TMI Blog2022 (5) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... l the issues raised by the PCIT in the revisionary order during assessment proceedings and only thereafter framed the assessments u/s 143(3) of the Act, the jurisdiction u/s 263 of the Act is not maintainable as the AO has taken a possible view or taken one of the two possible views to which the PCIT does not agree or is of the opinion that the AO has taken one view whereas according to PCIT the second view should have been taken by the AO. It is settled law that in order to invoke the jurisdiction u/s 263 of the Act by the PCIT, the twin conditions i.e. the order has to be erroneous and prejudicial to the interest of the revenue, have to be satisfied. In case one of the condition is satisfied out of the two, even then the PCIT cannot invoke the jurisdiction u/s 263 of the Act to revise the assessment. 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 assessment 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 enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act was conducted on the assessee on 06.01.2015 and certain documents were seized marked as SKAPL-1 to SKAPL-11 and external hard disk marked as SK/HD/1 were impounded. The impounded documents comprised of two profit and loss accounts one showed profit of Rs. 46,82,054/- and the second one showed loss of Rs. 26,82,183/- for AY 2014-15. During the course of survey, statement of Shri Saurav Rungta one of the directors of the assessee company was recorded who expressed his ignorance about these two profit and loss accounts. The assessee filed return of income on 30.09.2009 declaring a loss of Rs. 22,08,271/- based upon the audited books of accounts. The Ld. A.R. submitted before the Bench that the issue proposed to raised by the Ld. PCIT which accordingly to him was allegedly not examined during the course of assessment proceedings is completely wrong and against the facts on record. The Ld. A.R. referred to the assessment order framed by the AO and submitted that the AO has specifically called upon the assessee to explain the discrepancies as contained in the documents marked as SKAPL-1 and SKAPL-2 which were found during the course of survey on 06.01.2015. The ld AR submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings, notice 142(1) of the Act along with questionnaire was issued calling for various details and explanation from the assessee on documents marked as SKAPL-1 and SKAPL-2 which were found during the course of survey on 06.01.2015. Both these documents were profit and loss accounts of the same date relating to the same period but showing different amount of net result. One showing profit of Rs. 46,82,054/- whereas the second one showed loss of Rs. 26,82,183/- for AY 2014-15 which were replied by the assessee by giving detailed explanation/evidences. Thereafter the Ld. PCIT invoked the jurisdiction u/s 263 of the Act on the ground that the AO has not examined/enquired seized documents during the assessment proceedings and accordingly came to the conclusion that the assessment so framed in was erroneous in so far as prejudicial to the interest of the revenue and revised assessment by directing the AO to pass fresh assessment order after examining these documents and assess the income by making proper enquiries/verification in respect of the issues as stated in revisionary order by affording reasonable opportunity of hearing to the assessee. We have perused the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra) the Hon ble Apex Court has held that the prerequisite to exercise of jurisdiction u/s 263 of the Act by Commissioner is that the order of the AO is erroneous insofar as prejudicial to the interest of the revenue. The Hon ble Court has held that the Ld. PCIT has to satisfy the twin conditions namely i) the order of the AO sought to be revised is erroneous and ii) it is prejudicial to the interests of the revenue and if one of them is absent, i.e. if the order of the AO is erroneous but is not prejudicial to the revenue or vice versa, recourse cannot be had to Section 263 of the Act. In the present case before us also the PCIT has failed to point out as to how the order passed by the AO is erroneous in so far as prejudicial to the interest of revenue. The Ld. PCIT simply discussed various issues which according to him have not been verified/examined by the AO during the assessment proceedings and has not pointed out as to how the assessments are erroneous in so far as prejudicial to the interest of the revenue and therefore the jurisdiction exercised under Section 263 cannot be sustained. In the case of CIT vs. Max India Ltd. (supra) the Hon ble Supreme Court has held that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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