Rasiklal M. Dhariwal (HUF), Pune V. Commissioner of Income-tax,

ITA 1103/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0254 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 23-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY N KAP ADIA
• Keywords: Revision of order; Depreciation; Search and seizure; Opportunity of being heard; Earning of tax free income; Difference of opinion; Change of opinion
• Section: 143(3); 80HHC; 153A; 263; 132

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , ! , # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NOS.1102 TO 1107/PUN/2014 & & / ASSESSMENT YEAR : 2004-05, 2006-07 TO 2010-11, RASIKLAL M. DHARIWAL (HUF), MANIKCHAND HOUSE, PLOT NO.100-101, D KENNEDY ROAD, PUNE 411 001. PAN NO.AABHD5583L. . / APPELLANT V/S COMMISSIONER OF INCOME - TAX , CENTRAL, ROOM NO.309, C WING, SWARGATE, PUNE 411037. . / RESPONDENT / APPELLANT BY : SHRI SANJAY N. KAPADIA / RESPONDENT BY : SHRI RAJEEV KUMAR ' / ORDER PER ANIL CHATURVEDI, AM : THESE 6 APPEALS OF THE ASSESSEES FOR AY 2004-05, AY 2006-07 TO AY 2010-11 ARISE OUT OF A CONSOLIDATED ORDER OF LD. CIT (PN/CIT- (C)/(JUDL.)/263 ORDER RMD/2013-14 DATED 28.3.2014 PASSED U /S 263 OF THE ACT. SINCE ALL THE APPEALS ARE AGAINST THE ORDE R PASSED U/S 263 OF THE ACT, ALL THE APPEALS ARE CONSIDERED TOGETH ER FOR DISPOSAL. / DATE OF HEARING : 24.11.2016 / DATE OF PRONOUNCEMENT: 28 .12.2016 2 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD AR E AS UNDER: 2.1 ASSESSEE IS AN HUF. A SEARCH ACTION U/S 132 OF THE ACT WAS CONDUCTED IN RMD GUTKA GROUP OF CASES ON 20.1.2010. SINC E WARRANT OF AUTHORIZATION U/S 132(1) OF THE ACT WAS EXECU TED IN THE CASE OF ASSESSEE, NOTICE U/S 153A DATED 14.9.2010 WAS EX ECUTED AND SERVED ON THE ASSESSEE AND IN RESPONSE TO WHICH A SSESSEE FILED THE RETURN OF INCOME FOR AY 2004-05 ON 15.10.2010 DECLARIN G TOTAL INCOME OF RS 17,26,91,130 (BEING THE SAME INCOME AS FILED AS PER THE ORIGINAL RETURN OF INCOME ON 28.10.2004). ASSESSEE ALSO FILED THE RETURNS OF INCOME FOR OTHER ASSESSMENT YEARS. THEREAFTE R THE CASES WERE TAKEN UP FOR SCRUTINY AND THE ASSESSMENTS FOR ALL T HE ASSESSMENT YEARS WERE FRAMED VIDE ORDER DATED 30.12.201 1 AND THE TOTAL INCOME FOR VARIOUS YEARS WERE DETERMINED AS UNDER: AY INCOME AS PER RETURN OF INCOME FILED PURSUANT TO NOTICE U/S 153A (RS) TOTAL INCOME DETERMINED U/S 153A RWS 143(3) (RS) 2004 - 05 17,26,91,130 17,90,65,423 2006 - 07 18,11,24,525 19,67,37,355 2007 - 08 16,99,16,007 17,87,45,189 2008 - 09 23,34,61,990 23,68,08,759 2009 - 10 37,54,97,632 37,90,09,291 2010 - 11 @ 50,86,35,425 @@ 52,90,71,154 @ - RETURN OF INCOME NOT FILED U/S 153A BUT A REGULAR RETURN. @@ - TOTAL INCOME DETERMINED U/S 143(3) 3 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 3. THEREAFTER ON VERIFICATION OF THE RECORDS AND THE ORDE RS PASSED BY AO, LD.CIT NOTICED THAT THE ORDER PASSED BY THE AO WERE PRIMA FACIE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE INTER- ALIA FOR THE FOLLOWING REASONS: 1. FOR A.Y. 2004-05, ACCORDING TO LD. CIT(A), ASSESSEE HAD SHO WN HIGHER PROFITABILITY IN EXPORT DIVISION AND THEREBY CLAIMED HIGHER DEDUCTION U/S 80HHC IN AY 2004-05. ACCORDING TO LD.CIT, THE CLAIM OF DEDUCTION WAS ALLOWED BY AO WITHOUT MAKING THE NECESSARY INQUIRIES FOR ASCERTAINING THE EXACT AMOUNT OF DEDUCTION. 2. FOR A.Y. 2004-05, 2006-07 TO 2010-11, ASSESSEE HAD CLA IMED DEPRECIATION ON FLEET OF VEHICLES (INCLUDING LUXURY CARS) AND THE CLAIM WAS ALLOWED BY THE AO. LD.CIT WAS OF THE VIEW THAT A O HAD NOT CONDUCTED NECESSARY ENQUIRIES TO ASCERTAIN AS THE WHETHER THE LUXURY CARS WERE USED FOR THE PURPOSE OF B USINESS OR PERSONAL PURPOSES. 