Shri. K. Muniraju, Bangalore V. Principal Commissioner Income Tax, Central, Bangalore

ITA 1376/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4654 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 22-09-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 10-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DILIP REDDY TO DEPT
• Keywords: Capital asset; Business income; Opportunity of being heard; Principle of natural justice; Question of law; Assessment record; Prejudicial to interest; Condonation of delay; Set aside; Capital Gains
• Section: 40A(3); 143(3); 153A; 40(a)(ia); 274; 264; 13; 22; 153C; 147; 68; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI A.K GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.1376 TO 1379/BANG/2019 ASSESSMENT YEAR : 2011-12 TO 2014-15 K MUNIRAJU, NO.849/2, CHINMAYA COMPLEX, 3 RD FLOOR, A BLOCK, 60 FEET ROAD 1 ST MAIN ROAD, SAHAKARANAGAR, BENGALURU-560 092. PAN AOOPK 9420 Q. VS. THE PR. COMMISSIONER OF INCOME TAX, CENTRAL, BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI RAJEEV C NULVI, ADVOCATE REVENUE BY : SHRI DILIP REDDY, STANDING COUNSEL TO DEPT. (DR) DATE OF HEARING : 22-09-2020 DATE OF PRONOUNCEMENT : 20-10-2020 ORDER PER BENCH : PRESENT APPEALS HAS BEEN FILED BY ASSESSEE AGA INST SEPARATE ORDER DATED 26/03/2019 PASSED BY LD.PR.CIT (CENTRAL ) FOR ASSESSMENT YEARS UNDER CONSIDERATION ON FOLLOWING G ROUNDS OF APPEAL. AT THE OUTSET, IT IS SUBMITTED THAT, GROUND S RAISED BY ASSESSEE IN ALL YEARS UNDER CONSIDERATION ARE IDENT ICAL AND SIMILAR. THEREFORE, FOR SAKE OF CONVENIENCE, WE ARE REPRODUCING PAGE 2 OF 26 ITA NO.1376-1379/BANG/2019 GROUNDS RAISED BY ASSESSEE FOR ASSESSMENT YEAR 2011 -12 WHICH ARE AS UNDER: ITA NO.1376/BANG/2019 1. THE ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) PASSED U/S 263 OF THE INCOME TAX ACT, 1961 IN SO FA R AS AGAINST THE APPELLANT, IS OPPOSED TO THE LAW, EQUITY, WEIGHT OF EVIDENCES, PROBABILITIES AND AGAINST THE FACT AND CIRCUMSTANCES OF THE APPEL LANTS CASE. 2. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) WAS NOT JUSTIFIED IN LAW AND FACT TO SET ASIDE THE ASSESSME NT ORDER DATED 29/12/2016 AND DIRECT THE ASSESSING OFFICER TO MAKE REDO THE ASSESSMENT DE-NOVA AFTER DUE CONSIDERATION OF THE F ACT AND LAW WITH REGARD TO ISSUES MENTIONED IN THE SHOW CAUSE NOTICE . 3. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) HAS GROSSLY ERRED IN REVISING THE ORDER PASSED BY THE ASSESSING OFFICER WITHOUT APPRECIATING THAT THE ORDER WAS NOT ERRONEOUS, MUCH LESS PREJUDICE TO THE INTEREST OF THE REVENUE TO WARRANT REVISION. 4. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) WAS NOT JUSTIFIED IN PASSING THE ORDER U/S 263 OF THE INCOM E TAX ACT, 1961 AS THE ORDER PASSED U/S 143(3) R.W.S 153A OF THE INCOME TA X ACT, 1961 WAS PASSED AFTER PROPER ENQUIRY ON THE FACTS AND CIRCUM STANCES OF THE CASE AND FOLLOWING THE JURISDICTIONAL HIGH COURT JUDGEME NT IN CASE OF LANCY CONSTRUCTIONS. 5. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) ERRED IN PASSING THE ORDER U/S 263 OF THE INCOME TAX ACT, 19 61 WITH THE DIRECTION TO MAKE THOROUGH VERIFICATION OF ISSUES/EVIDENCES/D OCUMENTS WHICH ARE NOT UNEARTHED OR FOUND DURING THE COURSE OF SEARCH. 6. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) FAILED TO APPRECIATE THE ACTION OF THE ASSESSING OFFICER WHER EIN GENERAL DISALLOWANCES SUCH AS 40A(3), 40(A)(IA) IN THE ASSE SSMENT PASSED U/S 143(3) R.W.S 153A OF THE INCOME TAX ACT, 1961, SHAL L NOT BE ON THE BASIS OF THE INFORMATION OBTAINED SUBSEQUENT TO THE SEARC H. 7. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) ERRED IN REVISING THE ORDER PASSED BY THE ASSESSING OFFICER WITHOUT FOLLOWING THE LATER JUDGEMENT OF JURISDICTIONAL HIGH COURT IN CAS E OF LANCY CONSTRUCTIONS AND BANGALORE ITAT JUDGEMENT IN CASE OF CORNER STONE PROPERTIES PVT LTD. VS ACIT. 8. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) ERRED IN REVISING THE ORDER OF THE ASSESSING OFFICER U/S 263 OF THE INCOME TAX ACT, 1961 AS THE ORDER OF THE ASSESSING OFFICER HAS STAN DS MERGED WITH ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN ALL RESPECT AND FOR ALL THE PAGE 3 OF 26 ITA NO.1376-1379/BANG/2019 ISSUES AS THE POWER OF THE COMMISSIONER OF INCOME T AX (APPEALS) ARE CO- EXTENSIVE AND CO-TERMINUS WITH THE POWERS OF THE AS SESSING AUTHORITY. 9. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) ERRED IN REVISING THE ORDER OF THE ASSESSING OFFICER U/S 263 OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACT THAT TRANSACTION S ARE GENUINE, PARTIES ARE IDENTIFIABLE AND THE PAYMENTS WERE MADE IN CASH FOR BUSINESS EXPEDIENCY ON BANKING HOLIDAYS AND AFTER BANKING HO URS. 10. FOR THESE AND OTHER REASONS WHICH MAY BE ADDUCE D AT THE TIME OF THE HEARING THE APPELLANT PRAYS BEFORE THIS HONOURABLE BENCH TO ANUL THE ORDER BY PRINCIPAL COMMISSIONER OF INCOME TAX (CENT RAL) U/S 263 OF THE INCOME TAX ACT, 1961 FOR SUBSTANTIAL CAUSE OF JUSTI CE. 11.THE APPELLANT CRAVES LEAVES, TO ADD, TO ALTER, T O AMEND AND TO DELETE ANY OTHER GROUNDS AT THE TIME OF HEARING. 2. AT THE OUTSET, LD.AR SUBMITTED THAT, PRESENT APP EALS ARE FILED WITH A DELAY OF 13 DAYS. IT HAS BEEN SUBMITTE D IN AFFIDAVIT DATED 06/06/2019 BY ASSESSEE THAT, DELAY WAS CAUSED , SINCE ASSESSEE WAS BUSY WITH GETTING ADMISSION TO MBBS CO URSE, FOR WHICH HE REQUIRED APPROVAL FROM MEDICAL COUNCIL OF INDIA. HE WAS THEREFORE NOT AVAILABLE TO PRESET THE APPEALS I N TIME BEFORE THIS TRIBUNAL . HE SUBMITTED THAT, IT WAS UNINTENTIONAL, AND PRAYED FOR CONDONATION OF DELAY BY 13 DAYS IN FILIN G PRESENT APPEALS BEFORE THIS TRIBUNAL . BEFORE US, LD.AR SUBMITTED THAT, DELAY OCCASIONED T O FILE APPEAL BEFORE THIS TRIBUNAL WAS NOT INTENTIONAL AND DELIBERATE AND GRAVE INJUSTICE WOULD BE CAUSED TO ASSESSEE, IF APPEALS A RE NOT ADMITTED. LD.CIT.DR ON THE CONTRARY, VEHEMENTLY ARGUED FOR TH E APPEALS TO BE DISMISSED IN LIMNE. 