Indo Rub Industries, New Delhi V. CIT- XIII, New Delhi

ITA 2007/DEL/2012

• Counselvise Citation: 200720114 RSA 2012
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 01-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIS GILL
• Assessee Lawyers: V P BATRA; R S SINGHVIARS
• Keywords: Depreciation; Opportunity of being heard; Period of limitation; Question of law; Difference of opinion; Assessment record; Change of opinion; Revenue expenditure; Capital expenditure
• Section: 143(3); 142(1); 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI C BENC H BEFORE SHRI RAJPAL YADAV, JM & SHRI A.N. PAHUJA, AM ITA NO.2007 /DEL/2012 ASSESSMENT YEAR: 2008-09 INDO RUB INDUSTRIES, 223, CYCLE MARKET, JHANDEWALAN EXTEN., NEW DELHI V/S . CIT-XIII, C.R. BUILDING, NEW DELHI [PAN : AAAFI 7357 J ] (APPELLANT) (RESPONDENT) ASSESSEE BY S/SHRI V.P. BATRA & R.S. SINGHVI,ARS REVENUE BY SHRI R.I.S. GILL, DR DATE OF HEARING 05-07-2012 DATE OF PRONOUNCEMENT 13-07-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 01.05.2012 BY THE ASSESSEE AGA INST AN ORDER DATED 07.03.2012 OF THE LEARNED CIT-XIII, NEW DELHI , RAISES THE FOLLOWING GROUND:- 1 (I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT WAS NOT JUSTIFIED IN INVOKING PROVISIONS O F SEC. 263 OF THE INCOME-TAX ACT, 1961 EVEN THOUGH ORDER PASSED BY ASSESSING OFFICER IS NEITHER ERRONEOUS NO R PREJUDICIAL TO THE INTEREST OF THE REVENUE. (II) THAT ISSUE RAISED IN THE SHOW CAUSE NOTICE WE RE SPECIFICALLY DEALT WITH BY THE ASSESSING OFFICER AN D ORDER U/S 143(3) WAS PASSED AFTER DETAILED CONSIDERATION AND APPLICATION OF MIND AND AS SUCH PROCEEDINGS U/S 263 ARE ILLEGAL, INVALID AND WITHOUT JURISDICTION. ITA N O.2007 /DEL./2012 2 (III) THAT PROCEEDINGS U/S 263 ARE MERELY ON THE B ASIS OF CHANGE OF OPINION AND IN TOTAL DISREGARD TO FACTS O N RECORD AND DETAILED SUBMISSION BY THE ASSESSEE DURI NG PROCEEDINGS U/S 263. (IV) THAT IT IS NOT THE CASE OF THE CIT THAT THE AS SESSING OFFICER HAD NOT CONDUCTED ENQUIRY IN RELATION TO IS SUE RAISED IN THE SHOW CASE NOTICE AND ONLY ALLEGATION IS THAT THERE WAS LACK OF ENQUIRY AND JURISDICTION WAS ASSU MED MERELY ON THE BASIS OF CHANGE OF OPINION AND IN TOT AL DISREGARD TO OBJECT AND SCOPE OF SEC. 263 OF THE IN COME- TAX ACT, 1961. 2. THAT ORDER U/S 263 IS NOT SUSTAINABLE ON FACTS A ND SAME IS BAD IN LAW. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THA T ASSESSMENT IN THIS CASE WAS COMPLETED ,DETERMINING NIL INCOME VIDE ORD ER DATED 20.08.2010 U/S 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT). SUBSEQUENTLY, THE LEARNED CIT, DELHI-XIII EXAMINED THE ASSESSMENT RECORDS AND ISSUED A SHOW CAUSE NOTICE U/S 263 OF THE ACT ON TH E GROUND THAT THE AFORESAID ASSESSMENT ORDER DATED 20 TH AUGUST, 2010 WAS ERRONEOUS IN SO FAR AS PREJUDICIA L TO THE INTEREST OF THE REVENUE, THE AO HAVING NOT M ADE DUE INQUIRIES IN RESPECT OF THE ADDITIONS AMOUNTING TO ` ` 5,36,73,181/- MADE TO FIXED ASSETS DURING THE YEA R, IN THE FIRST HALF OF THE FINANCIAL YEAR AND ` `69,31,924/- IN THE SECOND HALF OF THE FINANCIAL YEAR AND THUS, FAILED TO EXAMINE THE GENU INENESS OF THE ASSESSEES CLAIM OF DEPRECIATION DURING THE PERIOD UNDER CONSI DERATION NOR EXAMINED THE ADDITION TO PARTNERS CAPITAL ACCOUNTS, AN AMOUNT O F ` `53,36,482/- HAVING BEEN ADDED BY SHSRI BALDEV RAJ MAKIJA AND ` ` 59,92,955/- BY SHRI PRAVEEN MAKIJA. IN RESPONSE, THE ASSESSEE FURNISHED A DETAILED REPLY. HOWEVER, THE LD. CIT DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE ON THE GROUN D THAT THOUGH THE ASSESSEE VIDE LETTER DATED 26.5.2010 FILED BEFORE THE AO CLA IMED TO HAVE SUBMITTED DETAILS OF ADDITION TO FIXED ASSETS ALONG WITH PHOTOCOPIES OF BILLS, THESE WERE NOT AVAILABLE ON RECORD AND THE AO SHOULD HAVE EXAMINE D THE SOURCE OF ADDITION TO ITA N O.2007 /DEL./2012 3 FIXED ASSETS. BESIDES , THE AO DID NOT MAKE ANY ENQ UIRY IN THIS REGARD NOR VERIFIED GENUINENESS OF CLAIM OF DEPRECIATION AND N OR EVEN EXAMINED DATE OF INSTALLATION AND PUTTING TO USE OF MACHINERY. SIMIL ARLY, THE AO DID NOT VERIFY SOURCES OF ADDITION MADE BY PARTNERS IN THEIR CAPIT AL ACCOUNTS. ACCORDINGLY, THE LD. CIT CONCLUDED THAT THE AFORESAID ASSESSMENT ORD ER DATED 20 TH AUGUST, 2010 WAS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTER EST OF THE REVENUE, THE AO HAVING NOT CONDUCTED DUE ENQUIRIES AND VERIFICATION . CONSEQUENTLY, WHILE REFERRING TO DECISIONS IN RAMPYARI SARAOGI VS. CIT , 67 ITR 84 (SC); MALABAR INDUSTRIES LTD. VS. CIT, 243 ITR 83(SC), GEE VEE EN TERPRISE VS. ADDL. CIT, 99 ITR 375 (DELHI); CIT VS. BHAGWAN DASS ,272 ITR 367( ALL.);CIT VS. EMERY STONE MANUFACTURING COMPANY, 213 ITR 843 (RAJASTHAN); ARV EE INTERNATIONAL VS. ADDL. CIT, 290 ITR (AT) 08 (MUMBAI),THE LD. CIT DIRECTED THE AO TO FRAME THE ASSESSMENT AFRESH. 3. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINS T THE AFORESAID FINDINGS OF THE LD. CIT. THE LD. AR ON BEHALF OF TH E ASSESSEE WHILE CARRYING US THROUGH PAGE 8 TO 14 OF THE PAPER BOOK CONTENDED TH AT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ISSUED A SHOW CAUSE NOTICE, SEEKING, INTER ALIA, THE DETAILS OF FIXED ASSETS AND SOURCES OF ADDITION TO CAPITAL ACCOUNT OF THE PARTNERS. THE ASSESSEE VIDE LETTER DATED 26 TH MAY, 2010 SUBMITTED DETAILS OF ADDITIONS TO FIXED ASSETS ALONG WITH PHOTO COPIES O F BILLS BESIDES CONFIRMATIONS OF THE PARTNERS TOWARDS ADDITION TO THEIR CAPITAL TO T HE EXTENT OF ` ` 53,36,428/- IN THE ACCOUNT OF SHRI BALDEV RAJ MAKHIJA AND ` ` 59,92,955/- IN THE ACCOUNT OF SHRI PRAVEEN MAKHIJA ALONG WITH COMPUTATION OF INCOME, COPIES OF THEIR ITR ACKNOWLEDGMENTS AND COPIES OF THEIR RESPECTIVE BANK ACCOUNTS. THUS, THE AO HAD MADE THE NECESSARY INQUIRIES AND WAS SATISFIED. IT WAS FURTHER POINTED OUT THAT THE ASSESSEE SUBMITTED ALL THE RELEVANT DETAIL S AGAIN BEFORE THE CIT. WITHOUT POINTING OUT AS TO HOW THE ASSESSMENT ORDER WAS ERR ONEOUS, THE LD. CIT CONCLUDED THAT THE AFORESAID ASSESSMENT ORDER DATED 20 TH AUGUST, 2010 WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE, THE LD. AR ADDED. THE LD. AR VEHMENTLY ARGUED THAT THE LD. CIT INCORRECTLY ASSUMED THE JUR ISDICTION U/S 263 OF THE ACT AND ITA N O.2007 /DEL./2012 4 SET ASIDE THE ASSESSMENT. INTER ALIA, THE LD. AR R ELIED UPON DECISIONS IN CIT VS. SUNBEAM AUTO LTD.,332 ITR167(DEL.) (DELHI);CIT VS. LEISURE EXPORTS LTD.,341 ITR 166(DEL.), CIT VS. HINDUSTAN MARKETING & ADVERT ISING CO. LTD.,341 ITR 180(DEL.); AND CIT VS. VIKAS POLYMERS,341 ITR 537 (DELHI). 4. ON THE OTHER HAND, THE LD. DR SUPPORTED THE FIN DINGS OF THE LD. CIT WHILE CONTENDING THAT THE ASSESSMENT WAS COMPLETED WITHOUT MAKING PROPER INQUIRIES AND THUS, WAS ERRONEOUS IN SO FAR AS PREJ UDICIAL TO THE INTEREST OF THE REVENUE. 5.. WE HAVE HEARD BOTH THE PARTIES AND GONE TH OUGH THE FACTS OF THE CASE AS ALSO THE AFORECITED DECISIONS. SINCE THE ISSUE RELA TES TO ASSUMPTION OF JURISDICTION BY THE CIT U/S 263 OF THE ACT , WE MAY, AT THE OUT SET, HAVE A LOOK AT THE RELEVANT PROVISIONS , WHICH READ AS UNDER:- 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 OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE MAY, AFTER GIVIN G THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUS ING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THER EON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORD ER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSM ENT AND DIRECTING A FRESH ASSESSMENT. EXPLANATION.- FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT, FOR THE PURPOSES OF THIS SUB-SECTION, - (A) AN ORDER PASSED ON OR BEFORE OR AFTER THE 1 ST DAY OF JUNE, 1988 BY THE ASSESSING OFFICER SHALL INCLUDE - (I) AN ORDER OF A SSESSMENT MADE BY THE ASSISTANT COMMISSIONER OR DEPUTY COMMISSIONER OR TH E INCOME-TAX OFFICER ON THE BASIS OF THE DIRECTIONS ISSUED BY TH E JOINT COMMISSIONER UNDER SECTION 144A; (II) AN ORDER MADE BY THE JOINT COMMISSIONER IN EXERCISE OF THE POWERS 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 COMM ISSIONER OR DIRECTOR GENERAL OR COMMISSIONER AUTHORIZED BY THE BOARD IN THIS BEHALF UNDER SECTION 120; ITA N O.2007 /DEL./2012 5 (B) RECORD SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT A VAILABLE 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 AN Y APPEAL FILED ON OR BEFORE OR AFTER THE 1 ST DAY OF JUNE, 1988, THE POWERS OF THE COMMISSIONER UNDER THIS SUB-SECTION SHALL EXTEND AND SHALL BE DE EMED 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) A FTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH T HE ORDER SOUGHT TO BE REVISED WAS PASSED. .. 