The Income Tax Officer, Ward-1(2) (5), , Rajkot V. Shri Dhirajlal Bhanjibhai Vadalia, Rajkot

ITA 228/RJT/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0334 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 17-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DEEPAK RINDANI
• Keywords: Capital asset; Audit objection; Set aside; Capital Gains
• Section: 54; 263; 143(3); 54B; 54F

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, राजकोट 瀈यायपीठ 瀈यायपीठ瀈यायपीठ 瀈यायपीठ, , , , राजकोट IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted Through Virtual Court) ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND T.R. SENTHIL KUMAR, JUDICIAL MEMBER ITA No.135/Rjt/2014 Assessment Year : 2009-10 Shri Dhirajlal Bhanjibhai Vadalia 1 st Floor, Sterling Appts., Jawahar Road, Rajkot. Vs CIT-1, Rajkot. स ु नवाई क तार ख/Date of Hearing : 25/04/2022 ITA No.228/Rjt/2017 With Cross Objection No.17/RJT/2017 Assessment Year : 2009-10 ITO, Ward-1(2)(5) Rajkot Vs Shri Dhirajlal Bhanjibhai Vadalia 1 st Floor, Sterling Appts., Jawahar Road, Rajkot. अपीलाथ / (Appellant) यथ / (Respondent) Assessee by : Shri Deepak Rindani, AR Revenue by : Shri Samir Tekriwal, CIT-DR स ु नवाई क तार ख/Date of Hearing : 26/04/2022 घोषणा क तार ख /Date of Pronouncement: 30/06/2022 आदेश/O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER: Assessee is in appeal inITA No.135/RJT/2014 against order dated 27.1.2014 passed by the Ld.Commissioner of Income Tax-1, Rajkot under section 263 of the Income Tax Act, 1961 ("the Act" for short) relating to the assessment years 2009-10. Revenue is in ITA No.135/Rjt/2014 and 2 Others 2 appeal in ITA No.228/Rjt/2017 against the giving effect to the order u/s.143(3) r.w.s. 263 and CIT(A)’s order dated 18.5.2017 and against this the assessee has also filed cross objection bearing no.17/Rjt/2017. We dispose of all the appeals/cross objection by this common order for the sake of convenience and the only assessment year involved herein is 2009-10. 2. Brief facts of the case is that upon perusal of the record for the Asst.Year 2009-10, there was an assessment order passed under section 143(3) of the Act by the AO on 22.12.2011, vide which the ld.AO had accepted the returned income by the assessee of Rs.3,92,440/-. On perusal of the assessment record, the ld.CIT noticed that the assessee had sold a capital asset viz. a land bearing Survey no.56/1/8, paiki/6 of Village Haripar Pal, and earned long term capital gain of Rs.2,94,27,541/-. The assessee claimed deduction of Rs.1,35,30,171/- under section 54F of the Act on account of construction of a new residential property from the sale of the above land. The assessee also claimed deduction of Rs.1,58,97,370/- under section 54B on account of purchase of new agricultural land. A perusal of the assessment order has revealed that the AO has not made any inquiry and passed a cryptic assessment order and accepted the returned income of the assessee as follows: “2. In response to the said notices, Shri Hitesh Bhatt, Advocate and Authorised Representative of the assessee attended from time to time on behalf of the assessee and the case was discussed with him. The details called for having furnished and the submission filed by the assessee has been verified and placed on record. The assessee produced books of accounts, bills, vouchers, bank statements, etc. which have been verified on test check basis. During the year under consideration, the assessee is deriving share of profit and capital gain. 3. Considering the details available on record and after due verification, the income returned by the assessee is accepted as under: ITA No.135/Rjt/2014 and 2 Others 3 Returned income Rs.3,92,440/- “ 3. The ld.CIT found that the AO has not made proper inquiry before allowing deduction under section 54F viz. whether the assessee has deposited capital gain amount in the specified capital gain tax account and the whether the assessee spent the money for construction of a residential house; whether the assessee is entitled to claim deduction under section 54F for more than one residential house; further AO failed to verify whether the land sold was an agriculture land two years before the date of transfer of the said land; the AO also not verified that no agriculture income has been shown by the assessee from the above agriculture land. As the AO, without verification of the details, given relief to the assessee, therefore, the ld.CIT invoked clause (b) to Explanation 2 of section 263 namely “the order is passed allowing any relief without enquiring into the claim” and issued show cause notice to the assessee calling for his explanation. In response to the show cause notice, the assessee filed written submissions as follows: "Kindly refer to your aforesaid notice issued by you whereby it is proposed by you to revise the order u/s 143(3) of the Act passed by the. A.O., on the ground that the said assessment is erroneous and is prejudicial to the interest of the Revenue because deduction u/s 54F and 54B was allowed by the A.O. In this regard, I