Dr. William Britto., Goa V. Dy. Commissioner, Central Circle., Panaji

ITA 164/PAN/2014

• Counselvise Citation: 16424114 RSA 2014
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 16-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NISHANT K LD
• Keywords: Opportunity of being heard; Principle of natural justice; Period of limitation; Time period of passing order; Reason to believe; Revenue expenditure; Capital expenditure
• Section: 143(3); 68; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA N O . 164 /PNJ/201 4 : (A.Y : 2008 - 2009 ) DR. WILLIAM BRITTO 184 - 189, MACHADOS COVE, VAINGUINIM VALLEY, DONA PAULA, GOA 403 004 ( APPELLANT) PAN : ADCPB3087D VS. COMMISSIONER OF INCOME TAX KARNATAKA (CENTRAL), CENTRAL REVENUE BUILDING, QUEENS ROAD, BANGALORE (RESPONDENT) ASSESSEE BY : JITENDRA JAIN, ADV. REVENUE BY : NISHANT K., LD. DR DATE OF HEARING : 15 / 12 /201 4 DATE OF ORDER : 23 / 01 /201 5 O R D E R PER P.K. BANSAL : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT, BANGALORE PASSED U/S 263 DT. 28.3.2014 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 1. ORDER BARRED BY LIMITATION: 1.1 THE LEARNED CIT ERRED IN PASSING ORDER UNDER SECTION 263 OF THE ACT BEYOND THE TIME PRESCRIBED BY SECTION 263(2) OF THE ACT AND HENCE SAME IS BARRED BY LIMITATION. 1.2 THE LEARNED CIT ERRED IN CONSIDERING DATE OF ORDER PASSED UNDER SECTION 153C AS THE STARTING DATE FOR LIMITATION PURPOSE. 1.3 THE LEARNED CIT OUGHT TO HAVE CONSIDERED DATE OF ORIGINAL ORDER UNDER SECTION 143(3) OF THE ACT FOR THE PURPOSE OF SECTION 263(2) OF THE ACT. 2. ORDER UNDER SECTION 153C CANNOT BE REVISED. 2.1 THE LEARNED CIT ERRED IN EXERCISING REVISIONAL JURISDICTION UNDER SECTION 263 OF THE ACT TO REVISE AN ORDER PASSED UNDER SECTION 153C OF THE ACT. 2 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) 2.2 THE APPELLANT SUBMITS THAT ON A TRUE AND PROPER CONSTRUCTION OF THE SCHEME OF THE ACT THE ORDER PASSED UNDER SECTION 153C IS NOT AMENABLE TO REVISIONAL JURISDICTION UNDER SECTION 263 OF THE ACT. 3. CONDITION OF SECTION 263 OF THE ACT NOT SATISFIED: 3.1 THE LEARNED CIT ERRED IN EXERCISING JURISDICTION UNDER SECTION 263 OF THE ACT IN RESPECT OF LOAN TRANSACTION WITH MR. SURYANARAYANA AMOUNTING TO RS. 6 CRORES ALTHOUGH SAME WAS DULY EXAMINED AND ACCEPTED IN THE COURSE OF ASSESSMENT PROCEEDINGS UNDER SECTION 153C OF THE ACT. 3.2 THE LEARNED CIT ERRED IN HOLDING THAT THE ORDER UNDER SECTION 153C OF THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 3.3 THE LEARNED CIT OUGHT NOT TO HAVE EXERCISED JURISDICTION IN RESPECT OF MATTERS ACCEPTED AFTER DUE APPLICATION OF MIND BY THE ASSESSING OFFICER. 3.4 THE LEARNED CIT ERRED IN GIVING DIRECTIONS U/S 263 OF INCOME TAX ACT TO THE ASSESSING OFFICER BY TOTALLY IGNORING THE CIVIL SUIT FILED BY MR. SURYANARAYANA AGAINST THE APPELLANT WITH CIVIL COURT FOR R EC OV ERY OF LOAN AMOUNT OF RS. 6 CRORES. 4. ADDITION OF LOAN RECEIPT: 4.1 THE LEARNED CIT ERRED IN HOLDING THAT SUM OF RS. 6 CRORES RECEIVED FROM MR. SURYANARAYANA IS NOT EXPLAINED BY THE APPELLANT AND SAME IS NOT OFFERED FOR TAXATION. 4.2 THE LEARNED CIT FAILED TO APPRECIATE THE EVIDENCES FILED IN THE COURSE OF ASSESSMENT AND REVISIONAL PROCEEDINGS WHEREIN THE GENUINENESS OF LOAN TRANSACTION HAS BEEN DULY EXPLAINED AND HENCE SAME CANNOT BE TAXED AS INCOME OF THE APPELLANT. 2. THE BRIEF F ACTS OF THE CASE ARE THAT THE CIT ON PERUSAL OF THE RECORD IN THE CASE OF THE ASSESSEE NOTED THAT ASSESSMENT U/S 153C R.W.S. 143(3) FOR THE IMPUGNED ASSESSMENT YEAR WAS COMPLETED ON 16.12.2011. IN THE BANK STATEMENT AN AMOUNT OF RS. 6 CRORE S HAS BEEN RECE IVED BY THE ASSESSEE; RS. 3 CRORE S EACH ON 29.2.2008 AND 25.3.2008 FROM N. SURYANARAYANA. CIT WAS OF THE OPINION THAT THE SAID AMOUNT OF RS. 6 CRORE S WAS NOT OFFERED BY THE ASSESSEE FOR TAXATION AND THEREFORE HE ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE DT . 4.12.2013 GIVING THEREIN DETAILS OF AMOUNT CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE AND STATING THEREIN THAT ACTION OF THE AO IN NOT CONSIDERING RECEIPT OF RS. 6 CRORE S WHILE PASSING THE ASSESSMENT ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY, PROVISIONS OF SEC. 263 OF THE 3 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) INCOME TAX ACT ARE ATTRACTED AND THEREFORE INVITED OBJECTION OF THE ASSESSEE BY ISSUING SHOW CAUSE . THE ASSESSEE VIDE LETTERS DT. 18.1.2014, 24.1.2014 AND 3.2.2014 MADE SUBMISSIO N S STATING THEREIN THAT THE AO AFTER SATISFYING HIMSELF ABOUT THE GENUINENESS OF THE LOAN AMOUNT ING TO RS. 6 CRORES RECEIVED BY THE ASSESSEE AND ALSO AFTER APPLYING HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE DID NOT TREAT THE SAID LOAN AS INCOME. THE SAID AO ADDED THE SAID SUM IN THE HANDS OF M/S. BRITTO AMUSEMENT S PVT. LTD. (BAPL) , A COMPANY IN WHICH THE ASSESSEE IS A DIRECTOR AND THE APPEAL IS PENDING BEFORE CIT(A), BANGALORE. THE ASSESSEE THEREFORE REQUESTED CIT TO DROP THE PROCEEDINGS INITIAT ED U/S 263. A PLEA WAS ALSO TAKEN THAT THE PROCEEDINGS INITIATED ARE BARRED BY LIMITATION AS PER THE PROVISIONS OF SEC. 263(2). CIT DID NOT AGREE WITH THE SUBMISSION OF THE ASSESSEE AND TOOK THE VIEW THAT THE IMPUGNED ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND SET ASIDE THE SAME WITH A DIRECTION TO THE AO TO CONSIDER THE ABOVE SUM OF RS. 6 CRORES DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE FOR THE A.Y 2008 - 09 IN ACCORDANCE WITH LAW AFTER GIVI NG REASONABLE AND PROPER OPPORTUNITY TO THE ASSESSEE. 3. THE LD. AR BEFORE US CONTENDED IN RESPECT OF LIMITATION I.E. GROUND NO. 1 THAT THE ORDER U/S 143(1) WAS PASSED ON 20.11.2008. SUBSEQUENT THERETO, THERE WAS A SEARCH ACTION IN THE CASE OF M/S. GOA GOLF CLUB PVT. LTD. (GGCPL) AND BAPL IN JANUARY, 2010. IN CONSEQUENCE THEREOF, ORDER U/S 153C R.W.S. 143(3) WAS PASSED IN THE CASE OF DR. BRITTO ON 16.12.2011. CIT PASSED THE ORDER U/S 263 ON 28.3.2014 SETTING ASIDE THE ORDER PASSED BY THE AO DT. 16. 12.2011. ACCORDING TO THE LD. AR, ON THE DATE OF THE SEARCH ASSESSMENT FOR A.Y 2008 - 09 WAS NOT PENDING AND THEREFORE AS PER THE SECOND PROVISO TO SEC. 153A(1) ASSESSMENT DID NOT ABATE. IT WAS ALSO SUBMITTED THAT THERE IS NO INCRIMINATING DOCUMENTS FOUND IN THE COURSE OF THE SEARCH WITH RESPECT TO THE AFORESAID SUM OF RS. 6 CRORES. STATEMENT RECORDED U/S 132 OF THE INCOME TAX ACT OF THE ASSESSEE 4 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) CANNOT BE SAID TO BE INCRIMINATING DOCUMENT NOR PAPERS OF CIVIL SUIT BETWEEN THE ASSESSEE AND N. SURYANARAYAN C AN BE SAID TO BE INCRIMINATING DOCUMENTS. IT WAS SUBMITTED THAT IN THE ABSENCE OF ANY INCRIMINATING DOCUMENTS, SUM OF RS. 6 CRORES COULD NOT HAVE FORMED SUBJECT MATTER OF PROVISION OF SEC. 153C. THEREFORE, THE LIMITATION SHOULD HAVE STARTED U/S 263(2) FR OM THE DATE WHEN THE RETURN U/S 143(1) WAS PROCESSED I.E. 20.11.2008. U/S 263 , AN ORDER CAN BE PASSED IN VIEW OF PROVISIONS OF SEC. 263(2) ONLY UPTO 2 YEARS FROM THE END OF THE YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED IS PASSED. SINCE SUM OF RS. 6 CR ORES COULD NOT HAVE BEEN CONSIDERED U/S 153C, THEREFORE, THE IMPUGNED ORDER PASSED FOR REVISING THE ORDER U/S 153C IS BEYOND THE LIMITATION PERIOD. WHATEVER COULD NOT HAVE BEEN DONE DIRECTLY CANNOT BE DONE INDIRECTLY. ORDER PASSED U/S 143(1) COULD HAVE B EEN REVISED LATEST BY 31.3.2011. 4. IN RESPECT OF GROUND NO. 2 IT WAS SUBMITTED BY THE LD. AR THAT JURISDICTION U/S 263 IS A SUPERVISORY JURISDICTION OVER THE ORDER OF THE LOWER AUTHORITIES. THE INTENT OF THE PROVISIONS OF SEC. 263 IS THAT ONLY THOSE OR DERS WHICH DO NOT REQUIRE APPROVAL OF ANY HIGHER AUTHORITY CAN BE REVISED I.E. ORDERS PASSED U/S 143(3), 147, 144 ETC. WHENEVER AN ORDER U/S 153C IS PASSED, APPROVAL U/S 132 BY THE CIT HAS TO BE OBTAINED IN VIEW OF PROVISIONS OF SEC. 153D. EVEN THE SAID P ROCEEDINGS ARE INITIATED U/S 132 BY THE CIT WHO CONTINUOUSLY MONITOR THE ASSESSMENT . SEC. 153C PROVIDES FOR THE SATISFACTION OF THE AO THAT THE INCOME FOUND FROM SEARCHED PERSON BELONGS TO NON - SEARCHED PERSON. SEC. 263 CANNOT BE INVOKED FOR REVISING SATI SFACTION OF THE AO BUT CAN BE INVOKED ONLY FOR REVISING THE ORDER AND SINCE SATISFACTION IS NOT AN ORDER, THE PROVISIONS OF SEC. 263 CANNOT BE INVOKED. 5. IN RESPECT OF GROUND NO. 3 THE LD. AR SUBMITTED THAT THE SHOW CAUSE NOTICE ISSUED U/S 263 DT. 4.12.2013 STATES THAT THE AO HAS NOT CONSIDERED THE RECEIPT OF RS. 6 CRORES WHILE PASSING THE ORDER U/S 153C AND THEREFORE THE SAME 5 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT WAS SUBMITTED THAT WE ARE CONCERNED WITH THE ASSESSMENT IN CASE OF SEARCH ACTION. THE SEARCH ACTION WAS TAKEN AGAINST GROUP COMPANIES OF THE ASSESSEE . VIDE LETTER DT. 3.6.2010 CIT CENTRALIZED THE CASES OF THE ASSESSEE ALONGWITH GGCPL & BAPL. THE CENTRALIZED ORDER WAS PASSED IN THE CASE OF ALL THE ASSESSEE S TO ASSESS THE CASE BY THE SAME ACIT. ASSESSMENT S FOR ALL THE THREE ASSESSEES WERE SIMULTANEOUSLY CARRIED OUT BY THE SAME AO. THE AO WHO PASSED THE ORDER U/S 153C HAD BEFORE HIM THE BANK STATEMENT, STATEMENT RECORDED IN THE COURSE OF THE SEARCH AND SURVEY, PAPERS AND PROCEEDINGS OF CIVIL SUIT BETWEEN THE ASSESSEE AND N. SURYANARAYAN. THE DATES OF HEARING OF THE ASSESSEE AND BAPL, AS EVIDENT FROM THE FIRST PAGE OF THE ASSESSMENT ORDER, ARE ALSO THE SAME. THE ASSESSMENT ORDER IN CASE OF ALL THE THREE ASSESSE ES HA D BEEN PASSED ON THE SAME DATE BY THE SAME AO. IN THE CASE OF BAPL THE AO AFTER CONSIDERING ALL THE MATERIALS ON RECORD I.E. BANK STATEMENT, STATEMENT RECORDED IN THE COURSE OF THE SEARCH AND SURVEY, PAPERS AND PROCEEDINGS OF THE CIVIL SUIT BETWEEN THE ASSESSEE AND N. SURYANARAYAN ETC. TOOK A CONSCIOUS DECISION OF ADDING THE SUM OF RS. 6 CRORES IN THE ASSESSMENT OF BAPL. THE ASSESSMENT ORDER OF BAPL SHOWS A DETAILED DISCUSSION ON THIS ISSUE BY THE AO. THE AO HAS NOT DONE PROTECTIVE ASSESSMENT BUT H AS SUBSTANTIVELY ADDED THIS AMOUNT IN THE HANDS OF BAPL. IN CASE OF CENTRALIZATION OF CASES, TO MAKE AN ASSESSMENT IN CASE OF SEARCH PROCEEDINGS, ALL THE ASSESSMENT ORDERS OF THE GROUP IS TO BE CONSIDERED FOR DETERMINING WHETHER THE A O HAS EXAMINED A PARTICULAR ISSUE OR NOT. IN THE INSTANT CASE, ON THE PERUSAL OF THE ORDER PASSED IN THE CASE OF BAPL, IT IS CLEAR THAT SUM OF RS.6 CRORES HAS BEEN CONSIDERED AND ADDED IN THE HANDS OF BAPL . THIS INDICAT ES THAT THE AO HAS APPLIED HIS MIND A ND WAS OF THE OPINION THAT THE AMOUNT HAS TO BE ADD ED IN THE HANDS OF BAPL. G ARNISHEE PROCEEDINGS INITIATED AGAINST THE ASSESSEE FOR RECOVERY OF RS.6 CRORES ON ACCOUNT OF OUTSTANDING TAX DEMAND OF MR. SURYANARAYA N WAS ALSO BEFORE HIM. IT WAS SUBMITTED TH AT THE SAID RS.6 CRORES APPEARS IN THE BANK ACCOUNT OF THE ASSESSEE WITH ANDHRA BANK. 6 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) T HIS ENTRY APPEARS IN THE MONTH S OF FEBRUARY AND MARCH, 2008. T HE AO IN THE CASE OF THE ASSESSEE HAS ADDED A SUM OF RS.60 L AKHS BEING CASH DEPOSITED IN THE VERY SAME BAN K ACCOUNT DURING THAT TIME. THEREFORE, IT CANNOT BE SAID THAT THE AO HAS NOT CONSIDERED THE SUM OF RS.6 CRORES APPEARING IN THE BANK ACCOUNT OF THE ASSESSEE WITH ANDHRA BANK. ONCE, THE AO HAS TAKEN A PARTICULAR VIEW UNTIL AND UNLESS THE VIEW TAKEN BY THE AO IS UNSUSTAINABLE IN LAW, IT CANNOT BE SAID THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. RELIANCE WAS PLACED ON THE DECISION OF THE BOMBAY BENCH OF THIS TRIBUNAL IN THE CASE OF GIRDHARI LAL B. ROHRA VS. CIT, 86 TTJ 117 AN D THAT OF JAGDISH CHAND GUPTA V. ACIT, 58 ITD 142 (ITAT[CHAND]) . ATTENTION WAS ALSO DRAWN TOWARDS PG. 120, 131, 139, 163, 184 AS WELL AS 15 & 16 OF THE PAPER BOOK. 6. IN RESPECT OF GROUND NO. 4 WHICH RELATES TO MERIT OF THE ADDITION AMOUNTING TO RS. 6 CRORES IN THE HANDS OF THE ASSESSEE , THE LD. AR VEHEMENTLY CONTENDED THAT THE SAID AMOUNT CANNOT BE TAXED IN THE HANDS OF THE ASSESSEE AS THE AMOUNT HAS BEEN RECEIVED FROM UNRELATED PERSON THROUGH BANKING CHANNEL AND THE LENDER HAS ADMITTED IN THE CIVIL S UIT THAT HE HAS LENT THE MONEY TO THE ASSESSEE. THE DEPARTMENT PROCEEDINGS U/S 226(3) ALSO RECOGNIZES THE FACT THAT THE SUM IS LENT BY MR. N. SURYANARAYAN AND HIS WIFE TO THE GROUP OF BRITTO . THE SAID GARNISHEE PROCEEDINGS STATES OF HUGE TAX DEMAND OF MORE THAN RS. 20 CRORES AGAINST MR. N. SURYANARAYAN . ORDER OF THE CIVIL COURT DT. 20.9.2014 WAS PASSED BY CONSENT PROVES THAT THE SUM OF RS. 6 CRORES IS AMOUNT LENT BY MR. N. SURYANARAYAN AND HIS WIFE. THERE IS NO MATERIAL ON RECORD THAT THE MONEY BELONGING TO THE ASSESSEE HAS BEEN ROUTED AS LOAN FROM MR. SURYANARAYAN . RELIANCE WAS PLACED IN THIS REGARD ON THE DECISIONS OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ORIENT TRADING CO. LTD. V S. CIT, 49 ITR 723 (BOM) AND CIT VS. TANIA INVESTMENTS P. LTD., 322 ITR 394 (BOM) . 7 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) 7. THE LD. DR ON THE OTHER HAND DREW OUR ATTENTION TO SEC. 263 IN RESPECT OF GROUND NO. 1 AND CONTENDED THAT IT IS THE ORDER PASSED U/S 153C WHICH HAS BEEN SET ASIDE BY TH E CIT. PROVISIONS OF SEC. 263 HAS BEEN INVOKED AGAINST ORDER PASSED U/S 153C NOT THE ORDER PASSED U/S 143(1). THE ORDER PASSED U/S 153C CANNOT BE DATED BACK TO THE ORDER PASSED U/S 143(1). THE ORDER U/S 153C SINCE WAS PASSED ON 16.12.2011, PROVISION OF SEC. 263 WERE INVOKED WITHIN TWO YEARS I.E. 28.3.2014 FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ASSESSMENT ORDER WAS PASSED . T HEREFORE, THE PROCEEDINGS ARE NOT BARRED BY LIMITATION. 8. IN RESPECT OF GROUND NO. 2 THE LD. DR CONTENDED THAT THE PRO VISIONS OF SEC. 263 ARE INDEPENDENT. CIT IS NOT HAVING SUPERVISORY JURISDICTION IN THE ORDER PASSED U/S 153C. THE ORDER TO BE PASSED U/S 153C DOES NOT REQUIRE PRIOR APPROVAL OF THE CIT. THEREFORE, THIS GROUND HAS TO BE DISMISSED. 9. IN RESPECT OF GROU ND NO. 3 THE LD. DR CONTENDED THAT EACH OF THE ASSESSEE IS AN INDEPENDENT ASSESSEE. THE AO MIGHT HAVE CONSIDERED THE SAID AMOUNT IN THE CASED OF BAPL DOES NOT MEAN THAT THE AO HAS CONSIDERED THE TAXABILITY OF THE SUM OF RS. 6 CRORES IN THE CASE OF THE ASS ESSEE. IT IS A CASE WHERE NO INQUIRY AND NO EXAMINATION HAVE BEEN CONDUCTED BY THE AO IN RESPECT OF SUM OF RS. 6 CRORES CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE. 10. IN RESPECT OF GROUND NO. 4 THE LD. DR CONTENDED THAT THE CIT HAS SIMPLY SET ASIDE THE ASSESSMENT ORDER AND HAS NOT DECIDED THE ISSUE ON MERIT WHETHER THE SUM OF RS. 6 CRORES IS THE INCOME TO BE ADDED U/S 68 OF THE INCOME TAX ACT. THE ASSESSMENT HAS SIMPLY BEEN SET ASIDE ON THIS ISSUE AND RESTORED TO THE FILE OF THE AO TO CONSIDER THE SAID SUM IN ACCORDANCE WITH LAW AFTER GIVING PROPER AND REASONABLE OPPORTUNITY TO THE ASSESSEE. 8 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) 11 . WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE HAVE ALSO GONE THROUGH THE ORDER OF THE TAX AUTHORITIES BELOW AS WELL AS THE ORDER OF THE CIT PASSED U/S 263 ALONGWITH THE CASE LAWS CITED BEFORE US. BEFORE DECIDING THE ISSUE IT IS NE CESSARY TO REFER TO THE PROVISIONS OF SEC. 263 WHICH IS BEING REPRODUCED HEREUNDER : - 263. (1) THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OF FICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCU MSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. EXPLANATION. - FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT, FOR THE PURPOSES OF THIS SUB - SECTION , - (A) AN ORDER PASSED ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988 BY THE ASSESSING OFFICER SHALL INCLUDE - (I) AN ORDER OF ASSESSMENT MADE BY THE ASSISTANT COMMISSIONER OR DEPUTY DIRECTOR OR THE INCOME - TAX OFFICER ON THE BASIS OF THE DIRECTIONS ISS UED BY THE JOINT COMMISSIONER UNDER SECTION 144A; (II) AN ORDER MADE BY THE JOINT COMMISSIONER IN EXERCISE OF THE POWER OR IN THE PERFORMANCE OF THE FUNCTIONS OF AN ASSESSING OFFICER CONFERRED ON, OR ASSIGNED TO, HIM UNDER THE ORDERS OR DIRECTIONS ISSUED BY THE BOARD OR BY THE CHIEF COMMISSIONER OR DIRECTOR GENERAL OR COMMISSIONER AUTHORISED BY THE BOARD IN THIS BEHALF UNDER SECTION 120; (B) 'RECORD' SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT AVAILABLE AT THE TIME OF EXAMINATION BY THE COMMISSIONER; (C) WHERE ANY ORDER REFERRED TO IN THIS SUB - SECTION AND PASSED BY THE ASSESSING OFFICER HAD BEEN THE SUBJECT MATTER OF ANY APPEAL FILED ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988, THE POWERS OF THE COMMISSIONER UNDER THIS SUB - SECTION SHALL EXTEND AND SHALL BE DEEMED ALWAYS TO HAVE EXTENDED TO SUCH MATTERS AS HAD NOT BEEN CONSIDERED AND DECIDED IN SUCH APPEAL. (2) NO ORDER SHALL BE MADE UNDER SUB - SECTION (1) AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED. 9 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) (3) NOTWITHSTANDING ANYTHING CONTAINED IN SUB - SECTION (2), AN ORDER IN REVISION UNDER THIS SECTION MAY BE PASSED AT ANY TIME IN THE CASE OF AN ORDER WHICH HAS BEEN PAS SED IN CONSEQUENCE OF OR TO GIVE EFFECT TO, ANY FINDING OR DIRECTION CONTAINED IN AN ORDER OF THE APPELLATE TRIBUNAL, THE HIGH COURT OR THE SUPREME COURT. EXPLANATION. - IN COMPUTING THE PERIOD OF LIMITATION FOR THE PURPOSES OF SUB - SECTION (2), THE TIME TAKE N IN GIVING AN OPPORTUNITY TO THE ASSESSEE TO BE REHEARD UNDER THE PROVISO TO SECTION 129 AND ANY PERIOD DURING WHICH ANY PROCEEDING UNDER THIS SECTION IS STAYED BY AN ORDER OR INJUNCTION OF ANY COURT SHALL BE EXCLUDED. 12 . FROM THE PERUSAL OF THE AFORES AID SECTION, IT IS APPARENT THAT THERE ARE FOUR MAIN FEATURES OF THE POWER OF REVISION TO BE EXERCISED U/S 263 BY THE COMMISSIONER OF INCOME - TAX. FIRSTLY, THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORDS OF ANY PROCEEDINGS UNDER THE ACT AND FOR THIS P URPOSE HE NEED NOT TO SHOW ANY REASON OR RECORD ANY REASON TO BELIEVE. IT IS A PART OF HIS ADMINISTRATIVE POWER TO CALL FOR THE RECORD AND EXAMINE THEM RELATING TO ANY ASSESSEE. SECONDLY HE MAY CONSIDER ANY ORDER PASSED BY THE ASSESSING OFFICER AS ERRONEO US AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THIS CONSIDERATION HAVING REGARD TO THE LANGUAGE OF SECTION 263 APPARENTLY IS A CONSIDERATION WHICH HE EXERCISES BY CALLING FOR AND EXAMINING THE RECORD AVAILABLE AT THIS STAGE. THERE IS NO QUESTIO N OF THE ASSESSEE TO APPEAR AND MAKE SUBMISSION. THIRDLY, IF AFTER CALLING FOR AND EXAMINING THE RECORDS THE COMMISSIONER CONSIDERS THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE IS BOUND TO GIVE AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH ENQUIRY AS HE MAY DEEM FIT, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE MAY JUSTIFY INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT OR CANCELING ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. THIS EMPOWERS THE C.I.T. TO CAUSE OR MAKE SUCH ENQUIRIES AS HE DEEMS NECESSARY. FOURTHLY THE C.I.T. U/S 263 CAN ENHANCE OR MODIFY THE ASSESSMENT. 10 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) 13 . IT IS A SETTLED LAW THAT FOR INVOKING THE PROVISIONS OF SECTION 263 THE CIT MUST SATISFY BOTH THE CONDITIONS THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND ALSO THAT IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IF ONE OF THE CONDITION S IS ABSENT, THE ORDER PASSED BY THE CIT BY INVOKING THE PROVISIONS OF SECTION 263 WILL NOT BE LEGAL. THE TERM ERRONEOUS HAS NOT BEEN DEFINED UNDER THE INCOME - TAX ACT BUT IT IS WELL SETTLED THAT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE A SSESSING OFFICER CANNOT BE SAID TO BE AN ERROR. AN ORDER CAN BE SAID TO BE ERRONEOUS IF THERE IS AN INCORRECT ASSUMPTION OF FACT OR INCORRECT APPLICATION OF LAW IN THE ORDER PASSED BY THE ASSESSING OFFICER. IF THE ASSESSING OFFICER AFTER MAKING THE ENQUIRI ES AND EXAMINING THE RECORDS, TAKEN ONE OF THE POSSIBLE VIEWS, IT CANNOT BE SAID THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS. 14 . IT IS ALSO APPARENTLY CLEAR THAT THE POWER OF THE CIT ARE THREE FOLD. ONE, PRIOR TO THE INITIATION OF THE PR OCEEDINGS U/S 263. SECOND, AT THE TIME OF INITIATION OF THE PROCEEDINGS. THIRD, THE FINAL OUTCOME AFTER THE INITIATION OF THE PROCEEDING. POWER OF THE CIT PRIOR TO THE INITIATION INCLUDES CALL FOR AND EXAMINE THE RECORDS OF ANY PROCEEDINGS UNDER THIS ACT . THE WORD RECORD IS VERY IMPORTANT, BECAUSE ON THE BASIS OF THE RECORD OF THE PROCEEDINGS THE CIT WILL FORM AN OPINION THAT THE ORDER PASSED IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ONCE HE FORMS AN OPINION, HE HAS TO GIVE AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND AFTER MAKING OR CAUSING THE ENQUIRY HE CAN PASS AN ORDER. MOREOVER THE INQUIRY IS CONDUCTED ONCE THE CIT FORMS AN OPINION ON THE BASIS OF RECORD THAT THE ORDER PASSED IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE WORD RECORD HAS BEEN DEFINED UNDER EXPLANATION (B) OF SECTION 263 TO MEAN THAT THE RECORD SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT AVAILABLE AT THE TIME OF EXAMINATION BY THE COMMISSIONER. T HE EXAMINATION OF THE RECORD IS TO BE CARRIED BY THE COMMISSIONER PRIOR TO THE 11 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) FORMING AN OPINION THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF THE REVENUE. ONCE THE RECORD IS EXAMINED AND THE CIT ON THE B ASIS OF EXAMINATION OF THE RECORD FORMS AN OPINION THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE IS EMPOWERED AFTER GIVING THE OPPORTUNITY TO THE ASSESSEE, TO MAKE SUCH ENQUIRY AS HE MAY DEEM NECESSARY. THEREFORE, THE ENQUI RY TO BE CONDUCTED BY THE CIT IS AN ACT ONCE THE CIT ARRIVES AT A CONCLUSION THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AFTER EXAMINING THE RECORD. THUS ENQUIRY PRECEDES THE RECORD AND THE MAT ERIAL COLLECTED DURING THE COURSE OF THE ENQUIRY CANNOT BE THE PART OF THE RECORD OF THE PROCEEDINGS WHEN THE CIT FORMS AN OPINION THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 15 . NOW , WE WIL L DEAL WITH THE ARGUMENT OF THE LD. A.R. THE FIRST SUBMISSION RELATES TO THE ISSUE WHETHER THE PROCEEDINGS ARE BARRED BY LIMITATION. SECTION 263(2) DEALS WITH THE LIMITATION. THIS SECTION CLEARLY LAYS DOWN THAT NO ORDER SHALL BE MADE UNDER SUB - SECTION (1) AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR FROM WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED. NOW, THE QUESTION BEFORE US IS WHICH ORDER SOUGHT TO BE REVISED. IF WE LOOK AT SECTION 263(1) THIS SECTION ALSO REFER TO ANY ORDER PASSED BY THE ASSESSING OFFICER. IT IS NOT DENIED THAT ORDER PASSED U/S 153C IS AN ORDER PASSED BY THE ASSESSING OFFICER. THE CIT HAS INVOKED THE JURISDICTION IN RESPECT OF THE SAID ORDER. IF AN ADDITION IS LEGALLY SUSTAINABLE OR NOT IN AN ORDER PASSED WILL NOT NULLIFY OR SHATTERED EXISTENCE OF THE ORDER. THE ORDER MAY NOT BE LEGALLY VALID BUT THAT CAN BE CANCELLED OR QUASHED IN THE APPEAL OR BY COURT OF LAW. UNTIL THE ORDER IS NOT QUASHED OR CANCELLED OR ANNULLED, WE CANNOT SAY THAT THERE IS NO ORDER PASSED U/S 153C. IT IS NOT DENIED THAT ORDER U/S 153C WAS PASSED ON 16.12.2011 IN THE CASE OF THE ASSESSE AND THE PROCEEDINGS U/S 263 WERE INITIATED AGAINST THE ASSESSEE BY SHOW CAUSE NOTICE AND ORDER U/S 263 WAS PASSED ON 12 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) 28.03.2014. THE ORDER U/S 263 HAS BEEN P ASSED WITHIN TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER U/S 153C WAS PASSED. CIT HAS NOT INVOKED THE JURISDICTION IN RESPECT OF THE INTIMATION ISSUED U/S 143(1) AND LIMITATION CANNOT START FROM THE DATE WHEN THE RETURN WAS PROCESSED U/ S 143(1). WE THEREFORE, DISMISS THE GROUND NO.1 TAKEN BY THE ASSESSE SO FAR IT RELATES TO THE ORDER PASSED U/S 263 IS BARRED BY LIMITATION. 