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TMI Blog2023 (3) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... as issued u/s 263 of the Act by the Pr. CIT observing that month-wise cash sales during FY 2016-17 especially in the month of November, 2016 till 8th November and in the month of December, 2016 which was reported at 32,59,351/- and Rs.8,200/- were abnormal, keeping in view the nature of the business carried out by the assessee, assessee has not given justification for increase in cash sales and the AO failed to verify the source of cash deposits. It was also observed that the AO failed to make any meaningful logical enquiry in respect of the capital introduced in the form by the partners and, therefore, in the show-cause notice assessee was requested to show as to why the assessment order passed u/s 143(3) of the Act cannot be set aside as being erroneous and prejudicial to the interest of the Revenue. As there was change in incumbent of office of the Pr.CIT notices dated 09.11.2011 and 10.02.2022 were issued once again to the assessee to furnish explanation. The assessee furnished its reply dated 07.03.2022 on the points raised by the Pr. CIT. However, not convinced with the replies furnished by the Assessee the Pr. CIT passed order dated 09.03.2022 u/s 263 of the Act setting asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were provided by the assessee regarding source of funds introduced, the confirmations given by Smt. Vijaya Laxmi Verma who is the mother of the two partners of the firm who has given amounts to her sons through banking channels. Ld. Counsel submits that the assessee has also produced bank statement of Smt. Vijaya Laxmi Verma, Income tax return of Smt. Vijaya Laxmi Verma to prove the identity and creditworthiness of the donor. All these details regarding source of funds introduced by the partners in the form of capital was furnished. It is also submitted that Assessee furnished the details of sale of shares by the partners in various companies which are also the source for the capital introduced into the firm. Therefore, the Ld. Counsel for the assessee submits that the assessee has furnished all the details required by the Assessing Officer in respect of cash sales and cash deposits made into bank account and also in respect of introduction of capital by the two partners in the firm and all these details were examined in the course of assessment proceedings and the assessment was completed u/s 143(3) of the Act and, therefore, it cannot be said that the order passed by the AO u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of Section 263 of the Act. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Company vs. CIT 243 ITR 83. 11. Ld. Counsel placing reliance on the decision of ITAT, Surat Bench in the case of Pramod Kesari Chand Shah vs. Pr.CIT in ITA No. 43/SRT/2018 and the decision of Delhi Bench of ITAT in the case of Champ Info Software vs. Pr.CIT in ITA No. 2799/Del/2018 dated 21.06.2019 submits that when cash deposits were examined in original assessment proceedings revision u/s 263 is not permissible. 12. Ld. Counsel for the assessee also made written synopsis/arguments which are as under: - "This appeal is against the Section 263 order of the Principal CIT, Delhi-10, New Delhi ordering a fresh assessment after holding the assessment order dated 12.12.2019 passed u/s 143(3) of the Income-tax Act, 1961 (the Act) by the Asst. Commissioner of Income-tax, Circle 51(1), New Delhi (AO hereafter) as being erroneous and prejudicial to the interest of revenue. 2. The ground taken in appeal reads as under:- "That on the facts and in the circumstances of the case and in law the Pr. Commissioner of Income Tax, Delhi- 10, New Delhi erred in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment as per the directions contained in the CBDT Circular for the scrutiny and examination of demonetization cases (please refer pages 18 to 28 of the Paper Book). The format in which information had to be sought by the AO's had been prescribed by the CBDT. All such information which was required to be collated by the CBDT had indeed been submitted by the assessee to the AO during the course of the assessment proceedings. All of it had been examined by the AO and was found to be in order. Please refer pages 30 to 37 of the Paper Book. More specifically there was neither any requirement as prescribed by the CBDT which was omitted to be provided by the assessee nor was anything left unexamined by the AO. It is only after considering all such material, details and explanations on record and after rigorously scrutinizing them and finding no anomaly that the AO concluded the assessment in the manner in which it was done. To put it