TMI Blog2021 (12) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 11,65,300/- has been reflected in return of income, which is not sustainable in law, hence order passed by the assessing officer is erroneous. AO has made addition of ₹ 18,989/-, (vide para 6 of assessment order) being opening balance in bank account no.36612082001, instead of making addition to the tune of ₹ 11,65,300/- being cash deposited by the assessee during the assessment year under consideration, thus, assessing officer framed the assessment order with incorrect assumption of facts and without application of mind, therefore, order passed by the assessing officer is prejudicial to the interest of revenue. Just to discuss the issue in the assessment order is not enough, it is to be seen whether assessing officer has applied his mind or not. The order u/s 263 of the IT Act, is valid even if one of the several items dealt with therein is found prejudicial to the interest of revenue. Further, it is also important to mention here that the provisions of Section 263 can be invoked even where full facts are disclosed but the AO has not examined these details as per correct provisions of law. In support of this proposition, Ld PCIT relied on the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence we dismiss the additional grounds raised by the assessee. 4. The main grievance raised by the assessee in this appeal, which is to be adjudicated, is that order of the assessing officer is neither erroneous nor prejudicial to the interest of Revenue, therefore ld. PCIT has wrongly exercised his jurisdiction under section 263 of the Act. 5. Succinct facts are that in this case, the assessee filed his return of income on 29.10.2007, declaring total income to the tune of ₹ 4,65,310/-. The case was re-opened u/s 148 of the Act and the assessment u/s 143(3) was passed on 13.02.2015 determining total income of ₹ 5,17,970/-. The Assessing Officer and the Range head i.e. Jt. CIT, Vapi Range, Vapi have proposed that the assessment order in assessee`s case is erroneous as well prejudicial to the interest of revenue and therefore, the same should be revised u/s 263 of the Act. Therefore, Ld PCIT issued a notice u/s 263 of the Act, dated 23.02.2017, which is reproduced below: Sub: Notice u/s 263 of the IT Act, 1961 in your case for AY 2007-08-reg. Please refer to above, 2. In this case, the assessee filed his return of income on 29.10.2007 declaring total inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous as well as prejudicial to the interest of revenue. 5. You are, therefore, required to show-cause as to why the said assessment order be not revised by invoking the provisions of 263 of IT Act, 1961.The hearing in your case is being fixed on 06.03.2017 at 11.00 AM. Please note that the required details should be submitted after numbering the documents enclosed and indexing the same in the forwarding/covering letter. 6. Please note that the required details should be submitted after numbering the documents enclosed and indexing the same in the forwarding/covering letter. You can attend the hearing either personally or through your duly authorized representative or can file written submissions on or before the stipulated date and time of hearing. 6. In response, assessee submitted that deposits in the said bank account have been earned by him from transport activity and the income from which has already been offered for tax and assessed as per the order dated 13.02.2015. The entire content of assessee s reply is reproduced hereunder: From:- Shri Bhupendra Manilal Patel, C/o.Rajvi Enterprises, Plot No.297/3 2nd Phase GIDC, Vapi,396195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in respect of two bank accounts maintained with HDFC, Bank, Vapi as mentioned in para-10 (part of the statement given by the assessee on 21.03.2017 should also be obtained by the AO for the entire period of life of the said bank account i.e. from the date of opening to date/the date of closure of the account whichever is later and examine whether the deposits made in these two bank accounts have been accounted for in the form of income returned by the assessee for the respective assessment years or not. 8. Therefore in view of the above factual matrix, ld PCIT held that assessment order dated 13.02.2015, u/s 143(3) of the Act, has been passed by the Assessing Officer without making any inquiries whatsoever in respect of the issues as mentioned hereinabove, Therefore, Ld PCIT set aside the assessment order and directed the assessing officer to frame fresh assessment order. 9. Aggrieved by the order of Ld. PCIT, assessee is in appeal before us. 10. Learned Counsel for the assessee submits before us written submission. In the written submission, Learned Counsel contended that assessing officer did sufficient enquiry during reassessment proceedings and assessee submitted re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a part of the statement recorded on 17.03.2017, you are requested to explain the sources of deposits in the form of cash and cheque in the saving bank account no.07371000041778 (previously a/c. no.36612082001) maintained with the then Centurian Bank, Vapi and now merged with HDFC Bank. Ans:- After consideration with my Accountant/CA, I have come to the conclusion that the deposits in the said account i.e. a/c. no.07371000041778 (previously a/c. no.36612082001) maintained with the then Centurian Bank, Vapi and now merged with HDFC Bank are out of undisclosed sources of income and hence not disclosed to the department in the returns of income filed so far. The total of the year-wise deposits is as under: Sl. No. F.Y. A.Y. Total deposits (Rs.) 1 2006-07 2007-08 24,16,606/- 2 2007-08 2008-09 29,84,157/- 3 2008-09 2009-10 3,37,986/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-, (vide para 6 of assessment order) being opening balance in bank account no.36612082001, instead of making addition to the tune of ₹ 11,65,300/- being cash deposited by the assessee during the assessment year under consideration, thus, assessing officer framed the assessment order with incorrect assumption of facts and without application of mind, therefore, order passed by the assessing officer is prejudicial to the interest of revenue. Just to discuss the issue in the assessment order is not enough, it is to be seen whether assessing officer has applied his mind or not. At the cost of repitation we state that the AO is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. The meaning to be given to the word erroneous in section 263 emerges out of this context. It is because it is incumbent on the AO to further investigate the facts stated in the return when circumstances would make such an inquiry prudent that the word errone ..... X X X X Extracts X X X X X X X X Extracts X X X X
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