TMI Blog2021 (3) TMI 1331X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudicial to the interest of revenue for invoking the jurisdiction u/s. 263 - See MALABAR INDUSTRIAL CO. [ 2000 (2) TMI 10 - SUPREME COURT] The order of the Ld. PCIT was definitely outside the purview of section 263 of the Act. As noted above, the exercise aimed at ascertaining the correct income of the assessee has been fulfilled by the Assessing Officer by exercising his quasi-judicial functions vis-a-vis passing the assessment order u/s.143(3) r.w.s 147 of the Act. Therefore, certainly it is not a case wherein adequate enquiries at the assessment stage were not carried out or assessment was made in haste. However, what is an opinion formed as a result of these enquiries and verification of the materials is something which is in exclusive domain of the Assessing Officer, and even if Ld. Pr. Commissioner does not agree with the results of such enquiries, the resultant order cannot be subjected to revision proceedings. - Decided in favour of assessee. - ITA No.43/SRT/2018 (Assessment Year: 2007-08) - - - Dated:- 16-3-2021 - SHRI PAWAN SINGH, JM DR. A. L. SAINI, AM Assessee by : Shri Rasesh Shah, CA Respondent by : Shri S. T. Bidari, CIT(DR) O R D E R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest of revenue and therefore, a notice under section 263 of the Act, dated 23.02.2017 was issued to the assessee, which is reproduced below: To, Shri Pramod Keshrichand Shah, Jain Street, Nani Daman Sub:- Notice u/s.263 of the I.T. Act, 1961 in your case (PAH:- AEUPS4588R) for A. Y. 2007-08-reg. Please refer to above. 2. In this case, the assessee filed his return of income on 31.10.2007 declaring total income of ₹ 9,14,884/-. The case was re-opened u/s.148 of the I.T. Act, 1961 and the assessment u/s 143(3) was passed on 28/01/2015 determining total income of ₹ 9,14,890/-. 3. The AO i.e. ITO, Ward-Daman, Vapi and the Range head i.e. Jt. CIT, Vapi Range, Vapi, vide their letters dated 20.02.2017 and 21.02.2017 respectively have proposed that the assessment order in this case is erroneous as well prejudicial to the interest of revenue and therefore, the same should be revised u/s 263 of the I.T. Act, 1961. 4. After going through the report of the AO, the Range head and examination of the assessment record of the AO, it is seen that the assessment framed by the ITO, Wd-Daman, Vapi suffers from following errors/mistakes which make it n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osit in bank account and it is indirectly and prima facie established that the assessee's claim, as made before the Assessing Officer, is not correct and cannot be substantiated with help of relevant documents. Therefore, in view of the above factual matrix, the ld. PCIT held that the assessment order dated 30.12.2014 under section 143(3) has been passed by the Assessing Officer without making any inquiries whatsoever in respect of the issue of cash deposit, therefore, the assessment order of the Assessing Officer dated 30.12.2014 was set-aside and directed the assessing officer to make fresh assessment after giving proper opportunity to the assessee. 7. Aggrieved by the order of the ld. PCIT, under section 263 of the Act, the assessee is in appeal before us. 8. Shri Rasesh Shah, Learned Counsel for the assessee, has contended that reassessment proceedings initiated by the Assessing Officer under section 147 of the Act, is itself not valid; therefore the consequential exercise of the jurisdiction under section 263 of the Act is also going to be invalid. The Ld. Counsel submits that during the reassessment proceedings, the Assessing Officer asked the assessee to furnish th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42(1) of the Income Tax Act, 1961, please note that failure to comply with the same will attract initiation of penalty u/s 271(1)(b) of the Income Tax Act, 1961 and finalization of ex-party assessment u/s 144 of the Income Tax Act, 1961, on the basis of information available on record. 4. This office records show that you have submitted details vide letter dated 09.05.2014 and 29.08.2014, wherein you furnished a chart showing your transactions and you have stated that the transactions of ₹ 16,00,000/- with banks are from known source of his income. However, you have not furnished any documentary evidences such as bank pass bock/statements, etc. to substantiate your claim. 5. In view of the above, you are requested to attend this office on 13.10.2014 at 3.00 P.M. with all details and documentary evidences positively. In case of failure to do so, your case will be decided on merits and addition of ₹ 16,00,000/- on account of cash deposit in saving bank account and ₹ 2,00,000/- investment made in Mutual Fund will be made to your total income. 11. From the above letter of the assessing officer, it is clear as day light that the Assessing Officer during the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings and submitted every type of document and explanation required by the assessing officer. The Assessing Officer after doing detailed examination of the documents and taking into account the submissions of the assessee, passed the reassessment order. The reassessment order was passed by AO with proper application of mind as he conducted inquiry and examined the cash deposit. To gather more information and then prove the claim of the assessee wrong is not the object of section 263 of the Act. The object of section 263 is to examine whether order passed by the AO is erroneous as well as prejudicial to the interest of revenue. Therefore, based on this factual position, the order passed by the AO under section 143(3) r.w.s.147 of the Act dated 28.01.2015 should not be erroneous. We note that Coordinate Bench of I.T.A.T., Kolkata in the case of Plastic Concern vs. ACIT [61 TTJ 87 (Cal) has held that mere possibility of gathering more material to prove the claim of the assessee wrong would not make the concluded assessment erroneous so long as the ld. A.O. had acted judiciously and conducted enquiries in the course of assessment proceedings. 13. We note that on the similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the A.O. The decisions of jurisdictional High Court cited before us support the ground of appeal. Hence, considering the same along side the material on record and the language of the assessment order, the assessment order cannot be said to be erroneous on grounds stated by the C.I.T. In view of above, we hold that only for the purpose of making re- enquiries, more so when inquiry report was also obtained by the CIT, the assessment cannot be set aside in the scheme of Section 263 of the Act. We are of the opinion that the Tribunal committed no error. When, during the course of framing of the assessment, the Assessing Officer had access to all the records of the assessee, after pursuing such record the Assessing Officer framed the assessment, such assessment could not have been re-opened in exercise of revision power under Section 263 of the Act for making further inquiries. In the facts of the case, in our opinion, Tribunal rightly interfered with such order. No question of law arises. Tax Appeal is, therefore, dismissed. 14. Conclusion : There is difference between Lack of enquiry and inadequate enquiry . It is for the Assessing Officer to decide the extent of enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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