TMI Blog2023 (3) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... case for reexamination of facts and evidences already examined by the AO while passing the order u/s 143/147 of the act. Such an action of PCIT is not justified in law and on the facts of the case. We have to understand that lack of enquiry/no enquiry is different from inadequate enquiry and it is only in case of no enquiry by the AO, Pr. CIT/C1T can exercise jurisdiction u/s 263 of the Act and not in case where the AO has made enquiries as seems appropriate in the facts and circumstances of the case. In the instance case inquiry on relevant issue has been made by AO, hence no action invited u/s 263. We hold that the impugned order passed by the PCIT is perverse to facts on record in holding assessment order erroneous and prejudice to the interest of revenue on account of lack of enquiry. Accordingly, the order passed by the PCIT -1, Jalandhar u/s 263 is cancelled being bad in law. Appeal of the assessee is allowed. - I.T. A. No. 35/Asr/2021 - - - Dated:- 2-3-2023 - Dr. M. L. Meena, Accountant Member And Sh. Anikesh Banerjee, Judicial Member For the Appellant : Sh. Ashray Sarna, CA For the Respondent : Smt. Rajinder Kaur, CIT- DR ORDER PER DR. M. L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dispute with the tax authority under this scheme, then the amount payable would be considered final and such cases will not be opened again for proceeding under the Income Tax Act. But Hon ble Principal Commissioner of Income Tax ignored this fact and initiated proceedings u/s 263 and set aside the Assessment made by A.O. u/s 147/143(3) of Income Tax Act, 1961 vide his order u/s 263 dated 23/03/2021 which is null and void. 6. That having regard to the facts and circumstances of the case, Hon'ble Principal Commissioner of Income Tax has erred in law and on facts, stating in his order u/s 263 that written submission and documents submitted by council of the assessee CA Inderjit Abhilashi needed to be verified since such verifications/enquiries have not been made by the A.O. at assessment stage, which is not correct because written submission and documents submitted by Council of the assessee during proceedings u/s 263 only contain submissions and documents which were submitted to the A.O. during assessment proceedings and thorough verification of the same was made by A.O. and there was only one matter in assessment proceedings which needed verification by A.O. which was v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1961. For sake of natural justice you are given an opportunity to file your reply/objections, if any, to the proposed action before the undersigned by 22.03.2021 on which date your case stands fixed for hearing at 11.00 A.M. in the office of the undersigned at Aayakar Bhawan, Rishi Nagar, Ludhiana. The reply alongwith supporting documentary evidence, if any, may kindly be sent online or email which shall be duly considered before taking final decision in the matter. , 3.1 The PCIT discussed that above show cause notice was issued through Speed Post as well as through ITBA System on 16.03.2021. In response to the show cause notice, Sh. lnderjit Abhilashi.CA, attended the proceedings and filed written submission. I have considered the reply of the assessee on the issues raised in the show cause notice and the documents filed by the assessee which need to be verified since such verifications/enquiries have not been made by the A.O. at assessment stage. Therefore, the order passed by the Assessing Officer is held to be erroneous and prejudicial to the interest of the revenue. The case is, therefore, set aside to the file of the A.O. for fresh assessment on the above mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 147/143(3) the assessee had preferred an appeal before CIT(A) NFAC, New Delhi. The assessee as a matter of fact had paid the demand amounting to Rs.207696/- as had been created by the AO. However, in the meanwhile the option to opt for Vivad Se Viswas Scheme in cases where appeals were pending was announced by the Government and the assessee opted for Vivad Se Viswas Scheme on 24/6/2020 and same has been accepted by the PCIT/ Department after considering all the fact and submission filed and after such verification the Certificate in Form-5 had been issued by the PCIT-1, Jalandhar on 08/01/2021. Thus with the issue of the certificate by the PCIT-1, all the proceedings with regards the order passed by the AO dated 21/12/2018 got finalized and hence the said order of the AO could not have been made basis of issue of revision u/s 263 by the PCIT-1. The PCIT-1 in the show cause notice dated 16/03/2021 had raised the issue to which a detailed reply was filed with supporting details which the PCIT-1 failed to consider and appreciate. A perusal of the order passed u/s 263 reveal that the source of cash deposit of Rs.3550000/-remained unverified and unexplained and hence in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is completely unsustainable in law. Reference is drawn to the findings of the Hon ble Supreme Court in case of Malabar Industrial Co. Ltd vs. CIT 243 ITR 83(SC) wherein in has been held that the phrase prejudicial to the interests of the revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer and every loss of revenue as a consequence of the order of the Assessing Officer cannot be treated as prejudicial to the interest of revenue. It was further held that whereto views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, the order passed by the Assessing Officer cannot be treated as erroneous order prejudicial to the interest of the revenue. The principles laid down in the aforesaid decision were reiterated by the Supreme Court in CIT Vs. Max India Ltd, 295 ITR 282 (SC) and recently in Ultratech Cement Ltd vs State of Rajasthan Ors, Civil Appeal No. 2773/202 decided on 17.07.2020. Further in the case of PCIT vs. V. Dhana Reddy Co. - [2018] 100 taxmann.com 358 (SC) it has been held that If AO had adopted a plausible view, revision u/s 263 not sustainable Further th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smissed by SC] Further reference is invited to the decision of the Punjab and Haryana High Court in the case of Hari Iron Trading Co. vs. Commissioner of Income-tax: 263 ITR 437, wherein it was held that even though the assessment orderly as silent with respect to the issues raised in the 263 order, that by itself did not vest the Commissioner with valid jurisdiction, considering that such issues were considered by the assessing officer and formed part of the assessment record. The aforesaid judgment has been followed with approval by the Delhi High Court in the case of CIT v,y. Eicher Limited: 294 ITR 310. The relevant observations are reproduced hereunder: 15. In Hari Iron Trading Co. v. Commissioner of Income 7nx.