TMI Blog2023 (11) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. PCIT and restore the assessment order passed by the Ld. AO under section 143(3) of the Act. Decided in favour of assessee. - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER For the Appellant : Shri Ajay Wadhwa, Advocate For the Respondent : Ms. Sapna Bhatia,CIT-DR ORDER PER ASTHA CHANDRA, JM The appeal filed by the assessee is directed against the order dated 09.03.2022 passed by the Ld. Principal Commissioner of Income Tax, Rohtak ( PCIT ) under section 263 of the Income Tax Act, 1961 (the Act ) pertaining to Assessment Year ( AY ) 2017-18. 2. The assessee has challenged the impugned order of the Ld. PCIT on the following grounds:- 1. That the order passed by the Hon'ble Principal Commissioner of Income Tax, Rohtak (hereinafter referred to as PCIT ) under section 263 of the Income Tax Act, 1961 ( the Act ) dated 09.03.2022 is bad in law and on facts. 2. That the action of the Hon'ble PCIT in assuming jurisdiction under section 263 of the Act and holding that the order passed by the Deputy Commissioner of Income Tax, CIR, Karnal (hereinafter referred to as the AO ) under section 143(3) dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the amendment made in section 115BBE of the Act on 15.12.2016 whereas the survey took-place on the business premises of the assessee on 16.09.2016 and therefore, on the date of survey this amended provision was not in force. The issue as to whether the new provision would apply to the assessee or not is prima-facie debatable and therefore, the revisionary proceedings on the said issue are not valid and without any jurisdiction. 4. The Hon'ble PCIT has grossly erred in law and on facts in holding that the assessment order was passed by the ld. AO in very casual manner without due diligence and without conducting proper enquiries and taking cognizance of the amended Finance Act, 2016. 5. That the Hon'ble PCIT has erred in law in invoking Explanation 2 to section 263 of the Act for passing the revisionary order. 3. It is a case of survey under section 133A of the Act which was carried out on 16.09.2016 at the premises of the assessee, proprietor of M/s. Fancy Jewellers, Purana Sarafa Bazar, Karnal, Haryana wherein an additional income of Rs. 90,63,000/- was admitted by the assessee on account of unexplained cash and stock. The assessee filed his retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roneous in so far as it is prejudicial to the interest of revenue. The same is, therefore, required to be suitably amended/modified u/s 263 of the Income Tax Act, 1961. You are, therefore, required to show cause as to why an appropriate order u/s 263(1) of the Act setting aside the assessment order passed as on 20.12.2019 should not be passed. In this connection, you may send your written reply along with supporting documentary evidences on the email-id (rohtak pcit@incometax.gov.in) or through e-proceedings by 16.02 2022. In case of no reply is received, it shall be assumed that you do not wish to say anything in the matter and the matter would be decided as per material on record without any further notice/intimation to you. 5. The assessee submitted a detailed reply before the Ld. PCIT which appears at pages 121-127 of the Paper Book challenging the applicability of the provisions of section 263 of the Act to the facts of the assessee s case. 6. The submissions/contentions of the assessee were not acceptable to the Ld. PCIT being devoid of merits. According to him, the surrendered income was in the nature of unexplained cash and unexplained stock and the same was liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as liable to be paid at the rate of 60% under section 115BBE of the Act. 11. At this juncture, it is expedient to reproduce the relevant findings recorded by the Tribunal in Shri Bharat Malhotra s case (supra) herein below:- 13. We have given thoughtful consideration to the orders of the authorities below. The bone of contention is whether the amount surrendered during the survey operation, which has been shown in the return of income as income from other sources be taxed as per provisions of section 115BBE of the Act and having not done so, whether the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. 14. At the very outset, we would like to state that an amendment has been brought in section 115BBE w.e.f. 2017-18, but the same was not there in the statute on the date of survey, which is 15.09.2016. 15. Taking a leaf out of the amended provisions, the PCIT was of the opinion that the tax rate should have been 60% instead of 30%, because of which the assessment order has become prejudicial to the interest of the Revenue. 16. The moot point is as to whether the amendment is prospective or retrospective as on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to surrender 13 an additional income of Rs. 9,50,000/- on account of above discrepancy in addition to any regular income for the year ending 31.03.2017. 23. The above offer was clear that the assessee is surrendering the income in addition to his regular income, which is business income and, therefore, the income surrendered by the assessee is also part of business income. 24. Merely because in the return of income inadvertently an amount has been shown under the head Income from other sources , would not change the colour of income surrendered. 27. It is a settled position of law that powers u/s 263 of the Act can be exercised by the Commissioner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and prejudicial to the interest of the Revenue. By 'erroneous' is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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