3. FOR AY 2004-05, ASSESSEE HAD CLAIMED EXEMPT INCOME IN TH E FORM OF DIVIDEND OF RS 13.90 CRORES (ROUNDED OFF) AND THEREFO RE PROVISIONS OF SEC.14A WERE APPLICABLE. ACCORDING TO LD.CIT, A O HAD NOT CONDUCTED ANY INQUIRY TO ASCERTAIN AS TO WHETH ER ASSESSEE HAD CLAIMED DEDUCTION OF ANY AMOUNT FOR EARNIN G EXEMPT INCOME AND HAS NOT DISALLOWED THE EXPENSES U/S 1 4A OF THE ACT. 4. FOR AY 2004-05, AY 2006-07 TO AY 2010-11, IT WAS NOTIC ED THAT ASSESSEE OWNED SEVERAL HOUSE PROPERTIES AND THAT THE ASSESSEE HAD OFFERED MEAGER AMOUNT OF INCOME AS INCOME FROM HOUSE PROPERTY IN COMPARISON TO THE MARKET VALUE OF THE 4 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 PROPERTIES. ACCORDING TO LD.CIT, THE INCOME FROM HOUSE PROPERTY WAS NOT COMMENSURATE WITH THE MARKET VALUE O F THE PROPERTIES AND THAT THE AO HAD ACCEPTED THE ANNUAL VA LUES IN THE RESPECTIVE YEARS AS DECLARED BY THE ASSESSEE WITHO UT CONDUCTING NECESSARY INQUIRIES. 5. FOR AY 2006-07 AND 2007-08 ASSESSEE HAD RECEIVED INCO ME TAX REFUNDS OF RS 1.72 CRORES (ROUNDED OFF) AND RS 1.30 CR ORES (ROUNDED OFF) AND THE SAME WAS CREDITED TO THE CAPITAL ACCOUNT. LD.CIT WAS OF THE VIEW THAT NO INTEREST ON INC OME TAX REFUND HAS BEEN OFFERED TO TAX BY THE ASSESSEE AND THE AO DID NOT CONDUCT NECESSARY INQUIRIES TO ASCERTAIN AS TO WHET HER THE INTEREST ON INCOME TAX REFUND WAS OFFERED TO TAX BY THE AO. 4. IN VIEW OF THE ABOVE OBSERVATIONS, LD.CIT WAS OF THE VIE W THAT THE ORDERS OF ASSESSMENTS PASSED BY THE AO FOR THOSE SIX YEARS WERE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THEREFORE HE INTENDED TO SET ASIDE/ MODIFY THE ASSESSMENT ORDE RS. HE ACCORDINGLY ISSUED NOTICES U/S 263 OF THE ACT ON 27.2.20 12 AND CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY THE ORDERS U/S 263 NOT BE PASSED. IN RESPONSE TO THE NOTICE, ASSESSE E INTER-ALIA RAISED OBJECTION AGAINST INITIATION OF PROCEEDINGS AND THE ASSUMPTION OF JURISDICTION BY LD.CIT U/S 263 OF THE ACT AN D ALSO ON THE MERITS OF THE ISSUES. THE SUBMISSIONS OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE LD.CIT AS HE WAS INTER-ALIA OF THE VIEW THAT ONCE A SEARCH/REQUISITION IS MADE U/S 132 OF THE ACT, T HE AO IS BOUND TO ISSUE NOTICE U/S 153A TO THE ASSESSEE TO FURN ISH THE RETURN FOR EACH ASSESSMENT YEARS FALLING WITHIN SIX ASSESSMENT Y EARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO T HE PREVIOUS 5 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 YEAR IN WHICH THE SEARCH WAS CONDUCTED OR REQUISITION WA S MADE AND THEREFORE THE AO IS EMPOWERED TO ASSESS OR REASSE SS THE TOTAL INCOME OF ALL THESE SIX ASSESSMENT YEARS. LD.CIT ALSO NOT ED THAT AO HAD HIMSELF SENT THE PROPOSAL FOR REVISION OF THE ORDERS U /S 153A R.W.S 143(3) FOR AY 2004-05, 2006-07 TO 2009-10 AND U/S 1 43(3) FOR AY 2010-11 AS HE COULD NOT CONDUCT THE NECESSARY ENQ UIRIES BECAUSE OF PAUCITY OF TIME. HE THEREAFTER VIDE CONSOLIDATED ORDER DATED 28.3.2014 FOR AYS 2004-05, 2006-07, 2007-08, 2008-0 9, 2009-10 AND 2010-11 CONCLUDED THAT THE ORDER PASSED BY THE AO U/S 153A R.W.S 143(3) WERE NOT ONLY ERRONEOUS BUT WERE ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE ACCORDINGLY SET ASIDE THE ORDERS PASSED BY THE AO AND DIRECTED THE AO TO P ASS FRESH ASSESSMENT ORDERS IN LINE WITH THE HIS OBSERVATIONS. AGGRIEVED BY TH E ORDER OF LD.CIT, ASSESSEE IS NOW IN APPEAL BEFORE US AND H AS RAISED THE FOLLOWING GROUNDS: 5. THE GROUNDS RAISED FOR AY 2004-05 IN ITA NO.1102/201 4 READS AS UNDER: 1 . THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE AN D IN LAW, THE LEARNED CIT HAS ERRED IN PASSING THE ORDER U/S 263 ON THOSE ISSUES FOR WHICH NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND THUS, THESE ISSUES WERE BEYOND THE SCOPE OF ADJUDICATION BY THE LEARNED ASS ESSING OFFICER AND EVEN LEARNED COMMISSIONER OF INCOME TAX 2. WITHOUT PREJUDICE TO THE GROUND OF APPEAL NO. 1, ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LEARNE D CIT HAS ERRED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT AND PASSING THE ORDER OF REVISION AND THEREBY DIRECTING THE LEARNED AO - TO ASCERTAIN AMOUNT OF DISALLOWANCE U/S 14A; - TO DETERMINE THE AMOUNT OF EXCESS DEDUCTION U/S 80HHC OF THE ACT ON ACCOUNT OF HIGHER GROSS PROFIT RATE; - TO FIND OUT AMOUNT OF DEPRECIATION & EXPENSES TO BE DISALLOWED ON ALL VEHICLES INCLUDING LUXURY CARS TO THE EXTENT THEY ARE USED FOR NON- BUSINESS PURPOSE; 6 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 - TO DETERMINE THE ADDITIONAL RENTAL INCOME FROM HOUS E PROPERTY . 3 . THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE AN D IN LAW, THE LEARNED CIT HAS ERRED IN INVOKING THE PROVISION S OF SECTION 263 OF THE ACT AND PASSING THE ORDER OF REVISION WI THOUT CONSIDERING THE DETAILED JUSTIFIABLE SUBMISSIONS FI LED BY THE APPELLANT DURING THE COURSE OF REVISION PROCEEDINGS . 4. WITHOUT PREJUDICE TO THE AFORESAID GROUNDS OF AP PEAL, ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LEARNED CIT HAS ERRED IN PASSING THE ORDER U/S. 263 OF THE ACT FOR THE SUBJECT YEAR, INSPITE OF THE FACT THAT ON SIMILAR IS SUES ON THREE GROUNDS OUT OF FOUR GROUNDS, THE REVISION PROCEEDIN GS FOR A.Y. 2005-06 HAS BEEN DROPPED. 5. THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE A ND IN LAW, THE LEARNED CIT HAS ERRED IN INVOKING THE PROVISION S OF SECTION 263 OF THE ACT AND PASSING THE ORDER OF REVISION UN DER THAT SECTION MERELY ON CHANGE OF OPINION ON ALL THE ISSU ES RAISED IN REVISION PROCEEDINGS, WHICH WERE DULY CONSIDERED BY THE LEARNED ASSESSING OFFICER WHILE FRAMING THE ASSESSM ENT U/S. 153A R.W.S. 143(3) OF THE ACT. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER , SUBSTITUTE, MODIFY ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL, IF NECESSARY, ON THE BASIS OF SUBMISSIONS TO BE MADE A T THE TIME OF PERSONAL HEARING. 6. THE GROUNDS RAISED BY ASSESSEE FOR A.Y. 2006-07 TO A.Y. 2010- 11 ARE SIMILARLY WORDED AS FOR A.Y. 2004-05 AND THEREFORE THE SAME ARE NOT REPRODUCED. 7. BEFORE US, AT THE OUTSET, THE LD. AR SUBMITTED THAT THE GROUNDS RAISED BY ASSESSEE IN ALL THE APPEALS BEING IDENTICAL AND T HE ISSUE BEING COMMON FOR ALL THE YEARS AND THEREFORE HIS SUBMISSIO NS BEING ALSO COMMON, ALL THE APPEALS CAN BE DISPOSED TOGETHER. L D.D.R. DID NOT OBJECT TO THE AFORESAID SUBMISSIONS OF LD. AR. WE THE REFORE, FOR THE SAKE OF CONVENIENCE, PROCEED TO DISPOSE OF ALL THE APPEALS BY A CONSOLIDATED ORDER. 8. BEFORE US, LD AR REITERATED THE SUBMISSIONS MADE BEFORE LD.CIT AND FURTHER SUBMITTED THAT THE PREREQUISITE CONDIT IONS SPECIFIED U/S 263 OF THE ACT WERE NOT SATISFIED AND THEREFO RE THE PROCEEDINGS U/S 263 INITIATED BY THE LD.CIT FOR ALL THE SIX 7 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 ASSESSMENT YEARS LACKS JURISDICTION AND ARE THEREFORE BA D IN LAW. HE SUBMITTED THAT U/S 263, THE LD.CIT CAN REVISE AN ORDER PASSED BY THE AO ONLY ON THE SATISFACTION OF TWIN CONDITIONS NAMELY (I) TH E ORDER IS ERRONEOUS AND (II) IT IS PREJUDICIAL TO THE INTEREST OF REVEN UE. IF ONE OF THEM IS ABSENT I.E. IF EITHER THE ORDER OF