (i) interest portion of ₹ 577.69 Lacs which was already credite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdance with Schedule VI of the erstwhile Companies Act, 1956, no adjustment was made to book profits computed u/s 115JB of the Act. Reliance was placed on the decision of Hon'ble Supreme Court in the case of Apollo Tyres Ltd (255 ITR 273) as affirmed in the case of Malayala Manorama Co. Ltd (300 ITR 251), for the submissions that the Assessing Officer could not go beyond the Profit and loss Account except to the extent of adjustment as enumerated in explanation to section 115JB of the Act. 2.4 It is evident from assessment order that though the case was reopened for multiple reasons, however, Ld.AO chose to make additions only against few reasons with following concluding observations: - 7. It is to be noted that on the remaining issues, the submissions made by the assessee are considered and accepted on the basis of merit of the issues and stand taken by the department in earlier years. Upon perusal of assessment order, it could be gathered that the assessee s explanation qua lease was accepted by Ld. AO and no such adjustment of principal component of lease assets have finally been made while computing Book Profits u/s 115JB. At the same time, from the above ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the assessee and facts of the case. The assessee has firstly argued that the assessing officer had completed re-assessment after making relevant enquiries and considering the details and explanation submitted. Therefore, revision u/s 263 is not warranted. It is true, that when the assessing officer issued notice u/s 148, the issue of non-inclusion of the principal component of lease rent was among the reasons recorded. It is also true that the assessee had made a submission on this point and finally in order dated 31.12.2018 passed u/s 143(3) r.w.s. 147, the assessing officer did not make addition on this point. However, perusal of assessment records does not show any reasoning behind the decision of the assessing officer on the point. Though the assessee had filed a submission in the matter, the assessing officer did not make any further query on the same. There is nothing on record such as order sheet entry, any noting or office note indicating that the assessing officer had indeed applied his mind on the issue. It would not be out of place to mention here that in the assessments for A.Y. 2012-13 and A.Y.2013-14 completed on 30.12.2019, the assessing officer did make additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1961 dated 31.12.2018 is set-aside with a direction to the assessing officer to make fresh assessment after conducting detailed verification of issue discussed above. The assessing officer is directed to grant sufficient opportunity to the assessee of being heard and examine and consider the submissions which the assessee may wish to make including its alternative claim of being allowed depreciation on leased-assets in computing book profit and thereafter decide the issue on merits and complete the assessment in accordance with law. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 4. We have carefully considered the factual matrix as well as arguments advances by both the representatives. Our adjudication to the issue, in the light of settled legal position as enumerated in opening paragraphs, would be as given in succeeding paragraphs. 5. Upon perusal of assessment order under consideration, it is quite evident that an order was passed by Ld. AO u/s 143(3) r.w.s. 147 of the Act. One of the reasons to reopen the case was the allegation of Ld. AO that income from assets given on lease, though offered to tax under n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the matter. That view could not be said to be contrary to law, perverse or unsustainable in law, in any manner and the same would be a possible view keeping in mind the assessee s submissions during reassessment proceedings. This being the case, the assessment order could not be subjected to revision u/s 263 and the action of Ld. Pr.CIT in invoking jurisdiction u/s 263 could not be sustained in the eyes of law. Similar is the view of the Tribunal in assessee s group concern i.e. M/s Reliance Corporate IT Park Ltd. V/s Pr. CIT (ITA No.2748/Mum/2015 dated 08/03/2017) wherein it has been observed by the coordinate bench that when Ld. AO had applied his mind on the given facts and material on record and took a possible view then such an assessment order could not be cancelled u/s 263 unless it was shown that the view was not tenable either in law or on facts. 6. The Ld. CIT-DR has relied upon the decision of Hon ble Allahabad High Court in the case of CIT V/s Bhagwan Dass (272 ITR 367) which is a case wherein it was held that the order was passed without application of mind by Ld. AO. The same is not the case here. The case law of Chennai Tribunal in Bharat Overseas Bank V/s CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