differently no discrepancy, deficiency or blemish of any sort was noticed by the AO in the accounts of the year and in particular with reference to the transactions during the demonetization period was located by the AO. 5. It is noteworthy that the Princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous. (iii) The pattern of cash deposits into the bank had been submitted by the assessee to the AO as per details contained on pages 33 & 34 of the Paper Book. In fact, the AO had gone a step further and for comparison of purposes had sought the pattern of cash-in-hand in the succeeding assessment year also. That was placed by the assessee as per page 34 of the Paper Book. (iv) The Pr. CIT is wrong in observing that documentary evidence to prove the contentions were not filed by the assessee during the revision proceedings. All details which was submitted to the AO were also explained to the Pr. CIT. The Pr. CIT had the entire record of assessment before him during the final hearing. That included monthwise cash and credit sales, list of top 20 parties to sales & purchases and the related VAT returns. Please see pages 85-95 of the Paper Book. The entire stock details were also in the records of assessment. Please see pages 96-138 of the Paper Book. (v) & (vi) The manner in which the businessman conducts his business is the sole prerogative of the businessman. The Pr. CIT could neither device nor dictate the mode and manner of conduct of business by the assessee based on his s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued vide F.No. 225/145/2019/ITA-ll. The assessee was asked to submit the details and explanations on the lines as prescribed by the Instructions and SOP's devised by the CBDT. All such data and records as opined to necessary by the CBDT were collected and placed on record and were duly examined by the AO. For the purpose the AO had served notice u/s 142(1) of the Act dated 24.10.2019(Paper Book pages 21-28) which was duly complied with by the assessee. The AO had also obtained the reasons for the comparatively higher sales during the demonetisation period in November 2016 and also for the lesser sales in December 2016. The AO was convinced that the higher sales occurred due to an unforeseen and exceptional circumstances of demonetization and that the sales in December 2016 in cash were less due to the non-availability of the new currency notes. The AO had also called for and placed on record RBI Circulars rationing the distribution and supply of the new Rs. 500/- and Rs. 2000/- notes (Paper Book pages 17-17A). All in all a deep and thorough investigation was carried out by the AO before closing fhe assessment. The Pr. CIT has not appreciated these acts and deeds of the AO. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less error is identified by the Commissioner in the assessment order he would not be vested with the power or jurisdiction to pronounce the order prejudicial to the Revenue. The decision of the apex Court in Malabar Industrial Co. Ltd. vs. Commissioner of Income-tax [2000] 243 ITR 83 (SC) is most relevant on this point. The Court observed as under:- "The phrase "prejudicial to the interests of the Revenue" has to be read in conjunction with an erroneous order passed by the Assessing officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when an Income-tax officer adopted one of the courses permissible in law and it has resulted in loss of Revenue; or where two views are possible and the Income-tax officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income-tax Officer is unsustainable in law. If has been held by this court that where a sum not earned by a person is assessed as income in his hands on his so offering the order passed by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion that the order is erroneous and is unsustainable in law." 9. In sum it is submitted that the AO found no dearth, deficiency, error or deviation from accepted standard operating procedure for assessment of demonetisation cases. The Pr. CIT has not pointed out any shortcoming. No fallacy or impropriety in the assessment order has been brought on record by the Pr. CIT. The Pr. CIT has attempted to substitute her subjective and uninformed opinion over the blemishless, appropriate and balanced opinion of the AO. The whims and fancies of a superior authority cannot displace the rational and balanced opinion of a judicial authority though the latter may be at a lower hierarchical level. Further for the mere reason that the AO has not made any approbatory remarks in the assessment the order about the transactions in the demonetisation period itself the AO could not be said to have framed the assessment without meaningful or logical enquiries. All requirements and enquiries adumbrated by the Board have been made in the subject case. The records of assessment speak for the manner in which AO has complied with the CBDT directions and instructions. The impugned order of the Pr. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FY 2016-17 with comparative figure for the FY 2015-16. 5. Copy of list of top 20 purchase parties along with their PAN & Address for the relevant FY 2016-17 with comparative figure for the FY 2015-16. 6. Copy of VAT returns for the FY 2016-17 & 2015-16. 7. Item-wise and month-wise detail of quantity of stock. 8. Copy of stock register. 16. It is also observed that the Assessing Officer issued notice u/s 142(1) of the Act dated 02.12.2019 along with annexure calling for the details in respect of capital introduced into the assessee firm by the partners and to explain the source with supporting evidences. In response to the said notice the assessee field its reply dated 05.12.2019 giving the details of capital introduced in the firm by the partners the sources along with the confirmations, bank statements, Income tax return of Smt. Vijaya Luxmi Verma who is the mother of the assessee from whom both the partners borrowed money and also giving the details of shares sold by them explaining the sources for introduction of capital in the firm. The Assessing Officer accepting the explanations of the assessee completed the assessment on 12.12.2019 u/s 143(3) and computed the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assesses on these observations is as under: Point No.- 3 of notice u/s 263 Observation No.-1 It is has been pointed out in the notice of hearing u/s 263 that "on perusal of the assessment records and ongoing through the information filed by the assessee in respect of the month wise cash sales during the F.Y. 2016=17, it is seen that the assessee has made cash sales of Rs.32,59,351 in the month of November'2016 till 8th November & Rs.82Q0/- in the month of December'2016 which seems to be abnormal keeping in view the nature of business carried out by the assessee. Reply In this connection it is submitted that the reason for sale of Rs 8200/= in cash only in the month of Dec 2016 was quiet obvious because on the declaration of demonetization old specified bank notes of Rs.500 & Rs.1000 were scrapped w.e.f 09.11.2016 and in their place new Rs.500/- & Rs.2Q00 notes were introduced. Since new notes were under printing and the sufficient notes could not be print till December 2016, hence there was a huge shortage of new currency. Thus Reserve Bank of India imposed various limits ,, for withdrawal of cash from ATM and Banks. Till December'2016 Rs.24000 can be withdrawn from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding abnormal increase in cash sales. The comparative month wise cash sales for both the financial years 2015-16 & 2016-17 were provided to the AO via Point No.6(ix) and 6(x) on 16-11-2019 in response to her notice dated 24-10-2019. The relevant portion is re-produced here: 2016-17 2015-16 Cash sales (without VAT) Cash Sales (without VAT) October 11,27,362 6,67,805 November upto 8th 32,59,351 NIL As far as the sales of October'2016 is concerned there is a difference of Rs.4.55,008 only which is not a major difference as compare to the last year. The cash sales were held in the month of October'2016 due to festival season starting from Navratri followed by Dushehra, Karvachauth, Dhanteras, Diwali, Bhaiduj and Chhatpuja. As far as cash sales for the period from 01-11=2016 to 08-11- 2016 is concerned, there is a cash, sales of Rs.32,59,351 as against nil sale in the same period of the fast year. This sales was because of the upcoming wedding season which was going to start from 11.11.2016 resultant there was cash sale of Rs.25,41,819 on 06.11.2016 and Rs.717,532 on 08-11-2016. Your attention is invited that in this period of 8days the credit s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the cash deposit during demonetization period through point No.-6(vii). 4] Month wise details of cash and credit sales as well as cash and credit purchases in the requisite form for the current F.Y, 2016-17 as well as preceding F.Y. 2015-16 to comparing the same through point No.-6(viii). 5] Month wise cash sales and cash deposited for the period from 01-04-2015 to 31-03-2016 through point No.-6(ix). 6] Similarly month wise cash sales and cash deposited for the period from 01-04-2016 to 31-03-2017 as well specifically asked for cash sales made in the November till 08-11-2016 and cash deposited in demonetization period through Point No.