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TMI Blog2018 (3) TMI 1938X X X X Extracts X X X X X X X X Extracts X X X X ..... referring to the facts and issue in ITA No.811/PUN/2015. 4. The assessee in ITA No.811/PUN/2015 has raised the following grounds of appeal : "1. On the basis of facts and in the circumstances of the case and as per law, the Commissioner of Income Tax (Central), Nagpur is not justified in invoking the provisions of section 263 of the Act. 2. On the basis of facts and in the circumstances of the case, the Commissioner of Income Tax (Central), Nagpur is not justified in invoking the provisions of section 263 of the Act for the reason that the AO has not verified whether the appellant has actually paid the amount of Rs. 1.19 crores to M/s. Jai Prakash Strips Ltd. and the business expediency of the said amount paid as compensation against the cancellation of Memorandum of Understanding for purchase of leasehold rights, particularly when the - 1. said transaction has been duly accounted for in the books of accounts of the appellant and the same has been verified by the AO; 2. original assessment was completed U Is. 143(3) and no any incriminating material is found during the course of search action or gathered as a result of post search inquiries; 3. the document found / seized is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f search i.e., assessment year 2011-12 additions were made on account of the notings in the seized diary. 6. The Commissioner was of the view that the Assessing Officer had failed to take full cognizance of the incriminating material relating to the assessee, which was seized during the course of search and seizure operations under Section 132 of the Act, which was conducted in the Suyojit Group of cases on 17.09.2010. Thus, the assessment order passed by the Assessing Officer, as per the Commissioner of Income Tax, was both erroneous and prejudicial to the interest of Revenue. Hence, show cause notice was issued under Section 263 of the Act. The Commissioner went through the seized material and was of the view that the same required thorough examination and verification to arrive at the undisclosed income of the assessee or any other connected party. The plea of the assessee that the assessment order passed by the Assessing Officer was after verification of the facts on record, after conducting full enquires and after obtaining prior approval from the Joint Commissioner of Income Tax, Central Range, Nashik, which was under the supervision of Commissioner of Income Tax (Central), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions and perused the material on record. The issue in all the present cases is about the invoking of provisions of Section 263 by ld.CIT. Section 263(1) of the Act, the powers under which CIT has assumed power for revision reads as under: "The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the ITO is erroneous in so far as it is prejudicial to the interests 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." 10. The reading of the above provisions makes it very clear that the power of suo motu revision under Section 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 under Section 263, namely (i) the order is erroneous (ii) by virtue of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. It may be said in such a case that in the opinion of the Commissioner the order in question is prejudicial to the interest of the Revenue. But that by itself will not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, namely, the order is erroneous, is absent. Similarly if an order is erroneous but not prejudicial to the interest of the Revenue, then also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be subject-matter of revision because the second requirement also must be fulfilled." 13. In the present appeals for six assessment years, it is seen that except for AY 2010-11 where the assessment was framed under Section 143(3), for all the other five years, the assessments were framed under Section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f which copies are available at pages 209 to 309 of the compilation of the assessee, Smt. Nausheen Farah Lari. These assessment orders were framed under section 153C read with section 153A of the Act consequent to the search and seizure operation conducted upon the assessee, in which cash of Rs. 2 crores were found. Therefore, the issue of seizure of Rs. 2 crores was also examined by the Revenue authorities in the hands of the concerned persons to whom the cash relate. Our attention was also invited to the copies of the extract of cash book in the case of Model Tanners (India) Pvt. Ltd.; Model Exims; Model Echoes Pvt. Ltd.; S. K. Enterprises and A. L. Razeek to establish the availability of cash in their books of account. 20. From a careful perusal of these evidences, we are of the considered opinion that while completing the assessment not only in the case of the assessees but also in the case of other assessees, to whom the cash 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 Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of this contention. He has also placed reliance upon the decision of Hon'ble Allahabad High Court in the case of CIT Vs. Dr. Ashok Kumar in I.T. Appeal No.192 of 2000 wherein it has been held that the assessment order approved by the Addl.CIT under section 263 of the I.T. Act. In view of the above decision also, we hold that the revision order under section 263 of the I.T. Act is not sustainable. Accordingly, we allow the grounds of the assessee." 17. We further find that in the case of Dr. Ashok Kumar Prop. S.S. Nursingh Home, the Co-ordinate Bench of the Tribunal, had set aside the order of CIT passed under Section 263 of the Act. Against the order of ITAT, Revenue carried the matter before Hon'ble Allahabad High Court. Allahabad High Court in the case (CIT Vs. Dr. Ashok Kumar Prop. S.S. Nursing Home, ITA No.192 of 2000 and others, order dated 06.08.2012) dismissed the appeal of Revenue. The relevant observations of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar of search, i.e. assessment year 2011-12, the facts were identical to the facts in the earlier years as is noted by the Commissioner of Income Tax and was based on the incriminating material found during the course of search. Accordingly, we hold where the assessment order in assessment year 2011-12 i.e. year of search was also passed with prior approval of Joint Commissioner of Income Tax, Central Range, Nashik, obtained vide letter dated 12.03.2013, which is mentioned in para 10 of the assessment order and where the Commissioner has not disturbed the order of the Joint Commissioner of Income Tax, Central Range, Nashik in the year of search, then the exercise of power under Section 263 of the Act was not correct. Accordingly, we hold so. The order of the Commissioner is invalid and is bad-in-law. The directions of the Commissioner in setting aside the assessment order are thus reversed. Accordingly, we decide the issue in the present appeal on the jurisdictional issue itself. Hence, the grounds raised by the assessee on merits become academic in nature. The grounds of appeal raised by the assessee are thus allowed. 11. The facts and issues raised in ITA Nos.809/PUN/2015, 810/PU ..... X X X X Extracts X X X X X X X X Extracts X X X X
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