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TMI Blog2022 (12) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... ge cash deposits in the bank in denomination of 1,000 and 500 during the demonetization period. The assessee duly explained that specified currency was allowed by the notification issued by RBI for petrol pumps and medicine dealers to accept the specified currency during the demonetization period. In consequence to the survey, the case was selected for scrutiny assessment proceedings. Notices u/s. 142(1) was issued to the assessee. It was asked to the assessee to furnish relevant information , materials and documents and in compliance the assessee furnished all the relevant documents, materials and information alongwith the books of accounts which were verified and test checked by the learned AO during the course of scrutiny proceedings. The learned AO verified all the materials and passed the order on 29.12.2019. Revision u/s.263 was conducted by the PCIT , Bhubaneswar -1 stating that certain details were not verified as such the assessment order is erroneous and prejudicial the interest of revenue. A notice was issued on 10.08.2021. The assessee through his AR appeared on 25.11.2021 and discussed the case with the Pr.CIT explaining the each and every query. Thereafter th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner under section 263(1) was justified. The Hon'ble Supreme Court further held in para-8 that the scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income-tax Officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. The cases where there is incorrect assumption of facts, nothing more is required from the side of the Pr. CIT. ii.) Coming to the decision of Hon'ble Orissa High Court in the case of Orissa State Police Housing & Welfare Corporation Limited (139 taxmann.com 207), it has been rendered on different facts. In the cited case, the profit element in Work-in-Progress (MP) was directed to be added especially when the profit from such WIP had already been included in the income of the assessee. It was noticed that the AO had in fact called for the details of the closing WIP which had been furnished by the Assessee and had examined it. If the CIT was of the view that the AO had not examined this issue at all, it could then lead to the conclusion that the order of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in Rampyari Devi and Tara Devi Aggarwal, the challenge of the petitioners to the jurisdiction of the Commissioner exercised under section 263 fails and the writ petitions do not qualify for admission on the ground of the impugned orders being without jurisdiction". iv.) In the present case, the view taken by the A.O. was not plausible and he had passed the assessment order without proper application of mind. The Hon'ble Delhi High Court in the case of Gee Vee Enterprises (99 ITR 375) held as under: "The reason is that it is not the Income-tax Officer but a superior officer like the Commissioner who is exercising a revisional jurisdiction suo motu there under. The superior officer could be trusted with a larger power. The only requirement for the exercise of this power is that the Commissioner should consider that the order passed by the Income-tax Officer is " erroneous in so far as it is prejudicial to the interests of the revenue ". What is the meaning of " erroneous " in this context ? It was argued for the assessees by Shri G. C. Sharma that the word " erroneous " means that the order must appear to be wrong on the face of it. In other words, he equate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck of inquiry or inadequate inquiry, will depend upon the facts obtaining in a particular case. What emerges as a broad principle from the various decisions is that where the AO has reached a rational conclusion, based on his inquiries and material on record, the Commissioner should not start the matter afresh in a way as to question the manner of his conducting inquiries. It is not the province of the Commissioner to enter into the merits of evidence; it has only to see whether the requirements of essential inquires and of law have been duly and properly complied with by AO or not. 28.2 It is well settled that before the Commissioner can invoke his powers u/s 263, he has to arrive at a conclusion that the assessment order is erroneous in so far as it was prejudicial to the interests of the revenue. Then only the powers u/s 263 can be invoked. Therefore, if AO accepts or rejects any claim of the assessee without due application of mind and if such failure causes prejudice to revenue, the Commissioner would be well within his powers u/s 263 to intervene in the matter. An inquiry which is just farce or mere pretence of inquiry, cannot be said to be an inquiry at all, much less an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the AO had not examined the interest for the Solar machine provided by HPCL and (vi) the issue was in regard to low NP rate which had not been examined by the AO as also the loss shown by the assessee in respect of HSD and petrol disclosed by the assessee. It was submitted by ld AR that the amount of Rs.80,000/- is not liable to be treated as unexplained money u/s.69A of the Act insofar as this was money drawn from the bank and same has been shown in the cash book. It was only on account of low tax effect in respect of the said addition, no appeal had been filed. It was the submission that it is not that the assessee has accepted the claim of unexplained money. In respect of interest paid to Bajaj Finance Ltd., it was the submission that the amount had been paid in lumpsum and it included principal and interest and Bajaj Finance Ltd was not cooperating in providing Form 10 BA to show that the amount has been disclosed by them in their return. In respect of other issues, it was submitted that when the book of account of the assessee itself had been impounded and examined by the AO but now the claim that the AO has not done any examination and restoring the issue to the file of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- is not before us. However, the addition is made. The addition having been made admittedly, the AO had the duty to invoke the provisions of section 115BBE insofar as he himself has invoked the provisions of section 69A of the Act. This, admittedly is an error in the assessment order and tax slab rate of 30% as against 60% caused prejudice to the interest of the revenue and on this issue, we are of the view that the order of the Pr. CIT is liable to be upheld and we do so. 8. In regard to the issue of interest paid to Bajaj Finance ltd., the assessee has been unable to produce Form 10BA before the Assessing officer or before the ld Pr. CIT. The nondeduction of TDS on the amount paid to Bajaj Finance Ltd., is clearly a violation of law which should have come to the attention of the AO. Failure on the part of the AO on this issue admittedly makes the order erroneous and prejudicial to the interest of the Revenue on that count. Consequently, in respect of issue of non-deduction of TDS in respect of payment made to Bajaj Finance ltd., we are of the view that the order of the Pr. CIT is on right footing and does not call for any interference. 9. Coming to other issues, being the ve ..... 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