Mr. Amit Kumar Aggarwal, Uttar Pradesh V. ITO, Saharanpur

ITA 1068/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3648 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 23-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST PASSED
• Keywords: Revision of order; Revenue expenditure; Capital expenditure
• Section: 143(3); 142(1); 263

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.:- 1068/DEL /2017 ASSESSMENT YEAR: 2013-14 AMIT KUMAR AGGARWAL PROP. M/S. KACHHAL ENTERPRISES, BOMANJI ROAD, SAHARANPUR UTTAR PRADESH PAN ABNPA9590K VS. ITO WARD-3 SAHARANPUR (APPELLANT) (RESPONDENT) O R D E R PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE AS SESSEE AGAINST THE ORDER PASSED BY THE LD. PR. COMMISSIONER OF INCOME TAX, M UZAFFARNAGAR CHALLENGING THE ORDER PASSED U/S 263 DATED 27.12.20 16 FOR ASSESSMENT YEAR 2013-14. ASSESSEE BY: SHRI A NIL JAIN, ADVOCATE DEPARTMENT BY : SMT. APARNA KARAN, CIT(DR) DATE OF HEARING 02/11 /2017 DATE OF PRONOUNCEMENT 16/11/ 2017 ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE TRADING OF CIGARETTES AND MATCH BOXES ETC. RETU RN OF INCOME WAS FILED DECLARING AN INCOME OF RS. 2,99,990/- AND AGR ICULTURAL INCOME OF RS. 50,000/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) O F THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) AFTER MAKI NG AN ADDITION OF RS. 1,00,000/- ON ACCOUNT OF DISALLOWANCE OF VARIOUS EX PENSES. SUBSEQUENTLY, THE LD. PR. COMMISSIONER OF INCOME TA X ISSUED NOTICE U/S 263 OF THE ACT ON 5.12.2016 ON THE GROUNDS THAT THI RD PARTY CONFIRMATIONS IN RESPECT SUNDRY CREDITORS AND DEBTO RS WAS NOT DONE BY THE A.O., REASON FOR LOW RATE OF PROFIT WAS NOT EXA MINED BY THE A.O. AND CASH DEPOSITS OF RS. 50,000/- EACH ON 198 OCCASIONS IN VARIOUS BANK ACCOUNT WERE NOT VERIFIED BY THE A.O. 2.1 IN RESPONSE THE SHOW CAUSE NOTICE U/S 26 3, THE ASSESSEE SUBMITTED THAT THE A.O. HAD DULY RAISED THE QUERY A BOUT CONFIRMATION FROM THIRD PARTIES AND THE RELEVANT PAPERS HAD BEEN SUBMITTED DURING THE COURSE OF SCRUTINY PROCEEDINGS. THE ASSESSEE AL SO SUBMITTED BEFORE THE LD. PR.CIT THAT A.O. HAD RAISED THE QUERY ON LO W RATE OF NET PROFITS AND THE SAME WAS ALSO RESPONDED TO BY THE ASSESSEE. ON THE ISSUE OF CASH DEPOSITS, IT WAS SUBMITTED THAT THE ASSESSEE H AD FILED COMPLETE BANK STATEMENTS AS WELL AS PRODUCED THE CASH BOOK B EFORE THE A.O. AND ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 3 HAD ALSO EXPLAINED THAT DUE TO THE NATURE OF TRADE 99% OF SALES WERE RECEIVED IN CASH. 2.2 HOWEVER, THE LD. PR.CIT HELD THAT THE A. O. HAD FAILED TO CARRY OUT PROPER INQUIRY ON ALL THE THREE ISSUES AS CONTA INED IN THE SHOW CAUSE AND PROCEEDED TO HOLD THAT THE ORDER PASSED BY THE A.O. WAS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF R EVENUE. THE LD. PR. CIT HELD THAT THE A.O. HAD FAILED TO EXAMINE THE CASE P ROPERLY ON THE ISSUE FOR WHICH THE CASE WAS SELECTED UNDER SCRUTINY AND ALSO OTHER ISSUES AND, THEREAFTER, THE LD. PR. CIT SET ASIDE THE ASSE SSMENT ORDER WITH DIRECTIONS TO PASS FRESH ASSESSMENT ORDER. 2.3 AGGRIEVED BY THE ORDER PASSED U/S 263 OF THE ACT, THE ASSESSEE HAS NOW APPROACHED THE ITAT AND HAS CHALLENGED THE ASSUMPTION OF JURISDICTION U/S 263. 3. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT AS FAR AS THE OBJECTION OF THE LD. PR.CIT REGARDING VERIFICATION AND CONFIRMATION OF SUNDRY DEBTORS AND CREDITORS WAS CONCERNED, THE A.O . HAD RAISED THE QUERY REGARDING THE SAME IN NOTICE ISSUED U/S 142 ( 1) OF THE ACT ALONG WITH THE QUESTIONNAIRE AND QUERY NO. 6 OF THE SAID QUESTIONNAIRE CONTAINED THE QUERY. IT WAS SUBMITTED THAT THE ASSE SSEE HAS DULY ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 4 RESPONDED TO THE QUERY AND THE RELEVANT COPIES OF T HE VARIOUS SUNDRY CREDITORS AND DEBTORS FILED BEFORE THE A.O. AND THE COPIES OF THE SAME WERE NOW PLACED IN THE PAPER BOOK. OUR ATTENTION WA S DRAWN TO THE RELEVANT PAGES IN THE PAPER BOOK. IT WAS SUBMITTED THAT, THUS, IT WAS NOT A CASE WHERE NO INQUIRY HAS BEEN MADE BY THE A. O. IN THIS REGARD. 3.1 ON THE SECOND OBJECTION OF THE LD. PR. CIT REGARDING LOW RATE OF NET PROFIT, IT WAS SUBMITTED THAT THE A.O. HAS R AISED THE QUERY ON THIS ISSUE ON THE ORDER SHEET ITSELF DURING THE COURSE O F SCRUTINY PROCEEDINGS. A COPY OF THE ORDER SHEET WAS PLACED BEFORE US TO S UBSTANTIATE THE SUBMISSION. THE LD. AR ALSO SUBMITTED THAT THIS QUE RY WAS DULY REPLIED TO VIDE SUBMISSION OF THE ASSESSEE BEFORE THE A.O. ON 10.11.2014 AND OUR ATTENTION WAS DRAWN TO A COPY OF THE SAME NOW P LACED IN THE PAPER BOOK. THE LD. AR SUBMITTED THAT ON THIS ISSUE ALSO THE ALLEGATION OF THE LD. PR.CIT WAS WRONG THAT NO INQUIRY HAD BEEN CONDU CTED BY THE AO. 3.2 ON THE THIRD ISSUE REGARDING CASH DEPOSITS, IT WAS SUBMITTED THAT THE BOOKS OF ACCOUNTS ALONG WITH THE RELEVANT VOUCH ERS AND BANK STATEMENTS WERE DULY PRODUCED BEFORE THE AO AND THE AO HAD NOT MADE ANY NEGATIVE COMMENT ON THE SAME IN THE ASSESSMENT ORDER. THUS, IT WAS APPARENT THAT THIS ISSUE WAS ALSO EXAMINED BY T HE AO AND FURTHER, ON THIS ISSUE ALSO, THE ORDER OF THE AO CANNOT BE H ELD TO BE ERRONEOUS IN ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 5 SO FAR AS BEING PREJUDICIAL TO THE INTEREST OF THE R EVENUE. THE LD. AR SUBMITTED THAT THE ORDER U/S 263 WAS BAD IN LAW AND REQUIRED TO BE SET ASIDE. 4. IN RESPONSE THE LD. CIT (DR) SUBMITTED THA T THE LD. PR.CIT HAD PASSED THE ORDER U/S 263 AFTER PROPERLY ANALYSING T HE ISSUE AND THAT A PERUSAL OF THE ASSESSMENT ORDER WOULD SHOW THAT THE RE WAS NO DISCUSSION WHATSOEVER IN THE IMPUGNED ASSESSMENT OR DER REGARDING THE ISSUES ON WHICH THE LD. PR. CIT HAS HELD THE ASSESS MENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REV ENUE. THE LD. CIT (DR) READ OUT EXTENSIVELY FROM THE ORDER PASSED U/S 263 AND VEHEMENTLY ARGUED THAT IT WAS A FIT CASE FOR UPHOLDING THE VAL IDITY OF 263 PROCEEDINGS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL ON RECORD. IT IS AN ADMITTED POSITION THAT THE CIT HAS BEEN CONFERRED WITH WIDE REVISIONARY POWERS U/S 263 OF T HE ACT FOR CALLING FOR AN EXAMINATION OF RECORDS SO AS TO FIND OUT WHETHER THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF THE REVENUE. HOWEVER, IT IS ALSO AN ADMITTED POSITION OF LAW THAT THE CIT, BEFORE REACHING SUCH CONCLUSION, MUST HAVE SOME MAT ERIAL TO HOLD A PRIMA FACIE OPINION ABOUT THE INHERENT ERROR IN THE ORDER, THE REBY, ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 6 MAKING THAT ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT IS AN EQUALLY