TMI Blog2021 (10) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... 154 of the Act were dropped by the same Assessing Officer who had requested for exercising powers u/s 263 of the Act by the Ld. Pr. CIT. It is also not disputed that the revision by the Ld. Pr. CIT is based upon the audit objections. Pr. CIT did not dispose of the objections of the assessee that assessment order passed by the Assessing Officer was without jurisdiction. Under these undisputed facts, we are of the view that the exercise of power u/s 263 of the Act by the Ld. Pr. CIT is not accordance with law. Therefore, the same deserves to be quashed. We, therefore, hereby quash the impugned order being unjust and contrary to the settled law. The grounds raised in this appeal by the assessee are allowed. Appeal of the assessee is allowed - ITA No.2181/DEL/2017 - - - Dated:- 25-10-2021 - Shri G.S. Pannu, Hon ble President And Shri Kul Bharat, Judicial Member For the Assessee : None For the Revenue : Sh. Satpal Gulati, CIT DR ORDER PER KUL BHARAT, JM, This appeal filed by the assessee is directed against the order of the learned Pr. Commissioner of Income Tax-22, New Delhi, dated 27.03.2017 passed u/s 263 of the Income Tax Act, 1961 (hereinafter refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan was paid, were not available in the records. The rent agreement of the property, on which rental income was received, was also not on the records. The reason for the acceptance of claim of interest against the said property of ₹ 23,92,809/- was not recorded by the Assessing Officer. It was further observed that after verifying the records, the Assessing Officer accepted the observation of the audit party and agreed qua the observation made by them that the copy of the rent agreement against the said property was not in the records and there was no documentary evidence to suggest payment of interest of ₹ 23,92,809/- against home loan related to the property. Hence, the Assessing Officer made proposal for setting aside the assessment order u/s 263 of the Act. Therefore, a notice u/s 263 of the Act dated 22.11.2016 was issued to the assessee. In response to first notice, none appeared on behalf of the assessee. Another notice was issued; in response thereto the Ld. Authorized Representative of the assessee attended the proceedings. The Ld. Pr. CIT recorded that the Ld. AR of the assessee requested that the written submission filed by the assessee may be considered. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee has further raised the issue that order is non-est because it was not passed by the officer having the correct jurisdiction. I have considered this also and observed that the jurisdictional issue was not raised at the time of assessment proceeding, it cannot be raised during the time of proceeding u/s 263 of the I.T.Act. Even if we presume, but not accepting, that the order was passed by the officer who was not having jurisdiction, that order is erroneous and prejudicial to the interest of the revenue. After considering all the issues, I am of the opinion that the AO has not properly investigated the case, documents filed by the Ld. A.R. at the time of assessment proceedings and also has not perused the earlier year s assessment record i.e. for AY 2011-12. AO was duty-bound to investigate the facts of the issue. He has not investigated the issue and also not applied his mind on the documents filed by the Ld. A.R. After considering these facts, I am of the opinion that the order passed by the AO is erroneous and prejudicial to the interest of the revenue. Accordingly, order is set aside with directions to the AO to investigate this issue only and pass a speaking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Assistant Commissioner or Deputy Commissioner or the Income-tax 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 Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General or Principal Commissioner or Commissioner authorised by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Principal 68[Chief Commissioner or Chief Commissioner or Principal] Commissioner or Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the** Principal Commissioner or Commissioner under this sub-section shall extend and shall be deemed always to have extended to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment. From the order of the Ld. Pr. CIT, it is clear that he set-aside the assessment order and directed the Assessing Officer to investigate the issue and pass a speaking order. In our considered view, this approach of the Ld. Pr. CIT is erroneous as the law is clear that the Ld. Pr. CIT either he can make enquiry himself or cause such enquiry to be made but such exercise is to be made before passing the order u/s 263 of the Act. It is not disputed by the Revenue that proceedings u/s 154 of the Act were dropped by the same Assessing Officer who had requested for exercising powers u/s 263 of the Act by the Ld. Pr. CIT. It is also not disputed that the revision by the Ld. Pr. CIT is based upon the audit objections. Further, the Ld. Pr. CIT did not dispose of the objections of the assessee that assessment order passed by the Assessing Officer was without jurisdiction. Under these undisputed facts, we are of the view that the exercise of power u/s 263 of the Act by the Ld. Pr. CIT is not accordance with law. Therefore, the same deserves to be quashed. We, therefore, hereby quash the impugned order being unjust and contrary to the settled law. The grounds raised in this appeal by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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