THE REVENUE IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE INTEREST OF REVENUE RECOURSE CANNOT BE HAD TO SEC.263(1). HE FURTHER SUBMITTED THAT T HE ERROR ENVISAGED BY SEC.263 IS NOT ONE WHICH DEPENDS ON POSSI BILITY OR GUESSWORK BUT IT SHOULD BE AN ACTUAL ERROR EITHER OF FACT S OR OF LAW. HE FURTHER SUBMITTED THAT WHEN TWO VIEWS ARE POSSIBLE AN D THE AO HAS TAKEN ONE VIEW WITH WHICH THE LD.CIT DOES NOT AGREE , THE ORDER OF THE AO CANNOT BE TREATED AS AN ERRONEOUS ORDER PR EJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE A O IS UNSUSTAINABLE IN LAW AND FOR THE AFORESAID PROPOSITION HE RE LIED ON THE DECISION IN THE CASE OF MALABAR INDUSTRIAL CO VS. CIT (2000) 243 ITR 83 (SC). HE FURTHER SUBMITTED THAT OF THE SIX YEARS IN APPEAL, IN 5 ASSESSMENT YEARS THE ASSESSMENT ORDERS WERE FRAME D U/S 153 A OF THE ACT. THE ASSESSMENTS U/S 153A OF THE ACT HAS TO BE MADE ON LY ON THE BASIS OF INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AND IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. HE SUBMITTED THAT THE ISSUES ON WHICH THE REVISION HAS BEEN PROPOSED DOES NOT REPRESEN T THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND THOSE MATERIAL WERE ALREADY CONSIDERED AT THE TIME OF ORIGINAL ASS ESSMENT PROCEEDINGS. HIS OTHER ARGUMENT WAS THAT ASSESSMENT U/S 153A HAS TO BE FRAMED BY THE AO ONLY AFTER OBTAINING PRIOR AP PROVAL OF 8 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 JOINT COMMISSIONER OF INCOME TAX (JCIT) U/S 153D OF THE ACT. IN THE PRESENT CASE, THE APPROVAL OF ADDL.CIT WAS OBTAINED BEFOR E FRAMING THE ASSESSMENT U/S 153A OF THE ACT. HE THEREFORE SUBM ITTED THAT WITHOUT REVISING THE DIRECTIONS OF ADDL.CIT, THE ASSESSMENTS FRAMED U/S 143(3) R.W.S. 153C, ARE NOT AMENABLE TO REVISIONARY P ROCEEDINGS U/S 263 OF THE ACT BY LD. CIT AND FOR THIS PROPOSITION HE RELIED ON THE DECISION OF ALLAHABAD HIGH COURT RENDERED IN THE CASE OF CIT VS DR ASHOK KUMAR (ITA NO 192 OF 2000 ORDER DATED 06.08.2 012), THE DECISION OF HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE O F TRINITY INFRAVENTURES LTD. VS. DCIT (ITA NOS.584-589/HYD/2015 ORDER DATED 04.12.2015) AND ALSO OTHER DECISIONS. HE ALSO PLAC ED ON RECORD THE COPIES OF THE AFORESAID DECISIONS. HIS THIRD ARG UMENT WAS THAT THE IMPUGNED ISSUES RAISED BY LD. CIT WERE EXAMINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) AND U/S 153A R.W.S. 143(3) AND THEREFORE ONCE THE ISSUES HAVE BEEN EX AMINED AND ORDERS HAVE BEEN PASSED, REVISIONARY PROCEEDINGS CANNOT BE INITIATED. HE SUBMITTED THAT IN THE PRESENT CASE, THE R EVISION PROCEEDINGS WERE INITIATED ONLY ON THE BASIS OF CHANGE OF OPINION WHICH IS NOT PERMISSIBLE AS PER LAW. HE THEREFORE SUBMITTED THAT THE ORDER PASSED BY LD.CIT U/S 263 LACKS JURISDICTION AND EVEN ON ME RITS IT CANNOT BE UPHELD AND THEREFORE THE ORDERS PASSED BY LD.CIT FOR ALL THE YEARS BE SET ASIDE. LD DR ON THE OTHER HAND SUPPO RTED THE ORDER OF LD.CIT. HE FURTHER SUBMITTED THAT WHEN AO HAS ALLOWED T HE CLAIM WITHOUT ANY DISCUSSION, THE ORDERS PASSED BY AO WERE ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THER EFORE LD. CIT HAS RIGHTLY INVOKED PROVISION OF SEC.263 OF THE ACT. IN R ESPONSE TO LD. A.RS ARGUMENT, THAT SINCE ORDER U/S 153C HAS BEEN P ASSED AFTER APPROVAL OF ADDL.CIT WHICH WAS OBTAINED U/S 153D AND TH EREFORE IT 9 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 IS NOT AMENABLE TO REVISIONARY PROCEEDINGS U/S 263, HE SU BMITTED THAT PROVISION OF SEC.263 DOES NOT SPECIFICALLY BAR SUCH RE VISION BY LD. CIT. HE THUS SUPPORTED THE ORDER OF LD. CIT. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN ALL THE PRESENT CASES IS A BOUT THE INVOKING OF PROVISIONS OF SECTION 263 BY LD.CIT. SECTION 26 3(1) OF THE ACT, THE POWERS UNDER WHICH CIT HAS ASSUMED POWER FOR REVISION READS AS UNDER: THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECOR D OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ITO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY , AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD A ND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEE MS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTA NCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR M ODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DI RECTING A FRESH ASSESSMENT. 10. THE READING OF THE ABOVE PROVISIONS MAKES IT VERY CLEA R THAT THE POWER OF SUO MOTU REVISION U/S 263(1) IS IN THE NATURE OF SUPERVISORY JURISDICTION AND THE SAME CAN BE EXERCISED O NLY IF THE CIRCUMSTANCES SPECIFIED THEREIN EXIST. TWO CIRCUMSTANCES MU ST EXIST TO ENABLE THE COMMISSIONER TO EXERCISE POWER OF REVISION U /S 263, NAMELY (I) THE ORDER IS ERRONEOUS (II) BY VIRTUE OF BEING ERR ONEOUS PREJUDICE HAS BEEN CAUSED TO THE INTERESTS OF THE REVENUE. 11. HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO LTD VS CIT (2000) 243 ITR 83 (SC) HAS HELD THAT LD.CIT HAS T O BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE AO SO UGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTER ESTS OF THE REVENUE. IF ONE OF THEM IS ABSENTIF THE ORDER OF THE ITO IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT 10 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUERECOURSE CA NNOT BE HAD TO SEC.263(1). IT WAS FURTHER HELD THAT THE PROVISION CANN OT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR E RROR COMMITTED BY THE AO; WHEN AN ITO ADOPTED ONE OF THE COURSES PE RMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE; OR WHERE TWO V IEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WITH WHICH THE LD .CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY T HE ITO IS UNSUSTAINABLE IN LAW. 12. IN THE CASE OF LD.CIT VS. GABRIEL INDIA LTD (1993) 203 ITR 108 (BOM), THE HONBLE BOMBAY HIGH COURT HAS HELD AS UNDER: AN ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT I S NOT IN ACCORDANCE WITH LAW. IF AN ITO ACTING IN ACCORDANCE WITH LAW MAKES CERTAIN ASSESSMENT, THE SAME CANNOT BE BRANDE D AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE ACCORD ING TO HIM THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORA TELY. THIS SECTION DOES NOT VISUALISE A CASE OF SUBSTITUTION O F JUDGMENT OF THE COMMISSIONER FOR THAT OF THE ITO, WHO PASSED THE ORDER, UNLESS THE DECISION IS HELD TO BE ERRONEOUS. CASES MAY BE VISUALISED WHERE ITO WHILE MAKING AN ASSESSMENT EXA MINES THE ACCOUNTS, MAKES ENQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE IN COME EITHER BY ACCEPTING THE ACCOUNTS OR BY MAKING SOME ESTIMATES HIMSELF. THE COMMISSIONER, ON PERUSAL OF THE RECORD S, MAY BE OF THE OPINION THAT THE ESTIMATE MADE BY THE OFFICE R CONCERNED WAS ON THE LOWER SIDE AND, LEFT TO THE COMMISSIONER , HE WOULD HAVE ESTIMATED THE INCOME AT A HIGHER FIGURE THAN T HE ONE DETERMINED BY THE ITO. THAT WOULD NOT VEST THE COMM ISSIONER WITH POWER TO RE-EXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIMSELF AT A HIGHER FIGURE. IT IS BECAUSE TH E ITO HAS EXERCISED THE QUASI-JUDICIAL POWER VESTED IN HIM IN ACCORDANCE WITH LAW AND ARRIVED AT A CONCLUSION AND SUCH A CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE C ONCLUSION. IT MAY BE SAID IN SUCH A CASE THAT IN THE OPINION O F THE COMMISSIONER THE ORDER IN QUESTION IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. BUT THAT BY ITSELF WILL NO T BE ENOUGH TO VEST THE COMMISSIONER WITH THE POWER OF SUO MOTU REV ISION BECAUSE THE FIRST REQUIREMENT, NAMELY, THE ORDER IS ERRONEOUS, IS ABSENT. SIMILARLY IF AN ORDER IS ERRONEOUS BUT N OT PREJUDICIAL TO THE INTEREST OF THE REVENUE, THEN ALSO THE POWER OF SUO MOTU REVISION CANNOT BE EXERCISED. ANY AND EVERY ERRONEO US ORDER CANNOT BE SUBJECT-MATTER OF REVISION BECAUSE THE SE COND REQUIREMENT ALSO MUST BE FULFILLED. 11 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 13. IN THE PRESENT APPEALS FOR SIX ASSESSMENT YEARS, IT IS SEEN THAT EXCEPT FOR AY 2010-11 WHERE THE ASSESSMENT WAS FRAMED U/S 143(3), FOR ALL THE OTHER FIVE YEARS, THE ASSESSMENTS WERE FR AMED U/S 153A R.W.S. 143(3) MEANING THEREBY THAT WHILE FRAMING THE ASSESSMENTS IN THOSE RESPECTIVE YEARS, THE NECESSARY APPROVAL OF ADDL.CIT WAS OBTAINED AND THAT APART FROM AO THE ADDL.CIT HAD ALSO APPLIED HIS MIND TO THE FACTS BEFORE PASSING THE ASSESSME NT ORDERS. IN SUCH A SITUATION WE FIND FORCE IN THE SUBMISSION OF LD.A.R. T HAT IT CANNOT BE SAID THAT THE NECESSARY INQUIRIES WERE NOT MA DE WHILE PASSING THE ASSESSMENT ORDERS U/S 143(3) R.W.S. 153A OF THE ACT. FURTHER IT IS A SETTLED POSITION THAT THE ASSESSMENT ORD ERS CANNOT BE SET ASIDE OR REVISED FOR INADEQUATE INQUIRY BY LD. CIT U/S 263 OF THE ACT. WE THEREFORE FIND FORCE IN THE SUBMISSION OF LD.A.R. THA T REVISIONARY PROCEEDINGS U/S 263 CANNOT BE INITIATED IN THE PRESENT CASES AND FOR WHICH WE ALSO FIND SUPPORT FROM THE FOLLOWING DECISIONS: 14. IN THE CASE OF SHRI CH. KRISHNA MURTHY VS. ACIT (ITA NO.766/HYD/2012 ORDER DATED 13.12.2015), IN IDENTICAL FACTS, THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS OBSERVED AS UNDER : 9.. THUS, FROM THE AFORESAID FACTS IT BECOMES CLEAR, THE ASSESSING OFFICER WHILE EXERCISING POWER U/S 153A HAS TO PASS THE ASSESSMENT ORDER AS PER THE APPROVAL GRANT ED BY ADDL.CIT U/S 153D. IN THESE CIRCUMSTANCES, ASSESSING OFFICER HAVING EXAMINED THE ISSUE AND APPLIED HIS MIND TO T HE FACTS AND HAVING PASSED THE ORDER IN TERMS WITH THE DIREC TIONS OF THE RANGE HEAD AS PER THE STATUTORY PROVISIONS CONT AINED U/S 153D, THE ASSESSMENT ORDER CANNOT BE HELD TO BE ERRONEOUS. IN FACT LD. CIT HAS BLAMED THE RANGE HEA D FOR THE DIRECTIONS GIVEN BY HIM WHILE APPROVING THE DRAFT AS SESSMENT ORDER. THEREFORE, IF AT ALL, THERE IS ANY ERROR, I T IS IN THE ORDER OF THE RANGE HEAD AND NOT IN THE ASSESSMENT ORDER . WITHOUT REVISING THE DIRECTIONS OF ADDL.CIT, ASSESSMENT ORD ER COULD NOT BE REVISED. 12 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 15. WE ALSO FIND THAT ON IDENTICAL ISSUE, IN THE CASE OF ME HTAB ALAM AND OTHERS VS. ACIT (ITA NO.288 TO 294/LKW/2014 OR DER DATED 18.11.2014) THE CO-ORDINATE BENCH OF THE LUCKNOW T RIBUNAL HAS OBSERVED AS UNDER: 19. IT IS ALSO OBVIOUS FROM THE RECORD THAT WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER HAS OBTAINED APPROVAL FROM THE JCIT. THEREFORE, THE JCIT HAS ALSO APPLIED HIS MIND TO THE FACTUM OF SEIZURE OF CASH OF RS.2 CRORES FRO M THE ASSESSEE AND AFTER OBTAINING APPROVAL, THE ASSESSME NT WAS FRAMED AND HAVING CONVINCED WITH THE EXPLANATIONS FURNISHED BY THE ASSESSEE WITH REGARD TO THE AVAILA BILITY OF CASH, NO ADDITION WAS MADE. OUR ATTENTION WAS ALSO INVITED TO THE ASSESSMENT ORDERS FRAMED IN THE CASES OF MOD EL EXIMS; MODEL ECHOES PVT. LTD. ; MOHD. KHALID, PROP. S. K. ENTERPRISES AND A. L. RAZEEK