TMI Blog2016 (12) TMI 1868X X X X Extracts X X X X X X X X Extracts X X X X ..... support from the following decisions. - Decided in favour of assessee. - ITA Nos. 1102 to 1107/PUN/2014 - - - Dated:- 28-12-2016 - MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM For the Appellant : Shri Sanjay N. Kapadia For the Respondent : Shri Rajeev Kumar ORDER PER ANIL CHATURVEDI, AM : These 6 appeals of the assessee s for AY 2004-05, AY 2006-07 to AY 2010-11 arise out of a consolidated order of ld. CIT (PN/CIT(C)/(Judl.)/263 order RMD/2013-14 dated 28.3.2014 passed u/s 263 of the Act. Since all the appeals are against the order passed u/s 263 of the Act, all the appeals are considered together for disposal. 2. The facts as culled out from the material on record are as under: 2.1 Assessee is an HUF. A search action u/s 132 of the Act was conducted in RMD Gutka Group of cases on 20.1.2010. Since warrant of authorization u/s 132(1) of the Act was executed in the case of assessee, notice u/s 153A dated 14.9.2010 was executed and served on the assessee and in response to which assessee filed the return of income for AY 2004-05 on 15.10.2010 declaring total income of ₹ 17,26,91,130 (being the same income as filed as per the origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. For AY 2004-05, AY 2006-07 to AY 2010-11, it was noticed that assessee owned several house properties and that the assessee had offered meager amount of income as income from house property in comparison to the market value of the properties. According to ld.CIT, the income from house property was not commensurate with the market value of the properties and that the AO had accepted the annual values in the respective years as declared by the assessee without conducting necessary inquiries. 5. For AY 2006-07 and 2007-08 assessee had received income tax refunds of ₹ 1.72 crores (rounded off) and ₹ 1.30 crores (rounded off) and the same was credited to the capital account. Ld.CIT was of the view that no interest on income tax refund has been offered to tax by the assessee and the AO did not conduct necessary inquiries to ascertain as to whether the interest on income tax refund was offered to tax by the AO. 4. In view of the above observations, ld.CIT was of the view that the orders of assessments passed by the AO for those six years were erroneous and prejudicial to the interest of the Revenue and therefore he intended to set aside/ modify the assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termine the amount of excess deduction u/s 80HHC of the Act on account of higher gross profit rate; - to find out amount of depreciation expenses to be disallowed on all vehicles including luxury cars to the extent they are used for non-business purpose; - to determine the additional rental income from house property. 3. That on the facts and circumstance of the case and in law, the learned CIT has erred in invoking the provisions of section 263 of the Act and passing the order of revision without considering the detailed justifiable submissions filed by the appellant during the course of revision proceedings. 4. Without prejudice to the aforesaid grounds of appeal, on the facts and circumstance of the case and in law, the learned CIT has erred in passing the order u/s. 263 of the Act for the subject year, inspite of the fact that on similar issues on three grounds out of four grounds, the revision proceedings for A.Y. 2005-06 has been dropped. 5. That on the facts and circumstance of the case and in law, the learned CIT has erred in invoking the provisions of section 263 of the Act and passing the order of revision under that section merely on change of opinion on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders were framed u/s 153 A of the Act. The assessments u/s 153A of the Act has to be made only on the basis of incriminating material unearthed during the course of search and in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. He submitted that the issues on which the revision has been proposed does not represent the incriminating material found during the course of search and those material were already considered at the time of original assessment proceedings. His other argument was that assessment u/s 153A has to be framed by the AO only after obtaining prior approval of Joint Commissioner of Income Tax (JCIT) u/s 153D of the Act. In the present case, the approval of Addl.CIT was obtained before framing the assessment u/s 153A of the Act. He therefore submitted that without revising the directions of Addl.CIT, the assessments framed u/s 143(3) r.w.s. 153C, are not amenable to revisionary proceedings u/s 263 of the Act by ld. CIT and for this proposition he relied on the decision of Allahabad High Court rendered in the case of CIT Vs Dr Ashok Kumar (ITA No 192 of 2000 order dated 06.08.2012) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the power of suo motu revision u/s 263(1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision u/s 263, namely (i) the order is erroneous (ii) by virtue of being erroneous prejudice has been caused to the interests of the Revenue. 11. Hon ble Apex Court in the case of Malabar Industrial Co Ltd Vs CIT (2000) 243 ITR 83 (SC) has held that ld.CIT has to be satisfied of twin conditions, namely, (i) the order of the AO sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent-if the order of the ITO is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue-recourse cannot be had to Sec.263(1). It was further held that the provision cannot be invoked to correct each and every type of mistake or error committed by the AO; when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the ld.CIT does not ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessments were framed u/s 153A r.w.s. 143(3) meaning thereby that while framing the assessments in those respective years, the necessary approval of Addl.CIT was obtained and that apart from AO the Addl.CIT had also applied his mind to the facts before passing the assessment orders. In such a situation we find force in the submission of ld.A.R. that it cannot be said that the necessary inquiries were not made while passing the assessment orders u/s 143(3) r.w.s. 153A of the Act. Further it is a settled position that the assessment orders cannot be set aside or revised for inadequate inquiry by ld. CIT u/s 263 of the Act. We therefore find force in the submission of ld.A.R. that revisionary proceedings u/s 263 cannot be initiated in the present cases and for which we also find support from the following decisions: 14. In the case of Shri Ch. Krishna Murthy Vs. ACIT (ITA No.766/Hyd/2012 order dated 13.12.2015), in identical facts, the Co-ordinate Bench of the Tribunal has observed as under : 9 . .Thus, from the aforesaid facts it becomes clear, the Assessing Officer while exercising power u/s 153A has to pass the assessment order as per the approval granted by Addl.CIT u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh was claimed to relate, were thoroughly examined by the Assessing Officers in their respective hands by making detailed enquiries/investigations and once . the Assessing Officer was convinced with the explanations with regard to . the source of cash of ₹ 2 crores found from the assessee during the course of search, no addition was made by the Assessing Officer either in the hands of the assessee or in the hands of the respective parties to whom the cash of ₹ 2 crores relate. 21. It is also placed on record that the Assessing Officer has framed the assessment in the assessee's case after obtaining approval from the JCIT. Therefore, not only the Assessing Officer but the JCIT has also applied his mind to the factum of seizure of cash of ₹ 2 crores from the assessee during the course of search. Therefore, it cannot be said that the Assessing Officer has not applied his mind or has not properly made necessary enquiries with regard to the issue of recovery of cash of ₹ 2 crores during the course of search operation from the Choudhary Charan Singh Airport. .. 32. We have also examined the judgment of the Hon'ble jurisdictional High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Bench of the Hon ble High Court are reproduced hereunder: 6. The Tribunal thereafter has observed as under : ..5.2 In the last it is also relevant fact that the AO was fully alive about the facts of the case and that is why he got necessary approval of Add! Commissioner before completing the assessment orders for all the assessment years and once that is not disputed by the Revenue than the CIT would not be Justified in interfering in the approval accorded by the Add! CIT for framing the assessment order and thus there was no case for setting aside the assessment orders for the assessment years in question. On the basis of facts and circumstances of the case I am of the opinion that the impugned order is liable to be quashed accordingly. 6. In the result, appeals are allowed. 9. We find that the Tribunal has not committed any error of law in setting aside the order of CIT passed under Section 263 of Income Tax Act for the assessment year 1991-92 to 1995-96. 18. Considering the totality of the aforesaid facts and relying on the decisions cited hereinabove, we are of the view that provisions of Sec.263 cannot be resorted to in the present cases. B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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