have to submit as follows: A. At the outset I may bring to your kind notice that during the course of original assessment proceedings, the A.O. made detailed inquiries on all aspects relating to the return of income filed by me. This factual aspect is discernible from the assessment order itself, wherein it is specifically mentioned that the assessee is deriving share of income and capital gain (sic). It can also be expressly gathered from the order itself that the details were called for verified by the A.O. and the books of accounts, bills, bank statements, vouchers etc. were also verified. It is also stated in para 3 of the order that the returned income was accepted after considering the details available on record and after due verification thereof. In short, a speaking order has been passed. Thus it would clearly transpire that the income was assessed and accepted after due verification process and obviously that would include the verification of the claim of deduction under capital gains. In other words, the ITA No.135/Rjt/2014 and 2 Others 4 A.O. can be said to have satisfied himself and arrived at a conscious view that the capital gain was properly computed accordingly the deduction claimed u/s 54F and 54B were examined and endorsed by the A.O. It may also state that nothing comes out from your aforesaid notice as to how it is believed by you that the records do not show any agricultural income at least in two years prior to the date of transfer of agricultural land. Nothing is pointed out in your notice as to which record shows that the impugned land was not cultivated in the last two years. In absence of any evidence substantiating your said belief, in my humble submission, this would amount to mere suspicion or surmise or at best a change of view from that already taken by the A.O. after due scrutiny and that too on same set of facts. Hence, on this count, with due respect, the assessment cannot be said to be erroneous in law. It appears that it is more out of presumption that it is stated in your notice that absence of agricultural income in my return of income makes me ineligible to claim deduction u/s 54B.. It is not stated in your said notice that there is any such pre-requisite laid down in the said section. In my humble submission, there is no such requirement laid down in the section. The section requires only user of the land for agricultural purposes and no sale of produce for legal provisions of Sec. 54B and thus the same cannot constitute an error as far as the provisions of Sec. 263 are concerned. Your notice itself, in para 3 thereof, states that the claim of deduction u/s 54B "does not appear to be a proper claim". In my respectful submission, jurisdiction u/s 263 requires that a specific error of fact or law must be pointed out while proposing to revise and order but the same cannot be based upon a doubt or a belief that may require further inquiry. Hence, on this count also, the notice cannot be said to be validly issued. However, without prejudice to the objections contained in para A above, on merits of the claim for deduction u/s 54F of the Act, I have to contend as follows: (i) The impugned agricultural land situate on survey no. 56/1/8 paiki 6 of Village Haripar Pal was very much cultivated in financial years 2006-07 and 2007-08 as also in 2008-09, as borne out from the crop mentioned in Govt. records form no. 12.1 have obtained recently the latest record and hence it is in the name of my successor-in-title but also contains record of crops taken in earlier years, the copy of the said records is submitted for your perusal ( Annexure Page Nos. 1 to 5). The reason for not reflecting the income in the Return of Incomes is that the lands theft were held by me were relatively smaller pieces of land end whatever crop on the land was produced was given away to the care takers of the land and small portion of it was being sent to my residence for self consumption. There was nothing which I could get out of actual sale in monetary form and hence despite the land giving a yield there was no income as such in monetary form which was available hence not reflected in the Return of Income. As far as the cultivation on the land is concerned it is abundantly clear that the said land was very much under cultivation, and the crop of "Urad" was taken during the concerned years. ITA No.135/Rjt/2014 and 2 Others 5 (ii) There is no requirement in law that agricultural produce must be converted to income by the assessee himself. There is also no such requirement laid down in Sec. 54B. Hence, not showing such income in the return of income does not make one ineligible for the said deduction. (iii) It has been stated in the notice that the agricultural land purchased during F.Y. 2008-09 and claimed as a deduction U/s. 54F should be used for agricultural purpose. There is no such requirement U/s. 54F, but without prejudice to the same I herewith submit the copies of the Form No. 12 showing that cultivation on the said land was carried out (Annexure Page Nos 6 to 15) (iv) In view of the above, it may kindly be held that deduction u/s 54B was correctly granted and that there cannot be said to be an error in this regard in the assessment order. C. As far as conditions of Sec. 54F are concerned, I have to submit as follows: (I) The Vajdi Agricultural Farm House referred to in your notice and in my balance sheet is an agricultural farm and the only construction thereon was that of a cattle shed. Even the shed was dismantled later. A letter to this effect was filed with the sarpanch-talati of the Vajdi Virda Village on 7-1-2010. A copy of the same in vernacular language with and a legible write of the said letter is submitted herewith ( Annexure \Page Nos. 16 to 17) In any case, the cattle shed cannot be said to be a construction of a residential \house. (ii) The Avadh land and construction so titled in the balance sheet was also an open land and the only construction thereon was that of a perimeter wall and as small security cabin. The said land was sold by me on 21-7-2011 by a registered deed of sale, copy of which is also enclosed (Annexure Page Nos. 18 to 31). The sale deed proves that the said sale is for open land only and there is no reference to any construction therein. (iii) The green net house referred to in para 2 of your notice, as the very name describes it, is a greenhouse and not a residential house. The greenhouse was put up on open land at Shitvan plot no. 27. A greenhouse is meant for cultivation of plants and it is not a residential house in any manner. (iv) Hence I held only one residential house on the date of transfer of the capital asset for which exemption is claimed. D. Further in respect of claim u/s 54F is concerned, I have to submit as follows: (i) In regard to the issue raised regarding the letter of permission was issued by Urban Development Authority on 9-12-2011 and the improbability that the money could not have been spent before the completion which is a requirement U/s. 54F. ITA No.135/Rjt/2014 and 2 Others 6 In this regard it is submitted that the expenses towards the construction of the residential house started way before the letter of permission was issued. It started right from the acquisition of the adjacent plot of land on 30-07-2010. Thereafter several activities and consequential expenses got started towards the construction of the residential house. The copies of the evidences in this regard are submitted herewith for your ready reference ( Annexure Page Nos. 32 to 68). It is further submitted that the provisions of Section 54F does not lay any relevance on the date of permission given by the local authority and the date of expenses start well before the permission of the local authority is granted and stretch well beyond the formal completion letter is granted for the residential house. The requirements of Section 54F are that the amounts claimed exempt should be spent within the stipulated time frame as provided in the section. (II) A total amount of Rs.1,35,30,171/- was deposited by me with Bonk of Maharashtra, Rajkot. The said amount was retained therein itself and thereafter the spending for construction has taken place from the said bank. The capital gain account scheme referred to by you is administered by banks. I have carried out the task of ensuring that the amount not spent before due date of filing the return of income (30-9-2009 in my case) was set aside in a bank account. In other words, the said amount has not been utilized by me or deployed anywhere other than with a bank. In view of above, both on law and on merits, the claims u/s 54B and 54F were rightly eligible and have been granted accordingly. Therefore, it is prayed that the proceedings initiated u/s 263 may kindly be dropped." 4. After considering the above reply the ld.CIT passed 263-order observing as follows: “4. In nutshell, since the Assessing Officer has allowed the deduction of Rs.1,35,30,171/- under section 54F of the Act and the deduction of Rs. 1,58,97,370/- u/s 54B without obtaining the relevant evidence of fulfillment of respective conditions as mentioned in para 3 above, and the assessee was not able to substantiate the fulfillment of these conditions during revisionary proceedings, the assessment order passed u/s. 143(3) on 22.12.2011 for Assessment Year 2009-10 is erroneous and prejudicial to the interest of Revenue. By the powers vested in CIT-I, Rajkot u/s. 263 of the I T Act, this order of the Assessing Officer is set aside. The Assessing Officer is directed to reassess the allow ability of deduction u/s. 54F and 54B of the Act on the points discussed above and complete the assessment afresh as per law.” 5. Aggrieved against the same, the assessee is before us raising the following grounds of appeal: ITA No.135/Rjt/2014 and 2 Others 7 “1. The Learned Commissioner of Income Tax, Rajkot -1, Rajkot erred in holding that the assessment order passed u/s. 143(3) on 22-12-2011 is erroneous and prejudicial to the interest of Revenue. 2. The Learned Commissioner of Income Tax, Rajkot - I, Rajkot failed to appreciate that I.T.O. had made detailed inquiries on all aspects of the income returned while assessing the income of the appellant u/s. 143(3) of the Act. 3. The Learned Commissioner of Income Tax, Rajkot - I, Rajkot erred in setting aside the order passed by the Income-tax Officer Ward - 1(1), Rajkot u/s 143(3) of the Act and in directing the assessing officer to reassess allow/ability of deductions u/s. 54F and 54B of the Act. 4. On merits, the Learned Commissioner of Income Tax, Rajkot - I, Rajkot erred in holding that the appellant did not satisfy conditions for allowability of deductions u/s. 54F and 54B of the Act.” 6.1 The ld.AR for the assessee, Shri Deepak Rindani, submitted that detailed inquiry on all aspects were made by theAO during the regular assessment and he took us through page no.6 of the paper book containing letter of the AO dated 30.6.2011, and drew our attention particularly to Sr.No.5 & 7 of the letter which reads as under: “5. Please furnish complete details of investment in movable and immovable giving source of investment along with documentary evidences. In case of purchase of immovable property copy of registered purchase deed/sale deed should also be furnished. ..... 7. Please furnish the details of deduction of Rs.2,94,27,541/- claimed against capital gain along documentary evidences.” 6.2 The assessee vide letter dated 4.8.2011 in response to query no.5, stated as follows: “5. In response to your query no.(5) of your letter, copies of purchase deed, sale deed of suncity land at Haripar and new purchase deed of Koindh agriculture land are attached herewith (Page Nos.20 to 112).” To the query No.4, assessee’s response is as follow: ITA No.135/Rjt/2014 and 2 Others 8 “7. In response to your query no.(7) of your letter, details of deduction of Rs.2,94,27,541/- are attached herewith (Page Nos.114 to 227). 6.3 The ld AR for the assessee, Shri Deepak Rindani further brought to our notice the letter dated 27-11-2012 by the ld AO to the CIT [audit] in reply to the objections raised by the Internal Audit Party, [available at page number 24 to 26 of the Paper Book] which is self-explanatory and reads as follows: “... Facts of the case is that the assessee is an individual deriving income from salary, share of profit from Firm and capital gain for the year under consideration [assessment year 2009–10]. Moreover he had sold agricultural land, based on which the case was selected for scrutiny under the AIR category with the remark “AO should examine the source of investment in property as appearing in AIR. Taxability of sale of property as reported in AIR, should be examined by the AO”. During the course of assessment proceedings,the assessee was asked to furnish full details regarding his land dealings which included the sale of agricultural land at village Haripar [PAI] of Lodhika Taluka and another purchase of agricultural land at village Kandh, Taluka Dhangandra, Dist. Surrendranagar. Letters in this regard seeking details under section 133[6] where also written to the Sub-registrar, Gondal&Dhangandra. On 25.07.2011 the assessee filed written submission and at point 5 submitted the details regarding sale residential land sold at Rs.3,00,00,000 [along with sale deed], details of purchase of land at village Kandh [along with purchase deed]. In the submission filed for land transaction the assessee has clearly given complete details of the entire expenses made for sale, purchase, registration, and development of land and had also furnished copies of ledger account. The Sub-registrar Gondalvide his office letter dated 24.11.2011 submitted the details [along with a copy of sale deed] called for regarding sale of agricultural land at village Haripar [PAL] of Lodhika taluk. Similarly the Sub- registrar, Dhangandra vide his office letter dated 07.09.2011 submitted the details [along with purchase deed] called for regarding purchase of agriculture at village Kandh, Taluka Dhangandra. Thus the source of investment in property was examined by the AO, now only the taxability of sale of property as reported in the AIR was to be examined by the AO. Since LTCG of Rs.2,94,27,541/- was earned by the assessee he had purchased another agricultural land of Rs.1,58,97,370/- as far as the remaining capital gain of Rs.1,35,30,171/-is concerned the assessee has claimed that he had invested the said amount in capital gains deposit scheme of Bank of Maharashtra and accordingly he is entitled for deduction under section 54 of the act. During the course of assessment the AR of the assessee vide his submission [Annexure-F of the Internal Audit Memo] dated 19.12.2011 submitted that “that the opening form of capital gain account is not available with me, it may be noted that I have submitted the copies of all the expenses that I am required to make under the provisions of section 54F of the income tax act under which I have claimed the exemption from capital gains. Since the matter was getting time-barred by limitation on 31.12.2011, the AO has not insisted of capital gains deposit scheme [account opening form] and taking other ITA No.135/Rjt/2014 and 2 Others 9 submission and material on record accepted the computation of LTCG and very specifically and catalytically mentioned in the office note how the assessment order that the assessee case selected for scrutiny and that the AIR category to verify the sources of investment in property as appearing in AIR & taxability of sale of property as reported in AIR, was duly verified. Details of sale of property [agricultural land], purchase of land [agricultural land], reply under section 133[6] from government records, computation of LTCG, copy of ledger [expense] of construction of house along with relevant bills produced during the course of assessment proceedings. Considering the above facts the audit objection prized by the IAP is not acceptable and a kindly be dropped.” 6.4 Thus the ld AR pleaded the assessing officer had made through enquiry by calling for information under section 133[6] from the office of the Sub- Registrar’s, got replies dated 24-11-2011 and 07- 09-2011 with documents. After going through the same and reply furnished by the assessee, the AO satisfied with the claim of deduction under section 54F and 54B accepted the returned income and completed the assessment. Thus the assessment order is neither erroneous nor prejudicial to the interest of Revenue, but the ld CIT wrongly invoked the explanation 2[b] to section 263 of the Act, on the premises that the AO has not made proper enquiry while framing the assessment order. 6.5 The ld.AR also submitted that the ld CIT has not formed his own belief in revising the assessment but based upon audit objection raised by Revenue Audit Party the above Revisional proceedings is initiated, which is bad in law and relied upon the Jurisdictional High Court judgment in the case of N.K. Roadways Pvt Ltd. v. Income-tax Officer (OSD) reported in [2015] 63 taxmann.com 342 (Gujarat) wherein it was held as follows: Where Assessing Officer had considered issue relating to taxability of interest in detail at time of assessment, action of reopening solely at behest of audit party without any independent belief while recording reasons would surely make reassessment vulnerable. ITA No.135/Rjt/2014 and 2 Others 10 6.6 The ld Counsel also relied on Three Judges Bench judgement of the Hon’ble Supreme Court in the case of Sirpur Paper Mill Ltd. -Vs- Commissioner of Wealth-tax reported in [1970] 77 ITR 6 (SC) wherein it was held as follows: Revision by Commissioner - Assessment years 1957-58 and 1958-59 - Whether orders, instructions and directions of Board may control exercise of powers of officers of department in administrative matters but not quasi- judicial matters - Held, yes - Whether where in deciding assessee's revision application under section 25, Commissioner merely carried out directions of Board of Revenue and did not exercise his independent judgment, his order under section 25 was liable to be set aside. 6.7 As far as merits of the case, the ld.AO also brought to our attention to the order passed by the ld.CIT(A) as against giving-effect order passed by the AO under section 143(3) read with section 263 of the Act. The ld.CIT(A) deleted the additions made by the AO pursuant to the Revision Order as follows: “6. I have gone through assessment order as well as the submissions of the appellant. The argument of the A.O. that "the appellant has not shown agricultural income from the land sold, hence, the land is not agricultural" is totally out of context. I am inclined to agree with the appellant that there is no compulsion to declare agricultural income to prove that the land in question is agricultural land. Only requirement of law is that agricultural activities should be done which according to Land Revenue record 7/12, is proved. The A.O. has doubted the authenticity of the very record 7/12 of Land Revenue to deny the exemption. In my considered view such exemption cannot be denied unless one has some authentic evidence contrary to the record of a Government Authority. The A.O. has not brought any such evidence on record which is contrary to 7/12 record of Land Revenue Department as submitted by the appellant. Therefore, the disallowance/addition made on this account is deleted and the ground of appeal is allowed. ...... ..... ...... ...... 7. I have gone through assessment order as well as the submissions of the appellant. I am inclined to agree with the appellant that there is no need to deposit in the specified account if the money is intended to spend within stipulated time (1 year before sale of land and 2 years after the sale or 3 years from the date of sale) as mentioned in section 54F. Here the appellant has already spent the amount in construction of new house within the stipulated time. Further the argument of the A.O. that the expenditure has been made before layout plan was passed before does not make any sense ITA No.135/Rjt/2014 and 2 Others 11 because there is no such condition laid down in the provisions of section 54F. Next argument of the A.O. that the appellant had already more than residential house is totally contrary to the fact because none of the properties (appearing in the balance sheet) as mentioned by the A.O. can ever be said to be a residential house. Hence, none of the arguments taken by the A.O. for not allowing the exemption u/s 54F is valid. I am of considered opinion that the appellant is very mush eligible for exemption from Capital Gain tax u/s 54F. Therefore, the disallowance/addition made on this account is deleted and the ground of appeal is allowed.” 6.8 Thus, the ld.AR submitted that even on merits, the ld.CIT(A) has deleted additions and allowed claim made by the assessee both under section 54B an 54F of the act. Thus, the ld.AR pleaded that the Revision Order passed by the ld.CIT is without any basis and the same liable to be quashed. 7. Per contra, the ld.DR appearing for the Revenue has supported the order passed by the ld.CIT and requested to uphold the same. 8. We have given our thoughtful consideration and perused the material available on record. It is seen from page no.25 (illegible copy) which is scrutiny sheet of the Income Tax Department relating to the assessee wherein the reason on which cases selected for scrutiny is given as “AO should examine the sources of investment in property as appearing in AIR”. However, it is seen from the assessment order dated passed by the AO that it is very cryptic order confined to two paragraphs only (extracted in para 2 at page 2 of this order) without making any discussions and justification for the relief granted to the assessee either under section 54B or under section 54F of the Act. A quasi judicial order is expected to discuss the issue with required to evidences and then appropriate relief/claim to be allowed. Thus, the assessment order dt.22.12.2011 passed by the AO is non-speaking order. It is seen from the letter dated 27.11.2012 by the ld.AO to the ld.CIT(Audit) in reply to the objection raised by the Internal Audit Party wherein the ITA No.135/Rjt/2014 and 2 Others 12 AO had called for the information from Sub-Registrar, Gondal and Dhangandra and the Sub-Registrar, Gondal vide his letter dated 24.11.2011 submitted copies of the details of sale deed and Sub- Registrar, Dhangandra vide his office letter dated 7.9.2011 submitted details called for by the AO relating to the purchase of agriculture land at Village Kandh. However, in the assessment order passed by the AO, there is no whisper on these inquiries made by him, before passing regular assessment order. Probably for this reason, the ld.CIT has reopened the assessment under section 263 of the Act. 9. Further, we find that the ld.CIT also has not verified assessment record properly and simply carried out the objections made by the Internal Audit Party of the department, and thereby initiated the Revision proceedings. It can be seen from the show cause notice issued under section 263 of the Act, wherein the ld.CIT has categorically mentioned that the AO did not verify the facts and allowed the deduction under section 54B & 54F of the Act. This observation by the ld.CIT is not correct, for the reason that the ld.AO has called for the details from the Sub-Registrar and received reply from Sub-Registrar on 24.1.2011 and 7.9.2011 respectively. Thus, the ld.AO though made inquiry about the claim made by the assessee, however, not discussed the same while passing assessment order. Thus, we find that the ld.CIT has initiated Revision proceeding based on the Internal Audit Party report only, which is not maintainable in law following jurisdictional High Court in the case of N.K. Roadways P.Ltd. (supra). Further Hon’ble Supreme Court also held that revision made by the Commissioner simply following direction of the Board, which may control exercise of power of officers of department in administrative matters but not ITA No.135/Rjt/2014 and 2 Others 13 quasi-judicial matters. In case of judicial matters, the Commissioner should apply his mind and initiate proceedings in accordance with law and not merely carry out directions of the Board. Thus, any order passed pursuant to the directions of the Board is liable to be set aside as Commissioner has not applied his independent judgments in invoking revision proceedings. 10. Respectfully following the above judgments of jurisdictional High Court and judgment of Hon’ble Supreme Court cited (supra) we hold that revision order dt. 27.01.2014 passed by the ld.CIT is not in accordance with law and the same is hereby quashed. Consequently giving-effect order passed and appellate order passed by the ld.CIT(A) has also no legs to stand, and the same become infructuous. 11. In the result, the appeal filed by the assessee in ITA No.135/RJT/2014 is allowed and Revenue’s appeal in ITA Noo.228/Rjt/2017 and cross objection No.17/Rjt/2017, both are dismissed. Order pronounced in the Court on 30 th June, 2022 at Ahmedabad. Sd/- Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER (T.R. SENTHIL KUMAR) JUDICIAL MEMBER Ahmedabad, dated 30/06/2022 vk*