TMI Blog2022 (8) TMI 1359X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the corroborative evidences being brought on record to hold that how the assessment order was to be erroneous and prejudicial to the interest of the revenue. In our view, such vague observation made by the PCIT, merely doubting the assessment proceedings cannot hold the assessment order erroneous and prejudicial to the interest of the Revenue and that to base on the audit objection in particular. Assessing Authority has made enquiry about the expenses claimed by the appellant assessee in respect of current repairs and maintenance of machinery, current repairs and maintenance of building and interest claimed during the course of assessment proceedings as well as 154 proceedings. The AO was satisfied from the reply of the assessee and after consideration of the reply, the AO has filed the proceedings u/s 154. The observation of the PCIT that no enquiries or verification were made, is factually incorrect - Appeal of the assessee is allowed. - I.T.A. No. 12/Asr/2020 - - - Dated:- 24-8-2022 - Dr. M.L. Meena, Accountant Member And Sh. Anikesh Banerjee, Judicial Member For the Appellant : Sh. Surinder Mahajan, CA. For the Respondent Sh. Amlendu Nath Misra, CIT DR. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons presumptions since no error existed or prejudice was caused to revenue, therefore, the order of the Learned Commissioner of Income Tax, Jalandhar- l( Ld. CIT ) passed u/s 263 of the Act deserves to be quashed. 6. That on the facts circumstances of the case, Learned Commissioner of Income Tax, Jalandhar-1 ( Ld. CIT ) has grossly erred in setting aside the assessment framed with the directions to pass fresh order after making necessary enquiries/investigations. Non issuance of specific directions for assessment to be framed clearly proves that it is a case of only change of opinion and the assessment framed is neither erroneous nor prejudicial to the interest of the revenue. 7. That the Appellant requests for leave to add or amend the grounds of appeal before the appeal is heard or disposed off. 3. There was a delay of 227 days in filing this appeal against the impugned order passed u/s 263 of the Act vide order dated 19.03.2019 as the appeal was required to be filed on or before 27.05.2019 but it has been filed on 09.01.2020. 4. The ld. counsel Mr. Surinder Mahajan explained reason for a delay on account of the death of Sh. Ravi D. Sharma Chartered Accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a bonafide reason for the said delay of 227 days in filing this appeal due to mistaken unbelief, and we, therefore, hereby condoned the delay and admit the appeal to be heard on merits. 7. The assessee has filed return declaring an income of Rs. 25,08,770/- (APB pg. no. 4-7) and that the assessment was framed u/s 143(3) of the Act by making an addition of Rs.4,26,748/- (APB pg. no. 66-67). Subsequently, proceedings u/s 154 of the Act were initiated based on audit objection by issuing a notice dated 08.06.2018 (APB pg. no. 68-71) which were filed. Afterwards, a notice u/s 263 of the Act dated 28.02.2019 was issued to the assessee (APB pg. no. 116-117). 8. The ld. PCIT after considering the reply of the assessee to the show cause notice observed that expenditure of Rs. 93,96,787/- claimed by the assessee on account of current repair and maintenance of machinery, most expenses are in respect of moving parts which are subject to daily wear and tear, however, the copy of ledger account filed by the assessee shows that substantial amounts have been reflected in the account which do not seem to be in the nature of repair and maintenance of machinery; that expenditure of Rs.12,88 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted proceedings u/s 263 of the Act on the same issues of machinery repairs and maintenance, building repairs and maintenance and interest paid which was already verified during the assessment proceedings u/s 144 of the Act and the proceedings u/s 154 of the Act as above. The ld. PCIT has merely stated that the appellant assessee failed to produce copy of the ledger account to establish and substantiate that the expense amounts have been reflected in the accounts which do not seem to be in the nature of current repairs and maintenance, however, the Ld. PCIT has not established the contrary on the record with the support of corroborative evidences in order to hold the assessment order to be erroneous and prejudicial to the interest of the Revenue. The ld. AR further argued that proceedings u/s 263 cannot be invoked on the basis of the audit objection. For this purpose, the Ld. AR placed reliance on the judgment of the Hon ble jurisdictional Punjab Haryana High Court in the case of CIT v. Sohana Woollen Mills (2009) 296 ITR 0238 (APB pg. 56-59) para 7, and other judgement as per CLPB-II. 11. The Ld. CIT DR supported the impugned order. However, he could not file any case law in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of CIT v. Sohana Woollen Mills (2009) 296 ITR 0238 (APB pg. 56-59) vide para 7, observed as under: 7. A reference to the provisions of s. 263 of the Act shows that jurisdiction there under can be exercised if the CIT finds that the order of the AO was erroneous and prejudicial to the interest of Revenue. Mere audit objection and merely because a different view could be taken; were not enough to say that the order of the AO was erroneous or prejudicial to the interest of the Revenue. The jurisdiction could be exercised if the CIT was satisfied that the basis for exercise of jurisdiction existed. No rigid rule could be laid down about the situation when the jurisdiction can be exercised. Whether satisfaction of the CIT for exercising jurisdiction was called for or not, has to be decided having regard to a given fact situation. 15. From the conjoint reading of the assessment order passed u/s 144 of the act and the replies filed, it is abundantly clear that the Assessing Authority has made enquiry about the expenses claimed by the appellant assessee in respect of current repairs and maintenance of machinery, current repairs and maintenance of building and interest claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of expenditure incurred by assessee and assessee had given detailed explanation in that regard and Assessing Officer had accepted the explanation of the assessee, the decision of Assessing Officer could not be held to be erroneous simply because in his order he did not make an elaborate discussion in this regard. In the present case, the Assessing Officer raised an enquiry and assessee filed detailed reply and thereafter, Assessing Officer accepted the explanation and did not make any addition on that account. The order of Assessing Officer cannot be said to be erroneous as he has taken a plausible view, keeping in view the facts and circumstances of the case. The Hon'ble Delhi High Court in the case of CIT vs. Anil Kumar Sharma 335 ITR 83 has held as under: There is a distinction between lack of inquiry and 'inadequate inquiry If there was any inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under section 263 of the Income-tax Act, 1961, merely because he has a different opinion in the matter: Held, dismissing the appeal, that the present case would not be one of lack of inquiry even if the inquiry was te ..... X X X X Extracts X X X X X X X X Extracts X X X X
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