TMI Blog2023 (4) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed by the assessing officer should not be erroneous and prejudicial to the interest of Revenue. AO was satisfied, after making an enquiry and examining the evidence produced by the assessee. The PCIT in his order of Revision does not indicate any doubts in respect of the examination of evidences and documents and to conduct further enquiry by the assessing officer. The satisfaction of the AO on the basis of the documents produced is not shown to be erroneous. This is a case where a view has been taken by the Assessing Officer on enquiry. Even if this view, in the opinion of the PCIT is not correct, it would not permit him to exercise power u/s 263 of the Act. The exercise aimed at ascertaining the correct income of the assessee has been fulfilled by the Ld. A.O. by exercising his quasi-judicial functions vis-a-vis passing the assessment order u/s.143(3) of the Act. Therefore, certainly it is not a case wherein adequate enquiries at the assessment stage were not carried out or assessment was made in haste. What is an opinion formed as a result of these enquiries and verification of the materials is something which is in exclusive domain of the AO and even if Ld. Pr. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment proceeding, the assessee firm contended that source of cash deposited during demonetization period is out of its cash sale made till the Month of October, 2016. Ongoing through the documents submitted by the assessee firm, it was observed by Ld. PCIT that there is inordinate increase in sale in the Month of October, 2016. During the Month of October 2016, the assessee firm claimed total sale of Rs.4,50,29,540/- as against total sales made of Rs.1,08,61,891/- in the Month of October, 2015. During the Month of October, 2016, sale of the assessee firm had increased by 314.56% as against sales made in October, 2015 without adding any other instruments and facilities. As per the submission made during the assessment proceedings, the assessee firm claimed that a new 4 storied air-conditioned show room was opened whereas it was a small shop till year 2015. However, on perusal of the balance sheet for the year under consideration, it was noticed that there is no addition in fixed assets under the head of Building. 4. Further, from the records available, it was noted by Ld. PCIT that there are total sales of Rs.4,50,29 540/- in the Month of October, 2016 as against the total sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT observed that assessment order u/s 143(3) of the Income-Tax Act, 1961 dated 19.12.2019 for A.Y. 2017-18 is erroneous in so far it is prejudicial to the interest of revenue. Therefore, Ld. PCIT directed the A.O. to re-frame the assessment after examining the issue discussed above and after making proper enquiries. 7. Aggrieved by the order of the Ld. PCIT, the assessee is in appeal before us. 8. Shri Rasesh Shah, Learned Counsel for the assessee, pleaded that at assessment stage, the Assessing Officer has issued the notice under section 142(1) of the Act and did the sufficient inquiry, about the issue raised by ld PCIT. In response to notice under section 142(1) of the Act, the assessee submitted its reply. The ld PCIT has raised issue stating that there is increase in sales without increase in fixed assets, and there is increase in salary expenses also, which the assessing officer has not verified properly. The ld PCIT has also raised issue that there were two VAT returns filed by the assessee, and the assessing officer did not apply his mind as at why the assessee has filed two VAT returns. The ld Counsel stated that due to Diwali festival the sales has increased in Octo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of cash deposited in the bank account. The assessee submitted detail of VAT returns filed during the F.Y.2016-17 which is placed at paper book page nos.70 to 71. The Monthly VAT returns for the Month of July and October, filed by the assessee, is placed at paper book page nos.72 to 79. The annual VAT return filed by assessee for F.Y.2016-17, is placed at paper book page nos.80 to 83. The assessee also submitted the acknowledgement of Return of Income and Computation of total income vide paper book page nos.84 to 87. The tax audit report along with audited financial statements were submitted before assessing officer, which is placed at paper book page nos.88 to 107. The ledger account of advertisement expenses for the period 01.04.2016 to 31.03.2017 was furnished by the assessee, before the assessing officer, which is placed at paper book page no.108. 11. The factual position, as narrated above, clearly states that during the assessment proceedings, the assessee has submitted justification of increase in sale, and increase in salary expenses. The assessee also submitted the justification of VAT returns and explanation about fixed assets. The assessee submitted before the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the assessing officer should not be erroneous. 13. As per the provisions of section 263(1), the Commissioner may call for and examine the record of any proceedings under the Income-tax Act, and if he considers that any order passed therein by the AO is erroneous in so far as it is prejudicial to the interest of the revenue, he may pass an order u/s 263. Hon`ble Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT 243 ITR 83 (SC) has held that if the order is erroneous but it is not prejudicial to the interests of the revenue, the Commissioner cannot exercise the revisional jurisdiction u/s 263(1). Similarly, if the order is not erroneous but is prejudicial to the revenue, the PCIT cannot exercise the revisional jurisdiction. There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the assessing officer. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. 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 reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sults of such enquiries, the resultant order cannot be subjected to revision proceedings. For that we rely on the decision of the Coordinate Bench of I.T.A.T., Kolkata in the case of Smt. Juthika Kar vs. ITO [I.T.A. No.1128/Kol/ 2009, dated 16.5.2012], wherein it has been held as under (relevant portion): 8 However, what is opinion formed as a result of these enquiries is something which is in exclusive domain of the Assessing Officer, and even if Commissioner has such results of enquiries, the resultant order cannot be subjected to revision proceedings. The conclusions arrived at as a result of enquiries cannot be tinkered with in the revision proceedings. The conclusions being drawn up as a result of enquiry is a highly subjective exercise and as to what is appropriate conclusion is something on which perceptions vary from person to persons. These variations in the perceptions of the Assessing Officer vis-a-vis that of the Commissioner, cannot render an order erroneous and prejudicial to the interest of the revenue. 15. The aforesaid position gets further strength from the decision of Hon ble jurisdictional High Court in the case of CIT vs. J.L. Morrison (India) Ltd. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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