5.1. THE LD. AR ON BEHALF OF THE ASSESSEE POINT ED OUT THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAD ENQUIRED IN T O THE ISSUE OF ADDITION TO FIXED ASSETS AND SOURCES OF ADDITION TO CAPITAL OF THE PARTNERS AND AFTER CONSIDERING THEIR DETAILED REPLY SUBMITTED VIDE LET TER DATED 26.5.2010 AND 9.8.2010, ACCEPTED THE SUBMISSIONS OF THE ASSESSEE. 5.2 AS IS APPARENT FROM THE AFORESAID PROVISI ONS OF SEC. 263 OF THE ACT, THE POWER OF SUO MOTO REVISION EXERCISABLE BY THE CIT IS UNDOUBTEDLY SUPERVISORY I N NATURE. THE OPENING WORDS OF SECTION 263 EMPOWER TH E CIT TO CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDINGS UNDER THE ACT . A BARE READING OF SECTION 263 ALSO MAKES IT CLEAR THAT THE COMMISSIONER HAS T O BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERE ST OF THE REVENUE. IF ONE OF THEM IS ABSENT I.E. IF THE ORDER OF THE AO IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IT IS PREJUDICIAL TO THE REVENUE RECOURSE CANNOT BE HAD TO PROVISIONS OF THE 263(1) OF THE ACT AS HELD IN MALABAR INDUSTRIAL CO. LTD. VS. CIT, 243 ITR 83 (SC). 5.3. AS REGARDS THE SCOPE AND AMBIT OF TH E EXPRESSION ERRONEOUS, HONBLE BOMBAY HIGH COURT IN CIT VS. GABRIEL INDIA LTD., (1993) 203 ITR 108 ITA N O.2007 /DEL./2012 6 (BOMBAY), WHILE REFERRING TO BLACKS LAW DICTIONARY THAT AN ERRONEOUS JUDGMENT MEANS ONE RENDERED ACCORDING TO COURSE A ND PRACTICE OF COURT, BUT CONTRARY TO LAW, UPON MISTAKEN VIEW OF LAW; OR UPON ERRONEOUS APPLICATION OF LEGAL PRINCIPLES , OBSERVED THAT AN ORDER CANNOT B E TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF AN AO ACTING I N ACCORDANCE WITH LAW MAKES A CERTAIN ASSESSMENT, THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE CIT MERELY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN DIFFERENTLY OR MORE ELABORATELY. THE PROVISIONS OF SEC. 263 OF THE ACT DO NOT VISUALIZE THE SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FO R THAT OF THE AO UNLESS HIS ORDER IS NOT IN ACCORDANCE WITH LAW. THERE AGAIN E VERY ERRONEOUS ORDER CANNOT BE THE SUBJECT MATTER OF REVISION BECAUSE THE SECON D REQUIREMENT HAS ALSO TO BE FULFILLED. THERE MUST BE MATERIAL ON RECORD TO SHOW THAT TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED AS HELD IN GABRIEL I NDIA LTD. (SUPRA). HOWEVER, THE EXPRESSION PREJUDICIAL TO THE INTEREST OF THE REVENUE, AS HELD BY THE HONBLE SUPREME COURT IN THE MALABAR INDUSTRIAL CO. LTD.,24 3 ITR 83(SC), IS NOT AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT AND , THEREFORE, MUST BE UNDERSTOOD IN ITS ORDINARY MEANING. IT IS OF WIDE IMPORT AND I S NOT CONFINED TO ONLY THE LOSS OF REVENUE. THE WORDS PREJUDICIAL TO THE INTEREST OF THE REVENUE, AS OBSERVED IN DAWJEE DADABHOY AND CO. VS. S.P. JAIN, 31 ITR 872 ( CALCUTTA ) , CAN ONLY MEAN THAT THE ORDERS OF ASSESSMENT CHALLENGED ARE SUCH AS ARE NOT IN ACCORDANCE WITH LAW, IN CONSEQUENCE WHEREOF THE LAWFUL REVENUE DUE TO THE STATE HAS NOT BEEN REALIZED OR CANNOT BE REALIZED. THUS, THE EX ERCISE OF REVISIONAL JURISDICTION UNDER THE PROVISIONS OF SECTION 263 OF THE ACT IS LIMITED TO CASES WHERE THE COMMISSIONER ON EXAMINING THE RECORDS COMES TO THE CONCLUSION THAT THE EARLIER FINDING OF THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THAT FRESH DETERMINATION OF THE ASSESSMENT WAS NE CESSARY. THERE MUST BE MATERIAL TO JUSTIFY THE COMMISSIONERS FINDING THAT THE ORDER OF THE ASSESSMENT WAS ERRONEOUS INSOFAR AS IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 5.4. THOUGH THERE IS A FINE THOUGH SUBTLE DIST INCTION BETWEEN LACK OF INQUIRY AND INADEQUATE INQUIRY, IT IS ONLY IN CASES OF L ACK OF INQUIRY THAT THE CIT CAN ITA N O.2007 /DEL./2012 7 EXERCISE HIS REVISIONAL JURISDICTION. AS HELD IN GA BRIEL INDIA LTD. (SUPRA), THE CIT CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FI SHING AND ROVING ENQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED. HON BLE BOMBAY HIGH COURT FURTHER OBSERVED IN THE SAID DECISION AS UNDER:- FROM THE AFORESAID DEFINITIONS AS IT IS CLEAR THAT AN ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF AN INCOME-TAX OFFICER ACTING