(2003) 263 ITR 437, a Division Bench of Punjab and Haryana High Court observed that an assessee has no control over the way an assessment order is drafted. It was observed that generally, the issues which are accepted by the Assessing Officer do not find mention in the assessment order and only such points are taken note of on which the assessee's explanations are rejected and additions / disallowances are made. We agree. 16. Applying the principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal before the CIT(A) challenging the addition made by the AO. During the pendency of the appeal the assessee opted for Vivad Se Viswas Scheme by filing form 1 and the PCIT after considering all the facts of the case and evidences filed issued order of full and final settlement of Tax Arrears in Form 5 on 8/1/2021 and when on the one hand the PCIT is issuing form 5 after verifying all facts on record and evidences filed then after a lapse of over two months the PCIT is issuing a show cause notice and then passing the order u/s 263 is very hard to understand as with the issuance of Form 5 the proceedings closed and there was no valid order remaining for the PCIT to resort to such action. Reference in this regard is drawn to Section 5 (3) of the Direct Tax Vivad Se Vishwas Act, 2020,wherein it has been stated that every order passed under sub section 5(1) , determining the amount payable under this Act shall be conclusive as to the matter stated therein and no matter covered by such order reopened in any proceedings under the Income -tax Act. Attention in this regard is invited to the case of Uma Corporation v. ACIT Ors. (2006) 204 CTR 282 / 284 ITR 67 (Bom.) (HC) the Court held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into an agreement for sale of property and received advance of Rs.20,00,000/-. Vide reply dated 12.12.2018, the cash flow was filed as under. - Opening Balance (istridhan business income) 1,50,000.00 08/07/2010 Cash received From Husband As Gift 20,00,000.00 Total 21,50,000.00 10/07/2010 (-) cash deposited 7,00,000.00 12/07/2010 (-) cash deposited 3,00,000.00 11,50,000.00 24/08/2010 (+) cash withdrawal 2,00,000.00 06/09/2010 (+) cash withdrawal 6,00,000.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of above facts, the assessee, vide order sheet entry dated 19.12.2018, was asked to furnish the evidence of refund of Rs.20,00,000/- along with supporting documents. In response, the assessee filed detailed reply stating that the agreement was made by her husband, and the amount was refunded by him. Further, she filed the details of sources of payment made, along with copy of bank account of Sh. Rajeshwar Kumar, as under- Cash received from Lata Narang as per cash flow filed on 12/12/2018 9,60,000 Cash withdrawal from Salaried Saving Bank Account 1,00,000 Cash Withdrawal from Personal Saving Bank Account 4,50,000 Cash Received from friends and family 4.90.000 20,00,000 2.4 In view of reply filed by the assessee, she, vide order sheet entry dated 21.12.2018, was asked to furnish details of the friends and family in respect of cash received at Rs.4,90,000/-. However, the counsel of the assessee stated that he was not able to provide the said details. Further, as regards the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the AO in accepting the source of cash deposits as explained by way of pointing out deficiencies and directing specific enquiries in respect of source of particular amount of cash deposit or the source of cash deposit of Rs.3550000/- remained unverified or unexplained. Meaning thereby, the PCIT s general and vague observation that the source of cash deposit of Rs.3550000/- remained unverified or unexplained and same need verification at assessment stage without appreciating the facts on record and holding the order passed by the AO to be erroneous and prejudicial to the interest of Revenue is against the intention of the legislation and bad in law. It is pertinent to mention that by way of the impugned order passed u/s 263, it can be said the PCIT-1 has attempted to made a case for reexamination of facts and evidences already examined by the AO while passing the order u/s 143/147 of the act. Such an action of PCIT is not justified in law and on the facts of the case. 9. The Hon ble Supreme Court in case of Malabar Industrial Co. Ltd vs. CIT , 243 ITR 83(SC) has observed that the phrase prejudicial to the interests of the revenue has to be read in conjunction with an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s 142(1) the assessee submitted the relevant documents before the revenue authorities. On basis of these documents the order was passed by the Id. AO. It cannot be said that the issue was untouched and unverified by the assessing authority. Mere change of opinion an order cannot be called as erroneous. We directed that the order passed by the PCIT is unjust for, and the order is setting aside. Thus the action of the PCIT on this account is bad and the revision order passed deserves to be cancelled. The other issue which requires consideration of the Honorable Bench is that the assessee against the order passed by the AO had preferred an appeal before the CIT(A) challenging the addition made by the AO. During the pendency of the appeal the assessee opted for Vivad Se Viswas Scheme by filing form 1 and the PCIT after considering all the facts of the case and evidences filed issued order of full and final settlement of Tax Arrears in Form 5 on 8/1/2021 and when on the one hand the PCIT is issuing form 5 after verifying all facts on record and evidences filed then after a lapse of over two months the PCIT is issuing a show cause notice and then passing the order u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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