TRADERS, OF WHICH COPIES ARE AVAIL ABLE AT PAGES 209 TO 309 OF THE COMPILATION OF THE ASSESSEE , SMT. NAUSHEEN FARAH LARI. THESE ASSESSMENT ORDERS WERE F RAMED UNDER SECTION 153C READ WITH SECTION 153A OF THE AC T CONSEQUENT TO THE SEARCH AND SEIZURE OPERATION COND UCTED UPON THE ASSESSEE, IN WHICH CASH OF RS.2 CRORES WER E FOUND. THEREFORE, THE ISSUE OF SEIZURE OF RS.2 CRORES WAS ALSO EXAMINED BY THE REVENUE AUTHORITIES IN THE HANDS OF THE CONCERNED PERSONS TO WHOM THE CASH RELATE. OUR ATTE NTION WAS ALSO INVITED TO THE COPIES OF THE EXTRACT OF CA SH BOOK IN THE CASE OF MODEL TANNERS (INDIA) PVT. LTD.; MODEL EXIMS; MODEL ECHOES PVT. LTD.; S. K. ENTERPRISES AND A. L. RAZEEK TO ESTABLISH THE AVAILABILITY OF CASH IN THEIR BOOKS O F ACCOUNT. 20. FROM A CAREFUL PERUSAL OF THESE EVIDENCES, WE A RE OF THE CONSIDERED OPINION THAT WHILE COMPLETING THE ASSESS MENT NOT ONLY IN THE CASE OF THE ASSESSEES BUT ALSO IN THE C ASE OF OTHER ASSESSEES, TO WHOM THE CASH WAS CLAIMED TO RELATE, WERE THOROUGHLY EXAMINED BY THE ASSESSING OFFICERS IN TH EIR RESPECTIVE HANDS BY MAKING DETAILED ENQUIRIES/INVES TIGATIONS AND ONCE . THE ASSESSING OFFICER WAS CONVINCED WITH THE EXPLANATIONS WITH REGARD TO . THE SOURCE OF CASH OF RS.2 CRORES FOUND FROM THE ASSESSEE DURING THE COURSE OF SEARCH , NO ADDITION WAS MADE BY THE ASSESSING OFFICER EITHER I N THE HANDS OF THE ASSESSEE OR IN THE HANDS OF THE RESPEC TIVE PARTIES TO WHOM THE CASH OF RS.2 CRORES RELATE. 21. IT IS ALSO PLACED ON RECORD THAT THE ASSESSING OFFICER HAS FRAMED THE ASSESSMENT IN THE ASSESSEE'S CASE AFTER OBTAINING APPROVAL FROM THE JCIT. THEREFORE, NOT ONLY THE ASS ESSING OFFICER BUT THE JCIT HAS ALSO APPLIED HIS MIND TO T HE FACTUM OF SEIZURE OF CASH OF RS.2 CRORES FROM THE ASSESSEE DURING THE COURSE OF SEARCH. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND OR HAS N OT PROPERLY MADE NECESSARY ENQUIRIES WITH REGARD TO THE ISSUE OF RECOVERY OF CASH OF RS2 CRORES DURING THE COURSE OF SEARCH OPERATION FROM THE CHOUDHARY CHARAN SINGH AIRPORT. 13 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 .. 32. WE HAVE ALSO EXAMINED THE JUDGMENT OF THE HON'B LE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. DR . ASHOK KUMAR (SUPRA) ON AN ISSUE WHETHER THE ASSESSMENT OR DER WAS PASSED WITH THE APPROVAL OF THE ADDL. CIT AND T HEIR LORDSHIPS HAVE HELD THAT THE ASSESSING OFFICER WAS FULLY ALIVE ABOUT THE FACTS OF THE CASE AND THAT IS WHY H E GOT NECESSARY APPROVAL OF THE ADDL. CIT BEFORE COMPLETI NG THE ASSESSMENT ORDERS FOR ALL THE ASSESSMENT YEARS AND ONCE THAT IS NOT DISPUTED BY THE REVENUE, THEN THE ID. COMMISSIONER OF INCOME-TAX WOULD NOT BE JUSTIFIED IN INTERFERING IN THE APPROVAL ACCORDING BY THE ADDL. CIT FOR FRAMING THE ASSESSMENT ORDER AND THUS THERE WAS NO CASE FOR SETTING ASIDE THE ASSESSMENT ORDER FOR THE ASSESSME NT YEARS IN QUESTION. 16. WE ALSO FIND THAT THE HYDERABAD BENCH IN THE CASE O F TRINITY INFRAVENTURES LTD. VS. DCIT (ITA NOS.584 TO 589/HYD/201 5 ORDER DATED 04.12.2015) HAS NOTED AS UNDER : 5.4 THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER SUBMITTED THAT THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 153C WAS PASSED AFTER GETTING APPROVAL OF ADDL.CIT UNDER SECTION 153D OF THE I.T. ACT AND THEREFORE SUCH AN ASSESSMENT CANNOT BE REVISED WITHOUT REVISING THE DIRECTIONS OF THE ADDL.CIT UNDER SECTION 153D OF THE I.T. ACT. THE LD. COUNSEL FOR THE ASSESSEE, HAS RELIED UPON THE DECISIONS OF THIS TRIB UNAL IN THE CASE OF CH. KRISHNA MURTHY VS. ACIT, C.C.3, HYDERABAD IN I.T.A.NO.766/HYD/2012 DATED 13.02.2015 AND ALSO THE DECISION OF LUCKNOW BENCH OF ITAT IN THE CASE OF MEHTAB ALAM 288/LUCK/2014 DATED 18.11.2014 IN SUPPORT OF THIS CONTENTION. HE HAS ALSO PLACED RELIANCE UPON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. DR. ASHOK KUMAR IN I.T. APPEAL NO.192 OF 2000 WHEREIN IT HAS BEEN HELD THAT THE ASSESSMENT ORDER APPROVED BY THE ADDL.CIT UNDER SECTION 263 OF THE I.T. ACT. IN VIEW OF THE ABO VE DECISION ALSO, WE HOLD THAT THE REVISION ORDER UNDER SECTION 263 OF THE I.T. ACT IS NOT SUSTAINABLE. ACCORDINGLY, WE ALLOW THE GROUNDS OF THE ASSESSEE. 17. WE FURTHER FIND THAT IN THE CASE OF DR. ASHOK KUMAR P ROP. S.S. NURSINGH HOME, THE CO-ORDINATE BENCH OF THE TRIBUNAL, HAD SET ASIDE THE ORDER OF CIT PASSED U/S 263 OF THE ACT. AGA INST THE ORDER OF ITAT, REVENUE CARRIED THE MATTER BEFORE HONBLE ALLAHA BAD HIGH 14 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 COURT. ALLAHABAD HIGH COURT IN THE CASE (CIT VS. DR. ASHO K KUMAR PROP. S.S. NURSING HOME, ITA NO.192 OF 2000 AND OTHERS, ORD ER DATED 06.08.2012) DISMISSED THE APPEAL OF REVENUE. THE RELE VANT OBSERVATIONS OF HONBLE BENCH OF THE HONBLE HIGH COURT ARE REPRODUCED HEREUNDER: 6. THE TRIBUNAL THEREAFTER HAS OBSERVED AS UNDER : ..5.2 IN THE LAST IT IS ALSO RELEVANT FACT THAT THE AO WAS FULLY ALIVE ABOUT THE FACTS OF THE CASE AND THA T IS WHY HE GOT NECESSARY APPROVAL OF ADD! COMMISSIONER BEFORE COMPLETING THE ASSESSMENT ORDERS FOR ALL THE ASSESSMENT YEARS AND ONCE THAT IS NOT DISPUTED BY T HE REVENUE THAN THE CIT WOULD NOT BE JUSTIFIED IN INTERFERING IN THE APPROVAL ACCORDED BY THE ADD! CIT FOR FRAMING THE ASSESSMENT ORDER AND THUS THERE WAS NO CASE FOR SETTING ASIDE THE ASSESSMENT ORDERS FOR THE ASSESSMENT YEARS IN QUESTION. ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE I AM O F THE OPINION THAT THE IMPUGNED ORDER IS LIABLE TO BE QUA SHED ACCORDINGLY. 6. IN THE RESULT, APPEALS ARE ALLOWED. ' 9. WE FIND THAT THE TRIBUNAL HAS NOT COMMITTED ANY ERROR OF LAW IN SETTING ASIDE THE ORDER OF CIT PASS ED UNDER SECTION 263 OF INCOME TAX ACT FOR THE ASSESSMENT YEAR 1991-92 TO 1995-96. 18. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS AND RE LYING ON THE DECISIONS CITED HEREINABOVE, WE ARE OF THE VIEW THAT PROVISIONS OF SEC.263 CANNOT BE RESORTED TO IN THE PRESENT CASES. BEFORE US, REVENUE HAS NEITHER BROUGHT ANY CONTRARY BINDING DECISIO N IN ITS SUPPORT NOT HAS PLACED ANY MATERIAL ON RECORD TO DEMON STRATE THAT THE VIEW TAKEN BY THE AO WAS AN IMPERMISSIBLE VIEW OR WAS CONTRARY TO LAW OR WAS UPON ERRONEOUS APPLICATION OF LEGAL PRINCIPLES NECESSITATING THE EXERCISING OF REVISIONARY POWERS U/S 263 . IN THE VIEW OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT IN TH E PRESENT CASES FOR AY 2004-05, 2006-07 TO 2010-2011, LD.CIT WAS NOT JUSTIFIED IN RESORTING TO THE REVISIONARY POWERS U/S 263 O F THE ACT. 15 ITA NO.1102 TO 1107/PUN/2014 AY : 2004-05, 2006-07 TO 2010-11 WE THEREFORE SET ASIDE THE ORDERS OF LD.CIT WHEREBY HE HAD SET ASIDE THE ASSESSMENT ORDERS PASSED BY THE AO. THUS THE GROUNDS OF ASSESSEE ARE ALLOWED IN ALL THE YEARS. 19. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLO WED. ORDER PRONOUNCED ON THE 28 TH DAY OF DECEMBER, 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE; ! DATED : 28 TH DECEMBER, 2016. YAMINI ' ( ) *+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE COMMISSIONER OF INCOME TAX (CENTRAL), PUNE. 4. #$% &&'(, * '(, A / DR, ITAT, A PUNE; 5. %+, - / GUARD FILE ' / BY ORDER , // TRUE COPY// //TRUE COPY// ./0 &1 '2 / SR. PRIVATE SECRETARY * '( , / ITAT, PUNE