- 6(x). Accordingly it can oe very well said that the AO had made every query to justify the reason for increase in cash saies not only through her wisdom but also as per instruction given by CBDT (supra). Point to be noted is that out of the lota! turnover of Rs.52 crores there is a cash sales of Rs.99 lacs only in the entire YeaF whlch is less than 2% of the total turnover hence there is no abnormal cash sales" # It is not the first time in the year under consideration that the cash sales was happened. In the following month there was ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the period from 01- 04-2016 to-31-03-2017 along with reason of revision in vat returns if any for the period prior to demonetization period. Please appreciate that all the returns were filed in time and none was revised for the purpose of revising the turnover. The assessee firm was registered with the Delhi VAT department. The cash sales made during the year were subject to charge of VAT accordingly cash sales were duly reported to the VAT Department in time as per Act. 2] The quantity wise details of Stock of every month showing Opening quantity, purchase quantity, sales quantity and closing quantity were submitted. The separate quantity wise detail of all the stock for all the 12 months separately were submitted for the perusal of the AO and it is to be noted that no discrepancy was pointed out by the AO. 3] Copy of day wise stock register in respect of all stock items such as Gold bar, alloy and Mixing , Gold and diamond jewellery etc. were also submitted before AO for her verification. In this regard it is submitted that the assessee firm is maintaining day wise stock register in respect of ail the stock items as stated above. Please appreciate that there was en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cash sales the genuine-ness can be verified only from the cash book, cash memos, availability of the stock and VAT Returns which the AO had asked to file and the assessee had uploaded on the portal for verification. CBDT instruction dated 09.08.2019 (supra) also advised the assessing officer to verify all these documents to determine the genuineness of the cash sales. The AO did so and there is no reason to disbelieve the sales. 9] It is humbly submitted that all the alleged cash sales had offered as revenue receipt in the trading and profit & loss account of the firm, resultant its income has been part of income shown in the return of income filed for the year. Since the income has already been offered for tax, the question of loss of tax to the revenue does not arise. The reliance is place in the following judicial pronouncement a) In the case of Lalchand Bhagat Ambica Ram v. CIT [1959] 37 ITR 288 [SC], the Hon'ble Apex Court decided the matter in favour of assessee of the ground that it was clear on the record that the assessee maintained the books of accounts according to the mercantile system and there was sufficient cash balance in its cash books and the books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o disbelieve the sales, either the assessee should not have sufficient stocks in their possession, or there must be defects in the stock registers/stocks. Once there was no defect in the purchases and sales, and the same matches inflow and the outflow of stock, there was no reason to disbelieve the sales. Tribunal had gone through the trading account and find that there was sufficient stock to affect the sales, and it didn 9t find any defect in the stock and the sales. Since assessee had, already admitted the sales as revenue receipt, there was no case for making the addition under \ Section 68 or tax the same under Section 115BBE again. " Accordingly on relying of this Hirapanna Case it can be very well said that the order passed by the AO is not prejudicial to the interest of revenue also. In conclusion it can be very well conclude i) that the AO had made proper enquiry which should have been made at her level best and as per her wisdom which satisfied the condition prescribed In clause(a) of the explanation 2 section 283 (as inserted from 01-06-2015). ii) Similarly, the order has been made in accordance with the instructions dated 09- 08-2019 (supra) issued by CBDT the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank statements of the partners were also filed. It is further submitted that it is a well settled law that the credit in the capital account of a partner cannot be brought to tax as income of the assessee firm u/s 68 of the Income Tax Act. Reliance is placed on the following judicial pronouncement : i) 257 Taxman 440 (SC) Pr. Cit v. Vaishnodevi Refoils & Soivex affirmed the judgment in the case of Pr. CIT v. Vaishnodevi Refoils & Soivex reported in 253 Taxman 135 (Guj) ii) 49 ITR 723 (Bom) Orient Trading Co. Ltd. v. CIT iii) 245 ITR 160 (MP) CiT v. Metachem Industries iv) 252 ITR 344 (P&H) CIT v. Barna Electro Corporation v) 11 TMI 630 (P&H) CIT v. Metal & Metals of India vi) 208 CTR 459 (P&H) C1T v. Rameshwar Dass Suresh Pal Cheeka vii) 53 Taxman 135 (Guj) Pr. CIT v. Vaishnodevi Refoils & Solvex viii) 141 UR 706 (All) CIT v. Jaiswal Motor Finance ix) 218 ITR 508 (All) India Rice Mills v. CIT x) 221 ITR 239 (All) Surendra Mahan Seth v. CIT xi) 263 CTR 612 (All) Zafa Ahmad and Co. v. CIT xii) 268 ITR 381 (Pat) CIT v. Md. Perwez Ahmad and Others xiii) 282 CTR 200 (Pat) CIT v. Anurag Rice Mills xiv) 268 ITR 381 (Pat) CIT v. Md. Parwez Ahmad xv) 400 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued in case of Shri Shaleen Vajpayee and, therefore, revenue is otherwise not without any legal recourse of examining such investment in the firm." "5.7 Accordingly, respectfully following the ratio of the various judgments as referred to in the preceding paragraphs, we have no hesitation in holding that the Id. Pr.CIT had wrongly invoked the revisionary powers u/s 263 of the Act and we have no option but to quash the same. If is so ordered accordingly. Grounds 1 to 6 thus stand allowed." It is hereby submitted that the case is supposed to be reassessed in pursuance of the section 263 on the ground that the credit worthiness of Smt. Vijay Laxmi Verma who give money to her sons is not verified by the AO. In this connection it is submitted that as per the section 68 the source to source is not mandatory in the case of partnership firm. It is in the case of company in which public is not substantially interested is required to explain the source of source as per the clause(a) of the first proviso. Section 68 is reproduced here: Section - 68 Cash Credit Where any sum is found credited in the books of an assessee maintained for any previous year and assessee offer no-explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceeding on this ground too and oblige." 18. The Ld. Pr. CIT passed order u/s 263 on 09.03.2022 holding that the Assessing Officer has not made any meaningful and logical enquiries in respect of sources of cash deposits into its bank account. The Pr. CIT observed that the Assessing Officer has not verified the abnormal increase in cash sales and there was no satisfactory explanation by the assessee, Assessing Officer failed to verify the stock/inventory maintained by the assessee in respect of cash sales. The Ld. Pr.CIT also observed that assessee failed to provide explanation in respect of sources of funds introduced as capital and creditworthiness of the lender. 19. On perusal of the order of the Ld. Pr.CIT, we observed that the Ld. Pr.CIT has not considered the entire reply of the assessee and only a part reply was extracted in her order. The Pr.CIT has not examined the contentions raised by the assessee in its detailed reply giving various reasons for increase in cash sales viz-a-viz credit sales, purchases, stocks, etc. for source of cash deposits into bank account. Ld. Pr.CIT also completely ignored the submissions of the assessee in respect of explanation and the ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 263 of the Act and in the absence of the finding that the order is erroneous and prejudicial to the interests of the Revenue, exercise of jurisdiction under the said section is not sustainable. In most cases of alleged inadequate investigation, it will be difficult to hold that the order of the Assessing Officer, who had conducted enquiries and had acted as an investigator, is erroneous, without the Commissioner of Income-tax conducting verification / inquiry. The order of the Assessing officer may be or may not be wrong. The Commissioner of Income-tax cannot direct reconsideration on this ground but only when the order is erroneous. An order of remit cannot be passed by the Commissioner of Income-tax to ask the Assessing Officer to decide whether the order was erroneous. This is not permissible. An order is not erroneous, unless the Commissioner of Income-tax hold and records reasons why it is erroneous. An order will not become erroneous because on remit, the Assessing Officer may decide that the order is erroneous. Therefore, the Commissioner of Income-tax must after recording reasons hold that the order is erroneous. The jurisdictional precondition stipulated is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination of the records of any proceedings under this Act, he considers that any order passed therein by the Income Tax Officer is 'erroneous in so far as it is prejudicial to the interests of the Revenue'. It is not an arbitrary or unchartered power, it can be exercised only on fulfillment of the requirements laid down in sub-section (1). The consideration of the Commissioner as to whether an order is erroneous in so far as it is prejudicial to the interests of the Revenue, must be based on materials on the record of the proceedings called for by him. If there are no materials on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. Such, decision of the Income Tax Officer cannot be held to be 'erroneous' simply because in his order he did not make an elaborate discussion in that regard." 