3. WE HAVE PERUSED SUBMISSION BY ASSESSEE IN THE AF FIDAVIT. HON'BLE SUPREME COURT IN COLLECTOR, LAND ACQUISITION VS. MST . KATJI & ORS REPORTED IN (1987) 167 ITR 471 HELD THAT, WHEN SUBSTANTIAL PAGE 4 OF 26 ITA NO.1376-1379/BANG/2019 JUSTICE AND TECHNICAL CONSIDERATION ARE PITTED AGAI NST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERR ED. HONBLE COURT HAS HELD THAT, THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY OR ON ACCOUNT OF CULPABLE N EGLIGENCE OR ON A MALAFIDE, AND THAT LITIGATION DOES NOT STAND T O BENEFIT BY RESORTING TO DELAY, IN FACT HE IS ON SERIOUS RISK. 4. IN VARIOUS CASES HONBLE SUPREME COURT AND HONBLE HIGH COURTS TIME AND AGAIN LAID DOWN PRINCIPLES THAT, THERE SH OULD BE A LIBERAL, PRAGMATIC, JUSTICE ORIENTED AND NON-PEDA NTIC APPROACH WHILE CONSIDERING THE APPLICATION OF CONDONATION OF DELAY. THE TERM SUFFICIENT CAUSE SHOULD BE CONSTRUED LIBERAL LY AND THAT SUBSTANTIAL JUSTICE BEING PARAMOUNT AND PIVOTAL, TE CHNICAL CONSIDERATION SHOULD NOT BE GIVEN UNDUE EMPHASIS. RESPECTFULLY FOLLOWING ABOVE PRINCIPLES, WE CONDONE D THE DELAY OF 13 DAYS CAUSED BY ASSESSEE IN FILING PRESE NT APPEALS . 5. LD.AR SUBMITTED THAT, FOR ALL YEARS UNDER CONSID ERATION, IDENTICAL ADDITIONAL GROUND NOS:12-13 ARE RAISED BY ASSESSEE, BEING LEGAL ISSUE, CHALLENGING VALIDITY OF ORDER PA SSED UNDER SECTION 263. FOR SAKE OF CONVENIENCE WE ARE REPRODU CING ADDITIONAL GROUND NO. 12-13 FROM ASSESSMENT YEAR 20 11-12 WHICH IS AS UNDER: ADDITIONAL GROUNDS OF APPEAL THE APPELLANT BEGS TO SUBMIT UNDER MENTIONED GROUN DS OF APPEAL, WHICH CHALLENGES VERY BASIC LEGAL QUESTION AGAINST THE PA SSING OF THE ORDER IN THE HANDS OF THE APPELLANT U/S 263 OF THE INCOME TA X ACT, 1961 AND IT DOESN'T INVOLVE ANY INVESTIGATION OF FACTS OTHERWIS E ON RECORD. AND IT IS PRAYED THAT THE ADDITIONAL GROUNDS MAY KINDLY BE AD MITTED AND DISPOSED OFF ON MERIT FOR THE SUBSTANTIAL CAUSE OF JUSTICE. RELIANCE IS PLACED ON THE RATIO DECISION OF HONOURABLE SUPREME COURT IN CASE OF 229 ITR 383 NATIONAL THERMAL POWER CO LTD VS CIT. PAGE 5 OF 26 ITA NO.1376-1379/BANG/2019 IN VIEW OF GROUND OF APPEAL NO. 11, THE APPELLANT C RAVES LEAVE FOR ADMISSION OF BELOW MENTIONED GROUNDS: 12. THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TA X (CENTRAL) HAS GROSSLY ERRED IN REVISING THE ORDER PASSED BY THE A SSESSING OFFICER FOR NOT MAKING THE PROPER ENQUIRIES AND VERIFICATION WHICH SHOULD HAVE BEEN MADE FOR THE INFORMATION AVAILABLE ON RECORD DURING THE COURSE OF ASSESSMENT WHICH IS AGAINST CLAUSE (A) OF EXPLANATI ON 2 TO SECTION 263(1) OF THE INCOME TAX ACT, 1961. THE SAID CLAUSE (A) OF EXPLANATION 2 TO SECTION 263(1) OF THE INCOME TAX ACT, 1961 IS MADE APPLICABLE FROM 01.06.2015 I.E. W.E.F A.Y 2016-17. 13. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) HAS ERRED IN R EVISING THE ORDER ONLY ON THE GROUND THAT THE ASSESSING OFFICER FAILED TO MAKE PROPER ENQUIRY IN RESPECT OF INFORMATION AVAILABLE ON RECORD SUBSEQUE NT TO DATE OF SEARCH. THE SAID FAILURE FOR REVISION WAS EFFECTIVE FROM 01 .06.2015 BY INTRODUCING CLAUSE (A) OF EXPLANATION 2 TO SECTION 263(1) OF TH E INCOME TAX ACT, 1961. 6. LD.AR SUBMITTED THAT LEGAL PLEA RAISED IS CHALLE NGING APPLICATION OF EXPLANATION 2 (A) TO SECTION 263 (1) OF THE ACT TO PRESENT CASE BY LD.PR.CIT. HE SUBMITTED THAT THE SA ID EXPLANATION 2 WAS INSERTED W.E.F. 01/06/2015, AND THEREFORE, NOT APPLICABLE TO THE YEARS UNDER CONSIDERATION, BEING PRIOR TO INSERTION. HE PLACED RELIANCE ON DECISION OF HONBLE SUPREME COURT IN CASE OF NTPC LTD. VS.CIT , REPORTED IN 229 ITR 383 . 7. WE ARE CONVINCED THAT THIS ADDITIONAL GROUND OF APPEAL IS PURELY LEGAL GROUND EMANATING FROM FACTS AVAILABLE ON RECORD ONLY. THE ADMISSION OF THIS GROUND DOES NOT REQUIRE ANY FURTHER INVESTIGATION INTO THE FACTS. THIS HAS BEEN FAIRLY CONCEDED BY LD.CIT.DR ALSO. SO THIS GROUND, BEING PURELY LEGAL GROUND, IS ENTERTAINABLE AND ADMISSIBLE FOR HEARING AS PER THE PROVISIONS OF RULE 11 OF THE ITAT RULES. ACCORDINGLY, FOLLOWING DECISIONS OF HONBLE SUPREME COURT IN CASE OF NTPC LTD. VS.CIT , REPORTED IN 229 ITR 383 AND DECISION OF PAGE 6 OF 26 ITA NO.1376-1379/BANG/2019 HONBLE DELHI HIGH COURT IN CASE OF JUTE CORPORATION OF INDIA VS. CIT REPORTED IN 1991 AIR 241 , WE ARE INCLINED TO ADMIT THE ADDITIONAL GROUND NOS:12-13. BRIEF FACTS OF THE CASE ARE AS UNDER: 8. SEPARATE ASSESSMENT ORDERS FOR ALL YEARS UNDER CONSIDERATION HAVE BEEN PASSED BY LD.AO ON 29/12/20 16, UNDER SECTION 143(3) READ WITH SECTION 153A OF THE ACT. O N PERUSAL OF ASSESSMENT ORDER, IT IS NOTED THAT, SEARCH ACTION U NDER SECTION 132 WAS CONDUCTED ON SH. K MUNIRAJU AND OTHERS (GRO UP) ON 09/10/2014. 9. CONSEQUENTIALLY, NOTICE UNDER SECTION 153A OF TH E ACT WAS ISSUED TO ASSESSEE REQUIRING HIM TO FILE RETURN OF INCOME WITHIN 30 DAYS OF RECEIPT, IN RESPONSE TO NOTICE UNDER SEC TION 153A. IT HAS BEEN SUBMITTED THAT, ASSESSMENT ORDER FOR ALL Y EARS UNDER CONSIDERATION WAS PASSED MAKING ADDITION UNDER THE HEAD CAPITAL GAINS BEING SALE PROCEEDS FROM LAND SOLD D URING THE YEARS. WE THEREFORE, FOR THE SAKE OF CONVENIENCE, R EFER TO DETAILS ENUMERATED IN ASSESSMENT ORDER PASSED FOR ASSESSMEN T YEAR 2011-12. ASSESSEE FILED RETURN OF INCOME ON 25/08/ 2016 DECLARING RS.3,04,59,132/- AS GROSS TOTAL INCOME AN D RS.3,03,59,130/- AS TAXABLE INCOME. LD.AO WHILE PASSING ASSESSMENT ORDER, MADE ADDITION IN THE HANDS OF ASSESSEE BEING CAPITAL GAIN THAT AROSE DUR ING THE YEAR DUE TO TRANSFER OF LAND BY ASSESSEE AMOUNTING TO RS .60,99,982/- . LD.AO FURTHER MADE ADDITION OF RS.18,88,06,908/- BEING CREDITS PAGE 7 OF 26 ITA NO.1376-1379/BANG/2019 ON ACCOUNT OF VARIOUS PERSONS WITH WHOM ASSESSEE WA S ALLEGED TO BE TRANSACTING FOR PURCHASE OF LAND. 10. FOR ASSESSMENT YEARS 2012-13, 2013-14 AND 2014- 15, LD.AO MADE ADDITION ON ACCOUNT OF RECEIPTS FROM S ALE OF LAND SOLD DURING THE YEAR AS BUSINESS INCOME. 