SETTLED LAW THAT IF THE ASSESSING OFFICER H AS MADE INQUIRIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE ISSUES COVERED U/S 263 AND THE ASSESSEE HAD ALREADY SUBMITTED EXPLANATIONS ON THOSE ISSUES BEFORE THE AO AND, FURTHER, THE ASSESSING OFFICER HAS BEEN SATISFIED BY THE EXPLANATION OF THE ASSESSEE, THEN IT CANNOT BE SAID THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS. IT IS NOT M ATERIAL THAT IN CASE OF INQUIRIES MADE BY THE ASSESSING OFFICER, THE ASSESS ING OFFICER MAKES DETAILED DISCUSSION ON THOSE ISSUES IN THE ASSESSME NT ORDER. ON THE FACTS OF THE CASE BEFORE US, IT IS EVIDENT FROM THE RECORDS THAT THE ASSESSING OFFICER HAD REQUIRED THE ASSESSEE TO FURN ISH DETAILS COVERED UNDER THE THREE HEADS IN TERMS OF NOTICE ISSUED U/S 142(1) OF THE ACT. THE ASSESSEE HAD FURNISHED THESE DETAILS AND THE SA ME ARE ON RECORD. THESE DETAILS ARE ALSO THE SUBJECT MATTER OF NOTICE ISSUED U/S 263 BY THE LD. PR. CIT AND, THEREFORE, IT IS EVIDENT THAT ON A LL THE ISSUES INVOLVED IN THE ORDER OF THE LD. PR. CIT, THE ASSESSING OFFICER HAD MADE SOME KIND OF INQUIRY TO WHICH THE ASSESSEE HAD DULY RESPONDED . THEREFORE, THE VIEW OF THE LD. PR. CIT THAT INQUIRY HAS NOT BEEN M ADE BY THE ASSESSING OFFICER IS NOT CORRECT AND IT IS NOT THE CASE OF LA CK OF INQUIRY AS HAS BEEN ALLEGED BY THE LD. PR. CIT. ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 7 5.1 IN THE CASE OF CIT VS. SUNBEAM AUTO LTD. REPORT ED IN 332 ITR 167 (DELHI) , THE HON'BLE DELHI HIGH COURT HAS HELD AS UNDER:- ' WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE COU NSEL ON THE OTHER SIDE AND HAVE GONE THROUGH THE RECORDS. T HE FIRST ISSUE THAT ARISES FOR OUR CONSIDERATION IS ABOUT TH E EXERCISE OF POWER BY THE COMMISSIONER OF INCOME-TAX UNDER SECTI ON 263 OF THE INCOME- TAX ACT. AS NOTED ABOVE, THE SUBMISS ION OF LEARNED COUNSEL FOR THE REVENUE WAS THAT WHILE PASS ING THE ASSESSMENT ORDER, THE ASSESSING OFFICER DID NOT CON SIDER THIS ASPECT SPECIFICALLY WHETHER THE EXPENDITURE IN QUES TION WAS REVENUE OR CAPITAL EXPENDITURE. THIS ARGUMENT PREDI CATES ON THE ASSESSMENT ORDER, WHICH APPARENTLY DOES NOT GIV E ANY REASONS WHILE ALLOWING THE ENTIRE EXPENDITURE AS RE VENUE EXPENDITURE. HOWEVER, THAT BY ITSELF WOULD NOT BE I NDICATIVE OF THE FACT THAT THE ASSESSING OFFICER HAD NOT APPL IED HIS MIND ON THE ISSUE. THERE ARE JUDGMENTS GALORE LAYING DOWN THE PRINCIPLE THAT THE ASSESSING OFFICER IN THE ASS ESSMENT ORDER IS NOT REQUIRED TO GIVE DETAILED REASON IN RE SPECT OF EACH AND EVERY ITEM OF DEDUCTION, ETC. THEREFORE, O NE HAS TO SEE FROM THE RECORD AS TO WHETHER THERE WAS APPLICA TION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION AS REVENUE EXPENDITURE. LEARNED COUNSEL FOR THE ASSESSEE IS RI GHT IN HIS SUBMISSION THAT ONE HAS TO KEEV IN MIND THE DISTINC TION BETWEEN 'LACK OF INQUIRY 1 AND 'INADEQUATE INQUIRY'. IF THERE WAS ANY INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF EIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UN DER SECTION 263 OF THE ACT, MERELY BECAUSE HE HAS A DIF FERENT OPINION IN THE MATTER. IT IS ONLY IN CASES OF 'LACK OF INQUIRY' THAT SUCH A COURSE OF ACTION WOULD BE OPEN. IN GABR IEL INDIA LTD. [1993] 203 ITR 108 (BOM), LAW ON THIS ASPECT W AS DISCUSSED