Shri Narayan Saraf, Kolkata V. Pr.C.I.T.-12, Kolkata

ITA 2214/KOL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3492 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 27-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(3); 201; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA [BEFORE SHRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER & SHRI ABY T. VARKEY, HONBLE JUDICIAL MEMBER] I.T.A. NO. 2214/KOL/2019 ASSESSMENT YEAR: 2014-2015 SHRI NARAYAN SARAF...............................APPELLANT 56, N.S. ROAD 2 ND FLOOR KOLKATA 700 001 [PAN: AKKPS 6352 B] VS. PR. COMMISSIONER OF INCOME TAX -12, KOLKATA.....................RESPONDENT APPEARANCES BY: SHRI SOUMITRA CHOUDHURY, ADVOCATE & SHRI JAYDEEP CHAKRABORTY, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE. DR. P.K. SRIHARI, JCIT, SR. D/R, APPEARING ON BEHALF OF THE REVENUE DATE OF CONCLUDING THE HEARING : NOVEMBER 13 TH , 2019 DATE OF PRONOUNCING THE ORDER : NOVEMBER 29 TH , 2019 O R D E R PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKATA -12, (HEREINAFTER THE LD. PR. CIT), PASSED U/S. 263 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 14/03/2019, FOR THE ASSESSMENT YEAR 2014-15. 2. AT THE OUTSET WE FIND THAT THERE IS A DELAY OF 131 (ONE HUNDRED THIRTY ONE) DAYS IN FILING OF THIS APPEAL. AFTER PERUSING THE PETITION FOR CONDONATION, WE ARE CONVINCED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING THE APPEAL ON TIME. HENCE THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED. 3. THE ASSESSEE HAS ORIGINALLY FILED ITS RETURN OF INCOME ON 30/09/2014 DECLARING TOTAL INCOME OF RS.19,04,650/-, FOR THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT ON 18/07/2016 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.21,84,660/-. THE LD. CIT(A) ISSUED A SHOWCAUSE NOTICE TO THE ASSESSEE CALLING FOR AN EXPLANATION AS TO WHY THE ASSESSMENT SHOULD NOT BE REVISED U/S 263 OF THE ACT, AS THE SAME IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. PR. CIT HAS EXTRACTED THE NOTICE AT PAGES 4 TO 6 OF HIS ORDER. A PERUSAL OF THIS SHOWCAUSE NOTICE DEMONSTRATES THAT THE LD. PR. CIT O BSERVED AS FOLLOWS: A) DURING THE PERIOD OF DEMONETIZATION, SHRI NARAYAN SARAF, DEPOSITED CASH TO THE TUNE OF RS.9,44,05,500/ B) SEVERAL SHORTCOMINGS AROSE DUE TO LACK OF EXAMINATION BY THE ASSESSING OFFICER WHILE PASSING THE ORDER U/S 143(3) OF THE ACT, FOR YEAR 2014- 15. THESE ARE LISTED AT PAGES 4 TO 6 OF THE SHOWCAUSE NOTICE. C) THE ASSESSEE DID NOT APPEAR AND HENCE, THE LD. CIT(A) CANCELLED THE ORDER OF ASSESSMENT PASSED ON 18/07/2016 AND DIRECTED THE ASSESSING OFFICER TO PASS A SPEAKING ORDER 4. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS: 5. THE REVISION IN QUESTION HAS BEEN MADE ONLY ON THE GROUND THAT THERE WERE CERTAIN INFIRMITIES IN THE ORDER PASSED U/S 143(3) OF THE ACT BY THE ASSESSING OFFICER ON 18/07/2016. WHAT IS THE ERROR IN THE ASSESSMENT ORDER WHICH CAUSED PREJUDICE TO THE REVEN UE HAS NOT BEEN BROUGHT OUT IN THE FINDINGS OF THE LD. PR. CIT. AT POINT 6 (A) THE LD. PR. CIT STATES THAT LACK OF SEGMENTAL DATA ON THE ASSESSEES BUSINESS OF TRADING IN SEEDS, FERTILIZERS AND PESTICIDES AND THE BUSINESS OF AND FORWARDING AGENTS OF TATA CHEMICALS, IS AN INFIRMITY. WHAT IS THE PREJUDICE CAUSED TO THE REVENUE AND WHAT IS THE ERROR COMMITTED BY THE ASSESSING OFFICER ON THIS ISSUE, HAS NOT BEEN BROUGHT OUT. SIMILARLY , AT POINT 6(B) INCREASE IN PURCHASES. HE STATES THAT THERE WAS STEEP DECLINE IN SALES WHICH IS FACTUALLY INCORRECT. SALES HAVE INCREASED FROM 25.77 CRORES IN ASSESSMENT YEAR 2013- 14 TO RS.52.02 CRORES IN ASSESSMENT YEAR 2014 PREJUDICE THAT IS CAUSED TO REVENUE IS BROUGHT OUT BY THE LD. PR. CIT. REVISION IS BASED ON CERTAIN SURMISES AND CONJECTURES. 2 PAGES 4 TO 6 OF HIS ORDER. A PERUSAL OF THIS SHOWCAUSE NOTICE DEMONSTRATES THAT THE BSERVED AS FOLLOWS: - DURING THE PERIOD OF DEMONETIZATION, SHRI NARAYAN SARAF, DEPOSITED CASH TO THE TUNE OF RS.9,44,05,500/ -. SEVERAL SHORTCOMINGS AROSE DUE TO LACK OF EXAMINATION BY THE ASSESSING OFFICER WHILE PASSING THE ORDER U/S 143(3) OF THE ACT, FOR THE ASSESSMENT 15. THESE ARE LISTED AT PAGES 4 TO 6 OF THE SHOWCAUSE NOTICE. THE ASSESSEE DID NOT APPEAR AND HENCE, THE LD. CIT(A) CANCELLED THE ORDER OF ASSESSMENT PASSED ON 18/07/2016 AND DIRECTED THE ASSESSING OFFICER TO PASS A SPEAKING ORDER AFRESH, IN VIEW OF THE INFIRMITIES. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS: - THE REVISION IN QUESTION HAS BEEN MADE ONLY ON THE GROUND THAT THERE WERE CERTAIN INFIRMITIES IN THE ORDER PASSED U/S 143(3) OF THE ACT BY THE ASSESSING OFFICER ON 18/07/2016. WHAT IS THE ERROR IN THE ASSESSMENT ORDER WHICH CAUSED UE HAS NOT BEEN BROUGHT OUT IN THE FINDINGS OF THE LD. PR. CIT. THE LD. PR. CIT STATES THAT LACK OF SEGMENTAL DATA ON THE ASSESSEES BUSINESS OF TRADING IN SEEDS, FERTILIZERS AND PESTICIDES AND THE BUSINESS OF AND FORWARDING AGENTS OF TATA CHEMICALS, IS AN INFIRMITY. WHAT IS THE PREJUDICE CAUSED TO THE REVENUE AND WHAT IS THE ERROR COMMITTED BY THE ASSESSING OFFICER ON THIS ISSUE, HAS NOT BEEN BROUGHT OUT. , AT POINT 6(B) , THE LD. PR. CIT HAS SUSPIC ION AS THERE WAS STEEP INCREASE IN PURCHASES. HE STATES THAT THERE WAS STEEP DECLINE IN SALES WHICH IS SALES HAVE INCREASED FROM 25.77 CRORES IN ASSESSMENT YEAR 14 TO RS.52.02 CRORES IN ASSESSMENT YEAR 2014 - 15. NO ERROR, MUCH LESS PREJUDICE THAT IS CAUSED TO REVENUE IS BROUGHT OUT BY THE LD. PR. CIT. HERE ALSO, THE REVISION IS BASED ON CERTAIN SURMISES AND CONJECTURES. I.T.A. NO. 2214/KOL/2019 ASSESSMENT YEAR: 2014-2015 SHRI NARAYAN SARAF PAGES 4 TO 6 OF HIS ORDER. A PERUSAL OF THIS SHOWCAUSE NOTICE DEMONSTRATES THAT THE DURING THE PERIOD OF DEMONETIZATION, SHRI NARAYAN SARAF, DEPOSITED CASH TO SEVERAL SHORTCOMINGS AROSE DUE TO LACK OF EXAMINATION BY THE ASSESSING THE ASSESSMENT 15. THESE ARE LISTED AT PAGES 4 TO 6 OF THE SHOWCAUSE NOTICE. THE ASSESSEE DID NOT APPEAR AND HENCE, THE LD. CIT(A) CANCELLED THE ORDER OF ASSESSMENT PASSED ON 18/07/2016 AND DIRECTED THE ASSESSING OFFICER TO WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE THE REVISION IN QUESTION HAS BEEN MADE ONLY ON THE GROUND THAT THERE WERE CERTAIN INFIRMITIES IN THE ORDER PASSED U/S 143(3) OF THE ACT BY THE ASSESSING OFFICER ON 18/07/2016. WHAT IS THE ERROR IN THE ASSESSMENT ORDER WHICH CAUSED UE HAS NOT BEEN BROUGHT OUT IN THE FINDINGS OF THE LD. PR. CIT. THE LD. PR. CIT STATES THAT LACK OF SEGMENTAL DATA ON THE ASSESSEES BUSINESS OF TRADING IN SEEDS, FERTILIZERS AND PESTICIDES AND THE BUSINESS OF CLEARING AND FORWARDING AGENTS OF TATA CHEMICALS, IS AN INFIRMITY. WHAT IS THE PREJUDICE CAUSED TO THE REVENUE AND WHAT IS THE ERROR COMMITTED BY THE ASSESSING OFFICER ON ION AS THERE WAS STEEP INCREASE IN PURCHASES. HE STATES THAT THERE WAS STEEP DECLINE IN SALES WHICH IS SALES HAVE INCREASED FROM 25.77 CRORES IN ASSESSMENT YEAR 15. NO ERROR, MUCH LESS THE HERE ALSO, THE IN POINT (C), IT IS STATED THAT COPY OF RENTAL AGREEMENT WAS NOT EXAMINED AND HENCE THE GENUINENESS OF THE RE ASSESSMENT ORDER AND THE PREJUDICE CAUSED TO THE REVENUE, IS NOT SPECIFIED. AT POINT (D) , THE LD. PR. CIT DIRECTS THE ASSESSING OFFICER TO INVESTIGATE THE GENUINENESS OF THE RECEIPT OF RS.3,26,23,561/ COMMODITIES PVT. LTD. THIS AMOUNT IS ON ACCOUNT OF JOINT VENTURE WITH ASHADEEP COMMODITIES PVT. LTD. AND THIS ANNUAL ACCOUNTS FOR FINANCIAL YEAR 2013 ASSESSING OFFICER DURING THE COURSE OF THE ORIGINAL ASSESSMENT U/S 1 42(1) OF THE ACT DT. 04/03/2016, A ASHADEEP COMMODITIES PVT. LTD., WERE MADE TO PERSONS THE ACT, INDICATING THAT THIS ASPECT HAS BEEN EXAMINED BY THE ASSESSING OFFICER. THIS IS NOT A CASE OF NON- APPLICATION OF MIND BY THE ASSESSING OFFICER. A POSSIBLE VIEW HAS BEEN TAKEN. THE ERROR IN THE ASSESSMENT ORDER IS NOT BROUGHT OUT BY THE LD. PR. CIT. POINT (E), IS NON- EXAMINATION OF NET PROFIT DECLARED BY THE ASSESSEE. THIS ALSO CANNOT BE A GROUND FOR REVISION OF ASSESSMENT. POINT (F) IS ALLEGED NON ENQUIRY ACCOUNT OF JOINT VENTURE WITH M/S. ASHADEEP COMMODI CANNOT BE A GROUND FOR REVISION AS THE LD. PR. CIT HAS NOT COMMUNICATED AS TO WHAT IS THE PREJUDICE CAUSED TO THE REVENUE BY CONDUCTING ENQUIRIES HIMSELF. AT POINT (G), HE REFERS TO QUESTION NO. 2 & 3 OF THE NOTICE ISSUED U/S 142( OF THE ACT, DT. 04/03/2016 AND DIRECTS FRESH EXAMINATION. NO ERROR HAS BEEN POINTED OUT IN THE ASSESSMENT ORDER MUCH LESS THE PREJUDICE CAUSED TO THE REVENUE IS POINTED OUT. POINT (H) REFERS TO ADJUSTMENT ENTRIES AGAINST LORD GANESHA AND GODDESS LAKSHMI. THESE ARE TRADITIONAL ACCOUNTS AND SOME AMOUNT IS ALWAYS SHOWN AS DUE TO GODS. THE PREJUDICE CAUSED TO THE REVENUE HAS NOT BEEN BROUGHT OUT. 3 (C), IT IS STATED THAT COPY OF RENTAL AGREEMENT WAS NOT EXAMINED AND HENCE THE GENUINENESS OF THE RE NT COULD NOT BE VERIFIED. HERE ALSO, THE ERROR IN THE THE PREJUDICE CAUSED TO THE REVENUE, IS NOT SPECIFIED. , THE LD. PR. CIT DIRECTS THE ASSESSING OFFICER TO INVESTIGATE THE GENUINENESS OF THE RECEIPT OF RS.3,26,23,561/ - , BEING LIABILITY FROM ASHADEEP COMMODITIES PVT. LTD. THIS AMOUNT IS ON ACCOUNT OF JOINT VENTURE WITH ASHADEEP COMMODITIES PVT. LTD. AND THIS AMOUNT HAS BEEN REFLECTED IN ANNEXURE(H) OF THE ANNUAL ACCOUNTS FOR FINANCIAL YEAR 2013 - 14 AND IT WAS ALSO REPLIE ASSESSING OFFICER DURING THE COURSE OF THE ORIGINAL ASSESSMENT , IN REPLY TO NOTICE 42(1) OF THE ACT DT. 04/03/2016, A T POINT NO. 19, THAT THE PAYMENTS MADE TO ASHADEEP COMMODITIES PVT. LTD., WERE MADE TO PERSONS SPECIFIED U/S 40A(2)(B) OF ACT, INDICATING THAT THIS ASPECT HAS BEEN EXAMINED BY THE ASSESSING OFFICER. APPLICATION OF MIND BY THE ASSESSING OFFICER. A POSSIBLE THE ERROR IN THE ASSESSMENT ORDER IS NOT BROUGHT OUT BY THE EXAMINATION OF NET PROFIT DECLARED BY THE ASSESSEE. THIS ALSO CANNOT BE A GROUND FOR REVISION OF ASSESSMENT. POINT (F) IS ALLEGED NON ENQUIRY INTO THE PROFITS EARNED BY THE ASSESSEE ON ACCOUNT OF JOINT VENTURE WITH M/S. ASHADEEP COMMODI TIES PVT. LTD. THIS ALSO CANNOT BE A GROUND FOR REVISION AS THE LD. PR. CIT HAS NOT COMMUNICATED AS TO WHAT IS THE PREJUDICE CAUSED TO THE REVENUE BY CONDUCTING ENQUIRIES HIMSELF. AT POINT (G), HE REFERS TO QUESTION NO. 2 & 3 OF THE NOTICE ISSUED U/S 142( OF THE ACT, DT. 04/03/2016 AND DIRECTS FRESH EXAMINATION. NO ERROR HAS BEEN POINTED OUT IN THE ASSESSMENT ORDER MUCH LESS THE PREJUDICE CAUSED TO THE REVENUE ADJUSTMENT ENTRIES AGAINST LORD GANESHA AND GODDESS LAKSHMI. THESE ARE TRADITIONAL ACCOUNTS AND SOME AMOUNT IS ALWAYS SHOWN AS DUE TO GODS. THE PREJUDICE CAUSED TO THE REVENUE HAS NOT BEEN BROUGHT OUT. I.T.A. NO. 2214/KOL/2019 ASSESSMENT YEAR: 2014-2015 SHRI NARAYAN SARAF (C), IT IS STATED THAT COPY OF RENTAL AGREEMENT WAS NOT EXAMINED AND NT COULD NOT BE VERIFIED. HERE ALSO, THE ERROR IN THE THE PREJUDICE CAUSED TO THE REVENUE, IS NOT SPECIFIED. , THE LD. PR. CIT DIRECTS THE ASSESSING OFFICER TO INVESTIGATE THE , BEING LIABILITY FROM ASHADEEP COMMODITIES PVT. LTD. THIS AMOUNT IS ON ACCOUNT OF JOINT VENTURE WITH ASHADEEP HAS BEEN REFLECTED IN ANNEXURE(H) OF THE 14 AND IT WAS ALSO REPLIE D TO THE IN REPLY TO NOTICE THAT THE PAYMENTS MADE TO U/S 40A(2)(B) OF ACT, INDICATING THAT THIS ASPECT HAS BEEN EXAMINED BY THE ASSESSING OFFICER. APPLICATION OF MIND BY THE ASSESSING OFFICER. A POSSIBLE THE ERROR IN THE ASSESSMENT ORDER IS NOT BROUGHT OUT BY THE EXAMINATION OF NET PROFIT DECLARED BY THE ASSESSEE. THIS PROFITS EARNED BY THE ASSESSEE ON TIES PVT. LTD. THIS ALSO CANNOT BE A GROUND FOR REVISION AS THE LD. PR. CIT HAS NOT COMMUNICATED AS TO WHAT IS THE PREJUDICE CAUSED TO THE REVENUE BY CONDUCTING ENQUIRIES HIMSELF. AT POINT (G), HE REFERS TO QUESTION NO. 2 & 3 OF THE NOTICE ISSUED U/S 142( 1) OF THE ACT, DT. 04/03/2016 AND DIRECTS FRESH EXAMINATION. NO ERROR HAS BEEN POINTED OUT IN THE ASSESSMENT ORDER MUCH LESS THE PREJUDICE CAUSED TO THE REVENUE ADJUSTMENT ENTRIES AGAINST LORD GANESHA AND GODDESS LAKSHMI. THESE ARE TRADITIONAL ACCOUNTS AND SOME AMOUNT IS ALWAYS SHOWN AS DUE TO GODS. THE PREJUDICE CAUSED TO THE REVENUE HAS NOT BEEN BROUGHT OUT. 6. IN ALL THESE CASES, IT CAN BE SEEN THAT THE LD. PR. CIT HAS NOT BOTHERED TO ENQUIRE INTO ANY OF THESE ISSUES AT LEAST PRELIMINARILY ERROR IN THE ORDER OF THE TRIBUNAL IN THE ORDER OF THE ASSESSING OFFICER WHICH CAUSED PREJUDICE TO THE REVENUE. HE HAS SIMPLY SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH EXAMIN CERTAIN DOUBTS IN MIND. A PERUSAL OF THE NOTICE DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS ON 28/08/2015, 04/03/2016 AND THE REPLIES OF THE ASSESSEE NOTICE DT. 04/03/2016, ADDITIONAL REPLIES GIVEN WHICH ARE AT PAGES 142 AND REPLIES ON 16.05.2016 AND 06/06/2016 DEMONSTRATES THAT THE ALLEGATION OF THE LD. PR. CIT THAT THERE WAS NO APPLICATION OF MIND BY THE ASSESSING OFFICER, IS INCORR THE POINTS RAISED BY THE LD. PR. CIT, HAS BEEN CONSIDERED AND EXAMINED BY THE ASSESSING OFFICER. 7. THE LD. PR. CIT HAS TO CONDUCT VERIFICATION AND ENQUIRY HIMSELF COME TO A CONCLUSION THAT THERE IS AN ERROR WHICH IS PREJUDICIAL TO THE REVENUE SUCH DECISION CANNOT BE TAKEN BASED ON SURMISES AND CONJECTURES. ASSESSMENTS CANNOT BE SET ASIDE BASED ON DOUBTS AND SUSPICION. DOWN THE POSITION:- DIRECTOR OF INCOME TAX VS. JYOTI FOUNDATION 357 ITR 388 (DELHI HIGH COURT ) IT WAS HELD THAT REVISIONARY POWER U/S 263 IS CONFERRED ON THE COMMISSIONER/DIRECTOR OF INCOME TAX WHEN AN ORDER PASSED BY THE LOWER AUTHORITY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. WHICH ARE PASSED WITHOUT INQUIRY OR INVESTIGA AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT ORDERS WHICH ARE PASSED AFTER INQUIRY/INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAU THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUIRED OR DEEPER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN. (EMPHASIS OURS) INCOME TAX OFFICER VS. DG HOUSING PROJECTS LTD343 ITR 329 (DELHI) REVENUE DOES NOT HAVE ANY R AGAINST AN ORDER PASSED BY THE ASSESSING OFFICER. S. 263 HAS BEEN ENACTED TO EMPOWER THE CIT TO EXERCISE POWER OF REVISION AND REVISE ANY ORDER PASSED 4 IN ALL THESE CASES, IT CAN BE SEEN THAT THE LD. PR. CIT HAS NOT BOTHERED TO ISSUES AT LEAST PRELIMINARILY AND BRING OUT WHAT IS THE ERROR IN THE ORDER OF THE TRIBUNAL IN THE ORDER OF THE ASSESSING OFFICER WHICH CAUSED PREJUDICE TO THE REVENUE. HE HAS SIMPLY SET ASIDE THE MATTER TO THE FILE OF FOR FRESH EXAMIN ATION AND ADJUDICATION, BECAUSE HE HAD CERTAIN DOUBTS IN MIND. A PERUSAL OF THE NOTICE S ISSUED BY THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS ON 28/08/2015, 04/03/2016 AND THE REPLIES OF THE ASSESSEE GIVEN ON 08/10/201 5 AND REPLY TO THE NOTICE DT. 04/03/2016, ADDITIONAL REPLIES GIVEN WHICH ARE AT PAGES 142 AND REPLIES ON 16.05.2016 AND 06/06/2016 DEMONSTRATES THAT THE ALLEGATION OF THE LD. PR. CIT THAT THERE WAS NO APPLICATION OF MIND BY THE ASSESSING OFFICER, IS INCORR THE POINTS RAISED BY THE LD. PR. CIT, HAS BEEN CONSIDERED AND EXAMINED BY THE THE LD. PR. CIT HAS TO CONDUCT VERIFICATION AND ENQUIRY HIMSELF COME TO A CONCLUSION THAT THERE IS AN ERROR WHICH IS PREJUDICIAL TO THE REVENUE SUCH DECISION CANNOT BE TAKEN BASED ON SURMISES AND CONJECTURES. ASSESSMENTS CANNOT BE SET ASIDE BASED ON DOUBTS AND SUSPICION. THE FOLLOWING CASE DIRECTOR OF INCOME TAX VS. JYOTI FOUNDATION 357 ITR 388 (DELHI HIGH COURT ) IT WAS HELD THAT REVISIONARY POWER U/S 263 IS CONFERRED ON THE COMMISSIONER/DIRECTOR OF INCOME TAX WHEN AN ORDER PASSED BY THE LOWER AUTHORITY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. WHICH ARE PASSED WITHOUT INQUIRY OR INVESTIGA TION ARE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT ORDERS WHICH ARE PASSED AFTER INQUIRY/INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAU THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUIRED OR DEEPER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN. INCOME TAX OFFICER VS. DG HOUSING PROJECTS LTD343 ITR 329 (DELHI) REVENUE DOES NOT HAVE ANY R IGHT TO APPEAL TO THE FIRST APPELLATE AUTHORITY AGAINST AN ORDER PASSED BY THE ASSESSING OFFICER. S. 263 HAS BEEN ENACTED TO EMPOWER THE CIT TO EXERCISE POWER OF REVISION AND REVISE ANY ORDER PASSED I.T.A. NO. 2214/KOL/2019 ASSESSMENT YEAR: 2014-2015 SHRI NARAYAN SARAF IN ALL THESE CASES, IT CAN BE SEEN THAT THE LD. PR. CIT HAS NOT BOTHERED TO AND BRING OUT WHAT IS THE ERROR IN THE ORDER OF THE TRIBUNAL IN THE ORDER OF THE ASSESSING OFFICER WHICH CAUSED PREJUDICE TO THE REVENUE. HE HAS SIMPLY SET ASIDE THE MATTER TO THE FILE OF ATION AND ADJUDICATION, BECAUSE HE HAD ISSUED BY THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS ON 28/08/2015, AND ON 5 AND REPLY TO THE NOTICE DT. 04/03/2016, ADDITIONAL REPLIES GIVEN WHICH ARE AT PAGES 142 AND REPLIES ON 16.05.2016 AND 06/06/2016 DEMONSTRATES THAT THE ALLEGATION OF THE LD. PR. CIT THAT THERE WAS NO APPLICATION OF MIND BY THE ASSESSING OFFICER, IS INCORR ECT. MOST OF THE POINTS RAISED BY THE LD. PR. CIT, HAS BEEN CONSIDERED AND EXAMINED BY THE THE LD. PR. CIT HAS TO CONDUCT VERIFICATION AND ENQUIRY HIMSELF AND THEN COME TO A CONCLUSION THAT THERE IS AN ERROR WHICH IS PREJUDICIAL TO THE REVENUE . SUCH DECISION CANNOT BE TAKEN BASED ON SURMISES AND CONJECTURES. ASSESSMENTS THE FOLLOWING CASE -LAW LAY DIRECTOR OF INCOME TAX VS. JYOTI FOUNDATION 357 ITR 388 (DELHI HIGH COURT ) IT WAS HELD THAT REVISIONARY POWER U/S 263 IS CONFERRED ON THE COMMISSIONER/DIRECTOR OF INCOME TAX WHEN AN ORDER PASSED BY THE LOWER AUTHORITY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ORDERS TION ARE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT ORDERS WHICH ARE PASSED AFTER INQUIRY/INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAU SE THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUIRED OR DEEPER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN. IGHT TO APPEAL TO THE FIRST APPELLATE AUTHORITY AGAINST AN ORDER PASSED BY THE ASSESSING OFFICER. S. 263 HAS BEEN ENACTED TO EMPOWER THE CIT TO EXERCISE POWER OF REVISION AND REVISE ANY ORDER PASSED BY THE ASSESSING OFFICER, IF TWO CUMULATIVE CONDITIONS AR THE ORDER SOUGHT TO BE REVISED SHOULD BE ERRONEOUS AND SECONDLY, IT SHOULD BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE EXPRESSION 'PREJUDICIAL TO THE INTEREST OF THE REVENUE' IS OF WIDE IMPORT AND IS NOT CONFINED TO MERELY LOSS OF TAX. THE TERM 'ERRONEOUS' MEANS A WRONG/INCORRECT DECISION DEVIATING FROM LAW. THIS EXPRESSION POSTULATES AN ERROR WHICH MAKES AN ORDER UNSUSTAINABLE IN LAW. THE ASSESSING OFFICER IS BOTH AN INVESTIGATOR AND AN ADJUDICATOR. IF THE ASSESSING OFFICER AS A WRONG ASSESSMENT WHICH IS UNSUSTAINABLE IN LAW, IT CAN BE CORRECTED BY THE COMMISSIONER IN EXERCISE OF REVISIONARY POWER. AS AN INVESTIGATOR, IT IS INCUMBENT UPON THE ASSESSING OFFICER TO INVESTIGATE EXAMINED AND VERIFIED TO COMPUTE THE TAXABLE INCOME. IF THE ASSESSING OFFICER FAILS TO CONDUCT THE SAID INVESTIGATION, HE COMMITS AN ERROR AND THE WORD 'ERRONEOUS' INCLUDES FAILURE TO MAKE THE ENQUIRY. IN SUCH CASES, THE ORDER BECO MES ERRONEOUS BECAUSE ENQUIRY OR VERIFICATION HAS NOT BEEN MADE AND NOT BECAUSE A WRONG ORDER HAS BEEN PASSED ON MERITS THUS, IN CASES OF WRONG OPINION OR FINDING ON MERITS, THE CIT HAS TO COME TO THE CONCLUSION AND HIMSELF DECIDE THAT THE ORDER IS ERRONE CONDUCTING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY, BEFORE THE ORDER UNDER S. 263 IS PASSED. IN SUCH CASES, THE ORDER OF THE ASSESSING OFFICER WILL BE ERRONEOUS BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW AND THE SAID FINDING MUST BE RE ASSESSING OFFICER TO DECIDE WHETHER THE FINDINGS RECORDED ARE ERRONEOUS. CASES WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT THE ORDER/INQUIRY MAD ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTAKE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASES POSSIBLY THOUGH RARELY, THE RECORD OR INFERENCES DRAWN FROM FACTS ON RECORD PER SE MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING M CLEAR, UNAMBIGUOUS AND NOT DEBATABLE. FRESH DECISION TO THE ASSESSING OFFICER TO CONDUCT FURTHER ENQUIRIES WITHOUT A FINDING THAT THE ORDER IS ERRONEOUS. A CONDITION OR REQUI JURISDICTION UNDER S. 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY AND MEAN THE CIT HAS NOT EXAMINED AND DECIDED WHETHER OR NOT THE ORDER IS ERRONEOUS BUT HA DIRECTED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. THIS DISTINCTION MUST BE KEPT IN MIND BY THE CIT WHILE EXERCISING JURISDICTION UNDER S. 263 OF THE ACT AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTE JURISDICTION UNDER THE SAID SECTION IS NOT SUSTAINABLE. ALLEGED 'INADEQUATE INVESTIGATION', IT WILL BE DIFFICULT TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS ERRONEOUS, WITHOUT CIT CONDUCTING VERIFICATION/INQUIRY. THE 5 BY THE ASSESSING OFFICER, IF TWO CUMULATIVE CONDITIONS AR E SATISFIED. FIRSTLY, THE ORDER SOUGHT TO BE REVISED SHOULD BE ERRONEOUS AND SECONDLY, IT SHOULD BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE EXPRESSION 'PREJUDICIAL TO THE INTEREST OF THE REVENUE' IS OF WIDE IMPORT AND IS NOT CONFINED TO MERELY OF TAX. THE TERM 'ERRONEOUS' MEANS A WRONG/INCORRECT DECISION DEVIATING FROM LAW. THIS EXPRESSION POSTULATES AN ERROR WHICH MAKES AN ORDER UNSUSTAINABLE IN LAW. THE ASSESSING OFFICER IS BOTH AN INVESTIGATOR AND AN ADJUDICATOR. IF THE ASSESSING OFFICER AS AN ADJUDICATOR DECIDES A QUESTION OR ASPECT AND MAKES A WRONG ASSESSMENT WHICH IS UNSUSTAINABLE IN LAW, IT CAN BE CORRECTED BY THE COMMISSIONER IN EXERCISE OF REVISIONARY POWER. AS AN INVESTIGATOR, IT IS INCUMBENT UPON THE ASSESSING OFFICER TO INVESTIGATE THE FACTS REQUIRED TO BE EXAMINED AND VERIFIED TO COMPUTE THE TAXABLE INCOME. IF THE ASSESSING OFFICER FAILS TO CONDUCT THE SAID INVESTIGATION, HE COMMITS AN ERROR AND THE WORD 'ERRONEOUS' INCLUDES FAILURE TO MAKE THE ENQUIRY. IN SUCH CASES, THE MES ERRONEOUS BECAUSE ENQUIRY OR VERIFICATION HAS NOT BEEN MADE AND NOT BECAUSE A WRONG ORDER HAS BEEN PASSED ON MERITS . THUS, IN CASES OF WRONG OPINION OR FINDING ON MERITS, THE CIT HAS TO COME TO THE CONCLUSION AND HIMSELF DECIDE THAT THE ORDER IS ERRONE CONDUCTING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY, BEFORE THE ORDER UNDER S. 263 IS PASSED. IN SUCH CASES, THE ORDER OF THE ASSESSING OFFICER WILL BE ERRONEOUS BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW AND THE SAID FINDING MUST BE RE CORDED. CIT CANNOT REMAND THE MATTER TO THE ASSESSING OFFICER TO DECIDE WHETHER THE FINDINGS RECORDED ARE ERRONEOUS. CASES WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT THE ORDER/INQUIRY MAD ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTAKE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASES POSSIBLY THOUGH RARELY, THE CIT CAN ALSO SHOW AND ESTABLISH THAT THE FACTS ON RECORD OR INFERENCES DRAWN FROM FACTS ON RECORD PER SE JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING M CLEAR, UNAMBIGUOUS AND NOT DEBATABLE. THE MATTER CANNOT BE REMITTED FOR A FRESH DECISION TO THE ASSESSING OFFICER TO CONDUCT FURTHER ENQUIRIES WITHOUT A FINDING THAT THE ORDER IS ERRONEOUS. FINDING THAT THE ORDER IS ERRONEOUS IS A CONDITION OR REQUI REMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER S. 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY AND MEAN THE CIT HAS NOT EXAMINED AND DECIDED WHETHER OR NOT THE ORDER IS ERRONEOUS BUT HA DIRECTED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. THIS DISTINCTION MUST BE KEPT IN MIND BY THE CIT WHILE EXERCISING JURISDICTION UNDER S. 263 OF THE ACT AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF REVENUE, EXERCISE OF JURISDICTION UNDER THE SAID SECTION IS NOT SUSTAINABLE. IN MOST CASES OF ALLEGED 'INADEQUATE INVESTIGATION', IT WILL BE DIFFICULT TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS ERRONEOUS, WITHOUT CIT CONDUCTING VERIFICATION/INQUIRY. THE I.T.A. NO. 2214/KOL/2019 ASSESSMENT YEAR: 2014-2015 SHRI NARAYAN SARAF E SATISFIED. FIRSTLY, THE ORDER SOUGHT TO BE REVISED SHOULD BE ERRONEOUS AND SECONDLY, IT SHOULD BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE EXPRESSION 'PREJUDICIAL TO THE INTEREST OF THE REVENUE' IS OF WIDE IMPORT AND IS NOT CONFINED TO MERELY OF TAX. THE TERM 'ERRONEOUS' MEANS A WRONG/INCORRECT DECISION DEVIATING FROM LAW. THIS EXPRESSION POSTULATES AN ERROR WHICH MAKES AN THE ASSESSING OFFICER IS BOTH AN INVESTIGATOR AND AN ADJUDICATOR. IF THE AN ADJUDICATOR DECIDES A QUESTION OR ASPECT AND MAKES A WRONG ASSESSMENT WHICH IS UNSUSTAINABLE IN LAW, IT CAN BE CORRECTED BY THE COMMISSIONER IN EXERCISE OF REVISIONARY POWER. AS AN INVESTIGATOR, IT IS THE FACTS REQUIRED TO BE EXAMINED AND VERIFIED TO COMPUTE THE TAXABLE INCOME. IF THE ASSESSING OFFICER FAILS TO CONDUCT THE SAID INVESTIGATION, HE COMMITS AN ERROR AND THE WORD 'ERRONEOUS' INCLUDES FAILURE TO MAKE THE ENQUIRY. IN SUCH CASES, THE MES ERRONEOUS BECAUSE ENQUIRY OR VERIFICATION HAS NOT BEEN THUS, IN CASES OF WRONG OPINION OR FINDING ON MERITS, THE CIT HAS TO COME TO THE CONCLUSION AND HIMSELF DECIDE THAT THE ORDER IS ERRONE OUS, BY CONDUCTING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY, BEFORE THE ORDER UNDER S. 263 IS PASSED. IN SUCH CASES, THE ORDER OF THE ASSESSING OFFICER WILL BE ERRONEOUS BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW AND THE CORDED. CIT CANNOT REMAND THE MATTER TO THE ASSESSING OFFICER TO DECIDE WHETHER THE FINDINGS RECORDED ARE ERRONEOUS. IN CASES WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT THE ORDER/INQUIRY MAD E IS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTAKE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASES CIT CAN ALSO SHOW AND ESTABLISH THAT THE FACTS ON JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING M UST BE THE MATTER CANNOT BE REMITTED FOR A FRESH DECISION TO THE ASSESSING OFFICER TO CONDUCT FURTHER ENQUIRIES WITHOUT FINDING THAT THE ORDER IS ERRONEOUS IS REMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER S. 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY AND MEAN THE CIT HAS NOT EXAMINED AND DECIDED WHETHER OR NOT THE ORDER IS ERRONEOUS BUT HA S THIS DISTINCTION MUST BE KEPT IN MIND BY THE CIT WHILE EXERCISING JURISDICTION UNDER S. 263 OF THE ACT AND IN THE ABSENCE OF THE FINDING THAT THE REST OF REVENUE, EXERCISE OF IN MOST CASES OF ALLEGED 'INADEQUATE INVESTIGATION', IT WILL BE DIFFICULT TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS ERRONEOUS, WITHOUT CIT CONDUCTING VERIFICATION/INQUIRY. THE ORDER OF THE ASSESSING OFFICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECONSIDERATION ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. AN ORDER OF REMIT CANNOT BE PASSE DECIDE WHETHER THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECOME ERRONEOUS BECAUSE ON REMIT, THE A MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFTER RECORDING REASONS HOLD THAT THE ORDER IS ERRONEOUS. THE JURISDICTIONAL PRECONDITION STIPULATED IS THAT THE CIT MUST COME TO THE CONCLUSION THAT THE ORDER IS ERRONEOUS AND IS UNSUSTAINABLE IN LAW. IT MAY BE NOTICED THAT THE MATERIAL WHICH THE CIT CAN RELY INCLUDES NOT ONLY THE RECORD AS IT STANDS AT THE TIME WHEN THE ORDER IN QUESTION WAS PASSED BY THE ASSESSING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATIO BARS/PROHIBITS THE CIT FROM COLLECTING AND RELYING UPON NEW/ADDITIONAL MATERIAL/EVIDENCE TO SHOW AND STATE THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS. ( EMPHASIS OURS) COMMISSIONER OF INCOME TAX VS. J. L. MORRISON (INDIA) LTD. 366 ITR AS REGARD THE SUBMISSION ON BEHALF OF THE REVENUE THAT POWER UNDER SECTION 263 OF THE ACT CAN BE EXERCISED EVEN IN A CASE WHERE THE ISSUE IS DEBATABLE, IT WAS HELD THAT THE CASE OF CIT VS. APPLICABLE. THE OBSERVATION THAT THE COMMISSIONER CAN EXERCISE POWER UNDER SECTION 263 OF THE ACT EVEN IN A CASE WERE THE ISSUE IS DEBATABLE WAS A MERE PASSING REMARK WHICH IS AGAIN CONTRARY TO THE VIEW TAKEN BY THE APEX COURT I N THECASE OF MALABAR INDUSTRIAL COMPANY LTD. & MAX INDIA LTD. IF THE ASSESSING OFFICER HAS TAKEN A POSSIBLE VIEW, IT CANNOT BE SAID THAT THE VIEW TAKEN BY HIM IS ERRONEOUS NOR THE ORDER OF THE ASSESSING OFFICER IN THAT CASE CAN BE SET ASIDE IN REVISION. ORDER OF THE ASSESSING OFFICER IS UNSUSTAINABLE. ANYTHING SHORT OF THAT WOULD NOT CLOTHE THE CIT WITH JURISDICTION TO EXERCISE POWER UNDER SECTION 263 OF THE ACT. CIT VS. M. M. KHAMBHATWALA REPORTED IN 198 ITR 144; CI RALSON INDUSTRIES LTD. REPORTED IN 288 ITR 322 (SC), NOT APPLICABLE; MALABAR INDUSTRIAL CO. LTD. V. CIT REPORTED IN 243 ITR 83, RELIED ON. (EMPHASIS OURS) AS REGARD THE THIRD QUESTION AS TO WHETHER THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OF FICER WITHOUT APPLICATION OF MIND, IT WAS HELD THAT THE COURT HAS TO START WITH THE PRESUMPTION THAT THE ASSESSMENT ORDER WAS REGULARLY PASSED. THERE IS EVIDENCE TO SHOW THAT THE ASSESSING OFFICER HAD REQUIRED THE ASSESSEE TO ANSWER 17 QUESTIONS AND TO FIL REGARD THERETO. IT IS DIFFICULT TO PROCEED ON THE BASIS THAT THE 17 QUESTIONS RAISED BY HIM DID NOT REQUIRE APPLICATION OF MIND. WITHOUT APPLICATION OF MIND THE QUESTIONS RAISED BY HIM IN THE ANNEXURE TO NOTICE UNDER SECTION 142 (1) OF THE A CT COULD NOT HAVE BEEN FORMULATED. THE ASSESSING OFFICER WAS REQUIRED TO EXAMINE THE RETURN FILED BY THE ASSESSEE IN ORDER TO ASCERTAIN HIS INCOME AND TO LEVY APPROPRIATE TAX ON THAT BASIS. WHEN THE ASSESSING OFFICER WAS SATISFIED THAT THE RETURN, FILED BY 6 ORDER OF THE ASSESSING OFFICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECONSIDERATION ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. AN ORDER OF REMIT CANNOT BE PASSE D BY THE CIT TO ASK THE ASSESSING OFFICER TO DECIDE WHETHER THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECOME ERRONEOUS BECAUSE ON REMIT, THE A SSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFTER RECORDING REASONS HOLD THAT THE ORDER IS ERRONEOUS. THE JURISDICTIONAL PRECONDITION STIPULATED IS THAT THE CIT MUST COME TO THE CONCLUSION THAT THE ORDER IS UNSUSTAINABLE IN LAW. IT MAY BE NOTICED THAT THE MATERIAL WHICH THE CIT CAN RELY INCLUDES NOT ONLY THE RECORD AS IT STANDS AT THE TIME WHEN THE ORDER IN QUESTION WAS PASSED BY THE ASSESSING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATIO N BY THE CIT. NOTHING BARS/PROHIBITS THE CIT FROM COLLECTING AND RELYING UPON NEW/ADDITIONAL MATERIAL/EVIDENCE TO SHOW AND STATE THAT THE ORDER OF THE ASSESSING OFFICER EMPHASIS OURS) COMMISSIONER OF INCOME TAX VS. J. L. MORRISON (INDIA) LTD. 366 ITR AS REGARD THE SUBMISSION ON BEHALF OF THE REVENUE THAT POWER UNDER SECTION 263 OF THE ACT CAN BE EXERCISED EVEN IN A CASE WHERE THE ISSUE IS DEBATABLE, IT WAS HELD THAT THE CASE OF CIT VS. M. M. KHAMBHATWALA WAS NOT APPLICABLE. THE OBSERVATION THAT THE COMMISSIONER CAN EXERCISE POWER UNDER SECTION 263 OF THE ACT EVEN IN A CASE WERE THE ISSUE IS DEBATABLE WAS A MERE PASSING REMARK WHICH IS AGAIN CONTRARY TO THE VIEW TAKEN BY THE N THECASE OF MALABAR INDUSTRIAL COMPANY LTD. & MAX INDIA LTD. IF THE ASSESSING OFFICER HAS TAKEN A POSSIBLE VIEW, IT CANNOT BE SAID THAT THE VIEW TAKEN BY HIM IS ERRONEOUS NOR THE ORDER OF THE ASSESSING OFFICER IN THAT CASE CAN BE SET ASIDE IN REVISION. IT HAS TO BE SHOWN UNMISTAKABLY THAT THE ORDER OF THE ASSESSING OFFICER IS UNSUSTAINABLE. ANYTHING SHORT OF THAT WOULD NOT CLOTHE THE CIT WITH JURISDICTION TO EXERCISE POWER UNDER SECTION 263 OF THE ACT. CIT VS. M. M. KHAMBHATWALA REPORTED IN 198 ITR 144; CI RALSON INDUSTRIES LTD. REPORTED IN 288 ITR 322 (SC), NOT APPLICABLE; MALABAR INDUSTRIAL CO. LTD. V. CIT REPORTED IN 243 ITR 83, RELIED ON. AS REGARD THE THIRD QUESTION AS TO WHETHER THE ASSESSMENT ORDER WAS PASSED FICER WITHOUT APPLICATION OF MIND, IT WAS HELD THAT THE COURT HAS TO START WITH THE PRESUMPTION THAT THE ASSESSMENT ORDER WAS REGULARLY PASSED. THERE IS EVIDENCE TO SHOW THAT THE ASSESSING OFFICER HAD REQUIRED THE ASSESSEE TO ANSWER 17 QUESTIONS AND TO FIL E DOCUMENTS IN REGARD THERETO. IT IS DIFFICULT TO PROCEED ON THE BASIS THAT THE 17 QUESTIONS RAISED BY HIM DID NOT REQUIRE APPLICATION OF MIND. WITHOUT APPLICATION OF MIND THE QUESTIONS RAISED BY HIM IN THE ANNEXURE TO NOTICE UNDER SECTION CT COULD NOT HAVE BEEN FORMULATED. THE ASSESSING OFFICER WAS REQUIRED TO EXAMINE THE RETURN FILED BY THE ASSESSEE IN ORDER TO ASCERTAIN HIS INCOME AND TO LEVY APPROPRIATE TAX ON THAT BASIS. WHEN THE ASSESSING OFFICER WAS SATISFIED THAT THE RETURN, FILED BY THE ASSESSEE, WAS IN I.T.A. NO. 2214/KOL/2019 ASSESSMENT YEAR: 2014-2015 SHRI NARAYAN SARAF ORDER OF THE ASSESSING OFFICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECONSIDERATION ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. D BY THE CIT TO ASK THE ASSESSING OFFICER TO DECIDE WHETHER THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. SSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFTER RECORDING REASONS HOLD THAT THE ORDER IS ERRONEOUS. THE JURISDICTIONAL PRECONDITION STIPULATED IS THAT THE CIT MUST COME TO THE CONCLUSION THAT THE ORDER IS UNSUSTAINABLE IN LAW. IT MAY BE NOTICED THAT THE MATERIAL WHICH THE CIT CAN RELY INCLUDES NOT ONLY THE RECORD AS IT STANDS AT THE TIME WHEN THE ORDER IN QUESTION WAS PASSED BY THE ASSESSING OFFICER BUT ALSO THE N BY THE CIT. NOTHING BARS/PROHIBITS THE CIT FROM COLLECTING AND RELYING UPON NEW/ADDITIONAL MATERIAL/EVIDENCE TO SHOW AND STATE THAT THE ORDER OF THE ASSESSING OFFICER AS REGARD THE SUBMISSION ON BEHALF OF THE REVENUE THAT POWER UNDER SECTION 263 OF THE ACT CAN BE EXERCISED EVEN IN A CASE WHERE THE ISSUE IS M. M. KHAMBHATWALA WAS NOT APPLICABLE. THE OBSERVATION THAT THE COMMISSIONER CAN EXERCISE POWER UNDER SECTION 263 OF THE ACT EVEN IN A CASE WERE THE ISSUE IS DEBATABLE WAS A MERE PASSING REMARK WHICH IS AGAIN CONTRARY TO THE VIEW TAKEN BY THE N THECASE OF MALABAR INDUSTRIAL COMPANY LTD. & MAX INDIA LTD. IF THE ASSESSING OFFICER HAS TAKEN A POSSIBLE VIEW, IT CANNOT BE SAID THAT THE VIEW TAKEN BY HIM IS ERRONEOUS NOR THE ORDER OF THE ASSESSING OFFICER IN THAT HAS TO BE SHOWN UNMISTAKABLY THAT THE ORDER OF THE ASSESSING OFFICER IS UNSUSTAINABLE. ANYTHING SHORT OF THAT WOULD NOT CLOTHE THE CIT WITH JURISDICTION TO EXERCISE POWER UNDER SECTION 263 OF THE ACT. CIT VS. M. M. KHAMBHATWALA REPORTED IN 198 ITR 144; CI T VS. RALSON INDUSTRIES LTD. REPORTED IN 288 ITR 322 (SC), NOT APPLICABLE; AS REGARD THE THIRD QUESTION AS TO WHETHER THE ASSESSMENT ORDER WAS PASSED FICER WITHOUT APPLICATION OF MIND, IT WAS HELD THAT THE COURT HAS TO START WITH THE PRESUMPTION THAT THE ASSESSMENT ORDER WAS REGULARLY PASSED. THERE IS EVIDENCE TO SHOW THAT THE ASSESSING OFFICER HAD E DOCUMENTS IN REGARD THERETO. IT IS DIFFICULT TO PROCEED ON THE BASIS THAT THE 17 QUESTIONS RAISED BY HIM DID NOT REQUIRE APPLICATION OF MIND. WITHOUT APPLICATION OF MIND THE QUESTIONS RAISED BY HIM IN THE ANNEXURE TO NOTICE UNDER SECTION CT COULD NOT HAVE BEEN FORMULATED. THE ASSESSING OFFICER WAS REQUIRED TO EXAMINE THE RETURN FILED BY THE ASSESSEE IN ORDER TO ASCERTAIN HIS INCOME AND TO LEVY APPROPRIATE TAX ON THAT BASIS. WHEN THE THE ASSESSEE, WAS IN ACCORDANCE WITH LAW, HE WAS UNDER NO OBLIGATION TO JUSTIFY AS TO WHY WAS HE SATISFIED. ON THE TOP OF THAT THE ASSESSING OFFICER BY HIS ORDER DATED 28 MARCH, 2008 DID NOT ADVERSELY AFFECT ANY RIGHT OF THE ASSESSEE NOR WAS ANY CIVIL R IGHT OF THE ASSESSEE PREJUDICED. HE WAS AS SUCH UNDER NO OBLIGATION IN LAW TO GIVE REASONS. THE FACT, THAT ALL REQUISITE PAPERS WERE SUMMONED AND THEREAFTER THE MATTER WAS HEARD FROM TIME TO TIME COUPLED WITH THE FACT THAT THE VIEW TAKEN BY HIM IS NOT SHOW WAS ALSO CONSIDERED BOTH BY THE TRIBUNAL AS ALSO BY US TO BE A POSSIBLE VIEW, STRENGTHENS THE PRESUMPTION UNDER CLAUSE (E) OF SECTION 114 OF THE EVIDENCE ACT. A PRIMA FACIE EVIDENCE, ON THE BASIS OF THE AFORESAID PRESUM PTION, IS THUS CONVERTED INTO A CONCLUSIVE PROOF OF THE FACT THAT THE ORDER WAS PASSED BY THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND. MEERUT ROLLER FLOUR MILLS PVT. LTD. VS. C.I.T., ITA NO. 116 /COCH/ 2012; CIT VS. INFOSYS TECHNOLOGIES LTD., 341 I UNION OF INDIA, AIR 1990 SC 1984; A. A. DOSHI VS. JCIT, 256 ITR 685; HINDUSTHAN TIN WORKS LTD. VS. CIT, 275 ITR 43 (DEL), DISTINGUISHED. (PARAS 90- 92, 102) 7.1. THE PROPOSITIONS OF LAW LAID DOWN IN THE ABOVE CASE DUTY OF THE COMMISSIONER OF INCOME TAX TO CONDUCT VERIFICATION AND ENQUIRY INTO THE FACTUAL POSITION AND THEN COME TO A CONCLUSION THAT THERE IS AN ERROR IN THE ORDER PASSED BY THE ASSESSING OFFICER WHICH HAS CAUSED PREJUDICE TO THE INTEREST OF THE REVENUE. AS THIS WAS NOT DONE AND IN VIEW OF OUR DISCUSSION IN THIS ORDER, QUASH THE ORDER OF THE LD. PR. CIT PASSED U/S 263 OF THE ACT, ACCORDANCE WITH LAW. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS KOLKATA, THE SD/- [ABY T. VARKEY] JUDICIAL MEMBER DATED : 29.11.2019 {SC SPS} 7 ACCORDANCE WITH LAW, HE WAS UNDER NO OBLIGATION TO JUSTIFY AS TO WHY WAS HE SATISFIED. ON THE TOP OF THAT THE ASSESSING OFFICER BY HIS ORDER DATED 28 MARCH, 2008 DID NOT ADVERSELY AFFECT ANY RIGHT OF THE ASSESSEE NOR WAS ANY IGHT OF THE ASSESSEE PREJUDICED. HE WAS AS SUCH UNDER NO OBLIGATION IN LAW TO GIVE REASONS. THE FACT, THAT ALL REQUISITE PAPERS WERE SUMMONED AND THEREAFTER THE MATTER WAS HEARD FROM TIME TO TIME COUPLED WITH THE FACT THAT THE VIEW TAKEN BY HIM IS NOT SHOW N BY THE REVENUE TO BE ERRONEOUS AND WAS ALSO CONSIDERED BOTH BY THE TRIBUNAL AS ALSO BY US TO BE A POSSIBLE VIEW, STRENGTHENS THE PRESUMPTION UNDER CLAUSE (E) OF SECTION 114 OF THE EVIDENCE ACT. A PRIMA FACIE EVIDENCE, ON THE BASIS OF THE AFORESAID PTION, IS THUS CONVERTED INTO A CONCLUSIVE PROOF OF THE FACT THAT THE ORDER WAS PASSED BY THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND. MEERUT ROLLER FLOUR MILLS PVT. LTD. VS. C.I.T., ITA NO. 116 /COCH/ 2012; CIT VS. INFOSYS TECHNOLOGIES LTD., 341 I TR 293 (KARNATAKA); S.N. MUKHERJEE VS. UNION OF INDIA, AIR 1990 SC 1984; A. A. DOSHI VS. JCIT, 256 ITR 685; HINDUSTHAN TIN WORKS LTD. VS. CIT, 275 ITR 43 (DEL), DISTINGUISHED. 92, 102) THE PROPOSITIONS OF LAW LAID DOWN IN THE ABOVE CASE - LAW IS THAT, IT IS THE DUTY OF THE COMMISSIONER OF INCOME TAX TO CONDUCT VERIFICATION AND ENQUIRY INTO THE FACTUAL POSITION AND THEN COME TO A CONCLUSION THAT THERE IS AN ERROR IN THE ASSESSING OFFICER WHICH HAS CAUSED PREJUDICE TO THE INTEREST OF AS THIS WAS NOT DONE AND IN VIEW OF OUR DISCUSSION IN THIS ORDER, QUASH THE ORDER OF THE LD. PR. CIT PASSED U/S 263 OF THE ACT, AS THE SAME IS NOT IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . KOLKATA, THE 29 TH DAY OF NOVEMBER, 201 9 [ J. SUDHAKAR REDDY] ACCOUNTANT MEMBER I.T.A. NO. 2214/KOL/2019 ASSESSMENT YEAR: 2014-2015 SHRI NARAYAN SARAF ACCORDANCE WITH LAW, HE WAS UNDER NO OBLIGATION TO JUSTIFY AS TO WHY WAS HE SATISFIED. ON THE TOP OF THAT THE ASSESSING OFFICER BY HIS ORDER DATED 28 TH MARCH, 2008 DID NOT ADVERSELY AFFECT ANY RIGHT OF THE ASSESSEE NOR WAS ANY IGHT OF THE ASSESSEE PREJUDICED. HE WAS AS SUCH UNDER NO OBLIGATION IN LAW TO GIVE REASONS. THE FACT, THAT ALL REQUISITE PAPERS WERE SUMMONED AND THEREAFTER THE MATTER WAS HEARD FROM TIME TO TIME COUPLED WITH THE FACT N BY THE REVENUE TO BE ERRONEOUS AND WAS ALSO CONSIDERED BOTH BY THE TRIBUNAL AS ALSO BY US TO BE A POSSIBLE VIEW, STRENGTHENS THE PRESUMPTION UNDER CLAUSE (E) OF SECTION 114 OF THE EVIDENCE ACT. A PRIMA FACIE EVIDENCE, ON THE BASIS OF THE AFORESAID PTION, IS THUS CONVERTED INTO A CONCLUSIVE PROOF OF THE FACT THAT THE ORDER WAS PASSED BY THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND. MEERUT ROLLER FLOUR MILLS PVT. LTD. VS. C.I.T., ITA NO. 116 /COCH/ 2012; CIT VS. TR 293 (KARNATAKA); S.N. MUKHERJEE VS. UNION OF INDIA, AIR 1990 SC 1984; A. A. DOSHI VS. JCIT, 256 ITR 685; LAW IS THAT, IT IS THE DUTY OF THE COMMISSIONER OF INCOME TAX TO CONDUCT VERIFICATION AND ENQUIRY INTO THE FACTUAL POSITION AND THEN COME TO A CONCLUSION THAT THERE IS AN ERROR IN THE ASSESSING OFFICER WHICH HAS CAUSED PREJUDICE TO THE INTEREST OF AS THIS WAS NOT DONE AND IN VIEW OF OUR DISCUSSION IN THIS ORDER, WE AS THE SAME IS NOT IN 9 . SD/- J. SUDHAKAR REDDY] ACCOUNTANT MEMBER C OPY OF THE ORDER FORWARDED TO: 1. SHRI NARAYAN SARAF 56, N.S. ROAD 2 ND FLOOR KOLKATA 700 001 2. PR. COMMISSIONER OF INCOME TAX 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 8 OPY OF THE ORDER FORWARDED TO: PR. COMMISSIONER OF INCOME TAX -12, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES I.T.A. NO. 2214/KOL/2019 ASSESSMENT YEAR: 2014-2015 SHRI NARAYAN SARAF TRUE COPY BY ORDER ASSISTANT REGISTRAR KOLKATA BENCHES