11. AGAINST ADDITIONS SO MADE, ASSESSEE PREFERRED A PPEAL BEFORE LD.CIT(A). LD.CIT(A), VIDE ORDER DATED 12/07/2018 D ELETED ADDITION ON THE GROUND THAT, THERE WAS NO INCRIMINA TING MATERIAL. LD.CIT(A) OBSERVED AS UNDER: 5. THE ADDITIONAL GROUND NOS. 5 & 6 ARE ON THE QUES TION OF LAW WHEREIN IT IS ARGUED THAT THE ADDITIONS MADE WERE NOT BASED ON THE INCRIMINATING DOCUMENTS OR MATERIAL FOUND DURING TH E COURSE OF SEARCH. THE A.R OF THE APPELLANT RELIED ON THE JURISDICTION AL KARNATAKA HIGH COURT JUDGEMENT IN THE CASE CIT VS LANCY CONSTRUCTI ON 383 ITR 168 AND ITAT BANGALORE JUDGEMENT IN THE CASE OF GMR SPO RTS PVT. LTD. VS DCIT IN ITA 1754/6ANG/2016 WHEREIN IT HAS BEEN HELD THAT 'IF IT IS FOUND THAT NO INCRIMINATING MATERIAL WAS FOUND DURI NG THE COURSE OF SEARCH THEN THE PROCEEDING INITIATED BY THE A.O U/S 153A OF THE INCOME TAX ACT, 1961 ARE NOT VALID'. THE A.R OF THE APPELL ANT HAS ALSO RELIED ON THE FOLLOWING CASE LAWS. A. COMMISSIONER OF INCOME TAX VS CONTINENTAL WEARHO USING CORPORATION 374 ITR 645 (BOMBAY). B. COMMISSIONER OF INCOME TAX VS ANIL KUMAR BHATIS 352 ITP 403 (DELHI). C. COMMISSIONER OF INCOME TAX VS KABUL CHAWLA 380 I TR 573 (DELHI). D. PRINCIPLE COMMISSIONER OF INCOME TAX VS KURELE P APER MILLS PVT. LTD. 380 ITR 761 (DELHI). IN THIS REGARD, IT IS SEEN FROM THE ASSESSMENT ORDE R THAT NO INCRIMINATING MATERIAL HAS BEEN BROUGHT ON RECORD I N SUPPORT OF THE ADDITIONS WHICH HAVE BEEN MADE. THE JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF CIT. VS. LANCY CONSTRUCTION 383 ITR 168 IS THE LATER JUDGMENT WHICH IS' BEING FOLLOWED BY THE BANG ALORE TRIBUNAL. THEREFORE, FOLLOWING JUDICIAL DISCIPLINE, I HEREBY ALLOW THE ABOVE GROUNDS OF APPEAL. IN THE RESULT, THE APPEAL OF THE APPELLANT IS ALLOW ED. 12. BE THAT AS IT MAY, LD.PR.CIT SOUGHT TO REVISE A SSESSMENT ORDERS FOR ALL ASSESSMENT YEARS UNDER CONSIDERATION , AND ISSUED PAGE 8 OF 26 ITA NO.1376-1379/BANG/2019 SEPARATE NOTICE U/S.263 ON 04/03/2019 TO ASSESSEE. LD.AR SUBMITTED THAT, IN NOTICE ISSUED, LD.PR.CIT, RECORD ED THAT, LD.AO DID NOT EXAMINE PAYMENTS MADE BY ASSESSEE IN CASH F OR PURPOSES OF BUYING LANDS WHICH WAS CLAIMED AS EXPEN DITURE FOR ARRIVING AT DIRECT INCOME FROM SALE OF LAND, AND W HETHER SUCH EXPENDITURE PAID IN CASH ATTRACTS PROVISION OF SECT ION 40A(3) OF THE ACT. HE ALSO NOTED THAT, LD.AO NEITHER EXAMINED NOR MADE ANY ENQUIRIES REGARDING THE SAME DURING ASSESSMENT PROCEEDINGS. 13. LD.AR SUBMITTED THAT FOR YEARS UNDER CONSIDERAT ION, LD.PR.CIT SOUGHT TO REVISE ASSESSMENT ORDER FOR VE RIFYING FOLLOWING EXPENDITURE MADE BY ASSESSEE IN CASH IN V IOLATION OF SEC.40A(3). S.NO. ASST.YR. EXPENDITURE PAID IN CASH 1. 2011-12 20,97,48,164/- 2. 2012-13 9,89,68,350/- 3. 2013-14 98,98,400 4. 2014-15 8,00,00,000/- 14. IN RESPONSE TO NOTICE ISSUED, ASSESSEE FILED IT S REPLY DATED 23/03/2019, WHEREIN IT WAS SUBMITTED THAT, INFORMAT ION ABOUT CHEQUE AND CASH PAYMENT IN PURCHASE OF PROPERTIES W ERE AVAILABLE BEFORE LD.AO VIDE ASSESSEES LETTER DATED 15/11/2006, AND THAT SUCH INFORMATION DOCUMENT WERE NOT FOUND S EIZED FROM PREMISES OF ASSESSEE DURING SEARCH. ASSESSEE RESPON DED BEFORE LD.PR.CIT AS UNDER: IT IS EVIDENT FROM YOUR ABOVE STATEMENT THAT THE INFORMATION ABOUT THE CHEQUE AND CASH PAYMENT IN PURCHASE OF THE PROP ERTIES WAS PAGE 9 OF 26 ITA NO.1376-1379/BANG/2019 AVAILABLE BEFORE YOUR HONOUR ONLY THROUGH OUR LETTE R DATED 15/11/2016 BUT NOT DURING THE COURSE OF SEARCH. SUC H INFORMATION OR DOCUMENT WERE NOT FOUND AND SEIZED IN THE PREMIS ES OF THE APPELLANT. WHEN THERE IS NO SUCH DOCUMENT OR EVIDEN CE WAS NOT FOUND DURING THE COURSE OF SEARCH THEN THE ASSESSME NT WHICH HAS BEEN COMPLETED AND WHICH HAS NOT BEEN ABETTED. THE ASSESSING OFFICER HAS NO JURISDICTION TO INTERFERE THE COMPLETED ASSESSMENT U/S 153A OF THE INCOME TAX ACT, 1961. THE KARNATAKA HIGH COURT. IN CASE OF CIT VS LANCY C ONSTRUCTIONS 380 ITR 168 HELD THAT ANY INCRIMINATING EVIDENCE FO UND DURING THE COURSE OF SEARCH IS A PRE CONDITION TO ENABLE THE A SSESSING OFFICER TO INTERFERE IN THE COMPLETED ASSESSMENT U/S 153A O F THE INCOME TAX ACT, 1961. IN VIEW OF THE ABOVE STATED JUDGMENT , DELHI AND BOMBAY HIGH COURT JUDGMENT WHICH ARE SUPPORTING THE VIEW OF THE KARNATAKA HIGH COURT JUDGMENT, THE ADDITION ON ACCO UNT OF SECTION 40A(3), THE INFORMATION REGARDING THIS MADE AVAILAB LE DURING THE COURSE OF ASSESSMENT CANNOT BE MADE BASIS FOR THE A DDITION IN THE ORDER U/S 143(3) R.W.S 153C R.W.S 153A OF THE INCOM E TAX ACT, 1961. FURTHER THE' BOMBAY HIGH COURT IN CASE OF CIT VS CO NTINENTAL WARE HOUSING CORPORATION 374 ITR 645 HELD THAT NO ADDITI ON CAN BE MADE WHERE THERE WAS PENDING ASSESSMENT, IF NO INCR IMINATING MATERIALS FOUND DURING THE SEARCH. THE SIMILAR VIEW OF TAKEN BY THE BOMBAY HIGH COURT IS CASE OF CIT VS GURINDER SINGH 386 ITR 483. THE ITAT PUNE IN LEELAVATI VIJAYKUMAR KOTECHA VS AC IT ITA NO. 1294 TO 1297/PUN/2016, WHEREIN ADDITION U/S 68 WAS AGATED, THE PUNE ITAT IN VIEW OF THE BOMBAY HIGH COURT JUDG MENT SET ASIDE THE ORDER OF THE ASSESSING OFFICER PASSED U/S 153A OF THE INCOME TAX ACT, 1961. 2. THE DELHI TRIBUNAL IN CASE OF LORD KRISHNA DWELL ERS (P) LTD. VS DCITITA NO. 5294/DEL/2013 AND 2403/DEL/2014 STATED THAT 'THE TRANSACTIONS FOUND IN THE SALE DEEDS ARE DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSES SING OFFICER HAS NOT POINTED OUT ANY DEFECT IN THE SAID TRANSACT IONS AND ALSO ASSESSING OFFICER HAS NEITHER DOUBTED THE GENUINENE SS OF THE TRANSACTION NOR HE HAS DOUBTED THE IDENTITY OF THE PAYEES. HENCE- MECHANICAL INVOCATION OF PROVISIONS OF SECTION 40A( 3) COULD NOT BE MECHANICALLY. THE INTENTION BEHIND THE PROVISION OF SECTION 40A(3) OF THE INCOME TAX ACT, 1961 HAS TO BE LOOKED INTO. SECTION 40A(3) WAS INSERTED BY THE FINANCE ACT, 196 8 WITH THE OBJECT OF CURBING THE EXPENDITURE IN CASH AND TO CO UNTER TAX EVASION. THE CBDT CIRCULAR NO 6P DATED 6.7.1968 REI TERATES THIS VIEW THAT THIS PROVISION IS DESIGNED TO COUNTER EVA SION OF A TAX THROUGH CLAIMS FOR EXPENDITURE SHOWN TO HAVE BEEN I NCURRED IN CASH WITH A VIEW TO FRUSTRATING PROPER INVESTIGATIO N BY THE PAGE 10 OF 26 ITA NO.1376-1379/BANG/2019 DEPARTMENT AS TO THE IDENTITY OF THE PAYEE AND REAS ONABLENESS OF THE PAYMENT.,. EXPLANATION 2 TO SECTION 263.OF THEINCOME TAX ACT, 1961 STATES THAT 'FOR THE PURPOSES OF THIS SECTION, IT/S HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEM ED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMIS SIONER OR COMMISSIONER, - (A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WIT H ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY T HE JURISDICTIONAL HIGH COURT OR, SUPREME COURT IN THE CASE OF THE ASS ESSEE OR ANY OTHER PERSON.' IN VIEW OF THE SAID EXPLANATION AS FOR CLAUSE A AND ALSO AS STATED BY YOUR HONOUR IN THE SHOW CAUSE NOTICE, THE ORDER PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE. IN THE APPELLANT'S CASE, IN VIEW OF THE KARNATAKA HIGH COURT' JUDGMENT IN CASE OF CIT VS LANCY CONSTRUCTIONS 380 ITR 168, THE SCOPE OF THE ADDITION IS RESTRICTED ONLY TO MAKE AD DITIONS ON THE BASIS OF THE INCRIMINATING MATERIALS/DOCUMENTS FOUN D DURING THE COURSE OF SEARCH. HENCE, THE ASSESSING OFFICER ADOP TED AND FOLLOWED THE JURISDICTIONAL HIGH COURT JUDGMENT AND PASSED THE ORDER WITHOUT MAKING GENERAL DISALLOWANCES SUCH AS U/S 40A(3), 40(A)(IA) OF THE INCOME TAX ACT, 1961 WHICH COULD H AVE BEEN MADE IN ORDER PASSED U/S 143(3) AND 147 OF THE INCOME. T AX ACT, 1961. SUCH ORDER IS NOT AN ERRONEOUS ORDER AS HE HAS FOLL OWED THE JURISDICTIONAL HIGH COURT JUDGMENT. 4. IN CIT VS PARMANAND M PATEL (2005) 278 ITR 3 (G UJ) HELD THAT IT IS WELL SETTLED THAT ONCE AN APPEAL HAS BEEN PRE FERRED AGAINST AN ORDER OF ASSESSMENT, THE ENTIRE ASSESSMENT IS OPEN BEFORE THE APPELLATE AUTHORITY. THE APPELLATE AUTHORITY IS ENT ITLED TO DO ALL THAT THE ASSESSING OFFICER COULD HAVE DONE. THE POWERS O F THE APPELLATE AUTHORITY ARE CO-EXTENSIVE AND CO- TERMINUS WITH TH E POWERS OF THE ASSESSING AUTHORITY. IT IS EQUALLY WELL SETTLED THA T THE CIT COULD HAVE NOT EXERCISE REVISIONAL JURISDICTION QUA PROCE EDINGS BEFORE AN APPELLATE AUTHORITY. THE ORDER OF ASSESSMENT DOES N OT HAVE ANY INDEPENDENT EXISTENCE AND STANDS MERGED WITH THE OR DER OF THE APPELLATE AUTHORITY.' SINCE THE ORDER OF THE ASSESS ING OFFICER IS MERGED WITH THE ORDER OF THE CIT(A), IN ALL RESPECT AND FOR ALL ISSUES, THEN CIT HAS NO JURISDICTION TO REVISE THE ORDER U/S 263 OF THE INCOME TAX ACT, 1961. II PAGE 11 OF 26 ITA NO.1376-1379/BANG/2019 5. SECTION 153D STATES THAT 'NO ORDER OF ASSESSMENT OR REASSESSMENT SHALL BE PASSED BY AN ASSESSING OFFICE R BELOW THE RANK OF JOINT COMMISSIONER IN RESPECT OF EACH ASSES SMENT YEAR REFERRED TO IN CLAUSE (B) OF [SUB-SECTION (1) OF] S ECTION 153A OR THE ASSESSMENT YEAR REFERRED TO IN CLAUSE (B) OF SUB-SE CTION (1) OF SECTION 1538, EXCEPT WITH THE PRIOR APPROVAL OF TH E JOINT COMMISSIONER. [PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SH ALL APPLY WHERE THE ASSESSMENT OR REASSESSMENT ORDER, AS THE CASE M AY BE, IS REQUIRED TO BE PASSED BY THE ASSESSING OFFICER WITH THE PRIOR APPROVAL OF THE [PRINCIPAL COMMISSIONER OR] COMMISS IONER UNDER SUB-SECTION (12) OF SECTION 144BA.]' IN VIEW OF THE ABOVE SCENARIO AND ALSO EVALUATING T HE PROPOSITION LED DOWN IN MADRAS AND KARNATAKA HIGH COURT IN CASE OF LAXMI JEWELLERY VS DCIT 252 ITR 712 MADRAS AND RISHABCHAN D BHANSALI VS DCIT 267 ITR 577 KARNATAKA CITED IN THE CONTEXT OF SECTION 158BG OF THE INCOME TAX ACT, 1961. THE ORDE R PASSED BY THE ASSESSING OFFICER AFTER THE APPROVAL OF JOINT C OMMISSIONER IS NOT AN, ERRONEOUS ORDER. HENCE, THE SAID ORDER OF T HE ASSESSING OFFICER PASSED U/S 153A OF THE INCOME TAX ACT, 1961 CANNOT BE SUBJECT TO REVISION U/S 263 OF THE INCOME TAX ACT, 1961. IN VIEW OF THE ABOVE SUBMISSION, THE ORDER OF THE A SSESSING OFFICER IS NOT ERRONEOUS AND NOT EXIGIBLE FOR REVISION U/S 263 OF THE INCOME TAX ACT, 1961. II. WITHOUT PREJUDICE TO OUR SUBMISSION SUBSTANTIAT ING THAT THE ORDER PASSED BY THE A.O FOR ASSESSMENT 'YEAR 2011-1 2 TO 2014-15 ARE NOT ERRONEOUS, AS THE SAID ORDERS ARE NOT EXIGI BLE FOR REVISION U/S 263. (I) AS STATED BY YOUR HONOUR IN THE SHOW CAUSE NOTI CES MAJOR PAYMENTS WERE MADE THROUGH CHEQUE AND OTHERS THROUG H CASH. THE PAYMENT IN CASH MORE THAN RS.20,000/- MIGHT HAV E BEEN PAID ON BANKING HOLIDAY OR AFTER BANKING HOURS. SUCH CAS H PAYMENTS ARE FALLS UNDER THE AMBIT OF RULE GDD(J) OF INCOME TAX RULES, 1962. THE SAID PAYMENTS CANNOT BE EXIGIBLE U/S 40A(3) AND ALSO SUCH PAYMENTS MIGHT HAVE BEEN PAID BY,'THE ASSESSEE BY C ASH DURING THE BUSINESS EXPEDIENCY. DUE TO PAUCITY OF TIME THE ASSESSEE COULD NOT ABLE TO PROVIDE THE DATE AND TIME OF PAYMENT BE FORE YOUR HONOUR, AS YOUR HONOUR DIRECTED US TO FILE REPLY WI THIN FOUR DAYS OF THE RECEIPT OF SHOW CAUSE NOTICE. II. THE HON'BLE I.T.A,T, DELHI BENCH IN CASE OF PRI ME INFRA DEVELOPERS PVT LTD VS I.T.O IN ITA NO.7144/DEL/2017 DATED 27-06- 2018 HELD THAT 'IT WAS NOTED THAT ASSESSEE-COMPANY HAD MADE ADVANCE PAYMENT FOR PURCHASE OF VARIOUS LAND TO FAR MERS AS A TOKEN MONEY FOR EXECUTION OF DEAL ON SUNDAY, I.E., DAY WHICH WAS PUBLIC HOLIDAY FOR BANKS. SEE-COMPANY HAD NO OPTION BUT TO MAKE IMMEDIATE PAYMENT DUE TO BUSINESS EXPEDIENCY A ND THUS PAGE 12 OF 26 ITA NO.1376-1379/BANG/2019 COVERED BY PROVISO TO SECTION 40A(3). PAYMENT WAS M ADE ON 0510812012, I.E., 'SUNDAY' WHICH WAS NOT DISPUTED B Y AO AS WELL AS CIT (A) AND RULE 6DD(J) SPECIFICALLY PROVIDES EX CEPTION FOR DISALLOWANCE UNDER SECTION 40A(3) ON DAY ONE, WHICH BANKS WERE CLOSED, PAYMENTS WERE MADE TO FARMERS FOR PURCHASE OF THEIR AGRICULTURAL LAND AND PAYMENTS WERE DULY SUPPORTED BY VARIOUS DOCUMENTS IN FORM OF CONVEYANCE DEED, ETC. ONCE THE TRANSACTIONS WERE CONSIDERED GENUINE AND BONA FIDE, THEN SAME WE RE TAKEN OUT OF PURVIEW OF SECT/ON 40A(3)./ [THE COPY OF JUDGMEN T IS ENCLOSED HEREWITH]. THE HON'BLE DELHI TRIBUNAL BY HOLDING AS ABOVE, REL IED ON THE FOLLOWING JUDGMENTS: 1. SRI LAXMI SATRANARAYANA OIL MILLS VS. CIT 367 I TR 200 (T & AP) 2. MARIGOLD MERCHANDISE (P) LTD. IN ITA NO.5170/DEL /2014 DATED 1110912017 3. HARSHILA CHORDIA VS. ITO 298 ITR 349 (RAJ) AND ALSO, THE ASSESSEE RELIED ON THE JUDGMENT F.HI GH COURT OF DELHI IN CASE OF R.C. GOYAL VS. CIT IN ITA N6.636 O F 2012. THE ABOVE SAID JUDGMENTS ARE SQUARELY APPLICABLE TO THE FACTS OF THE ASSESSEE'S CASE. IN VIEW OF THE ABOVE SUBMISSION YOUR HONOUR IS REQU ESTED TO DROP THE PROCEEDINGS INITIATED U/S 263. 15. THEREAFTER, ON 26/03/2019, LD.PR. CIT PASSED IM PUGNED ORDER BY OBSERVING AS UNDER: 7. I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND DULY GONE ROUGH THE RECORDS AVAILABLE AND FACTS OF THE CASE, AS ALSO THE LEGAL POSITION IN THIS REGARD. 