IN THE FOLLOWING MANNER (PAGE 113): '. . . FROM A READING OF SUB-SECTION (1) OF SECTION 263, IT IS CLEAR THAT THE POWER OF SUO MOTU REVISIO N CAN BE EXERCISED BY THE COMMISSIONER ONLY IF, ON EXAMINATION OF THE RECORDS OF ANY PROCEEDINGS UNDER THIS ACT, HE CONSIDERS THAT ANY ORDER PASSED THEREI N BY ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 8 THE INCOME-TAX OFFICER IS 'ERRONEOUS IN SO FAR AS I T 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 I N SUB-SECTION (1). THE CONSIDERATION OF THE COMMISSIO NER AS TO- WHETHER AN ORDER IS ERRONEOUS IN SO FAR AS I T 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 REC ORD 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 ROV ING 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 O F FINALITY IN ALL LEGAL PROCEEDINGS, THAT STALE ISSUE S SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND TH AT 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)... 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 ACTIN G 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. TH IS SECTION DOES NOT VISUALISE A CASE OF SUBSTITUTION O F THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE INCOME- TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISI ON 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 ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 9 CASE AND DETERMINES THE INCOME EITHER BY ACCEPTING THE ACCOUNTS OR BY MAKING SOME ESTIMATE HIMSELF. TH E 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 WITH POWER TO RE-EXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIMSELF AT A HIGHER FIGURE . IT IS BECAUSE THE INCOME-TAX OFFICER HAS EXERCISED THE QUASI-JUDICIAL POWER VESTED IN HIM IN ACCORDANCE WIT H LAW AND ARRIVED AT A CONCLUSION AND SUCH A CONCLUSI ON CANNOT BE FORMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE CONCLUSION ... THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT TAX WHICH WAS LAWFULLY EXIGI BLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATION A LESSER TAX THAN WHAT WAS JUST HAS B EEN IMPOSED ... WE MAY NOW EXAMINE THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE POWERS OF THE COMMISSIONER SET OUT ABO VE. THE INCOME-TAX OFFICER IN THIS CASE HAD MADE ENQUIRIES IN REGARD TO THE NATURE OF THE EXPENDITURE INCURRED BY THE AS SESSEE. THE ASSESSEE HAD GIVEN DETAILED EXPLANATION IN THAT REGARD BY A LETTER IN WRITING. ALL THESE ARE PART OF THE R ECORD OF THE CASE. EVIDENTLY, THE CLAIM WAS ALLOWED BY THE INCOM E-TAX OFFICER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. SUCH DECISION OF THE INCOME-TAX OFFICER C ANNOT BE HELD TO BE 'ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. 5.2 FURTHER, THE HON'BLE DELHI HIGH COURT IN CIT VS . VIKAS POLYMERS REPORTED IN 341 ITR 537 (DELHI) HAS HELD THAT AN IN QUIRY WHICH HAS BEEN RAISED DURING THE COURSE OF SCRUTINY BY THE ASSESSI NG OFFICER AND WHICH ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 10 HAS BEEN ANSWERED TO THE SATISFACTION OF THE ASSESS ING OFFICER BUT NEITHER THE INQUIRY NOR THE ANSWER WAS REFLECTED IN THE ASSESSMENT ORDER, THAT WOULD NOT, BY ITSELF, LEAD TO THE CONCL USION THAT THE ORDER OF THE ASSESSING OFFICER CALLED FOR ANY INTERFERENCE A ND REVISION. 5.3 SIMILARLY, THE HONBLE BOMBAY HIGH COURT IN CIT VS FINE JEWELLERY (INDIA) LTD. REPORTED IN 372 ITR 303 (BOMBAY) HAS H ELD THAT IF AN INQUIRY IS RAISED DURING THE ASSESSMENT PROCEEDINGS AND RES PONDED TO BY THE ASSESSEE, THE MERE FACT THAT IT HAS NOT DEALT WITH IT IN THE ASSESSMENT ORDER WOULD NOT LEAD TO A CONCLUSION THAT NO MIND H AD BEEN APPLIED TO IT. 5.4 THE HON'BLE BOMBAY HIGH COURT IN GABRIEL INDIA LTD. REPORTED IN 203 ITR 108 (BOMBAY) HAS HELD THAT THE POWER OF SUO MOTO REVISION CANNOT BE EXERCISED BY THE COMMISSIONER IF, ONLY BA SED ON THE EXAMINATION OF RECORDS, HE CONSIDERS THAT ANY ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS P REJUDICIAL TO THE INTEREST OF THE REVENUE. THE HONBLE HIGH COURT HELD THAT P OWER U/S 263 IS NOT AN ARBITRARY OR UNCHARTERED POWER AND CAN BE EXERCI SED ONLY ON THE FULFILMENT OF THE REQUIREMENT LAID DOWN IN SECTION 263(1) OF THE ACT. THE HON'BLE BOMBAY HIGH COURT FURTHER HELD THAT THE CON CLUSION OF THE COMMISSIONER MUST BE BASED ON MATERIAL ON RECORD AN D PROCEEDINGS ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 11 CALLED FOR BY HIM AND IF THERE ARE NO MATERIALS ON RECORD ON THE BASIS OF WHICH IT COULD BE SAID THAT THE COMMISSIONER ACTING IN A REASONABLE MANNER COULD HAVE COME TO SUCH A CONCLUSION, THE VE RY INITIATION OF PROCEEDINGS BY HIM WILL BE ILLEGAL AND WITHOUT JURIS DICTION. THE HON'BLE BOMBAY HIGH COURT HELD THAT THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED. AS SUCH, AC TION WILL BE AGAINST WELL ACCEPTED POLICY OF LAW THAT THERE MUST BE A PO INT OF FINALITY IN ALL LEGAL PROCEEDINGS AND THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND FURTHER THAT LAPSE OF TIME M UST INDUCE A REPOSE IN AND SET AT REST JUDICIAL AND QUASI-JUDICIAL CONTROVER SIES, AS IT MUST, IN OTHER SPHERES OF HUMAN ACTIVITY. 5.5 FROM THE ABOVE IT IS CLEAR THAT IN THE ULTIMATE ANALYSIS IT IS A PRE- REQUISITE THAT THE COMMISSIONER MUST GIVE REASONS T O JUSTIFY THE EXERCISE OF SUO MOTO REVISIONAL POWERS BY HIM TO RE-OPEN A CONCLUDED ASSESSMENT. A BARE REITERATION BY HIM THAT THE ORDE R OF THE INCOME-TAX OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, WILL NOT SUFFICE. THE EXERCISE OF THE POWE R BEING QUASI-JUDICIAL IN NATURE, THE REASONS MUST BE SUCH AS TO SHOW THAT THE ENHANCEMENT OR MODIFICATION OF THE ASSESSMENT OR CANCELLATION OF T HE ASSESSMENT OR ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 12 DIRECTIONS ISSUED FOR A FRESH ASSESSMENT WERE CALLE D FOR, AND MUST IRRESISTIBLY LEAD TO THE CONCLUSION THAT THE ORDER OF THE INCOME- TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL T O THE INTEREST OF THE REVENUE. THUS, WHILE THE AO IS NOT CALLED UPON TO W RITE AN ELABORATE JUDGMENT GIVING DETAILED REASONS IN RESPECT OF EACH AND EVERY DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTO REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO. 5.7 IN THE INSTANT APPEAL BEFORE US, IT IS NOT THE DEPARTMENTS CASE THAT NO INFORMATION REGARDING THE VARIOUS ISSUES AS ENUM ERATED BY THE LD. PR. CIT WAS CALLED FOR BY THE AO. THAT RELEVANT DETAILS AND DOCUMENTS WERE FURNISHED BY THE ASSESSEE DURING THE ASSESSMENT PRO CEEDINGS IS EVIDENT FROM THE DOCUMENTS ON RECORD. HENCE, NO INFERENCE C AN BE DRAWN THAT THE AO HAS NOT EXAMINED THE ISSUES ALTHOUGH HE HAS NOT EXPRESSED IT IN AS MANY TERMS AS MAY BE CONSIDERED APPROPRIATE BY H IS SUPERIOR AUTHORITY AND EVEN IF THE SAME IS FOUND TO BE INADE QUATE THE SAME CANNOT BE A GROUND FOR REVISION. THE HONBLE MADRAS HIGH COURT HELD IN THE CASE OF CIT V VALLIAMMAL (D.) REPORTED IN 230 I TR 695 (MAD) THAT ASSESSMENT ORDER MADE AFTER CONSIDERING ALL FACTS A ND INFORMATION CANNOT BE REVISED. WHERE THE ASSESSEE HAD FURNISHED THE REQUISITE ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 13 INFORMATION AND THE ASSESSING OFFICER HAD COMPLETED THE ASSESSMENT AFTER CONSIDERING THE FACTS BUT THE COMMISSIONER RE VISED THE ASSESSMENT ORDER ON THE GROUND THAT THE ASSESSING OFFICER HAD NOT MADE PROPER ENQUIRIES, THE TRIBUNAL WAS HELD TO BE JUSTIFIED IN REVERSING THE ORDER OF THE COMMISSIONER AND RESTORING THAT OF THE ASSESSIN G OFFICER. COMMISSIONER CANNOT RE-EXAMINE ACCOUNTS AND SUBSTIT UTE HIS JUDGMENT FOR THAT OF THE ASSESSING OFFICER. AN ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF ASSESSING OFFICER MAKES ASSESSMENT IN ACCORDANCE WITH LAW, THE SAME C ANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, AC CORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY. TH IS SECTION DOES NOT VISUALIZE A CASE OF SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE ASSESSING OFFICER UNLESS THE DECISION I S HELD TO BE ERRONEOUS. CASES MAY BE VISUALIZED WHERE THE ASSESSING OFFICER EXAMINES THE ACCOUNTS, MAKES ENQUIRES, APPLIES HIS MIND TO THE F ACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME EITHER BY MAKING THE ACCOUNTS OR BY MAKING SOME ESTIMATES HIMSELF. T HE COMMISSIONER, ON PERUSAL OF THE RECORDS, MAY BE OF THE OPINION TH AT THE ESTIMATE MADE BY THE OFFICER WAS ON LOWER SIDE AND, LEFT TO THE C OMMISSIONER, HE WOULD HAVE ESTIMATED THE INCOME AT A HIGHER FIGURE THAT T HE ONE DETERMINED BY ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 14 THE ASSESSING OFFICER. THAT WOULD NOT VEST THE COMM ISSIONER WITH THE POWER TO RE-EXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIMSELF AT A HIGHER FIGURE. FURTHER IN THE CASE OF INFOSYS TEC HNOLOGIES VS. JCIT (ASST) REPORTED IN 286 ITR (AT) 211, THE BANGALORE BENCH OF THE ITAT HELD THAT WHERE THE A.O HAS EXAMINED AND CONSIDERED AND ISSUE, THOUGH NOT MENTIONED IN THE ASSESSMENT ORDER, IT CANNOT BE SAID THAT THE ORDER PASSED WAS ERRONEOUS. 5.7 THEREFORE, ON THE FACTS OF THE CASE AS WELL AS IN LIGHT OF THE RATIO OF THE VARIOUS JUDICIAL PRECEDENTS AS DISCUSSED AFORESA ID, WE ARE OF THE CONSIDERED OPINION THAT THE ORIGINAL ASSESSMENT ORD ER DATED 12.11.2014 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE A CT WAS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND A CCORDINGLY, WE DEEM IT FIT TO QUASH THE ORDER DATED 27.12.2016 PASSED U /S 263 OF THE ACT BY THE LD. PR. CIT AND RESTORE THE ASSESSMENT ORDER IN ITIALLY FRAMED BY THE ASSESSING OFFICER. 6. IN THE FINAL RESULT, THE APPEAL PREFERRED BY THE ASSESSEE IS ALLOWED. ITA NO. 1068/DEL/2017 AMIT KUMAR AG GARWAL VS. ITO 15 ORDER PRONOUNCED IN THE OPEN COURT ON 16/11/2017. SD/- SD/- (B.P. JAIN) (SUDH ANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16/11/2017 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI