TMI Blog2021 (7) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... s and prejudicial to the interest of the revenue, but does not confer jurisdiction to substitute his opinion for the opinion of the AO. Therefore, u/s 263 of the Act CIT has power to revised only those orders which are erroneous and prejudicial to the interest of the revenue. In the present case, the Ld. CIT has revised the assessment order on the ground that the AO has not taken any adverse view in respect of the payment made to the retiring partner, without pointing out as to how the assessment order is erroneous. In the case of CIT vs. Krishna Capbox (P) Ltd [ 2015 (3) TMI 17 - ALLAHABAD HIGH COURT] has held that where the assessing officer passes assessment order after raising queries from the assessee, mere non discussion or non-mention thereof in assessment order could not lead to the assumption that the AO did not apply his mind. Invoking of revisional jurisdictional on the said ground was held unjustified. We hold that the impugned order is not in consonance with the law laid down by the Hon ble Courts discussed above. Since the AO had passed the assessment order after making proper enquiry, the Ld. CIT has wrongly exercised the jurisdiction u/s 263 - Appeal of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to retired partner Sh. Shailesh Sanwaria at the rate of 65,100/- per month, who had not rendered any service to the firm. The Ld. Pr. CIT rejecting the explanation/reply filed by the authorized representative of the assessee, cancelled the assessment order holding the order erroneous and prejudicial to the interest of the revenue and directed the AO to frame assessment order afresh after carrying out necessary enquiries on the points discussed in the order. The assessee is in appeal against the said order passed by the Ld. Pr. CIT. 3. The appellant/assessee has challenged the impugned order on the following grounds: - 1. Whether on the facts and circumstances of the case and in law, the Learned CIT has exceeded legislative jurisdiction under Section 263 of the Act thus order passed is bad in law. 2. That the Ld. CIT has erred in passing order under Section 263 in the absence of any erroneous position prejudicial to the interest of revenue in the original Assessment order passed by Ld. ITO under Section 143(3) of the Act. 3. That the Ld. CIT has erred in substituting an alternative view as against the firm view adopted by the Ld. ITO at the time of original assessment u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed the assessment order after conducting proper enquiry with regard to the payment made to the retiring partner. However, the Ld. CIT rejecting the contention of the assessee passed the impugned order. The Ld. counsel contended that since the AO had examined the issue relating to salary/pension paid to Mr. Shailesh, the Ld. CIT has wrongly exercised the jurisdiction u/s 263 of the Act on the ground that the AO has not taken any adverse view in respect of the payment made to Mr. Shailesh. The Ld. counsel invited our attention to the copy of letter dated 03.08.2017 in which the AO has raised the query regarding payment made to Sh. Shailesh and asked to furnish the reasons and reconcile the same with supporting documents. The Ld. counsel invited our attention to the copy of reply furnished by the assessee in response to the said query, which is available in the paper book. The Ld. counsel further submitted that the said payment was made in terms of the partnership deed dated 10.12.2012. Therefore, this is neither a case of no enquiry nor a case of insufficient enquiry. Moreover, during the 263 proceedings these facts were brought to the notice of the Ld. CIT. Further, it was submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue, to pass order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment after affording an opportunity of being heard to the assessee. So, as per the settled law, in order to exercise jurisdiction u/s 263 of the Act, the CIT has to be satisfied of twin conditions that the order sought to be revised is erroneous and that the order is prejudicial to the interest of the revenue. The Hon ble Punjab Haryana High Court in the case of CIT vs. Indo German Fabs IT Appeal No 248 of 2012 has inter alia held that under section 263 the CIT has power to examine an assessment order to ascertain as to whether it is erroneous and prejudicial to the interest of the revenue, but does not confer jurisdiction to substitute his opinion for the opinion of the AO. Therefore, u/s 263 of the Act CIT has power to revised only those orders which are erroneous and prejudicial to the interest of the revenue. In the present case, the Ld. CIT has revised the assessment order on the ground that the AO has not taken any adverse view in respect of the payment made to the retiring partner, without pointing out as to how the assessment order is erroneous. It is appar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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