IN ACCORDANCE WITH LAW MAKES A CERTAIN ASSESSMENT, THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BEC AUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY . THIS SECTION DOES NOT VISUALIZE A CASE OF SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE INCOME-TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISION IS HELD TO BE ERRONEOUS. CASES MAY BE VISUALIZED WHERE THE INCOME -TAX OFFICER WHILE MAKING AN ASSESSMENT EXAMINES THE ACCOUNTS, MAKES ENQUIRIE S, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME EITHER BY ACCEPTING THE ACCOUNTS OR BY MAKING SOME ESTIMATE H IMSELF. THE COMMISSIONER, ON PERUSAL OF THE RECORDS, MAY BE OF THE OPINION TH AT THE ESTIMATE MADE BY THE OFFICER CONCERNED WAS ON THE LOWER SIDE AND LEFT TO THE COMMISSIONER HE WOULD HAVE ESTIMATED THE INCOME AT A FIGURE HIGHER THAN T HE ONE DETERMINED BY THE INCOME-TAX OFFICER. THAT WOULD NOT VEST THE COMMISS IONER WITH POWER TO RE- EXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIMSE LF AT A HIGHER FIGURE. IT IS BECAUSE THE INCOME-TAX OFFICER HAS EXERCISED THE QU ASI-JUDICIAL POWER VESTED IN HIM IN ACCORDANCE WITH LAW AND ARRIVED AT CONCLUSIO N AND SUCH A CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE CONCLUSION. X X X X THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD T O SHOW THAT TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY T HE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATIO N A LESSER TAX THAN WHAT WAS JUST HAS BEEN IMPOSED. X X X X WE MAY NOW EXAMINE THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE POWERS OF THE COMMISSIONER SET OUT ABOVE. THE INCOME-TAX OFFI CER IN THIS CASE HAD MADE ENQUIRIES IN REGARD TO THE NATURE OF THE EXPENDITUR E INCURRED BY THE ASSESSEE. THE ASSESSEE HAD GIVEN DETAILED EXPLANATION IN THAT REGARD BY A LETTER IN WRITING. ALL THESE ARE PART OF THE RECORD OF THE CASE. EVIDE NTLY, THE CLAIM WAS ALLOWED BY THE INCOME-TAX OFFICER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. SUCH DECISION OF THE INCOME-TAX OFFICER CANNOT BE H ELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE AN ELABORATE D ISCUSSION IN THAT REGARD.. 5.5 WHILE ADJUDICATING A SIMILAR ISSUE, HONBLE SUPREME COURT IN THE CASE OF CIT VS MAX INDIA LTD. (SUPRA) RELYING UPON ITS EARL IER DECISION IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. (SUPRA) HELD AS UNDER: ITA N O.2007 /DEL./2012 8 THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE RE VENUE IN SECTION 263 OF THE INCOME-TAX ACT, 1961, HAS TO BE READ IN CONJUNCTION WITH THE EXPRESSION ERRONEOUS ORDER PASSED BY THE ASSESSIN G OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSI NG OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVE NUE. FOR EXAMPLE, WHEN THE ASSESSING OFFICER ADOPTS ONE OF TWO COURSES PERMISS IBLE 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 THE COMMISSIO NER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE REVENUE, UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABL E IN LAW. 5.6 SIMILARLY, HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS R. K. CONSTRUCTION CO. 313 ITR 65 HELD AS UNDER: AS FAR AS LAW IS CONCERNED, THE ASSESSING OFFICER H AS TAKEN A PARTICULAR VIEW ON THE BASIS OF EVIDENCE PRODUCED BEFORE HIM. ON THE BASIS OF THE SAID MATERIAL AND MATERIALS WHICH WERE COLLECTED BY THE CIT IN REVISIONAL PROCEEDINGS, THE COMMISSIONER HAS TAKEN A DIFFERENT VIEW. HOWEVER, IN THE REVISIONAL PROCEEDINGS UNDER SECTION 263, IT IS NOT OPEN FOR THE COMMISSIONER TO TAKE SUCH A DIFFERENT VIEW IN VIEW OF THE DECISIONS OF THE HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUST RIAL CO. LTD. THERE IS NOTHING ON RECORD TO SUGGEST THAT THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE AT LAW. THIS COURT HAS ALSO TAKEN THE SAME VIEW IN CASE OF ARVIND JEWELLERS WHEREBY THE ORDER PASSED BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT WAS QUASHED AND SET ASIDE. . 