TMI Blog2022 (3) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for details/explanations from the assessee on all the issues as proposed by PCIT in the order passed u/s 263 and assessee has responded the same by filing written submissions with details/evidences which are part of the assessment records. The revisionary jurisdiction is not available to the PCIT merely on the ground that AO sought reply from the assessee during assessment proceedings which furnished by the assessee with evidences and are available in the assessment records however it did not find an elaborate discussion or reference in the assessment order. Similarly the powers of revision u/s 263 of the Act cannot be exercised arbitrarily in order to make roving enquiries and initiate fresh enquiries - Thus the jurisdiction u/s 263 can be exercised to revise the assessments where no enquiry at all has been conducted by the AO which is a case of lack of enquiry but not in a case where the AO has conducted an enquiry which in the opinion of PCIT is inadequate /insufficient without showing as to how the order framed by the AO after appreciating the evidences filed by the assessee is contrary to facts or not in accordance with law. Thus we hold that the revisionary jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years wise issues raised by the Ld. PCIT are as under: In AY 2013-14, the Ld. PCIT noted that the assessee trust has received ₹ 1,11,00,000/- as an unsecured loan and has also purchased land from unidentified persons which have not been examined by the AO as the same have neither been confronted to the assessee nor the assessee offered any explanation qua these transactions. In assessment year 2014-15, Ld. PCIT exercised the jurisdiction because of two issues namely i) non examination of credit in a/c no. 3041002100035 with Punjab National bank of ₹ 1,06,27,500/- on 16.07.2013 and ii) undisclosed enrollment fees in respect of outside students for enrollment with CBSE Board for Class-X XII amounting to ₹ 26,71,000/-.According to Ld. PCIT, the 1st issue of credit in the a/c with Punjab National Bank was not enquired during the assessment proceedings. Similarly qua the second issue the Ld. PCIT observed from the perusal of searched/impounded materials that various schools which were operated by the Trust were allowing the outside students for enrollment with CBSE Board for Class-X XII and was charging fees for enrollment which was not disclosed in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thus there was a suppression of fee to the tune of ₹ 8,74,32,476/-. According to Ld. PCIT, these receipts have not been enquired or investigated by the AO in the assessment proceedings. 3. The assessee replied said show cause notices vide submission dated 16.03.2021 and 25.03.2021 with necessary details/evidences for all four assessment years wherein the it was submitted that all these issues were specifically raised by the AO by issuing notices u/s 142(1) with detailed questionnaires during the assessment proceedings which were complied with by the assessee by filing detailed written submissions with evidences and it is only after examining of the submissions and explanation of the assessee , the assessments u/s 143(3) read with Section 153A of the Act were framed in all four assessment years. The assessee filed before the ld PCIT the copies of the submissions with all evidences as filed before the AO to corroborate the fact that all these issues were examined and accepted by the AO. 4. The PCIT, after considering the submissions arguments of the assessee, cancelled the assessments framed u/s 143(3) read with Section 153A of the Act for all the above four assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting that the assessee has purchased plot ad measuring 1.16 acres from Shri Shankar Kumar , Smt. Neelu Devi at Gharichak for the purpose of expansion of school infrastructure which was registered on 21.12.2012 for a consideration of 1,16,00,000/-. The assessee paid ₹ 5,00,000/- at the time of registration of sale deed and the balance amount of 1,11,00,000/- was to be paid in 18 months from the date of sale deed. The Ld. Counsel for the assessee submitted that the copy of sale deed was also filed before the AO. It was stated that the purchase of land was reflected in the balance sheet as addition in the schedule of fixed asset of the assessee with amount payable of ₹ 1,11,00,000/- was shown as liability against the purchase of land. The Ld. A.R stated that this amount was paid in subsequent years. The ld AR argued that since it was duly explained before the AO , the said amount payable against the purchase of land in no way can be considered as unsecured loan. The Ld. A.R. submitted that the assessment was framed after accepting the arguments of the assessee by the AO with regard to this liability of ₹ 1,11,00,000/- and therefore the assessment order is neither err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds which was accepted by the AO. Therefore the exercise of jurisdiction u/s 263 was not invalid as the AO has accepted the plea of the assessee on both the issues and accordingly framed the assessment. 5.3. In respect of AY 2015-16. the ld. Counsel submitted by referring to the notice issued u/s 142(1) dated 14.09.2018 along with questionnaire a copy of which is placed at page no. 214 wherein the AO has vide para 16 called upon the assessee to explain the non disclosure of fee of ₹ 2,12,36,700/- and why the same should not be treated as undisclosed receipt on the basis of seized documents which was replied by the assessee vide para 16 of written submissions copy of which is placed at page 217 to 220 of PB with corroborating evidences. The AO, after examining this reply and evidences filed by the assessee, framed the assessment and therefore the jurisdiction of PCIT u/s 263 was wrongly invoked in this year also. 5.4. In the fourth year i.e. AY 2016-17 the Ld. Counsel submitted that the AO called for similar details as in the earlier years vide para 16 of the questionnaire issued with the notice u/s 142(1) of the Act dated 14.09.2018 copy of which is placed at page no. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment by relying on the decision of Malabar Industrial Co vs. CIT 198 ITR 611(SC). The Ld. Counsel further argued the ld PCIT cannot exercise the jurisdiction u/s 263 of the Act where the AO has taken one of the two courses permissible under the law which has resulted in loss of revenue or where two views are possible and the AO has taken one possible view as in that scenario also the assessment cannot be treated as erroneous in so far as prejudicial to the interest of revenue. The AR argued that unless the view taken by the AO is not sustainable in law or not in accordance with law or contrary to the facts , the jurisdiction u/s 263 of the Act cannot be resorted to. In defense of this arguments, the ld A.R relied on the decision of CIT vs. Maxx India Ltd. 295 ITR 282 (SC). The ld. Counsel also argued that where the AO has conducted the proper enquiries by calling upon the assessee to explain the particular point and the assessee has duly responded the same and furnished all the required information/details and the AO has framed the assessment after considering the same, even then the assessment order cannot be held to be erroneous in so far as prejudicial to the interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxman 324 (Del). 5.6. The Ld. A.R. also referred to explanation (2) of Section 263 as inserted w.e.f. 01.06.2015 which conferred the PCIT specific power to revise the assessment where order is passed without making any enquiry or verification which should have been made. The Ld. A.R. submitted that this issue has been discussed at length by the Tribunal in the case of Boddhisatva Chattapadhyay (supra) wherein the issue whether in the opinion of PCIT s order was erroneous u/s section 263 it was held that based on the explanation ( 2) to Section 263 of the Act, it is not possible to revise the order if in the opinion of PCIT the order has been passed by the AO without making investigation or enquiries which should have been made as the explanation cannot override substantive provisions of law as explanation only intended to explain the law and not override it. The Ld. A.R. finally prayed before the bench that in view of the foregoing facts and position of law as laid down by the various judicial forums as discussed above, the assessment framed u/s 143(3) read with Section 153A of the Act are neither erroneous nor prejudicial and therefore the revisionary proceedings u/s 263 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the assessment proceedings, notices 142(1) of the Act along with questionnaires were issued calling for various details and explanation from the assessee on various issues which were replied by the assessee pointwise with evidences and finally assessments were framed by the AO u/s 143(3) read with Section 153A of the Act for all the above four years. Thereafter the Ld. PCIT invoked the jurisdiction u/s 263 of the Act on the ground that the AO has not examined/enquired some issues as narrated above during the assessment proceedings and accordingly came to the conclusion that the assessments so framed in all the above 4 years from AY 2013-14 to 2016-17 were erroneous in so far as prejudicial to the interest of the revenue and revised all the above 4 assessment years by directing the AO to pass fresh assessment orders after examining all the issues and re-computing the assessee s income by making proper enquiries/verification in respect of all the issues as stated in revisionary order by affording reasonable opportunity of hearing to the assessee. We have perused the notices issued by the AO u/s 142(1) dated 14.09.2018 and replies/written submissions filed before the AO in respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary jurisdiction is not available to the PCIT merely on the ground that AO sought reply from the assessee during assessment proceedings which furnished by the assessee with evidences and are available in the assessment records however it did not find an elaborate discussion or reference in the assessment order. Similarly the powers of revision u/s 263 of the Act cannot be exercised arbitrarily in order to make roving enquiries and initiate fresh enquiries . In our considered view , the jurisdiction u/s 263 can be exercised to revise the assessments where no enquiry at all has been conducted by the AO which is a case of lack of enquiry but not in a case where the AO has conducted an enquiry which in the opinion of PCIT is inadequate /insufficient without showing as to how the order framed by the AO after appreciating the evidences filed by the assessee is contrary to facts or not in accordance with law. The case of the assessee finds supports on all these propositions from several decisions by the Apex Courts and other juridical forums as cited before us during the course of hearing and are being discussed hereunder: In the case of Malabar Industrial Co. (supra) the Hon ble Ape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with the law in consequence whereof the lawful revenue due to the State has not been realized or cannot be realized. The Hon ble Court held that such a decision of Income Tax Officer cannot be held to be erroneous simply because he has not made elaborate discussion in that regard in the assessment order. The same ratio has been laid down by the Hon ble Bombay High Court in the case of CIT vs. M/s Design Automation Engineers (Bombay) Pvt. Ltd. in ITA No. 147 of 2002 after following the earlier orders passed by the Co-ordinate Bench in the case of CIT vs. Gabriel India Ltd. by holding that the order of the AO cannot be said to be erroneous or is passed without application of mind because in his order he has not made any elaborate discussion in that regard. The Hon ble Court has held that the PCIT has set aside the order of the AO only on the ground that the PCIT did not agree the view taken and take a different view by the AO. In the case of CIT vs. Leisure Wear Exports Ltd. reported in 46 DTR 97, the Hon ble Delhi High Court has held that the revisionary power is not meant to be exercised for the purpose of directing the AO to hold another investigation without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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