8. AT THE OUTSET, THE FACT THAT THE CASH PAYMENTS WER E MADE IN ACQUIRING THE LANDS AND SUCH PAYMENTS IN ARRIVING AT THE BUS INESS INCOME IS ESTABLISHED ON RECORD AND THERE IS NO DISPUTE WHATS OEVER BY THE ASSESSEC IN THIS REGARD. IT IS ALSO A FACT THAT THE IMPUGNED CASH PAYMENTS PRIMA FACIE ATTRACT THE PROVISIONS OF SECT ION 40A(3) OF THE ACT, WHEREVER THE SAME EXCEEDS RS.20000/-, SUBJECT TO OT HER CONDITIONS LAID DOWN THEREIN. IT IS ALSO A FACT THAT THE AO HAS FAI LED TO EXAMINE THE APPLICABILITY OF THE SAID PROVISIONS DESPITE THE FA CT THAT THE BASIC INFORMATION AS TO THE DETAILS OF CASH PAYMENTS IS A VAILABLE ON RECORD. IN THE NORMAL CIRCUMSTANCES ANY SUCH OMISSION OR FAILU RE ON THE PART OF THE AC, MAKES THE ASSESSMENT ORDER ERRONEOUS, WHICH IS LIKELY TO REU1T IN LOSS OF REVENUE AND THEREFORE, SUCH ORDER IS PREJUD ICIAL TO THE INTERESTS OF REVENUE ALSO. THE ASSESSEE HAS CONTENDED THAT IN VI EW OF THE HONBLE KARNATAKA HIGH COURTS ORDER IN THE CASE OF M/S LANC Y CONSTRUCTIONS, THE AG IS BARRED FROM EXAMINING SUCH ISSUES ARID MAKING DISALLOWANCES IN THE ASSESSMENT U/S 153A OF THE ACT AND THEREFORE, T HERE IS NO ERROR COMMITTED BY THE AG IN THIS REGARD REQUIRING REVISI ON U/S 263 OF THE ACT. THE PROPOSITION LAID OUT BY THE ASSESSEE IS EXAMINE D BY THE HONBLE PAGE 13 OF 26 ITA NO.1376-1379/BANG/2019 KARNATAKA HIGH COURT ONCE AGAIN THE RECENT ORDER DA TED 8TH JANUARY 2019 IN THE CASE OF PCIT (CENTRAL) VS GMR ENERGY LT D IN ITA NOS.358/359/360 OF 2018 WHEREIN IT IS HELD AS UNDER : '5. LEARNED COUNSEL FOR THE REVENUE CONTENDS THAT T HE TRIBUNAL HAS COMMITTED AN ERROR IN RELYING ON THE JUDGMENT IN LA N.CYS CASE, HE CONTENDS THAT THE HON'BLE COURT IN THE CASE OF CAIVARA HOUSI NG DEVELOPMENT COMPANY V/S. DCIT REPORTED IN 274 CTR 122 (KARNA7AXA) HAS L AID DOWN THE LAW WITH REGARD TO THE SAME. WE HAVE CONSIDERED THE SAI D JUDGMENT. AT PARA-1 0 OF THE SAID ORDER, IT IS NARRATED AS FOLLOWS: PARA 10 - :.....THE CONDITION PRECEDENT FOR APPLICATION OF SECTION 153A IS THERE SHOULD BE A SEARCH UNDER SECTION 132. INITIATION OF PROCEEDINGS UNDER SECTION 15311 IS NOT DEPENDENT ON ANY UNDISCLOSED INCOME BEING UNEARTHED DURING SUCH SEAR CH. 6. THEREFORE., THE POSITION OF LAW IS QUITE CLEAR. THE TRIBUNAL WAS OF THE VIEW THAT THE LATEST JUDGMENT IN THE CASE OF COMMISSIONE R OF INCOME TAX V/S. LANCY CONSTRUCTIONS REPORTED IN 2016TCZXRNANN. COM 264 (K4RNATAKA) WAS VALID SINCE IT IS THE LATEST JUDGME NT. WE HAVE CONSIDERED THE SAID JUDGMENT. THEREIN THE HONBLE HIGH COURT H ELD IN PARA 6, AS FOLLOWS: PARA 6 - ........MERELY BECAUSE A SEARC H IS CONDUCTED IN THE PREMISES OF THE ASSESSEE, WOULD NOT ENTITLE THE REVENUE TO INITIATE THE PROCESS OF REASSESSMENT, FOR WHICH THERE IS A SEPARATE PROCEDURE PRESCRIBED IN THE STATUTE. IT IS ONLY WHE N. THE CONDITIONS PRESCRIBED FOR REASSESSMENT ARE FULFILLED THAT A CO NCLUDED ASSESSMENT CAN BE REOPENED. 7. ON CONSIDERING THE SAME, WE ARE OF THE CONSIDERE D VIEW THAT THE REASONS ASSIGNED BY THE TRIBUNAL ARE ERRONEOUS. FIRSTLY, TH E JUDGMENT REPORTED IN CANARA HOUSING DEVELOPMENT COMPANY WAS RIOT EVEN CO NSIDERED IN LANCY CONSTRUCTION'S CASE SECONDING, LANCYS CASE W AS DISMISSED AT THE STAGE OF ADMISSION WITHOUT EVEN A NOTICE TO THE ASS ESSEE. THE HIGH COURT IN THE CASE OF LANCY CONSTRUCTIONS, WAS OF THE VIEW TH AT NO SUBSTANTIAL QUESTION OF LAW WOULD ARISE FOR CONSIDERATION IN TH E APPEAL. THEREFORE, IN THE ABSENCE OF ANY SUBSTANTIAL QUESTION OF RAW, THE QUESTION OF ADMITTING THE APPEAL WOULD BE INAPPROPRIATE. A JUDGEMENT OF T HE COURT BECOMES BINDING ONLY WHEN A QUESTION ARISES FOR CONSIDERATI ON, IS CONTESTED BY BOTH SIDES AND THEREAFTER FINDINGS ARE RECORDED BY THE C OURT. NONE OF THESE CONDITIONS 1TAUE BEEN FULFILLED. THERE IS NO NOTIC E ISSUED TO THE OTHER SIDE. NO QUESTION OF LAW HAS BEEN DETERMINED. THE APPEAL WAS DISMISSED, AS BEING BEREFT OF ANY SUBSTANTIAL QUESTION OF LAW. TH EREFORE, THE JUDGMENT REPORTED IT LANCY'S CASE CANNOT HE SAID TO BE APPLI CABLE IN LAW OR THAT IT IS BINDING FOR ANY REASON WHATSOEVER. THE RELIANCE PLA CED BY THE TRIBUNAL ON THE JUDGMENT IN LANCY'S CASE IS MISPLACED THE JUDGM ENT IN LANCY'S CASE DOES NOT RENDER THE TRUE POSITION IN LAW. IT CANNOT BE CONSIDERED AS A PRECEDENT. 9. IN VIEW OF THE ABOVE, LANCY CONSTRUCTIONS ORDER IS NO MORE A GOOD LAW AND THE KARNATAKA HIGH COURTS ORDER IN THE CASE OF CANARA HOUSING HOLDS FORT AS ON DATE, WHICH ALLOWS THE AO TO CONSI DER ALL SUCH INCOMES IN THE ASSESSMENT U/S 153A, WHICH OTHERWISE ARISE FROM THE ORIGINAL RETURN/ORIGINAL ASSESSMENT U/S143(3). THEREFORE, TH E AO IS DUTY BOUND TO PAGE 14 OF 26 ITA NO.1376-1379/BANG/2019 EXAMINE THE ISSUE RELATING TO APPLICABILITY OF PROV ISIONS OF SECTION 40A(3) OF THE ACT IN THE GIVEN CIRCUMSTANCES. ACCORDINGLY, FAILURE ON THE PART OF THE AO TO DO SO, MAKES THE ORDER ERRONEOUS. SECONDL Y, THE ARGUMENT THAT THE ASSESSMENT ORDER GOT MERGED WITH THE CIT(A) ORD ER ON ACCOUNT OF ASSESSEE'S APPEAL AND THEREFORE THE PCIT HAS NO JUR ISDICTION TO TAKE UP REVISION PROCEEDINGS IS NOT A CORRECT PROPOSITION T HAT THE ISSUE UNDER CONSIDERATION WA NOT PART OF THE PROCEEDINGS BEFORE CIT(A). THE LAW IS CLEAR ON THIS ISSUE THAT PROCEEDINGS U/S 263 CAN AL WAYS BE TAKEN UP ON MATTERS WHICH ARE NOT SUBJECT MATTER OF APPEAL. THE MERGER OF THE ASSESSMENT ORDER WITH THAT OF THE CIT(A) ORDER IS O NLY TO THE EXTENT OF ISSUES RAISED IN THE ASSESSMENT ORDER AND NOT BEYON D. 10. AS REGARDS THE VARIOUS CASE LAWS CITED BY THE ASSE SSEE, THE DECISIONS IN THOSE CASES WERE RENDERED HAVING REGAR D TO THE FACTS OF THE SAID CASES AND NOT OTHERWISE: ALL THE SAID DECISION S ARC DULY CONSIDERED AND NOTED THAT THE ISSUE IN THE SAID CASES IS WHETH ER THE PROVISIONS OF SECTION 40A(3) ARE CORRECTLY APPLIED IN THE GIVEN S ET OF FACTS, WHEREAS IN THE PRESENT CASE, THE AO HAS NEITHER COLLECTED ANY FACTS NOR CONDUCTED ANY ENQUIRY AND THEREFORE NEVER EXAMINED THE ISSUE IN THE LIGHT OF THE APPLICABILITY OF THE PROVISIONS OF SECTION 40A(3). SUCH LACK OF ENQUIRY MAKES THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF REVENUE. IT IS FOR THE .AO TO COLLECT THE FACTS, GI VE AN OPPORTUNITY TO THE ASSESSEE, EXAMINE WHETHER ANY CIRCUMSTANCES EXIST C ALLING FOR EXCEPTION TO THE 0A(3) PROVISIONS U/R 6DDJ AND TO APPLY THE C ORRECT POSITION OF LAW THEREAFTER. THERE IS ABSOLUTE FAILURE ON THE PART O F THE AO IN THIS REGARD AND IT IS SUCH FAILURE WHICH CALLS FOR REVISION OF THE ASSESSMENT ORDER U/S 263 OF THE ACT. 11. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM SATISFIED THAT THE EXPLANATION (2) OF SECTION 263 I S CLEARLY ATTRACTED IN THIS CASE AS THE ORDER IS PASSED WITHOUT MAKING INQUIRIE S OR VERIFICATION WHICH SHOULD HAVE BEEN MADE AND HENCE IT HAS MADE THE ASS ESSMENT ORDER PASSED NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTERESTS OF REVENUE. ACCORDINGLY, THE IMPUGNED ASSESSMENT ORDER IS SET ASIDE WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE REQUISIT E INQUIRIES AND PROPER VERIFICATION WITH REGARD TO THE ISSUES MENTIONED AB OVE AND REDO THE ASSESSMENT DE-NOVO AFTER DUE CONSIDERATION OF THE F ACTS AND LAW IN THIS REGARD. THE ASSESSEE IS AT LIBERTY TO ADDUCE THE FA CTS AS DEEMED RELEVANT BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSM ENT PROCEEDINGS IN CONSEQUENCE TO THIS ORDER AND THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO MAKE RELEVANT SUBMISSIONS. 16. AGGRIEVED BY DIRECTION ISSUED BY LD.PR.CIT, ASS ESSEE FILED APPEAL BEFORE THIS TRIBUNAL . PAGE 15 OF 26 ITA NO.1376-1379/BANG/2019 17. AT THE OUTSET, LD.AR SUBMITTED THAT, ADDITIONAL GROUND MAY BE CONSIDERED, AS IT GOES TO THE ROOT CAUSE OF IMPU GNED ORDER. HE SUBMITTED THAT, REASON STATED BY LD.PR.CIT, FORMS P ART OF CLAUSE (A) OF EXPLANATION 2 TO SECTION 263 (1) OF THE ACT, WHICH WAS INSERTED BY FINANCE ACT 2015 W.E.F. 01/06/2015. LD. A.R. TOOK US THROUGH EXPLANATION 2 THAT READS AS UNDER: EXPLANATION 1.. EXPLANATION 2: FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFI CER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICI AL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER,- A. THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; B. THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; C. THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH A NY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119; OR D. THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN T HE CASE OF THE ASSESSEE OR ANY OTHER PERSON. 18. LD.AR VIDE WRITTEN SUBMISSION SUBMITTED THAT, A S PER CLAUSE (A) OF EXPLANATION 2 TO SECTION 263(1) OF INCOME TAX ACT, 1961, ORDER PASSED BY LD.AO SHALL BE DEEMED TO BE ERRONEO US IN SO FAR AS PREJUDICE TO THE INTEREST OF THE REVENUE, IF IN OPINION OF LD.PR.CIT, 'THE ORDER IS PASSED WITHOUT MAKING AN ENQUIRY OR VERIFICATION WHICH SHOULD HAVE BEEN MADE' . 19. HE SUBMITTED THAT, EXPLANATION 2 IS APPLICABLE FROM 01/06/2015 AND IN ASSESSEE'S CASE, ASSESSMENT YEARS INVOLVED ARE 2011-12, 201213, 2013-14 & 2014-15. HE THUS SU BMITTED PAGE 16 OF 26 ITA NO.1376-1379/BANG/2019 THAT EXPLANATION 2 IS NOT APPLICABLE. IT WAS SUBMIT TED THAT FOR LACK OF PROPER ENQUIRY OR VERIFICATION BY LD.AO WH ILE FARMING ASSESSMENT, BASED ON INFORMATION AVAILABLE ON RECO RD, CANNOT BE CONSIDERED AS ERRONEOUS IN SO FAR AS IT IS PREJUDIC IAL TO THE INTEREST OF REVENUE. HE THUS SUBMITTED THAT, EVEN O N THIS SCORE LD.PR.CIT HAS NO JURISDICTION TO REVISE THE ORDERS IN PRESENT CASE FOR A.Y 2011-12 TO 2014-15 LD.AR THUS PRAYED FOR AN NULING ORDERS OF LD.PR.CIT, PASSED U/S 263 OF INCOME TAX A CT, 1961 DATED 26/03/2019 FOR ALL YEARS UNDER CONSIDERATION. 20. HE PLACED RELIANCE ON FOLLOWING DECISIONS IN SU PPORT OF HIS CLAIM: CIT VS LANCY CONSTRUCTIONS 383 ITR 168 KARNATAKA HIGH COURT CIT VS CONTINENTAL WARE HOUSING CORPORATION 374 ITR 645 BOMBAY HIGH COURT CIT VS GURINDER SINGH 386 ITR 483 BOMBAY HIGH COURT CIT VS KABUL CHAWLA 380 ITR 573 DELHI HIGH COURT RAJU 3 SOOMANEY VS ACIT IN ITA NO.347114UM/2014 MUMBAI ITAT KOLKATA ITAT 'C' BENCH IN CASE OF KRISHNA KUMAR SINGHANIA VS DY. CIT LT(SS) APPEAL NO. 104 TO 112 ( KOL) OF 2017 AUTHOR OF JUDGMENT SRI. N.V. VASUDEVAN 3M & M. INDORE ITAT IN CASE OF OMPRAKASH GUPTA VS ACIT IT(SS)A.NO.277 TO 2811IND/2017, 283 TO 2871IND/2017 DELHI BENCH ITAT IN CASE OF ACIT VS SMC POWER GENERATION LTD IN ITA NO.33951DEL/2015 CO NO.4361DEI/2015 MUMBAI ITAT 'E' BENCH IN CASE OF DY.CIT VS SOPARIWA LA EXPORTS IN ITA NO.3037, 3038, 3040 AND 3077/MUM/2014 ITAT AMRITSAR BENCH, JALANDHAR CAMP IN CASE OF SANJANA MITTAL VS DY CIT IN ITA NO.487/ASR/2018 PAGE 17 OF 26 ITA NO.1376-1379/BANG/2019 21. ON THE CONTRARY, LD.STANDING COUNSEL APPEARING FOR DEPARTMENT SUBMITTED THAT, IN CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT REPORTED IN (2000) 243 ITR 83 , HONBLE SUPREME COURT HELD THAT, THERE MUST BE TWO CONDITIONS, NAMELY ORDER O F ASSESSMENT IS ERRONEOUS, AND THAT, THE ORDER OF ASSESSMENT IS PREJUDICIAL TO THE INTERESTS OF REVENUE, WHICH MUST BE SATISFIED B EFORE LD.PR.CIT INVOKED HIS POWERS UNDER SECTION 263 OF T HE ACT. LD.STANDING COUNSEL APPEARING FOR DEPARTMENT SUBMIT TED THAT, ASSESSING OFFICER WHILE PASSING ASSESSMENT ORDERS F OR ALL YEARS UNDER CONSIDERATION DID NOT VERIFY HUGE EXPENDITUR E MADE IN CASH BY ASSESSEE TOWARDS PURCHASE OF LAND. WHILE SU PPORTING THE ORDER OF REVIEW BY LD.PR.CIT, LD.STANDING COUNSEL S UBMITTED THAT, EVEN THOUGH ASSESSEE FILED SOME DETAILS IN TH E FORM OF CHART REVEALING MANNER IN WHICH SALE CONSIDERATION WAS PA ID, WHICH INCLUDES PAYMENT MADE BY CHEQUE AS WELL AS IN CASH, LD.AO FAILED TO ENQUIRE APPLICABILITY OF SECTION 40A(3) OF THE ACT IN RESPECT OF PAYMENTS MADE IN CASH FOR YEARS UNDER CO NSIDERATION. LD.STANDING COUNSEL THUS SUBMITTED THAT, THE ASSESS ING OFFICER DID NOT APPLY HIS MIND TO THE SPECIFIC ISSUE PICKED UP BY LD.PR.CIT IN 263 PROCEEDINGS. 