5.7 IN THE CASE OF CIT V. ARVIND JEWELLERS [20 03] 259 ITR 502(GUJ) , IT WAS OBSERVED THAT THE FINDING OF FACT GIVEN BY THE TRIB UNAL WAS THAT THE ASSESSEE HAD PRODUCED RELEVANT MATERIAL AND OFFERED EXPLANATIONS IN PURSUANCE OF THE NOTICES ISSUED UNDER SECTION 142(1) AS WELL AS SECTION 143( 2) OF THE ACT AND AFTER CONSIDERING THE MATERIAL AND EXPLANATIONS, THE INCO ME-TAX OFFICER HAD COME TO A DEFINITE CONCLUSION. SINCE THE MATERIAL WAS THERE O N RECORD AND THE SAID MATERIAL WAS CONSIDERED BY THE INCOME-TAX OFFICER AND A PART ICULAR VIEW WAS TAKEN, THE MERE FACT THAT A DIFFERENT VIEW CAN BE TAKEN SHOULD NOT BE THE BASIS FOR AN ACTION UNDER SECTION 263. THE HONBLE HIGH COURT, THEREFOR E, TOOK THE VIEW THAT THE ORDER OF REVISION WAS NOT JUSTIFIED. IN THE WORDS O F THE HONBLE HIGH COURT IT WAS HELD AS UNDER: COMING TO THE FACTS OF THE PRESENT CASE, IT IS THE FINDING OF FACT GIVEN BY THE TRIBUNAL THAT THE ASSESSEE HAS PRODUCED RELEVANT MA TERIAL AND OFFERED EXPLANATIONS IN PURSUANCE OF THE NOTICES ISSUED UND ER SECTION 142(1) AS WELL AS ITA N O.2007 /DEL./2012 9 SECTION 143(2) OF THE ACT AND AFTER CONSIDERING THE MATERIALS AND EXPLANATION, THE INCOME-TAX OFFICER HAS COME TO A DEFINITE CONCLUSIO N. THE COMMISSIONER OF INCOME-TAX DID NOT AGREE WITH THE CONCLUSION REACHE D BY THE INCOME-TAX OFFICER. SECTION 263 OF THE ACT DOES NOT EMPOWER HIM TO TAKE ACTION ON THESE FACTS TO ARRIVE AT THE CONCLUSION THAT THE ORDER PASSED BY T HE INCOME-TAX OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. SINCE THE MATERIAL WAS THERE ON RECORD AND THE SAID MATERIAL WAS CONSIDERE D BY THE INCOME-TAX OFFICER AND A PARTICULAR VIEW WAS TAKEN, THE MERE FACT THAT A DIFFERENT VIEW CAN BE TAKEN, SHOULD NOT BE THE BASIS FOR AN ACTION UNDER SECTION 263 OF THE ACT AND IT CANNOT BE HELD TO BE JUSTIFIED. 5.8 IN CIT V. MEHROTRA BROTHERS 270 ITR 157 (MP), THE HONBLE HIGH COURT GAVE THE STAMP OF APPROVAL TO THE ORDER OF TH E TRIBUNAL WHICH, AFTER RELYING ON CIT V. RATLAM COAL ASH CO. [1988] 171 ITR 141, HAD HELD THAT WHEN THE AO CONSIDERED THE RECORDS BEFORE HIM AND COMPLETED THE ASSESSMENT AFTER CONSIDERING THE EVIDENCE FILED AND AFTER HIS SATISF ACTION ABOUT THE GENUINENESS OF CASH CREDITS, THE ORDER OF REVISION UNDER SECTION 2 63 ON THE VAGUE GROUND THAT THE AO DID NOT MAKE PROPER ENQUIRY WAS NOT VALID. 5.9 HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS DEEPAK MITTAL 324 ITR 411 HELD THAT CHANGE OF OPINION BY REAPPRAISING THE EVIDENCE IS NOT WITHIN THE PARAMETERS OF REVISIONAL JURISDICTION OF THE COMMISSIONER UNDER SECTION 263 OF THE ACT. 5.10 IN CIT VS. INTERNATIONAL TRAVEL HOUSE,194 TA XMAN 324(DEL),HONBLE DELHI HIGH COURT WHILE RELYING, IN TER ALIA, ON THE DECISION OF HONBLE GUJRAT HIGH COURT IN ARVIND JEW ELLERS(SUPRA) OBSERVED THAT THE COMMISSIONER HAD REALLY MADE AN EFFORT TO CAUSE A ROUTINE INQUIRY WITH REGARD TO THE MATTER THAT HAD ALREADY BEEN CONCLUDED AND HE THOUGHT THAT HE HAD THE AUTHORITY TO BEGIN A FRESH LITIGATION BECAUSE OF THE VIEW ENTERTAINED BY HIM. HONBLE HIGH COURT HELD THAT A MERE CHANGE OF OPINION OR VIEW WOULD NOT ENABLE THE COMMISSIONER TO EXERCISE JURISDICTION UNDER SECTION 263 OF THE ACT, MORE SO, WHEN THE ASSESSING OFFICER HAD CONSIDERED THE DETAILS AND THE EXPLANATION OFFERED BY THE ASSESSEE. ITA N O.2007 /DEL./2012 10 5.11 IN CIT VS. SUNBEAM AUTO LTD. [2010] 189 TAXM AN 436 (DEL), HONBE JURISDICTIONAL HIGH COURT WHILE ADJUDICATING A SIMILAR ISSUE DREW DISTINCTION BETWEEN LACK OF ENQUIRY AND INADEQ UATE ENQUIRY AND ACCORDINGLY, OBSERVED AS UNDER: 'AS NOTED ABOVE, THE SUBMISSION OF LEARNED COUNSEL FOR THE REVENUE WAS THAT WHILE PASSING THE ASSESSMENT ORDER, THE ASSES SING OFFICER DID NOT CONSIDER THIS ASPECT SPECIFICALLY WHETHER THE EXPENDITURE IN QUESTION WAS REVENUE OR CAPITAL EXPENDITURE. THIS ARGUMENT PREDICATES ON TH E ASSESSMENT ORDER, WHICH APPARENTLY DOES NOT GIVE ANY REASONS WHILE ALLOWING THE ENTIRE EXPENDITURE AS REVENUE EXPENDITURE. HOWEVER, THAT BY ITSELF WOU LD NOT BE INDICATIVE OF THE FACT THAT THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND ON THE ISSUE. THERE ARE JUDGMENTS GALORE LAYING DOWN THE PRINCIPLE THAT THE ASSESSING OFFICER IN THE ASSESSING ORDER IS NOT REQUIRED TO GIVE DETAILED RE ASON IN RESPECT OF EACH AND EVERY ITEM OF DEDUCTION, ETC. THEREFORE, ONE HAS TO SEE FROM THE RECORD AS TO WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWI NG THE EXPENDITURE IN QUESTION AS REVENUE EXPENDITURE. LEARNED COUNSEL FO R THE ASSESSEE IS RIGHT IN HIS SUBMISSION THAT ONE HAS TO KEEP IN MIND THE DISTINC TION BETWEEN 'LACK OF INQUIRY' AND INADEQUATE INQUIRY'. IF THERE WAS ANY INQU IRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SECTION 263 OF THE ACT, MERELY BECAUSE HE HAS DIFFERENT OPI NION IN THE MATTER.' 