16. THE SECOND CONTENTION OF THE LD. A.R RELATES TO THE ISSUE THAT THE ORDER PASSED U/S 153C CANNOT BE REVISED U/S 263. WE HAVE GONE THROUGH THE PROVISION OF SECTION 153C AS WELL AS 153D. WE NOTED U/S 153D PRIOR APPROVAL OF JOINT COMMISSIONER IS REQUIRED IF THE ORDER HAS TO BE PASSED BY AN ASSESSING OFFICER BELOW THE RANK OF JOINT COMMISSIONER. COMMISSIONER HAS BE EN DEFINED U/S 2(16) WHILE JOINT COMMISSIONER HAS BEEN DEFINED U/S 2(28C). THE DEFINITION OF THE COMMISSIONER DOES NOT INCLUDE THEREIN JOINT COMMISSIONER. THE JURISDICTION U/S 263 HAS TO BE EXERCISED BY THE COMMISSIONER NOT BY THE JOINT COMMISSIONER. NO D OUBT ORDER U/S 153C HAS TO BE PASSED UNDER THE SUPERVISORY JURISDICTION OF JOINT COMMISSIONER BUT IT HAS NOT TO BE WITH THE PRIOR APPROVAL OF THE COMMISSIONER. IF WE LOOK INTO THE EXPLANATION TO SECTION 263, IT IS APPARENT THAT CIT CAN INVOKE THE JURISDIC TION U/S 263 EVEN IN RESPECT OF THE ORDER MADE BY THE JOINT COMMISSIONER OR AN ORDER PASSED BY THE ASSESSING OFFICER ON THE BASIS OF THE DIRECTIONS ISSUED BY THE JOINT COMMISSIONER U/S 144A. INITIATION OF SUCH PROCEEDINGS U/S 132 CANNOT BE REGARDED THAT TH E ORDER PASSED U/S 153C HAS BEEN PASSED WITH THE APPROVAL OF THE CIT. THE POWER U/S 263 IS A PART OF THE ADMINISTRATIVE POWER TO BE EXERCISED AGAINST THE ASSESSING OFFICER WITH THE INTENTION THAT IN CASE AN ASSESSING OFFICER PASSES AN ORDER WHICH IS ERRONE OUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, THE CIT CAN INVOKE JURISDICTION U/S 263. IF THIS POWER IS NOT GIVEN, THE SECTION WILL BECOME REDUNDANT AND THE CIT WILL NOT HAVE ANY ADMINISTRATIVE CONTROL OVER THE ORDER PASSED BY THE ASSESSING 13 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) OFFICER . WE THEREFORE DO NOT AGREE WITH THE LD. AR THAT THE ORDER PASSED U/S 153C CANNOT BE REVISED U/S 263. WE DISMISS THIS GROUND. 17. THE THIRD GROUND DEALS WITH THE CONTENTION THAT THE AO HAS DULY CONSIDERED THE RECEIPT OF RS. 6 CRORES WHILE PASSING THE ORD ER U/S 153C. THEREFORE, IT CANNOT BE SAID THAT IT IS NOT A CASE WHERE INQUIRIES WERE NOT MADE BY THE AO. AO HAS DULY MADE THE INQUIRY AND TAKEN A VIEW AFTER APPLYING HIS MIND THAT THIS AMOUNT HAS TO BE ADDED IN THE HANDS OF THE COMPANY IN WHICH ASSESSEE IS A DIRECTOR. IT IS AN UNDISPUTED FACT THAT IN THE CASE OF THE SEARCH THE CASES OF THE GROUP ARE CENTRALIZED SO THAT EACH AND EVERY MATTER WHICH HAS BEARING ON THE DETERMINATION OF THE INCOME CAN BE CONSIDERED BY ONE OFFICER AND THERE CANNOT BE ANY DOUBL E ADDITION OR ESCAPEMENT OF THE INCOME IN THE HANDS OF ONE ASSESSEE. IN THE CASE OF THE ASSESSEE WAS CENTRALIZED VIDE LETTER DT. 3.6.2010 ALONGWITH THE CASE OF GCPL & BAPL. THE ASSESSMENT S IN CASE OF ALL THE THREE ASSESSEES WERE SIMULTANEOUSLY DONE BY THE SAME AO. THE AO WHO PASSED THE ASSESSMENT ORDER IN THE CASE OF THE ASSESSEE HAD BEFORE HIM THE BANK STATEMENTS, STATEMENTS RECORDED IN THE COURSE OF THE SEARCH AND SURVEY, THE PAPERS AND PROCEEDINGS OF THE CIVIL SUIT BETWEEN THE ASSESSEE AND SURYANARAYAN . EVEN THE DATE OF HEARING IN THE CASE OF THE ASSESSEE AND BAPL, THE COMPANY IN WHICH THE ASSESSEE IS A DIRECTOR IS ALSO THE SAME. THE ASSESSMENT ORDER IN THE CASE OF ALL THE THREE ASSESSEES WERE PASSED ON THE SAME DATE BY THE SAME AO. THIS IS ALSO A FAC T THAT IN CASE OF CENTRALIZED PROCEEDINGS ESPECIALLY IN SEARCH CASES, COMMON QUERY LETTER IS ISSUED BY THE AO. THE ASSESSEE ALSO SUBMITS COMMON REPLY. WE NOTED THAT IN THE CASE OF BRITTO AMUSEMENT PVT. LTD. THE AO UNDER PARA 9 TO 9.6 HAD A DETAILED DISCU SSION IN RESPECT OF THE SAID SUM OF RS. 6 CRORES WHICH HAS BEEN CREDITED INTO THE ACCOUNT OF THE ASSESSEE AND ULTIMATELY ADDED THE SAID SUM ON SUBSTANTIVE BASIS IN THE HANDS OF M/S. BRITTO AMUSEMENT PVT. LTD. IN THE FOLLOWING MANNER : - 14 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) 9.1 MR. N. SURYANA RAYAN PAID ANOTHER SUM OF RS. 6 CR TO DR. WILLIAM BRITTO WHICH WAS DEPOSITED IN THE PERSONAL ACCOUNT OF DR. BRITTO. MR SURYANARAYAN CLAIMED THAT THIS AMOUNT WAS GIVEN FOR AN OFF SHORE CASINO PROJECT CONCEIVED BY DR. BRITTO. BUT DR. BRITTO DID NOT REPAY TH IS AMOUNT. MR. N. SURYANARAYAN FILED A CIVIL CASE FOR RECOVERY OF THE AMOUNT OF RS. 6 CRORES. DR. WILLIAM BRITTO FILED AN AFFIDAVIT BEFORE THE COURT STATING THAT THE MAOUNT OF RS. 6 CRORES WAS GIVEN AS REPAYMENT OF GAMBLING DEBT WHICH MR. SURYANARAYAN HA D INCURRED WHILE PLAYING IN THE CASINO. IT WAS FOUND THAT THE SAID GAMBLING DEBTS ARE NOT ACCOUNTED IN THE BOOKS OF M/S BRITTO AMUSEMENTS PVT. LTD OR M/S GOA GOLF CLUB PVT. LTD. WHEN CONFRONTED DR. WILLIAM BRITTO WHILE DEPOSING ON 12.01.2010 STATED AS UND ER :.. 9.6 IN VIEW OF THE ABOVE IT IS CLEAR THAT DR. BRITTO HAD BEEN TAKING CONTRADICTORY STANDS IN THIS ISSUE. FURTHER, THE COMPANIES OF DR. BRITTO ARE HAVING ENOUGH CASH FLOW TO REPAY ANY LOAN THAT IS OUTSTANDING AND FROM THE BOOKS OF ACCOUNTS IT IS FOUND THAT NO EFFORTS HAVE BEEN MADE TO REPAY THE MONEY AFTER TAKING THE SAME FROM HIM. THIS CLEARLY INDICATES THAT THE SAME REPRESENTS NOT A LOAN BUT AN AMOUNT WHICH WAS DUE TO M/S GOA GOLF CLUB PVT LTD OR M/S BRITTO AMUSEMENTS PVT LTD AS GAMBLING DEBT. THE AFFIDAVIT FILED BEFORE THE HONBLE COURT CANNOT BE IGNORES. THE STAND NOW TAKEN BEFORE THE DEPARTMENT IS ONLY AN AFTERTHOUGHT ATTEMPT TO CIRCUMVENT THE PROVISIONS OF LAW AND A SELF SERVING STATEMENT TO EVADE PAYMENT OF TAXES. THERE IS NO EVIDENCE AS TO THE POINT OF TIME WHEN THE GAMBLING DEBTS WERE CREATED. THE GAMBLING DEBTS HAVE NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT NOR HAVE THE REPAYMENTS BEE N RECORDED. HENCE THE UNDISCLOSED INCOME OF RS. 6 CRORES IS BROUGHT TO TAX FOR AY 2008 - 09 IN THE HANDS OF M/S BRITTO AMUSEMENTS PVT LTD AS CLAIMED BY DR. WILLIAM BRITTO IN HIS AFFIDAVIT. THUS, WE ARE OF THE VIEW THAT THE AO HAS DULY INQUIRED ABOUT THE SUM OF RS. 6 CRORES CAME INTO THE BANK ACCOUNT OF THE ASSESSEE AND AFTER APPLYING HIS MIND TOOK A CONSCIOUS DECISION THAT THE SAID SUM CREDITED INTO THE BANK ACCOUNT OF THE ASSESSEE REPRESENT S THE INCOME OF M/S. BRITTO AMUSEMENT PVT. LTD. AND HAS TO BE ADDED IN ITS HANDS AND ACCORDINGLY NO ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE . 18. IT IS A SETTLED LAW THAT IF THE AO HAS TAKEN ONE OF THE POSSIBLE VIEWS, IT CANNOT BE SAID THAT THERE IS AN ERROR IN THE ORDER PASSED UNLESS AND UNTIL 15 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) THE VIEW TAKEN BY THE AO IS UNSUSTAINABLE IN LAW. THE SAID VIEW HAS BEEN TAKEN BY THE HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT, 243 ITR 83 (SC) WHEREIN THEIR LORDSHIPS HAS H ELD AS UNDER : - THE PRE - REQUISITE TO THE EXERCISE OF JURISDICTION BY THE COMMISSIONER UNDER SECTION 263 IS THAT THE ORDER OF THE AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED OF TWIN CON DITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENT - IF THE ORDER OF THE ASSESSING OFFICE IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE RE VENUE - RECOURSE CANNOT BE HAD TO SECTION 263(1). 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 INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION O F MIND. THE PHRASE 'PREJUDICIAL TO THE INTEREST OF THE REVENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF THE ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDI CIAL TO THE INTERESTS OF THE REVENUE. FOR EXAMPLE, IF THE ASSESSING OFFICER HAS ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH TH E COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HIS H ANDS ON HIS SO OFFERING THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME WITHOUT APPLICATION OF MIND AS SUCH WILL BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE.' 19 . WE HAVE ALSO GONE THROUGH THE DECISIONS AS HAS BEEN RELIED BY THE LD. AR IN THE CASE OF CIT VS. LEISURE WEAR EXPORTS LTD., 341 ITR 166 (DEL) ( SUPRA ). WE NOTED THAT IN THIS CASE THE HON'BLE HIGH COURT HAS CLEARLY HELD AS UNDER : - T HE POWER OF REVISION IS NOT MEANT TO BE EXERCISED FOR THE PURPOSE OF DIRECTING THE AO TO HOLD ANOTHER INVESTIGATION WITHOUT DESCRIBING AS TO HOW THE ORDER OF THE AO IS ERRONEOUS. FROM THIS IT ALSO FOLLOWS THAT WHERE THE ASSESSMENT ORDER HAS BEEN PASSED BY THE AO AFTER TAKING INTO ACCOUNT THE ASSESSEES SUBMISSIONS AND DOCUMENTS FURNISHED BY HIM AND NO MATERIAL WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE CIT WHICH SHOWED THAT THERE WAS ANY DISCREPANCY OR FALSITY IN EVIDENCES FURNISHED BY THE ASSESSEE, THE ORDER OF THE AO CANNOT BE SET ASIDE FOR MAKING DEEP 16 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) INQUIRY ONLY ON THE PRESUMPTION AND ASSUMPTION THAT SOMETHING NEW MAY COME OUT. FOR MAKING A VALID ORDER UNDER S. 263 IT IS ESSENTIAL THAT THE CIT HAS TO RECORD AN EXPRESS FINDING TO THE EFFECT THAT ORDE R PASSED BY THE AO IS ERRONEOUS WHICH HAS CAUSED LOSS TO THE REVENUE. FURTHERMORE, WHERE ACTING IN ACCORDANCE WITH LAW THE AO FRAMES CERTAIN ASSESSMENT ORDER, SAME CANNOT BE BRANDED AS ERRONEOUS SIMPLY BECAUSE ACCORDING TO THE CIT, THE ORDER SHOULD BE WRI TTEN MORE ELABORATELY. 2 0 . IN THE CASE OF DIT VS. JYOTI FOUNDATION, 357 ITR 388 (DEL) ( SUPRA ), THE HON'BLE DELHI HIGH COURT HAS HELD AS UNDER : - REVISIONARY POWER UNDER SECTION 263 IS CONFERRED BY THE ACT ON THE COMMISSIONER/DIRECTOR OF INCOME - TAX WHE N AN ORDER PASSED BY THE LOWER AUTHORITY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ORDERS WHICH ARE PASSED WITHOUT INQUIRY OR INVESTIGATION ARE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT ORDERS WHICH ARE PA SSED AFTER INQUIRY/INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUIRED OR DEEP ER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN. 21. IF THE AO HAS NOT DISCUSSED THE INQUIRY MADE BY HIM IN THE CASE OF EACH AND EVERY ASSESSEE WHICH FORMED PART OF THE GROUP IN RESPECT OF WHICH THE ASSESSMENT ORDER HAS BEEN PASSED IN CONSEQUENCE OF THE SEARCH, WE CANNOT SAY THAT ORDER IS ERRONEOUS AS THE AO HAS NOT MADE ANY INQUIRY INTO THE MATTER. THE ASSESSEE CANNOT DICTATE THE AO WHAT SHOULD HE INCORPORATE IN THE ASSESSMENT ORDER AND HOW HE SHOULD DRAFT THE ASSESSMENT ORDER. WE FIND THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V GABRIEL INDIA LIMITED 203 ITR 108 HAS HELD IN THIS REGARD AS UNDER: - 'HELD, THAT THE INCOME - TAX OFFICER I N THIS CASE HAD MADE ENQUIRIES IN REGARD TO THE NATURE OF THE EXPENDITURE INCURRED BY THE ASSESSEE. THE ASSESSEE HAD GIVEN A DETAILED EXPLANATION IN THAT REGARD BY A LETTER IN WRITING. ALL THESE WERE PART OF THE RECORD OF THE CASE. EVIDENTLY, THE CLAIM WAS ALLOWED BY THE INCOME - TAX OFFICER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. THIS DECISION OF THE INCOME - TAX OFFICER COULD NOT BE HELD TO BE 'ERRONEOUS' 17 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. MORE OVER, IN THE INSTANT CASE, THE COMMISSIONER HIMSELF, EVEN AFTER INITIATING PROCEEDINGS FOR REVISION AND HEARING THE ASSESSEE, COULD NOT SAY THAT THE ALLOWANCE OF THE CLAIM OF THE ASSESSEE WAS ERRONEOUS AND THAT THE EXPENDITURE WAS NOT REVENUE EXPENDITURE B UT AN EXPENDITURE OF CAPITAL NATURE. HE SIMPLY ASKED THE INCOME - TAX OFFICER TO RE - EXAMINE THE MATTER. THAT WAS NOT PERMISSIBLE. THE TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE THE ORDER PASSED BY THE COMMISSIONER OF INCOME - TAX UNDER SECTION 263.' 22 . SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. MAHENDER KUMAR BANSAL, 297 ITR 0099 IN WHICH RESPECTFULLY FOLLOWING THE DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. GOYAL PRIVATE FAMILY SPECIFIC TRUST, 171 ITR 69 8 (ALLD.) HAS HELD UNDER PARA NO.12 AS UNDER : - AS HELD BY THIS COURT IN THE CASE OF GOYAL PRIVATE FAMILY SPECIFIC TRUST (SUPRA,) WE ARE OF THE CONSIDERED OPINION THAT MERELY BECAUSE THE ITO HAD NOT WRITTEN LENGTHY ORDER, IT WOULD NOT ESTABLISH THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3)/148 OF THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WITHOUT BRINGING ON RECORD SPECIFIC INSTANCES, WHICH IN THE PRESENT CASE, THE CIT HAS FAILED TO DO. 23. A PERUSAL OF THE ORDER FRAMED BY CIT INDICATES THAT THE ASSESSMENT ORDER PASSED BY THE A.O. WAS SET ASIDE ON THE GROUND THAT THE ASSESSEE HAS NOT OFFERED HER TAXATION THE SUM OF RS.6 CRORES RECEIVED FROM MR. N. SURYANARAYAN . THIS, IN OUR CONSIDERED OPINIO N, CANNOT BE SUFFICIENT GROUND FOR SETTING ASIDE THE ASSESSMENT. WHILE MAKING ASSESSMENT ORDER, IT IS THE SATISFACTION OF THE A.O. WHO MADE THE ENQUIRY AND IT SHOULD BE A TOUCHSTONE OF THE ASSESSMENT ORDER PASSED BY HIM, THE CIT CANNOT SUBSTITUTE HIS VIEW IN PLACE OF FINDING OF THE A.O. UNTIL AND UNLESS THE VIEW TAKEN BY THE A.O. IS UNSUSTAINABLE IN LAW. NO COGENT MATERIAL OR EVIDENCE WAS BROUGHT TO OUR KNOWLEDGE BY THE LD. D.R. 18 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) WHICH MAY PROVE THAT THE DECISION TAKEN BY THE A.O. THAT THE SUM OF RS. 6 CRO RES HAS TO BE ADDED IN THE HANDS OF THE COMPANY NAMELY GAPL. THE ORDER PASSED BY CIT IS ILLEGAL WITHOUT JURISDICTION. THE ORDER PASSED BY THE CIT CANNOT BE SUSTAINED IF THE ORDER IS SUSTAINED THEN THIS WILL PERMIT THE ILLEGALITY TO CONTINUE AND THE SUBSEQ UENT ACTION CARRIED OUT ON THE ILLEGAL ORDER ARE ALSO ILLEGAL. 24 . THEREFORE, ON THIS BASIS, WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY WE QUASH THE O RDER PASSED U/S 263 BY ALLOWING THE GROUND NO.3 . 25. THE GROUND NO. 4 RELATES TO THE CONTENTION OF LD. A.R THAT THE SUM OF RS. 6 CRORES RECEIVED BY THE ASSESSE CANNOT BE REGARDED TO BE THE INCOME OF THE ASSESSE. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE NOTED THAT THIS GROUND DOES NOT ARISE OUT OF THE ORDER OF THE CIT AS THE CIT HAS NOT GIVEN THE DIRECTION TO THE ASSESSING OFFICER TO MAKE THE ADDITION OF RS. 6 CRORES BUT HAS ONLY SET ASIDE THE ORDER PASSED U/S 263 WITH THE DIRECTION TO CONSIDER THE ABOVE SUM OF RS. 6 CRORES DEPOSITED IN THE BANK OF THE ASSESSE FOR THE ASSESSMENT YEAR 2008 - 09 IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. THUS THE GROUND NO.4 STANDS DISMISSED. 26. IN THE RESULT, THE APPEAL FILED BY THE ASSES SE IS PARTLY ALLOWED. SD/ - (D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI - GOA DATED : 23 /01/2015 * SSL & A* COPY TO : 19 ITA NO.164/PNJ/2014 (ASST. YEAR : 2008 - 09) (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER ASSISTANT REGISTRAR ITAT, PANAJI BENCH, PANAJI