22. LD.STANDING COUNSEL SUBMITTED THAT, ADDITIONAL GROUND RAISED BY ASSESSEE DOES NOT HAVE ANY RELEVANCE IN P RESENT FACTS OF THE CASE. HE SUBMITTED THAT, IF POWERS OF LD.PR.CIT TO REVIEW AN ASSESSMENT ORDER IN WHICH NO ENQUIRY WAS CARRIED OU T BY ASSESSING OFFICER, IS CONSTRUED TO BE AVAILABLE FRO M 01/06/2015, THEN ALL PROCEEDINGS INITIATED BYLD.PR.CIT PRIOR TO THE PAGE 18 OF 26 ITA NO.1376-1379/BANG/2019 AMENDMENT ON SIMILAR SITUATION WILL HAVE TO BE CONS IDERED AS NULL AND VOID. REFERRING TO PRINCIPALS LAID DOWN BY HONBLE SUPREME COURT IN CASE OF MALABAR INDUSTRIES (SUPRA), AND VARIOUS OTHER DECISIONS, UNDER SEC.264(1) LD.STANDING COUNS EL SUBMITTED THAT, ASSESSMENT PASSED PRIOR TO 1/6/2015 COULD BE CONSIDERED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REV ENUE, WHERE NO ENQUIRY IS MADE BY LD.AO. HE SUBMITTED THAT INSER TION OF EXPLANATION 2 IS MERELY CLARIFICATION TO SEC.264(1 ). 23. HE THUS VEHEMENTLY SUPPORTED IMPUGNED ORDER BY SUBMITTING THAT, LD.AO IN YEARS UNDER CONSIDERATION DID NOT VERIFY/ENQUIRE PAYMENTS MADE IN CASH, CLAIMED AS EX PENDITURE BY ASSESSEE. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 24. DECISIONS RELIED BY LD.AR IS NOT IN THE CONTEXT OF APPLICABILITY OF EXPLANATION 2. EXPLANATION 2 WAS INSERTED BY THE FINANCE ACT, 2015, W.E.F 01/06/2015. EXPLANATION 2 SETS OUT, WHAT ORDERS PASSED BY ASSESSING OFFICER CONSTITUTE ORDERS, WHICH ARE ERRO NEOUS, IN SO FAR AS THEY ARE PREJUDICIAL TO THE INTEREST OF REVE NUE. WE HAVE PERUSED EXPLANATORY NOTES TO MEMORANDUM OF OBJECTS TO THE FINANCE BILL, 2015, REPORTED IN (2015) 371 ITR 233 (ST) . IT HAS BEEN MENTIONED THAT, ISSUE OF WHAT CONSTITUTES ASSE SSMENT ORDERS, ERRONEOUS AND PREJUDICIAL TO THE REVENUE, IS A CONTENTIOUS ONE AND EXPLANATION 2 WAS INTRODUCED TO CLARIFY, PAGE 19 OF 26 ITA NO.1376-1379/BANG/2019 WHAT CONSTITUTES AN ERRONEOUS ORDER THAT IS PREJUDI CIAL TO THE REVENUE. AT THIS JUNCTURE, WE AGREE WITH ARGUMENT ADVANCED B Y LD.STANDING COUNSEL THAT IF INTERPRETATION ADVANCED BY LD.AR IS ACCEPTED, ALL DECISIONS PASSED BY HONBLE HIGH COURTS ACROSS THE COUNTRY AND HONBLE SUPREME COURTS , UPHOLDING ORDERS PASSED UNDER SECTION 263 FOR NO ENQUIRY, WILL HAVE TO BE CONSIDERED REDUNDANT. THIS CANNOT BE THE INTENTION OF LEGISLAT URE. IN OUR OPINION, EPLANATION 2 IS CLARIFICATORY IN NATURE, AS IT EXPRESSLY SPECIFIES CIRCUMSTANCES UNDER WHICH LD.PR.CIT COULD INVOKE SECTION 263. PROVISIONS OF SECTION 263 WAS CONSIDER ED BY HONBLE SUPREME COURT IN CASE OF MALABAR INDUSTRIAL CO. LTD . V. CIT (SUPRA). IT WAS HELD BY HONBLE SUPREME COURT THAT THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE ', HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY A SSESSING OFFICER AND EVERY LOSS OF REVENUE AS A CONSEQUENCE OF SUCH ORDER OF THE ASSESSING OFFICER HAS BE TREATED AS PREJUDIC IAL TO THE INTEREST OF REVENUE. AT THIS JUNCTURE WE ALSO REFER TO DECISIONS OF HONBLE SUPREME COURT IN CASE OF RAM PYARI DEVI SAGAR VS. CIT REPORTED IN (1968) 67 ITR 84 AND TARADEVI AGARWAL VS. CIT REPORTED IN (1973) 88 ITR 323, WHEREIN, IT IS HELD THAT, MERE FAILURE TO MAKE ENQUIRIES WOULD MAKE THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO INTEREST OF REVENUE. THESE PRINCIPLES LAID DOWN IN AFORESAID DECISION WERE REITERATED BY HONBLE SUPREME COURT IN 'CIT V. MAX INDIA LTD. REPORTED IN 295 ITR 282 AND RECENTLY IN ' ULTRATECH CEMENT LTD. & ORS. VS. STATE OF PAGE 20 OF 26 ITA NO.1376-1379/BANG/2019 RAJASTHAN& ORS. IN CIVIL APPEAL NO.2773/2020 DECIDED ON 17/07/2020. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN ADDITIONAL GROUND RAISED BY ASSESSEE AND THE SAME IS DISMISSED. 25. ON MERITS OF THE CASE, LD.AR PLACED RELIANCE ON FOLLOWING DECISIONS VIDE PAPER BOOK FILED ON 24/09/2020 BEFOR E THIS TRIBUNAL : A. CIT VS LANCY CONSTRUCTIONS 383 ITR 168 KARNATAKA HI GH COURT B. CIT VS CONTINENTAL WARE HOUSING CORPORATION 374 ITR 645 BOMBAY HIGH COURT C. CIT VS GURINDER SINGH 386 ITR 483 BOMBAY HIGH COURT D. CIT VS KABUL CHAWLA 380 ITR 573 DELHI HIGH COURT E. RAJU J SOOMANEY VS ACIT IN ITA NO.347114UM/2014 MUMBAI ITAT F. KOLKATA ITAT 'C' BENCH IN CASE OF KRISHNA KUMAR SINGHANIA VS DY. CIT LT(SS) APPEAL NO. 104 TO 112 (KOL) OF 2017 AUTH OR OF JUDGMENT SRI. N.V. VASUDEVAN 3M & M. G. INDORE ITAT IN CASE OF OMPRAKASH GUPTA VS ACIT I T(SS)A.NO.277 TO 2811IND/2017, 283 TO 2871IND/2017 H. DELHI BENCH ITAT IN CASE OF ACIT VS SMC POWER GE NERATION LTD IN ITA NO.33951DEL/2015 CO NO.4361DEI/2015 I. MUMBAI ITAT 'E' BENCH IN CASE OF DY.CIT VS SOPAR IWALA EXPORTS IN ITA NO.3037, 3038, 3040 AND 3077/MUM/2014 J. ITAT AMRITSAR BENCH, JALANDHAR CAMP IN CASE OF S ANJANA MITTAL VS DY CIT IN ITA NO.487/ASR/2018 J K. PRIME INFRA DEVELOPERS PVT LTD VS ITO IN ITA NO. 7144/DEL/2017 DATED 27-06-2018 L. SRI LAXMI SATRANARAYANA OIL MILLS VS. CIT 367 IT R 200 (T & AP) M. MARIGOLD MERCHANDISE (P) LTD. IN ITA NO.5170/DEL /2014 DATED 11/09/2017 N. HARSHILA CHORDIA VS. ITO 298 ITR 349 (RAJ) 26. LD.AR HAS ALSO RELIED ON DECISIONS REPRODUCED I N PARA 20 HEREINABOVE IN WHILE DISCUSSING THE LEGAL ISSUE. 27. ON THE CONTRARY, LD.STANDING COUNSEL FOR REVENU E SUBMITTED THAT ALL THESE DECISIONS RELIED UPON BY L D.AR ARE IN CONTEXT OF 153A/153C PROCEEDINGS, WHEREIN ADDITIONS WERE MADE BY ASSESSING OFFICER IN A CONCLUDED ASSESSMENT WITH OUT THERE PAGE 21 OF 26 ITA NO.1376-1379/BANG/2019 BEING SEIZED MATERIALS TO SUPPORT. HE SUBMITTED THA T, RATIO LAID DOWN BY HONBLE HIGH COURT AND VARIOUS COORDINATE BENCHES OF THIS TRIBUNAL IN ABOVE REFERRED DECISIONS DOES NOT HAVE ANY BEARING ON THE FACTS OF PRESENT CASE. LD.STANDING C OUNSEL SUBMITTED THAT RELIANCE IS PLACED BY LD.AR ON CIT VS LANCY CONSTRUCTION (SUPRA) PASSED BY HONBLE KARNATAKA HIGH COURT . HE FURTHER SUBMITTED THAT, HONBLE KARNATAKA HIGH COURT IN (GMR ENERGY LTD.,) IN ITA NO. 358-360 OF 2018 BY ORDER DATED 08/01/2019 HELD THAT, VIEW TAKEN BY COORDINATE BENCH OF KARNATAKA HIGH COURT IN LANCY CONSTRUCTION (SUPRA) IS WITHOUT CONSIDERING DECISION IN CASE OF CANARA HOUSING DEVELOPMENT COMPANY REPORTED IN 62 TAXMANN.COM 650 . HONBLE KARNATAKA HIGH COURT , HELD THE LAW EXPRESSED IN LANCY CONSTRUCTION (SUPRA) CASE IS NO MORE A GOOD LAW. HE THUS SUBMITTED THAT THE RATIO CANNOT BE FOLLOWED PURSUANT TO VIEW TAKEN BY HONBLE KARNATAKA HIGH COURT IN CASE OF GMR ENERGY (SUPRA) . 