TMI Blog2014 (2) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... efore taking any action, Ld. CIT himself shall apply his mind after examining the record of any proceedings and his satisfaction is must As in the present case, the satisfaction was of the ITO (Tech.) who proposed action under section 263 of the Act, but not of the Ld. CIT. Therefore, issuance of notice under section 263 of the Act on the basis of the proposal made by the ITO was void ab initio. We, therefore, set aside the same. Appeal of assessee allowed. - ITA No. 347/JP/2013 - - - Dated:- 28-2-2014 - SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER For the Assessee : Shri P.C. Parwal. For the Department : Shri Subhash Chandra - D.R. ORDER PER N.K. SAINI, A.M This is an appeal by the assessee against the order dated 06/03/2013 of ld. CIT, Kota. The following grounds have been raised in this appeal: 1. Under the facts and circumstances of the case, order passed u/s 263 by Ld. Commissioner of Income Tax is illegal and bad in law be quashed since:- (i) The Ld. CIT has not called for and examined the record himself before initiation of proceedings u/s 263 but has initiated such proceedings on the basis of propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 2.00 lakhs by Smt. Sandhya Sharma, a sum of₹ 168000/-has been treated by AO as genuine gift being withdrawn from her bank account and balance amount of ₹ 32000/- has been added as income from undisclosed sources. On perusal of the copies of bank accounts available on record of both the donors, no cash withdrawal is found to be there so as to prove the genuine cash gift to the extent of amount as mentioned by the AO in the assessment order. In both the bank account, donors have issued cheques in the name of Shri Priyank Sharma which may be for some other reason but no cash withdrawal in their bank account is reflected. Therefore, the entire alleged gifted amount of₹ 4.00 lakhs should have been treated as income from undisclosed sources. (ii) As per record, a copy of account of Smt. Kanchan Bai in Central Bank of India, Kunhari is available on file which reflects that Smt. Kanchan Bai is residing at Kunhari in her husband's house. On perusal of the said bank account, it is noticed that during the year her source of income was only family pension because from time to time she has withdrawn the amount for her lively hood apparently. The statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udes ₹ 182000/- ₹ 168000/- respectively given out of cash withdrawn by them from their Bank a/cs, no cash withdrawal is found to be there so as to prove the genuineness of cash gift to the extent of amount mentioned by the Ld A.O. in assessment order. The Ld A.O. has made addition of ₹ 18000/- ₹ 32000/- being balance gift received from V.D. Sharma Smt. Sandhya Sharma in assessee's income treating it as undisclosed income. You have also mentioned that on perusal of Bank a/c in both the Bank a/c donors have issued cheques in the name of Shri Priyank Sharma which may be for some other reason but no cash withdrawal in their Bank a/c is reflected. Therefore, the entire alleged gifted amount of ₹ 4.00 lakh should have been treated as income from Undisclosed Sources. b) As regards cash gift of₹ 6 lacs received by the assessee from Smt Kanchan Bai your goodself have observed that Smt Kanchan Bai was not having cash balance with her so as to prove the genuineness of gift made by her on a/c of following reasons- i) On perusal of her bank A/c it is noticed that her source of income was only from Family Pension she has withdrawn the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which she has received after the death of her husband thereafter received from Rental Agriculture Income from her five sons who were well to do enjoying good salary income. She has opened Bank a/c for the purpose of getting payment towards family pension only. She has never deposited any amount in cash in her Bank a/c. The withdrawal of cash from Bank was for the purpose of giving petty gifts to her grandson Mr Rohit granddaughter Miss Yashi son/daughter of his son Mahesh Sharma her daughter Smt. Bhagwati. She was residing with her son Shri V.D. Sharma who was bearing her household lively hood expenses, therefore, she did not made any cash withdrawl from Bank for her own requirement. b) Your allegation that Central Public School, Vigyan Nagar, Kota belongs to Assessee his family funds generated there from must have been channelized through these gifts is without any basis. (iv) That the Ld A.O. has after considering the assessee's explanation the documents filed before him and after detailed discussion about the same in his assessment order has made additions of ₹ 350000/- U/s 69A of the I.T. Act, 1961 treating the gifts to the extent as incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on but also mistaken view of law which had made the order erroneous and prejudicial to the interest of the revenue. He, accordingly set side the assessment order by considering the same as erroneous and prejudicial to the interest of the revenue and cancelled the same. The Ld. CIT directed the Assessing Officer to frame the assessment denovo after making proper verification enquiry of the books of accounts and other records. Now the assessee is in appeal. 6. Learned counsel for the assessee submitted that in the present case assessment was framed under section 143(3) of the Act. Thereafter, Assessing Officer moved a proposal under section 263 of the Act dated 11/04/2011 to the Ld. CIT for revision of the assessment order and a show cause notice dated 17/01/2013 was then issued by the ITO (Tech.) to the assessee reference was made to 2nd 3rd paras of the impugned order. It was further stated that consequently, the Ld. CIT passed the order under section 263 of the Act holding that the assessment order passed by the Assessing Officer under section 143(3) of the Act was without due and proper enquiry and was mistaken view of law which had made the order erroneous and prejudicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case, from para 3 of the impugned order, it is noticed that the notice dated 17/01/2013 under section 263 of the Act was issued only on receipt of the proposal under section 263 of the Act from the ITO, Ward-2(2), Kota and the assessee explained, vide written submission which has been reproduced in para 4 of the impugned order, each and every objection raised by the ITO, Ward-2(2), Kota. It is well settled that the Ld. CIT while exercising the revisionary powers under section 263 of the Act may call for and examine the records of any proceedings and thereafter if he considers that any order passed therein is erroneous insofar as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justified. Therefore, before taking any action, Ld. CIT himself shall apply his mind after examining the record of any proceedings and his satisfaction is must. However, in the present case, the satisfaction was of the ITO (Tech.) who proposed action under section 263 of the Act, but not of the Ld. CIT. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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