TMI Blog2023 (9) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... ail to advance the case of the assessee either because of amendment to section 263 of the IT Act with effect from 01/06/2015 through insertion of Explanation (2) to section 263(1) of the ITAT; or because of clearly distinguishable facts, or because of well settled position of law as established by decision of Hon'ble Supreme Court in the case of CIT vs. Amitabh Bachhan [supra] We take guidance from order of Pr. CIT vs. Venus Woollen Mills [ 2019 (2) TMI 292 - PUNJAB AND HARYANA HIGH COURT] in which it was held by Hon'ble High Court that where Assessing Officer did not apply mind to correctness of books of account, except to note that books of account were produced and test checked, impugned revisionary order passed u/s 263 was to be upheld. Decided against assessee. - Shri Sudhanshu Srivastava, Judicial Member And Shri Anadee Nath Misshra, Accountant Member For the Appellant : None For the Respondent : Smt. Sheela Chopra, CIT (D.R.) ORDER PER ANADEE NATH MISSHRA:A.M. (A) This appeal has been filed by the assessee against impugned order dated 22/02/2022 (DIN Order No. ITBA/REV/F/REV5/2020- 21/1040010337(1) of Pr. Commissioner of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly holding that the law is well settled that failure by the A.O. to make enquiries called for in the circumstances of the case renders the assessment erroneous and liable for revision u/s 263 (Rampyari Devi Sarogi v. CIT 67 ITR 84 (SC), Tara Devi Aggarwal v CIT 88 ITR 323 (SC), Gee Vee Enterprises v Addl. CIT 99 ITR 375 (Delhi) , whereas he was satisfied that there were no lapses as pointed out in the show cause notice and no further show cause notice was given with regard to lack of enquiries. (A.1) In this case assessment order dated 24/12/2019 was passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 ( IT Act for short) whereby the assessee s total income was assessed at Rs. 89,85,720/- as against returned income of Rs. 87,06,920/-. Subsequently, the learned Principal Commissioner of Income Tax ( Pr. CIT for short) issued show cause notice u/s 263 of the IT Act. Vide impugned revision order dated 22/02/2022 u/s 143(3) r.w.s. 263 of the IT Act, the learned Pr.CIT set aside the aforesaid assessment order dated 24/12/2019 and directed the Assessing Officer to frame denovo assessment order as per law keeping in view the observations made by the Pr.CIT in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of three months or till the appeal of the assessee was decided by the Income Tax Appellate Tribunal, whichever was earlier. The relevant portion of the aforesaid order of Lucknow Bench of Allahabad High Court is reproduced as under: The petitioner- assessee has filed this petition seeking writ of mandamus directing the Assessing Officer not to finalize the remand assessment proceedings in pursuance to the order dated 22.02.2022 passed u/s 263 of the Income Tax Act, 1961, which were initiated by means of a notice u/s 142(1) of the Income Tax Act dated 3.3.2023, till decision of Appeal No.ITA 75/LKW/2022, which is pending before learned ITAT. The contention in nutshell is that assessment proceedings were undertaken against the petitioner u/s 143 (3) of the Income Tax Act. The orders were passed in favour of the petitioner but exercising power u/s 263 of the Income Tax Act, the Commissioner concerned set aside the assessment and remanded the matter back for reassessment vide its order dated 22.02.2022. This order of the Principal Commissioner of Income Tax, Bareilly dated 22.02.2022 has been challenged by the petitioner before the Income Tax Appellate Tribunal by mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.02.2022 for a period of three months or till the appeal of the petitioner is decided by the ITAT, whichever is earlier. Subject to result of appeal u/s 253 of the Income Tax Act i.e. if it goes against the petitioner then, it will be open for the Assessing Officer to complete the re-assessment proceedings as per law and for this purpose the period of stay of such proceedings under the order of this Court shall be excluded in view of explanation-1 of Section 153 of the Income Tax Act. In this eventuality pendency of this petition shall not come in the way of conclusion of such re-assessment proceedings. (A.2.1) The hearings fixed in ITAT on 02/05/2023 and 29/05/2023 were adjourned on the request of learned Counsel for the assessee on stated ground of ill health of the learned Counsel for the assessee. On 22/06/2023, the case was taken up for hearing in ITAT. The hearing progressed for some time. However, while the hearing was still in progress, the learned Counsel for the assessee as well as learned CIT (DR) for Revenue requested for adjournment of hearing. During the period while the hearing progressed on 22/06/2023, the learned Counsel for the assessee admitted to certain