5.111 THE HONBLE HIGH COURT IN THE SAID DECISION FURTHE R WENT ON TO OBSERVE THAT : 'THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT TAX WHICH WASLAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT B Y THE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTE RPRETATION A LESSER TAX THAN WHAT WAS JUST HAS BEEN IMPOSED.' 5.12 IN CIT VS. ANIL KUMAR SHARMA [2010] 194 T AXMAN 504 (DEL), WHILE FOLLOWING THEIR OWN DECISION IN SUNBEAM AUTO LTD. (SUPRA), HONBLE DELHI HIGH COURT OBSERVED AS UNDER: 7. IN VIEW OF THE ABOVE DISCUSSION, IT IS APPARENT THA T THE TRIBUNAL ARRIVED AT A CONCLUSIVE FINDING THAT, THOUGH THE ASSESSMENT ORDE R DOES NOT PATENTLY INDICATE THAT THE ISSUE IN QUESTION HAD BEEN CONSIDERED BY T HE ASSESSING OFFICER, THE RECORD SHOWED THAT THE ASSESSING OFFICER HAD APPLIE D HIS MIND. ONCE SUCH APPLICATION OF MIND IS DISCERNIBLE FROM THE RECORD, THE PROCEEDINGS UNDER SECTION 263 WOULD FELL INTO THE AREA OF THE COMMISSIONER HA VING A DIFFERENT OPINION. WE ARE OF THE VIEW THAT THE FINDINGS OF FACTS ARRIVED AT BY THE TRIBUNAL DO NOT ITA N O.2007 /DEL./2012 11 WARRANT INTERFERENCE OF THIS COURT. THAT BEING THE POSITION, THE PRESENT CASE WOULD NOT BE ONE OF LACK OF INQUIRY AND, EVEN IF THE INQUIRY WAS TERMED AS INADEQUATE, FOLLOWING THE DECISION IN SUNBEAM AUTO LTD.S CASE (SUPRA), 'THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSION ER TO PASS ORDERS UNDER SECTION 263 OF THE SAID ACT, MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER'. NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION. CONSQUENTLY, THE APPEAL IS DISMISSED. 5.13 IN CIT VS. LEISURE WEAR EXPORTS LTD. [2010 ] 46 DTR (DEL) 97 HONBLE DELHI HIGH COURT HELD THAT POWER OF REVISI ON U/S 263 OF THE ACT IS NOT MEANT TO BE EXERCISED FOR THE PURPOSE O F DIRECTING THE AO TO HOLD ANOTHER INVESTIGATION, WITHOUT DESCRIBING A S TO HOW THE ORDER OF THE AO IS ERRONEOUS. WHERE THE ASSESSMENT ORDER HAS BEEN PASSED BY THE AO AFTER TAKING INTO ACCOUNT ASSESSEE 'S SUBMISSIONS AND DOCUMENTS FURNISHED BY HIM, AND NO MATERIAL IS BROUGHT ON RECORD BY THE CIT WHICH SHOWS THAT THERE WAS ANY DI SCREPANCY OR FALSITY IN THE EVIDENCE FURNISHED BY THE ASSESSEE, THE ORDER OF THE AO CANNOT BE SET ASIDE FOR MAKING DEEP ENQUIRY ONLY ON THE PRESUMPTION THAT SOMETHING NEW MAY COME OUT. SINCE THERE WAS NOT EVEN A WHISPER THAT THE ORDER WAS ERRONEOUS NOR AS TO HOW THE SAID ORDER WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE WHILE THE ONLY OBSERVATIONS OF THE CIT WERE THAT A DEEPER PR OBE BY CALLING FOR MORE DETAILS WAS REQUIRED OR THAT THE MATTER NEEDE D EXAMINATION BY THE AO, HONBLE HIGH COURT HELD THAT THIS DID NOT S ATISFY THE INGREDIENTS OF S. 263 OF THE ACT. ACCORDINGLY, HON BLE HIGH COURT UPHELD THE FINDINGS OF THE TRIBUNAL, SETTING ASIDE THE ORDER OF THE CIT. 5.14 AS REGARDS ABSENCE OF DISCUSSION IN THE ASSE SSMENT ORDER, IN CIT VS. NIRMA CHEMICALS WORKS P. LTD. [2009] 309 IT R 67 (GUJ) A SIMILAR CONTENTION WAS RAISED WHEN THE HONBLE GUJR AT HIGH COURT FOLLOWING THEIR EARLIER DECISION IN RAYON SILK MI LLS V. CIT [1996] 221 ITR 155 CONCLUDED IN THE FOLLOWING TERMS: ITA N O.2007 /DEL./2012 12 THE CONTENTION ON BEHALF OF THE REVENUE THAT T HE ASSESSMENT ORDER DOES NOT REFLECT ANY APPLICATION OF MIND AS TO THE ELIGIBILI TY OR OTHERWISE UNDER SECTION 80-I OF THE ACT REQUIRES TO BE REJECTED. AN ASSESSMENT O RDER CANNOT INCORPORATE REASONS FOR MAKING/GRANTING A CLAIM OF DEDUCTION. I F IT DOES SO, AN ASSESSMENT ORDER WOULD CEASE TO BE AN ORDER AND BECOME AN EPIC TOME. THE REASONS ARE NOT FAR TO SEEK. FIRSTLY, IT WOULD CAST AN ALMOST IMPOS SIBLE BURDEN ON THE ASSESSING OFFICER, CONSIDERING THE WORKLOAD THAT HE CARRIES A ND THE PERIOD OF LIMITATION WITHIN WHICH AN ORDER IS REQUIRED TO BE MADE; AND, SECONDLY, THE ORDER IS AN APPEALABLE ORDER. AN APPEAL LIES, WOULD BE FILED, O NLY AGAINST DISALLOWANCES WHICH AN ASSESSEE FEELS AGGRIEVED WITH. AS FAR AS ABSENCE OF DISCUSSION IN THE ASSESSMENT O RDER IS CONCERNED, THIS IS WHAT HAS BEEN LAID DOWN BY THIS COURT IN THE CASE O F RAYON SILK MILLS V. CIT [1996] 221 ITR 155 : 'IN THE FIRST INSTANCE IT WAS CONTENDED BY LEARNED COUNSEL FOR THE ASSESSEE THAT THE VERY PREMISE ON WHICH ORDER UNDER SECTION 263 WAS MADE AGAINST THE ASSESSEE, NAMELY, THAT THE INCOME-TAX O FFICER HAS NOT AT ALL EXAMINED THE GOODWILL ACCOUNT IS NOT EXISTE NT. ACCORDING TO HIM, IT IS APPARENT FROM THE RECORD THAT THE GOODWILL ACCOUNT WAS THOROUGHLY EXAMINED BY THE INCOME-TAX OFFICER BEFORE MAKING THE ASSESSMENT AND AFTER EXAMINING WHEN HE ACCEPTED THE CONTE NTION OF THE ASSESSEE ITS DISCUSSION DID NOT FIND PLACE IN THE ASSESSMEN T ORDER, AS NO ADDITIONS WERE GOING TO BE MADE OR NO MODIFICATI ONS IN THE RETURN FILED BY THE ASSESSEE WERE REQUIRED TO BE MADE I N THAT REGARD. THIS CONTENTION OF THE ASSESSEE APPEARS TO BE WELL-FOUNDED . IT IS TRUE THAT THE ASSESSMENT ORDER DOES NOT SPEAK ABOUT THE EXAMI NATION OF GOODWILL ACCOUNT AS SUCH. HOWEVER, AS WE HAVE NOTICED ABOVE , THE ASSESSEE IN HIS REPLY TO THE SHOW-CAUSE NOTICE UNDER SECTION 2 63 HAD SPECIFICALLY MENTIONED THAT THE ENTIRE MATTER WAS SCRUTI NISED AND ACCEPTED WHILE PASSING THE ASSESSMENT ORDER. OUR ATTENTION WAS ALSO DRAWN TO ANNEXURE 'D'. A SUBMISSION MADE BY THE ASSESSEE TO THE INCOME-TAX OFFICER, SURAT, DATED OCTOBER 18, 1976, REG ARDING THE ASSESSMENT YEAR 1974-75 GIVING DETAILED CHRONOLOGICAL DAT A OF THE CONSTITUTION OF THE FIRM ON NOVEMBER 11, 1968, INDUCT ION OF FOUR MORE PARTNERS ON NOVEMBER 7, 1972, THE CREATION OF GOODWIL L IN THE BOOKS OF ACCOUNT OF THE FIRM BY DEBITING THE GOODWILL ACCOUNT AN D CREDITING THE OLD PARTNERS' CAPITAL ACCOUNTS IN THEIR PROFIT SHARING RA TIO ON THAT DATE, FORMATION OF A PRIVATE LIMITED COMPANY IN THE NAME O F RAYON SILK MILLS PRIVATE LIMITED, AND ITS INDUCTION INTO THE FIRM AS PA RTNER BY THE DEED OF PARTNERSHIP DATED OCTOBER 27, 1973, AND THE DISSOLUT ION OF THE PARTNERSHIP FIRM ON FEBRUARY 23, 1974, LEAVING THE P RIVATE LIMITED COMPANY AS A SOLE PROPRIETOR THEREOF AND THE VALUATION OF THE BUSINESS AT THE BOOK VALUE AS ON THAT DATE. AFTER GIVING THE CHRONOLOGICAL ITA N O.2007 /DEL./2012 13 SEQUENCE OF EVENTS, THE ASSESSEE ALSO CONTENDED IN HIS SUBMI SSION BEFORE THE INCOME-TAX OFFICER THAT THERE WAS NO ACTUAL TRANSFER OF ANY ASSET INASMUCH AS WHEN A PARTNER IS ADMITTED INTO THE FI RM NO TRANSFER TAKES PLACE. IT WAS ALSO CONTENDED THAT NO CASH TRANSFER TOOK PLACE FROM PERSON TO PERSON AND THE TRANSFER AND THE DISSOLUTI ON OF THE FIRM ALSO DID NOT RESULT IN ACCRUAL OF CAPITAL GAINS. IN THE F ACE OF THIS MATERIAL ON RECORD, IT IS DIFFICULT TO EXPLAIN THAT T HE ASSESSMENT ORDER WAS MADE WITHOUT MAKING ANY ENQUIRY INTO THE GOODWIL L ACCOUNT OF RS. 10,75,000.' THERE IS ANOTHER ASPECT OF THE MATTER. THE ASSESSEE HAD CH ALLENGED JURISDICTION OF THE COMMISSIONER OF INCOME-TAX TO EXERCISE POWERS UNDER SECTION 263 OF THE ACT. FOR AN ORDER OF THE ASSESSIN G OFFICER TO BE INTERFERED WITH IN EXERCISE OF REVISIONAL POWERS THE COMMISSIONER OF INCOME-TAX HAS TO FIND IN THE FIRST INSTANCE THAT THE O RDER IS ERRONEOUS AND, SECONDLY, THE ORDER IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE CONDITIONS ARE TWIN CONDITIONS AS HELD BY THE APEX CO URT AND BOTH OF THEM HAVE TO BE FULFILLED BEFORE THE COMMISSIONER OF INCOME-TAX CAN EXERCISE JURISDICTION UNDER SECTION 263 OF THE ACT. IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. V. CIT [2000] 243 ITR 83 (SC) THE APEX COURT HAS HELD: 'THE PHRASE 'PREJUDICIAL TO THE INTEREST S OF THE REVENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEO US ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUE NCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUD ICIAL TO THE INTERESTS OF THE REVENUE. FOR EXAMPLE, WHEN AN INCOME- TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER D OES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJ UDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW.' APPLYING THE AFORESAID TESTS TO THE FACTS O F THE CASE IT IS NOT POSSIBLE TO UPHOLD THE ORDER OF THE TRIBUNAL AS REGARDS JURISDI CTION AFTER CONSIDERING THE LAW ENUNCIATED BY THE APEX COURT. THE ASSESSING OFFICER AFTER MAKING DUE INQUIRIES, AS NOTED HEREINBEFORE, ADOPTED ONE VIEW AND GRANTED PARTIAL RELIEF UNDER SECTION 80-I OF THE ACT. THE COMMISSIONER OF INCOME-TAX TAK ES A DIFFERENT VIEW OF THE MATTER. HOWEVER, THAT WOULD NOT BE SUFFICIENT TO PE RMIT THE COMMISSIONER OF INCOME-TAX TO EXERCISE POWERS UNDER SECTION 263 OF THE ACT BECAUSE WHEN TWO VIEWS ARE POSSIBLE AND THE COMMISSIONER OF INCOME-T AX DOES NOT AGREE WITH THE VIEW TAKEN BY THE ASSESSING OFFICER, THE ASSESSMENT ORDER CANNOT BE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. T HAT IS NOT THE POSITION IN THE PRESENT CASE. IN FACT EVEN THE PARTIAL DENIAL OF RE LIEF UNDER SECTION 80-I OF THE ACT HAS BEEN FOUND TO BE INCORRECT BY THE APPELLATE AUT HORITY. THEREFORE, EXISTENCE OF ITA N O.2007 /DEL./2012 14 TWO VIEWS STANDS ESTABLISHED. IN THE AFORESAID CIRC UMSTANCES, THE COMMISSIONER OF INCOME-TAX COULD NOT HAVE EXERCISED JURISDICTION UNDER SECTION 263 OF THE ACT AS PER SETTLED LEGAL POSITION. 5.15 IN VIKAS POLYMERS(SUPRA),HONBLE JURISDICTION AL HIGH COURT HELD THAT MERELY BECAUSE THE COMMISSIONER CONSIDERS ON EXAMIN ATION OF THE RECORD THAT THE ORDER HAVE BEEN ERRONEOUSLY PASSED SO AS TO PRE JUDICE THE INTEREST OF THE REVENUE WILL NOT SUFFICE. THE ASSESSEE MUST BE CALL ED, HIS EXPLANATION SOUGHT FOR AND EXAMINED BY THE COMMISSIONER, AND THEREAFTER, I F THE COMMISSIONER STILL FEELS THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF THE REVENUE, THE COMMISSIONER MAY PASS REVISIONAL ORDERS. IT WAS FU RTHER OBSERVED THAT IF A QUERY IS RAISED DURING THE COURSE OF SCRUTINY BY THE AO, WHICH WAS ANSWERED TO THE SATISFACTION OF THE AO, BUT NEITHER THE QUERY NOR T HE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE AO CALLED FOR INTERFERENCE AND REVISION. 5.16 IN CIT VS. HINDUSTAN MARKETING & ADVERTISING CO. LTD.,341 ITR 180(DEL.),HONBLE JURISDICTIONAL HIGH COURT HELD TH AT WHEN THE ITO HAD MADE REASONABLY DETAILED ENQUIRIES, COLLECTED RELEVANT M ATERIAL AND DISCUSSED VARIOUS FACETS OF THE CASE WITH THE ASSESSEE, THE ORDER OF THE COMMISSIONER TO DIRECT FRESH ASSESSMENT BY GOING DEEPER INTO THE MATTER WO ULD NOT FORM A VALID OR LEGAL BASIS TO EXERCISE JURISDICTION UNDER SECTION 263 OF THE ACT. MOREOVER,IT WAS NOT CLEAR AS TO WHAT KIND OF FURTHER ENQUIRY THE COMMIS SIONER WANTED THE AO TO MAKE, KEEPING IN VIEW THE NATURE OF THE ASSESSEES BUSINESS, MORE SO WHEN NO ERROR WAS POINTED OUT IN THE ASSESSMENT ORDERS AND IT WAS ALSO NOT POINTED OUT AS TO HOW THESE ASSESSMENT ORDERS HAD CAUSED PREJUDICE TO THE REVENUE . 6. IN THE LIGHT OF VIEW TAKEN IN THE AFORESAID DECISIONS BY THE HONBLE JURISDICTIONAL HIGH COURT AND OTHER HIGH COURTS , I T IS APPARENT THAT THE CIT HAS TO GIVE REASONS TO JUSTIFY THE EXERCISE OF SUO MOTO REVISIONAL POWERS BY HIM TO RE- OPEN A CONCLUDED ASSESSMENT. IN THE INSTANT CASE ,A NOTICE WAS ISSUED BY THE AO, RAISING QUERIES ON ADDITION TO FIXED ASSETS AND ADDITION TO CAPITAL OF THE ITA N O.2007 /DEL./2012 15 PARTNERS AND THE ASSESSEE SUBMITTED ITS REPLY VID E LETTERS DATED 26.5.2010&9.8.2010. THIS FACT HAS NOT BEEN DISPUTED BEFORE US BY THE LD. DR. APPARENTLY, THE AO HAD NOT SHIRKED HIS RESPONSIBILI TY OF EXAMINING AND INVESTIGATING THE CASE. AFTER ENQUIRY, THE AO WAS SATISFIED WITH THE EXPLAN ATION OF THE ASSESSEE REGARDING ADDITION TO FIXED ASSETS AN D SOURCES OF ADDITION TO CAPITAL OF THE PARTNERS. MERE CHANGE OF OPINION OR VIEW WOULD NOT ENABLE THE CIT TO EXERCISE JURISDICTION U/S 263 OF THE ACT MORE SO , WHEN THE AO HAD CONSIDERED THE DETAILS AND THE EXPLANATION OFFERED BY THE ASSE SSEE . C HANGE OF OPINION BY REAPPRAISING THE EVIDENCE IS NOT WITHIN THE PARAMET ERS OF REVISIONAL JURISDICTION OF THE COMMISSIONER UNDER SECTION 263 OF THE ACT. IN VIEW THEREOF, WE SET ASIDE THE IMPUGNED ORDER U/S 263 OF THE ACT AND QUASH THE SAM E. THEREFORE, GROUND NOS. 1(I) TO(IV) & 2 IN THE APPEAL ARE ALLOWED. 7.. NO OTHER SUBMISSION OR ARGUMENT WAS MADE B EFORE US. 8. IN THE RESULT , APPEAL IS ALLOWED. SD/- SD/- (RAJPAL. YADAV) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEE 2. CIT-XIII, C.R. BUILDING,NEW DELHI 3. DR, ITAT,C BENCH, NEW DELHI 4. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT