TMI Blog2022 (11) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... LHI HIGH COURT] Power of the Commissioner u/s 263 of the Act is in the nature of supervisory jurisdiction. This power is granted to correct an error, which is prejudicial to the interest of the Revenue in the order of the Assessing Officer, even if it is approved by the Joint Commissioner, who is also falling below the rank of the Pr. Commissioner. If the argument of the ld. AR is accepted then the supervisory authority of the Pr. Commissioner granted under the Act is hampered. On provisions of Section 263 of the Act give unfettered right to the CIT to revise any order passed by the Assessing Officer. Whatever was to be excluded by the law has already been provided under that Section and the only exception are the issues decided and considered in the appellate orders. Therefore, the reasoning of the arguments advanced by the Ld. AR on this line also fails and we dismiss the same. Validity of order passed u/s 263 - We find that this is quite contradictory on the part of the ld. Pr.CIT. In one part of the order, he is computing the addition which should have been done in the hands of the assessee. Thereafter, he is stating that there is lack of further enquiry and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s consideration with reference to the assessee's share in these firms which is assessable u/s 56(2)(vii)(b) of the Act ignoring that this issue has been examined by the AO in detail in course of assessment proceedings (ii) variation of Rs.1,49,0001- between the return filed u/s 139(1) 153 A ignoring that the difference is on account of claim of deduction u/s 80C of the Act on account of tuition fees of child duly reflected in the return filed u/s 153A of the Act. 3. The Ld. PCIT has erred on facts and in law in passing the order u/s 263 without rebutting the various contentions raised by the assessee. 3. Brief facts of the case are that the assessee filed his return of income on 30.08.2016 having total income of Rs.5,52,640/- u/s 139 (1) of the Act. A search and seizure operation was carried out by the Investigation Wing in the case on 30.11.2017 at the residential premises of the assessee at Haveli, Jawahar Ganj, Mandi, Shamli. Thereafter on 19.12.2019, order u/s 143(3) / 153A of the IT Act was passed by ACIT, Central Meerut and two additions on account of unexplained investment of Rs.5,54,000/- and on unexplained expenditure of Rs.2,00,000/- were made in the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the assessing the officer in the cases of Shri Shashi Bala partner in the firm M/s Agarwal Sons and M/s Goel Sons, Manisha Gupta partner in the firm M/s Gupta Sons and M/s Agarwal sons in the cases of Yogesh Bindal, Sushil Garg, Dr. Anguri Gard Narandra Kumar Mittal partner in the firm M/s Agarwal Sons. e) Further, on perusal of records difference of income amounting to Rs.1,49,000/- was also left out from assessment as mentioned in the show cause. 4. After the above observation, ld. Pr.CIT invoked the provisions of clause (a) of Explanation 2 to section 263 of the Act and held that there is lack of verification and enquiries which were required to be made. He further observed that the assessee is liable to be taxed as per section 56(2)(vii)(b) in respect of his share of land computed on the basis of his profit sharing ratio in the two firms, namely, M/s. Aggarwal Sons and M/s. Gupta Sons. That Explanation 2 enjoins upon the AO to conduct necessary enquiries and verification before passing an assessment order and the failure to do so, would lead to invocation of provisions of section 263 of the Act. That the failure of AO to do so has rendered the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Kapil Mehta in ITA No.533/Del/2021 order dated 11.01.2021. ITAT has rejected similar argument in this regard as under :- 6.11 On a plain reading of the section, we do not find that there is any fetters on the powers of PCIT or CIT for revising any order passed by the AO except as provided in explanation 1(c) of the section. 6.12 However, here the argument of the assessee is that powers granted to the PCIT and CIT u/s 263 becomes otiose if the authority below the rank of PCIT/ CIT i.e Joint Commissioner of Income tax, has approved the order u/s 153D of the Act. The natural corollary of the argument is that if the lower authority, u/s 153D, has approved the order, the Higher Authority i.e., PCIT and CIT lose their power to revise such orders. . It is obvious and as glaring as the day light that Pr. Commissioner of Income Tax is way high above the Joint Commissioner of Income Tax. Reference to section 116 of the Income Tax Act, where the Income Tax authorities in their hierarchial order are listed, clears any doubt about it. 6.13 The Hon ble Delhi High Court in NIIT Ltd. Vs. Union of India in WPC No. 172 179/2009 dated 11th December, 2009 in para No. 20 has c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity either under Section 144A or Section 144B of the Act. The Hon ble Supreme Court held that :- 2. The power to revise orders of the Income-tax Officer under section 263 of the Income-tax Act, 1961 was sought to be limited by the appellant-assessee by contending that the phrase order passed by the Income-tax Officer in section 263 excluded those orders passed by the Income-tax Officer pursuant to the directions of the Inspecting Assistant Commissioner under section 144B which was then included in the Act. 3. The High Court in its decision has followed its earlier decision in which it had referred to and relied upon the reasoning of several other High Courts on the same issue to negative the contentions of the assessee. Given the uniformity of interpretation by the several High Courts, it would not be appropriate to interfere with the decision of the High Court. 4. In any event we are of the view that having regard to the subsequent amendments to the Act issued from time to time there was no scope for limiting the phrase 'order passed by the Income-tax Officer' in section 263 to exclude orders passed by the Income-tax Officer on the directions of a superior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of the arguments advanced by the Ld. AR on this line also fails and we dismiss the same. 9. We find that the above proposition is duly applicable in the ground raised by the assessee in this regard wherein it is urged that the jurisdiction exercised by Pr.CIT is wrong inasmuch as that is without revising the approval of the Addl. CIT. As already held by the ITAT above, there are no such fetters to the powers of ld. Pr.CIT and more so for the officer who is below in rank to the Pr. Commissioner. Hence, ground no.1 stands dismissed. 10. Now, we come to order passed under section 263 of the Act. In this regard, in the order passed u/s 263 of the Act, ld. Pr.CIT has already made a computation of addition which as per him should have been made. But in the same breadth, he is invoking the provisions of clause (a) of Explanation 2 to section 263 of the Act holding and directing the AO to make proper enquiry. We find that this is quite contradictory on the part of the ld. Pr.CIT. In one part of the order, he is computing the addition which should have been done in the hands of the assessee. Thereafter, he is stating that there is lack of further enquiry and hence he is invoking ..... X X X X Extracts X X X X X X X X Extracts X X X X
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