t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the assessee, requesting for further adjournment on the ground of his ill health, informing that he was advised complete bed rest for a further period of 15 days. It may be mentioned that on an earlier occasion, hearing fixed on 04/08/2022 was adjourned on the basis of adjournment application dated 04/08/2022 filed by the Revenue, wherein it was stated that the learned CIT (DR) was not keeping well. Today this appeal was listed for hearing as First on Board . At the time of hearing learned Counsel for the assessee filed written submissions running into 14 pages. In paragraph 4.1 of the written submissions it has been contended that liquors cannot be purchased from the open market . However, the learned Counsel for the assessee could not substantiate this contention on the basis of materials on the record of the ITAT. He sought for some more time to file materials in support of this contention. Moreover, on 15/06/2023, a paper book was filed from the assessee s side containing 74 pages, which included copies of purchase invoices produced before the Assessing Officer for test check (pages 59-74 of the paper book). In the certificate, contained in the paper book, it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions on 20/06/2023 and 22/06/2023 respectively, which needs to be thoroughly examined. In view of the above fact, your are requested to kindly adjourn above appeal to first week of july or any other date convenient to your honours. As representatives of both sides have requested for adjournment of hearing today, the hearing is adjourned to 4th July, 2023 as first on board. (A.2.1.1) On the request of both sides the case was adjourned to 04/07/2023. (A.2.2) On 04/07/2023, the appellant assessee was represented by none. However, letter dated 28/06/2023 was filed stating as under: I respectfully submit that at the time of hearing i.e. 22.06.2023, the Hon'ble Bench pointed out that at Sl. No. 12 of the paper book which was filed on 15.06.2023 states that purchase invoices were produced before the Assessing Officer for test check whereas the certificate states that purchase invoices were filed before the Assessing Officer. The Hon'ble Bench was pleased to grant time to the assessee to amend the paper book and/or certificate. 2. Further, to substantiate the argument that liquors cannot be purchased from the open market, I am enclosing herewith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once again the assessee was represented by none. However, letter dated 12/07/2023 was filed from the assessee s side stating as under: We thankfully acknowledge receipt of the Notice of the date fixed for the hearing of above-mentioned Appeal on July 18, 2023. In this connection the humble appellant most humbly request the Hon'ble Bench that our Appeal (ITA No. 75/LKW/2022) may kindly be decided on the basis of our Written Submissions, Paper-Book and Compilation of Judgements already on Record, waiving of our right of personal hearing or hearing through the 'Counsel', please. We may also submit that this WAIVER is being made with full and conscious knowledge of the existence of our sacrosanct right. (A.2.2.3) Learned CIT (DR) filed status report vide letter dated 04/07/2023, stating as under: In this context, it is hereby informed that above case was listed for hearing on 03/07/2023 before the Hon'ble Allahabad High Court. Shri Kushagra Dixit, counsel for the Income Tax Department has informed that the Hon'ble Bench did not function on 03/07/2023 and further status will be informed as and when it is listed before Hon'ble Allahabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I am filing fresh paper-book with amended certificate; I want to withdraw my earlier paper book which was filed on 15.06.2023. I sincerely apologize for the inconvenience caused due to typographical error. (B.1) At the time of hearing before us on 18/07/2023, the appellant assessee was represented by none, which was in accordance with aforesaid letters dated 28/06/2023 and 12/07/2023, referred to in foregoing paragraphs (A.2.2.1) and (A.2.2.2) of this order. Revenue was represented by learned CIT, D.R. She relied on the aforesaid impugned order dated 22/02/2022 of learned Pr.CIT. (B.1.1) In the course of appellate proceedings in ITAT, written submissions were filed from the assessee s side vide letter dated 21/06/2023, the relevant portion of which is reproduced below: May it please the Hon'ble Members', The appellant is in appeal against the order of Ld. Pr. Commissioner of Income tax, Bareilly dated 22.02.22, setting aside the order of assessment dated 24.12.2019 to be framed denovo as per law on the ground that The Assessing officer has passed the assessment order on 29.07.2019 u/s 143(3) of the Act without enquires on the above issues and accepted su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/ vouchers. 5. The AO has made addition while passing the assessment order. He was required to initiate penalty proceedings u/s 270A of the IT Act, 1961. The initiation of penalty proceeding is compulsory from A.Y. 2017-18 whenever there is addition to income. 4. From the perusal of the above grounds, the Ld. PCIT presumed that no inquiry was done by the AO and he has simply relied on the replies of the appellant - assessee. The appellant most respectfully submits that the grounds which were raised by the Ld. PCIT were either part of records with the Income-tax Department or specific queries/information was asked by the Ld. Assessing Officer. 4.1. The appellant most humbly submits that the first ground which was noted by the Ld. PCIT has two parts; first, the AO has not made enquiry from the State Excise Department regarding purchases; and second, the AO should have examined the expenditure in trading account as well as P L account on test check basis. Your honour would appreciate that State Excise Department issue licence for sale of liquors to the whole seller as well as to the retailers. Whole seller purchases liquors from manufacturer and retailer purchases f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AOP, Pratap Narain others, Lucknow Division. Since all the licensees as per agreement, agreed to run business under AOP M/s Pratap Narain others Lucknow Division, therefore, all the purchases and sales are done by AOP M/s Pratap Narain others Lucknow Division which can be verified from TCS records and book of accounts as well as purchase bills and vouchers. The Ld. Pr. CIT failed to appreciate that at the time of assessment proceedings, the Ld AO vide notice u/s 142(1) dated 24.09.2019 made a specific query relating to the business of the appellant which is at serial no 1 and 2: 1. Give a detail note on the business activities carried out during the year. 2..... Also furnish the copy of Partnership Deed. A detailed reply alongwith the relevant annexure were filed on 23.10.2019 before the Ld. A.O. All the trading were done under AOP Pratap Narain others Lucknow Division and all the expenses were incurred by the appellant. This fact was also brought to the notice to Ld. Pr. CIT, but no comment was given by him in the regard. An enquiry was made by the AO in relation to trade/business of the appellant. It cannot be said that no enquiry was made by the AO rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest of the Revenue. This is not a case of lack of inquiry. Inadequacy of the inquiry does not give jurisdiction to the PCIT to invoke the provisions of section 263. No doubt clause (a) of Explanation 2 to Section 263 deems an order to be erroneous and prejudicial to the interest of the revenue in case the order is passed without making enquiries. i) Hon'ble Apex Court in the case of Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC), wherein it was held as under: 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 interest of the Revenue unless the view taken by the Income Tax Officer is unsustainable in law. (page 1-6 of the compilation) ii) The Hon'ble Punjab Haryana High Court in the case of CIT v. Indo German Fabs IT Appeal No. 248 of 2012, dated 24-12-2014, in the following words: Section 263 of the Act confers power to examine an assessment order so as to ascertain whether it is erroneous and prejudicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r spheres of human activity. 20. Further clause (a) of Explanation states that an order shall be deemed to be erroneous, if it has been passed without making enquiries or verification, which should have been made. In our considered view, this provision shall apply, if the order has been passed without making enquiries or verification which a reasonable and prudent officer shall have carried out in such cases, which means that the opinion formed by Ld Pr. CIT cannot be taken as final one, without scrutinising the nature of enquiry or verification carried out by the AO vis- -vis its reasonableness in the facts and circumstances of the case. Hence, in our considered view, what is relevant for clause (a) of Explanation 2 to sec. 263 is whether the AO has passed the order after carrying our enquiries or verification, which a reasonable and prudent officer would have carried out or not. It does not authorise or give unfettered powers to the Ld Pr. CIT to revise each and every order, if in his opinion, the same has been passed without making enquiries or verification which should have been made. In our view, it is the responsibility of the Ld Pr. CIT to show that the enquiries or ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are, therefore, of opinion that without going into the merits of the claim of the assessee it was not possible for the Commissioner to say that the order of the Income-tax Officer had caused any prejudice to the interests of revenue and, as such, he was not competent to set aside the assessment order and remand the matter to the Income-tax Officer. (page 63-65 of compilation) b) In the case of CIT vs. Goyal Private Family Specific Trust, (1998) 171 ITR 698 (All) (page 66-69 of compliation): followed in CIT vs. Mahendra Kumar Bansal 297 ITR 99 (All, it was held that The Commissioner having failed to point out any error, no error can be inferred from the order of the Income-tax Officer for the simple reason that they are bereft of details. If the order is not erroneous, then it cannot be prejudicial to the interest of the Revenue. There is nothing to show in the order of the Commissioner that the Income-tax Officer would have reached a different conclusion had he passed a detailed order. So the conclusion of the Commissioner that the orders of the Income-tax Officer are erroneous and prejudicial to the interest of the Revenue is based merely on suspicion and surmise in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 judicial and quasi-judicial controversies as it must in other spheres of human activity. [See: Parashuram Pottery Works Co. Ltd. v. ITO[1977] 106 ITR 1 (SC) at page 10]... (page 78-85 of compilation) Whether PCIT can travel beyond the notice u/s 263 of the Act and set aside the assessment on new grounds? 10. The appellant most humbly submits that from the perusal of the notice u/s 263 of the Act, your honour will appreciate that there are five grounds/reasons stated in his notice (supra). Point wise reply was given to the Ld. Pr. CIT to the notice u/s 263. It is humbly stated that no adverse finding/observation on the point-wise reply was given by him. The Pr. CIT while setting aside the assessment, made new grounds which were not in the notice and stated in his order that It is apparent from the submission filed by the assessee during the proceedings that the assessee has not submitted any reply with regard to specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l account amounting Rs. 79.10 lakhs. AO did not verify the source, genuineness, creditworthiness of the partners as well as the mode of payment. iv) There were major expenses like purchases, processing fees, carriage onwards and other expenses, which were not examined by the AO neither with regard to genuineness of the expenses claimed nor whether the same were allowable as per provisions of the Act. v) During the year, the assessee has paid security deposit of Rs. 40 lakhs from 04.04.2016 to 07.04.2016. The AO has not verified the source of this huge amount deposited in cash. 11.1 The Appellant would like to bring kind notice to your honours that: i.) Regarding ground/point no.1 in the PCIT order, the appellant would like to draw your kind attention towards query raised on point no. 4. 5 and 6 of notice u/s 142(1) dated 17/10/2019, which A.O. specifically asked for large cash deposit asked to submit details in format provided in notice alongwith cash book cash flow statement. Further, the Ld. A.O. vide notice u/s 142(1) dated 12/12/2019 had asked to produce books of accounts alongwith bills and vouchers and certificate from bank reflecting date wise details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant has filed the aforesaid 'Act' along with the paper book. It is at serial no 13 of the paper-book. 2. It is respectfully stated that sec.3 (13) defines intoxicant means any liquor or intoxication drug as defined by this Act. Sec. 6 provides power of the State Government to declare limit of sale by retail; and sec. 7 provides sale by whole sale. Sec.20 of this Act provides that 'Possession of intoxicants in excess of the quantity prescribed by the State Government prohibited except under permit. Sec. 21 provides sale of intoxicant without license prohibited. Further, sec. 60 of the aforesaid Act provides 'Penalty for unlawful import, export, transport, manufacture, possession, sale, etc. From the perusal of the aforesaid section, your Honour will appreciate that liquors cannot be purchased from open market without license. (B.1.2) In addition, a compilation of judgments was filed from the assessee s side in the following cases: S.No. Particulars 1. Copy of judgment of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd vs CIT reported in 243 ITR 83 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2023 are as under: 1. Copy of notice u/s 263 of the Act dated 27.01.2021 issued by PCITBareilly 2. Copy of notice u/s 263 of the Act dated 18.11.2021 issued by PCITBareilly 3. Copy of reply filed by the appellant in compliance to notice u/s 263 of the Act dated 12.02.2021 4. Copy of notice u/s 143(2) of the Act dated 24.09.2018 5. Copy of notice u/s 142(1) of the Act dated 17.10.2019 6. Copy of reply dated 23.10.2019 filed in compliance to notice dated 17.10.2019. 7. Copy of notice u/s 142(1) of the Act dated 12.12.2019 8. Copy of reply dated 13.12.2019 filed in compliance to notice dated 12.12.2019. 9. Copy of Form 26AS showing party-name, purchases and TCS thereon 10. Copy of AOP agreement of Pratap Narain Lucknow Division others 11. Copy of Income-tax Return along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sheet and Profit Loss account along with all their annexure for A.Y. 2017-18. 3. That the detail of bank accounts in required format is given on separate sheet enclosed along with all bank statements from 01.04.2015 to 31.03.2017. 4. That the details of deposit in required format are given on separate sheet enclosed. 5. That you are requested to kindly permit to produce the books of accounts along-with vouchers manually as per provision mentioned at point no. 4 (I) of Note on E-Proceeding as they are in bulk. 6. That the cash flow statement is given on separate sheet enclosed. 7. That during the financial neither any fresh unsecured taken nor any payments made. 8. That there were no sundry creditors at the end of year. 9. That we deal in non VAT goods hence there was no need for VAT registration. 10. That all expenses are below TDS limits hence no deduction was made during the yea. 11. That the ledger account of breakage is being enclosed. 12. That the capital introduced by members was out of current year s income as well as from past savings and withdrawal made from other joint ventures. 13. That the ledger of security deposit is being enclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were allowable as per provisions of the Act. v) During the year, the assessee has paid security deposit of Rs. 40 lakhs from 04.04.2016 to 07.04.2016. The AO has not verified the source of this huge amount deposited in cash. (C.1) In the written submissions dated 21/06/2023 [referred to in foregoing paragraph (B.2) of this order], the learned Counsel for the assessee disputes the aforesaid finding of learned Pr. CIT. The relevant portion of the aforesaid written submissions dated 21/06/2023 is at paragraph 11.1 of the written submissions. Regarding point No. (i), the learned Counsel for the assessee has claimed that the relevant query was raised on point number (iv), (v) and (vi) of aforesaid notices u/s 142(1) of the IT Act dated 17/10/2019 and 12/12/2019 which were complied with by the assessee through the aforesaid replies dated 23/10/2019 and 12/12/2019. However, on perusal of records, we find that printout of PDF attachments of assessee s aforesaid replies dated 23/10/2019 and 13/12/2019 have not been provided from the assessee s side. Therefore, in view of foregoing paragraph (B.3) of this order, we hold that the assessee has failed to establish that the assessee had f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer at Sl.No. 13 of aforesaid notice u/s 142(1) dated 17/10/2019 and that the assessee complied vide reply filed on 23/10/2019. However, on perusal of records, we find that the printout of PDF attachments of assessee s aforesaid reply dated 23/10/2019 have not been filed from the assessee s side. Therefore, in view of foregoing paragraph (B.3) of this order, we hold that the assessee has failed to establish that necessary details were filed by the assessee during assessment proceedings and that the Assessing Officer has completed assessment after due verification on this point. Thus, we conclude that on all the five points identified by learned Pr. CIT in his aforesaid impugned revisionary order dated 22/02/2022, the assessee, during appellate proceedings in ITAT, has failed to establish that the necessary details were filed by the assessee during assessment proceedings and that the Assessing Officer has completed the assessment after due verification on these five points. The case before us in this appeal is very clearly one in which the assessment order has been passed without making inquiries or verifications which should have been made; and is, therefore, hit by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned revisionary order has been passed by learned Pr. CIT on 22/02/2022. The aforesaid dates of 24/12/2019 and 22/02/2022 fall after aforesaid date of 01/06/2015 and the relevant assessment year is 2017-18 in the present case. Therefore, there is no doubt about applicability of aforesaid Explanation (2) to section 263(1) of the IT Act in the present case before us. (C.3) The learned Counsel for the assessee has placed reliance on certain decisions which are referred to in aforesaid written submissions dated 21/06/2023 and in the aforesaid compilation of judgments, referred to in foregoing paragraph (B.1.2) of this order. With utmost regard to Hon'ble Supreme Court, Hon'ble High Court and various Benches of the ITAT, we may mention that the aforesaid cases vide Malabar Industrial Co. Ltd. vs. CIT (supra), CIT vs. Indo German Fabs (supra), CIT vs. Sunbeam Auto Ltd., J. P. Srivastava Sons (Kanpur) Ltd. vs. CIT (supra), CIT vs. Goyal Family Specific Trust (supra), CIT vs. Mahendra Kumar Bansal (supra), CIT vs. MAX India Limited (supra) and CIT vs. Gabrial India Limited (supra) were passed after the aforesaid date of 01/06/2015 and therefore, have not factored in the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r enquiry and re-considering the evidences already on record duly considered during assessment proceedings based on purported proposal that fresh facts have been emerged subsequent to the order of assessment which is factually incorrect and untenable and the conditions or the factors enabling the Learned. Pr. CIT to invoke his jurisdiction u/s 263 have not been satisfied. However, in the present case before us, the facts clearly distinguishable in view of the foregoing paragraph number (C.1) of this order in which we have held that the assessee has failed to establish that the necessary details were filed by the assessee during assessment proceedings and that the Assessing Officer has completed the assessment after due verification. In the case of Pr. CIT vs. Universal Music India Pvt. Ltd., the issue before Hon'ble High Court was whether the Commissioner can travel beyond the reasons given by him for revision in the show cause notice. In this regard, we take guidance from the well settled position, as enunciated by Hon'ble Supreme Court in the case of CIT vs. Amitabh Bachhan [2016] 384 ITR 200 in which Hon'ble Supreme Court held that there is nothing in section 263 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll furthermore, it was held in the case of Indu Fine Lands (P.) Ltd. vs. CIT [2014] 45 Taxmann.com 307 (Hyd) (Trib.) that Commissioner may consider an order of the Assessing Officer to be erroneous not only when it contains some apparent error on reasoning or on law or on facts on face of it but also when it is a stereotype order which simply accepts what assessee has stated in his return of income and fails to make enquiries or examine genuineness of claim which are called for in circumstance of case. Moreover, in the case of Rajmandir Estate (P.) Ltd. vs. Pr. CIT [2017] 77 Taxmann.com 285 (SC) Hon'ble Supreme Court dismissed assessee s SLP against order of Hon'ble High Court, holding where assessee with some amount of authorized share capital raised used from on account of premium, exercise of revisionary powers of Commissioner opinion that this could be a case of money laundering, was justified. Also in the case of Sesa Starlite Ltd. vs. CIT [2021] 123 Taxmann.com 217 (Bom), the Assessing Officer sought information from the assessee; however, without considering such information produced by the assessee and without application of mind, he allowed the assessee s claim. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , this order of Hon'ble Supreme Court goes against the assessee. In the case of Malabar Industrial Co. Ltd. (supra), Hon'ble Supreme Court held that incorrect assumption of facts or incorrect application of law will satisfy the requirement of the order being erroneous. Hon'ble Supreme Court also held that an order passed without application of mind also fell in the same category. Hon'ble Supreme Court upheld the order of Hon'ble Madras High Court in the case of Malabar Industrial Co. Ltd. vs. CIT [1991] 198 ITR 611 in which Hon'ble Madras High Court has held that the words prejudicial to the interest of Revenue are of wise import; that where the Assessing Officer has failed to apply his mind to the case in all its perspective, the order could be said to be prejudicial to the interest of the Revenue, conferring a jurisdiction upon the Commissioner u/s 263. On facts of the present case before us, therefore, order of Hon'ble Supreme Court in Malabar Industrial Co. Ltd. vs. CIT 243 ITR 83 (SC) goes against the assessee. (D.1.1) Also we find that the case laws on which the learned Pr. CIT has placed reliance in his impugned revisionary order dated 22/02/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de can certainly be erroneous and prejudicial to the interest of revenue. (iv) Hon'ble Delhi High Court in the case of Gee Vee Enterprises v/s Addl. CIT (1975) 99 ITR 375(Delhi) following the aforesaid above two judgements of the Hon'ble Apex Court held that the position and function of the Income Tax Officer is very different from that of a Civil Court. The statements made in a pleading proved by minimum amount of evidence may be accepted by Civil Court in absence of any rebuttal. The Civil Court is neutral. It simply gives decision on the basis of the pleading and evidences which comes before it. Further, it was held by the Hon'ble Court that: The Income tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparent in the order but call for further enquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an enquiry. The meaning to be given to the word erroneous in section 263 emerges out of its context. It is because it is incumbent on the Income Tax officer to further investigate the facts stated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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