28. ON PERUSAL OF DECISIONS RELIED, WE NOTE THAT, F ACTS ARE NOT SIMILAR TO THAT OF ASSESSEE. MOST OF THESE DECISION S( AT SL.NO. (A) TO (I) REFERS TO PROCEEDINGS UNDER SECTION 153A OF THE ACT, WHERE THERE WAS NO SEIZED MATERIAL BASED ON WHICH, CERTAI N ADDITIONS WERE MADE IN AN UNABATED ASSESSMENT. THESE DECISIO NS DO NOT CONSIDER SITUATION OF NO ENQUIRY BY LD.AO ON ANY IS SUE. 29. IN CASE OF M/S RAJEESH EXPORTS LTD VS PRINCIPALS CIT (SUPRA) , RELIED BY LD.AR, IN IDENTICAL SITUATION THIS TRIBUNAL PLACED RELIANCE ON DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS LANCY CONSTRUCTIONS REPORTED IN 237 TAXMAN 728 . PAGE 22 OF 26 ITA NO.1376-1379/BANG/2019 LD.STANDING COUNSEL FOR REVENUE BROUGHT TO OUR NOTI CE THAT DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS LANCY CONSTRUCTIONS (SUPRA) IS NO LONGER HELD TO BE A GOOD LAW BY SUBSEQUENT BENCH OF HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS GMR ENERGY LTD. (SUPRA). BE THAT AS IT MAY, WE NOTE THAT, EVEN IN CASE OF RAJEESH EXPORTS LTD VS LD.PR.CIT(SUPRA) THERE IS A CATEGORICAL OBSERVATION BY THIS TRIBUNAL THAT, LD. AO IN ORIGINAL ASSESSMENT PRIOR TO SEARCH HAD ADJUDICATED THIS ISS UE. IN THE PRESENT FACTS OF THE CASE LD.AR HAS NOT BROUGHT ANY THING ON RECORD TO ESTABLISH ANY VERIFICATION/ENQUIRIES BY LD.AO ON THE ISSUE OF HUGE CASH PAYMENTS FOR YEARS UNDER CONSIDE RATION, EITHER IN SEC. 143(3) R.W.S 153A PROCEEDINGS OR OR IGINAL ASSESSMENT ORDER PASSED BY LD.AO U/S143(3) OF THE A CT. 30. IN THE PRESENT FACTS OF THE CASE, PROVISIONS OF 263 ARE INVOKED BY LD.PR.CIT ALLEGING THAT, NO ENQUIRY/VERI FICATION WAS CONDUCTED BY LD.AO, IN RESPECT OF EXPENDITURE INCUR RED IN CASH AND APPLICABILITY OF PROVISIONS OF SECTION 40A(3), IS DISCERNIBLE FROM ASSESSMENT RECORDS. 31. FURTHER IN CASE OF H. NAGARAJA VS CIT (SUPRA) RELIED BY LD.AR, THIS TRIBUNAL QUASHED PROCEEDINGS UNDER SECTION 263, AS IT WAS A CASE OF INADEQUATE ENQUIRY BY LD.AO ON ALL EGED ISSUES THEREIN. IN FACTS BEFORE US, LD.PR.CIT INITIATED PR OCEEDINGS UNDER SECTION 263, WHEREIN NO ENQUIRY WAS CONDUCTED BY LD .AO, AS WAS DISCERNED BY HIM FROM ASSESSMENT RECORDS. 32. IN DECISION RELIED ON BY LD.AR OF HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS SLUM REHABILITATION AUTHORITY (SUPRA) , HONBLE PAGE 23 OF 26 ITA NO.1376-1379/BANG/2019 COURT CONSIDERED THE ISSUE IN CASE OF TRUST, WHEREIN, FA CTS WERE THAT, ASSESSEE THEREIN CHALLENGED REVISION ORDER BE FORE MUMBAI TRIBUNAL AND MUMBAI TRIBUNAL ALLOWED APPEAL ON THE GROUND OF MERGER, AS WELL AS ON THE GROUND THAT THE ORDER OF ASSESSMENT COULD NOT BE STATED TO BE PREJUDICIAL TO THE INTERE ST OF THE REVENUE SINCE ASSESSING OFFICER REJECTED ASSESSEES CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT, MAY NOT BE WITH REFERE NCE TO SECTION 2 (15) OF THE ACT. 33. IN THE PRESENT FACTS OF THE CASE, APPLICABILITY OF PRINCIPLE OF MERGER DO NOT ARISE SINCE LD.AO HAD NOT CONSIDERED THE ISSUE OF EXPENDITURE MADE IN CASH BY ASSESSEE AND APPLICABIL ITY OF SECTION 40A (3) OF THE ACT U/S 143(3) R.W.S 153A. ON AN APP EAL BY ASSESSEE BEFORE LD.CIT (A), WE NOTE THAT ASSESSEE CHALLENGED ONLY DISALLOWANCES MADE BY LD.AO, UNDER THE HEAD CAPITAL GAINS. 34. HON'BLE SUPREME COURT IN MALABAR INDUSTRIAL CO. LTD . V. CIT (SUPRA) HELD THAT: '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; IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. AN IN CORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOU S. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING T HE PRINCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATIO N OF MIND. PAGE 24 OF 26 ITA NO.1376-1379/BANG/2019 35. FURTHER HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. SUNBEAM AUTO LTD., REPORTED IN (2010) 189 TAXMAN 436 HAS HELD THAT; 'THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS N OT REQUIRED TO GIVE A DETAILED REASON IN RESPECT OF EA CH AND EVERY ITEM OF DEDUCTION, ETC. THEREFORE, ONE HAS TO SEE WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWI NG THE EXPENDITURE IN QUESTION. IF THERE WAS ANY INQUIRY, EVEN INADEQUATE, THAT WOULD NOT BY ITSELF GIVE OCCA SION TO THE COMMISSIONER TO PASS ORDERS UNDER SECTION 263 OF TH E INCOME-TAX ACT 1961, MERELY BECAUSE HE HAS A DIFFER ENT OPINION IN THE MATTER. IT IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN.' 36. IN THE INSTANT CASE, LD.PR.CIT ON PERUSAL OF AS SESSMENT RECORDS HELD THAT LD.AO, DID NOT MAKE ANY INQUIRIES OR CALLED FOR ANY INFORMATION/EVIDENCES IN RESPECT OF SUCH HUGE E XPENDITURE IN CASH, AND THAT ASSESSMENT ORDER; DO NOT REVEAL THAT, LD.AO CONSIDERED ALL ASPECTS OF THE CASE, INCLUDING HUGE EXPENDITURE INCURRED BY ASSESSEE IN CASH. EVEN BEFORE US, LD.A R COULD NOT ESTABLISH THE FACT THAT, ANY QUERY WAS RAISED AND/O R ENQUIRIES CONDUCTED BY WAY OF DOCUMENTARY EVIDENCES ON THIS A SPECT. THEREFORE IN OUR VIEW, LD.AO FAILED TO APPLY HIS M IND TO THIS ISSUE AND THEREFORE ORDER PASSED BY HIM WAS ERRONE OUS IN SOFAR AS IT WAS PREJUDICIAL TO THE INTERESTS OF THE REVEN UE. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY PR .CIT AND THE SAME IS UPHELD. PAGE 25 OF 26 ITA NO.1376-1379/BANG/2019 ACCORDINGLY GROUNDS RAISED BY ASSESSEE STANDS DISMI SSED FOR ASST. YEAR 2011-12. 37. THE DECISION BASED ON DISCUSSION ABOVE SHALL AP PLY MUTATIS MUTANDIS TO ASST. YEARS 2012-13, 2013-14 AND 2014-15, AS FAC TS ARE IDENTICAL AND GROUNDS ALLEGED BY ASSESSEE ON ME RITS ARE SIMILAR. IN THE RESULT APPEALS FILED BY ASSESSEE FOR ASST. Y EAR 2011-12 TO 2014-15 STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20TH OCT, 202 0. SD/- SD/- (A.K GARODIA) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 20 TH OCT, 2020. /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE. PAGE 26 OF 26 ITA NO.1376-1379/BANG/2019 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -10-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -10-2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -10-2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -10-2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -10-2020 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -10-2020 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -10-2020 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS