TMI Blog2021 (12) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... the same in the hands of the assessee in all the three years. Thus, we notice that the AO has adopted one of the possible views in this matter. As held by Hon ble Supreme Court in the case of Malabar Industrial Company (supra), if the AO has taken one of the possible views, then the same would not make the assessment order prejudicial to the interests of revenue. PCIT has held the assessment orders to be erroneous for the reason that the AO should have estimated income from unaccounted sales at a higher figure, thus it is case where Ld PCIT is having a different view on the manner of estimation of income from unaccounted sales. As held by Hon ble Bombay High Court in the case of Gabriel India Ltd (supra), the view so entertained by Ld PCIT would not give him power u/s 263 of the Act to initiate revision proceedings, since the view of the AO cannot be termed as erroneous. We are of the view that the impugned assessment orders cannot be termed as erroneous and prejudicial to the interests of revenue. Accordingly, Ld PCIT was not justified in invoking revision proceedings in all the three years under consideration - Decided in favour of assessee. - ITA Nos. 137 to 139/Bang/202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the Assessing Officer and accepted by him. c) The notings in the seized material does not include any payment towards unaccounted purchases. d) There is no investment in this line of trade as the sale proceeds of the sale of arecanut was used to make the payments towards unaccounted purchases. e) A copy of the seized material and the statement identifying the unaccounted sales and unaccounted purchases be furnished for filing additional submissions. Accordingly, the assessee contended that the impugned assessment orders cannot be considered to be erroneous and prejudicial to the interest of revenue. The Ld. Principal CIT did not accept the contentions of the assessee and accordingly set aside the assessment orders passed by the A.O. for all the 3 years under consideration and directed the A.O. to pass fresh assessment order de-novo by taking into account all the entries recorded in the seized documents. The assessee is aggrieved. 5. The Ld A.R submitted that the Ld PCIT was not justified in invoking revision proceedings for the years under consideration merely for the reason that he has entertained different view on the manner of computation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to the interests of the Revenue, to pass an order upon hearing the assessee and after an enquiry as is necessary, enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment. The key words that are used by section 263 are that the order must be considered by the Commissioner to be erroneous in so far as it is prejudicial to the interests of the Revenue . This provision has been interpreted by the Supreme Court in several judgments to which it is now necessary to turn. In Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83, the Supreme Court held that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer and it is only when an order is erroneous that the section will be attracted . The Supreme Court held that an incorrect assumption of fact or an incorrect application of law, will satisfy the requirement of the order being erroneous. An order passed in violation of the principles of natural justice or without application of mind, would be an order falling in that category. The expression prejudicial to the interests of the Revenue , the Supreme Court held, it is of wide im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. (See Parashuram Pottery Works Co. Ltd. v. ITO ). 10. As observed in Sirpur Paper Mills Ltd. v. ITO by Raghuveer J. (as his Lordship then was), the Department cannot be permitted to begin fresh litigation because of new views they entertain on facts or new versions which they present as to what should be the inference or proper inference either of the facts disclosed or the weight of the circumstances. If this is permitted, litigation would have no end, except when legal ingenuity is exhausted . To do so, is . . . to divide one argument into two and to multiply the litigation . 11. The power of suo motu revision under subsection (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 this subsection, viz., (i) the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusion. It may be said in such a case that in the opinion of the Commissioner the order in question is prejudicial to the interests 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, viz., that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the interests of the Revenue, then also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also must be fulfilled. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. 10. We shall now examine the issues applying the legal principles discussed above. A perusal of the assessment order would show that the assessing officer has discussed in detail about the unaccounted sales in paragraph 5 to 5.5 of the assessment order. Hence it cannot be said that the assessing officer did not make any enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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