23. In the case of CIT vs. D.G. Housing Projects Ltd., 343 ITR 329 the Hon'ble Delhi High Court held as under: - "12. The Assessing Officer is both an investigator and an adjudicator. If the Assessing Officer as an adjudicator decides a question or aspect and makes a wrong assessment which is unsustainable in law, it can be corrected by the Commissioner in exercise of revisionary power. As an investigator, it is incumbent upon the Assessing Officer to investigate the facts required to be examined and verified to compute the taxable income. If the Assessing Officer fails to conduct the said investigation, he commits an error and the word "erroneous" includes failure to make the enquiry. In such cases, the order becomes erroneous because enquiry or verification has not been made and not because a wrong order has been passed on merits. 13. Delhi High Court in Gee Vee Enterprises vs. Additional Commission of Income-Tax, Delhi-I & Ors.,(1975) 99 ITR 375, has observed as under:- "The reason is obvious. The position and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave to be distinguished from other cases (i) where there is enquiry but the findings are incorrect/erroneous; and (ii) where there is failure to make proper or full verification or enquiry. 16. In the case of Commissioner of Income Tax vs. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del), Delhi High Court was considering the aspect, when there is no proper or full verification, and it was held as under:- "We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the Commissioner of Income-tax under section 263 of the Income-tax Act. As noted above, the submission of learned counsel for the Revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Works Co. Ltd. v. ITO [1977] 106 ITR 1 (SC) at page 10) . . . From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income- tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dertaken the same. However, the said finding must be clear, unambiguous and not debatable. The matter cannot be remitted for a fresh decision to the Assessing Officer to conduct further enquiries without a finding that the order is erroneous. Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under Section 263 of the Act. In such matters, to remand the matter/issue to the Assessing Officer would imply and mean the CIT has not examined and decided whether or not the order is erroneous but has directed the Assessing Officer to decide the aspect/question." 24. The principle laid down by the above decisions squarely applies to the facts of the assessee's case. The Ld. Pr.CIT in order to hold the assessment order as erroneous and prejudicial to the interest of the Revenue should make enquiries himself pointing out the error or omission on the part of the Assessing Officer in conducting the enquiries. On a reading of the order of the Ld. Pr.CIT it is observed that no such exercise has been done by the Ld. Pr.CIT before concluding that the order passed by the Assessing Officer is erroneous and prejudicial to the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejudicial to the interest of the Revenue has to be preceded by some minimal enquiry by the Pr.CIT. It was held that if that basic exercise has not been undertaken by the Pr.CIT he cannot exercise the second option available to Pr.CIT u/s 263 of the Act by sending the entire matter back to the Assessing Officer for a fresh assessment. The Hon'ble High Court opined that the second option of sending back the entire matter to the Assessing Officer can be exercised only after the Pr.CIT undertakes an enquiry himself. In the case on hand before us, the Ld. Pr.CIT has not made basic exercise, enquiries herself with respect to the evidences/explanation on record before concluding that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of Revenue even though elaborate submissions were made by the assessee along with evidences to prove its case that the assessment order passed by the Assessing Officer is neither erroneous nor prejudicial to the interest of Revenue. 26. The decisions relied on by the Ld. DR are distinguishable on facts and have no application to the facts of the assessee's case. 27. In view of what is discussed above and following the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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