Ankit Gupta, Kolkata V. Principal commissioner of Income Tax, Kolkata

ITA 233/KOL/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5709 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 11-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S M SURANA MR
• Keywords: Gift; Audit objection; Principle of natural justice; Earning of tax free income; Right to appeal; Revenue expenditure; Rule 8D; Set aside; Capital Gains
• Section: 143(3); 142(1); 80HHC; 14A; 133(6); 143(2); 43; 13; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER & SRI ABY T. VARKEY, HONBLE JUDICIAL MEMBER) ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA............................................................APPELLANT 49B, BLOCK-C NEW ALIPORE KOLKATA 700 053 [PAN : AGFPG 5624 H] VS. PR. COMMISSIONER OF INCOME TAX -10, KOLKATA...............................................................RESPONDENT APPEARANCES BY: SHRI S.M. SURANA, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE. MR. JOHN VINCENT DONKUPAR LANGSTIEH, CIT, D/R, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : APRIL 7 TH , 2021 DATE OF PRONOUNCING THE ORDER : APRIL 30 TH , 2021 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED PR. COMMISSIONER OF INCOME TAX - 10, KOLKATA (HEREINAFTER THE LD. CIT(A)), PASSED U/S. 263 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 12/12/2018, FOR THE ASSESSMENT YEAR 2014- 15 2. THE ASSESSEE IS A COMPANY AND HAD FILED ITS RETURN OF INCOME ON 12/03/2015, DISCLOSING TOTAL INCOME OF RS.3,37,930/-. THE COMPANY HAD ISSUED SHARES AT A PREMIUM DURING THE YEAR. THE ASSESSING OFFICER SELECTED THE CASE FOR SCRUTINY AND ISSUED NOTICES U/S 143(2) AND 142(1) OF THE ACT. THE A/R OF THE ASSESSEE APPEARED BEFORE THE ASSESSING OFFICER AND PRODUCED ALL THE DETAILS AND DOCUMENTS CALLED FOR. THE ASSESSING OFFICER CONCLUDED THAT ALL THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES ARE GENUINE AFTER ISSUING NOTICE U/S 133(6) OF THE ACT FOR VERIFICATION OF THE DETAILS AND DOCUMENTS FILED BY THE ASSESSEE AND AS NO DISCREPANCY WAS FOUND IN THE TRANSACTION. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON 27/07/2016, ACCEPTING THE RETURN OF INCOME FILED BY THE ASSESSEE BY OBSERVING AS FOLLOWS:- 3. ON PERUSAL OF THE DETAILS SUBMITTED BY THE ASSESSEE THAT DURING THE FINANCIAL YEAR 2013-14 RELEVANT TO ASSESSMENT YEAR 2014-15, ASSESSEE DERIVED INCOME FROM LONG TERM CAPITAL GAIN (WITH STT) AND CLAIMED EXEMPTION U/S 10(38) OF THE INCOME TAX ACT, '61. IT WAS REVEALED THAT ASSESSEE HAD MADE SOME SHARE TRANSACTIONS REGARDING SALE OF SHARES THROUGH M/S DYNAMIC EQUITIES PVT. LTD. IT THIS CONNECTION, LETTER .U/S 133(6) OF THE ACT WAS ISSUED TO M/S DYNAMIC EQUITIES PVT. LTD. FOR VERIFICATION OF SAID TRANSACTIONS REGARDING SALE OF SHARES. REPLY RECEIVED FROM M/S DYNAMIC EQUITIES PVT. LTD. WHICH APPEARS TO BE CONFIRMED WITH DETAILS FILED BY THE ASSESSEE AND ALL TRANSACTIONS MADE THROUGH BANKING CHANNEL AND NO DISCREPANCY TRANSACTIONS. 3. THE LD. PR. CIT, ISSUED A NOTICE PROPOSING TO REVISE THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT ON 27/07/2016, FOR THE REASON THAT AN ERROR DETECTED IN THE ASSESSMENT ORDER. A PROPOSAL WAS RECEIVED FROM THE ASSESSING OFFICER THAT THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, LOOKED ERRONEOUS, INSOFAR AS, IT WAS PREJUDICIAL TO THE LD. PR. CIT EXTRACTED THE SHOWCAUSE NOTICE A PAGE 2 & 3 OF ASSESSEE FILED HIS REPLIES TO THE SHOWCAUSE NOTICE VIEWS AND ALSO STATED THE MODUS OPERANDI THESE PAGES, HE HAS MADE A NUMBER OF GENERAL STATEMENTS AND ALSO REFERRED TO SOME CASE FINALLY, AT PARA 5.12.2 & 5.12.3, HE OBSERVED AS FOLLOWS: 5.12.2. THUS, IN THE INSTANT CASE, IT CAN CONDITIONS OF RENDERING AN ASSESSMENT ERRONEOUS IN SO FAR IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE ARE MET SINCE: (A) DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DID NOT CONDUCT EXTENSIVE/NECESSARY E KAILASH AUTO; (B) THE ASSESSING OFFICER WHATSOEVER, IN THE ORIGINAL ASSESSMENT ORDER ACCEPTED THE RETURN OF INCOME FILED BY THE ASSESSEE, MORE PARTICULARLY ON THE ISSUE OF GAIN/LOSS ON SALE OF SHARES IN KAI 5.13. THE ASSESSEE IN HIS SUBMISSION HAD REFERRED TO VARIOUS ITAT JUDGMENTS. IN THIS REGARD, I WOULD LIKE TO SAY THAT ALTHOUGH, SOME OF THESE DECISIONS ARE IN THE FAVOUR OF THE ASSESSEE, BUT THE REVENUE HAS NOT YET ACCEPTED SUCH DECISIONS AS THE SAME SETTLED IN THE COURT OF LAW. 4. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE, SUBMITTED AS FOLLOWS: (A) THAT THE ASSESSING OFFICER CANNOT SUGGEST INVOCATI THE ACT. I T WAS FOR THE LD. PR. CIT TO CALL FOR AND VERIFY THE RECORDS AND AFTER BEING 2 TRANSACTIONS REGARDING SALE OF SHARES. REPLY RECEIVED FROM M/S DYNAMIC EQUITIES PVT. LTD. WHICH APPEARS TO BE CONFIRMED WITH DETAILS FILED BY THE ASSESSEE AND ALL TRANSACTIONS MADE THROUGH BANKING CHANNEL AND NO DISCREPANCY THE LD. PR. CIT, ISSUED A NOTICE DT. 09/11/2018 U/S 263 OF THE ACT TO THE ASSESSEE PROPOSING TO REVISE THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT ON 27/07/2016, FOR THE REASON THAT AN ERROR WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE DETECTED IN THE ASSESSMENT ORDER. A PROPOSAL WAS RECEIVED BY THE LD. PR. CIT FROM THE ASSESSING OFFICER THAT THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, LOOKED ERRONEOUS, INSOFAR AS, IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. PR. CIT EXTRACTED THE SHOWCAUSE NOTICE A PAGE 2 & 3 OF TO THE SHOWCAUSE NOTICE . THEREAFTER, THE LD. PR. CIT GAVE HIS MODUS OPERANDI IN SUCH CASES FROM PAGES 3 TO 12 OF HIS ORDER. IN THESE PAGES, HE HAS MADE A NUMBER OF GENERAL STATEMENTS AND MADE GENERAL OBSERVATIONS AND ALSO REFERRED TO SOME CASE -LAW. FINALLY, AT PARA 5.12.2 & 5.12.3, HE OBSERVED AS FOLLOWS: - THUS, IN THE INSTANT CASE, IT CAN BE SUMMARISED THAT THE AFORESAID TWIN CONDITIONS OF RENDERING AN ASSESSMENT ERRONEOUS IN SO FAR IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE ARE MET SINCE: DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DID NOT CONDUCT EXTENSIVE/NECESSARY E NQUIRIES REGARDING THE ISSUE OF TRANSFER OF SHARES OF KAILASH AUTO; THE ASSESSING OFFICER WHATSOEVER, IN THE ORIGINAL ASSESSMENT ORDER ACCEPTED THE RETURN OF INCOME FILED BY THE ASSESSEE, MORE PARTICULARLY ON THE ISSUE OF GAIN/LOSS ON SALE OF SHARES IN KAI LASH; THE ASSESSEE IN HIS SUBMISSION HAD REFERRED TO VARIOUS ITAT JUDGMENTS. IN THIS REGARD, I WOULD LIKE TO SAY THAT ALTHOUGH, SOME OF THESE DECISIONS ARE IN THE FAVOUR OF THE ASSESSEE, BUT THE REVENUE HAS NOT YET ACCEPTED SUCH DECISIONS AS THE SAME SETTLED IN THE COURT OF LAW. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE, SUBMITTED AS FOLLOWS: - THE ASSESSING OFFICER CANNOT SUGGEST INVOCATI ON OF POWERS U/S 263 OF T WAS FOR THE LD. PR. CIT TO CALL FOR AND VERIFY THE RECORDS AND AFTER BEING ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA TRANSACTIONS REGARDING SALE OF SHARES. REPLY RECEIVED FROM M/S DYNAMIC EQUITIES PVT. LTD. WHICH APPEARS TO BE CONFIRMED WITH DETAILS FILED BY THE ASSESSEE AND ALL FOUND INTO THE U/S 263 OF THE ACT TO THE ASSESSEE PROPOSING TO REVISE THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT ON 27/07/2016, THE INTEREST OF THE REVENUE WAS BY THE LD. PR. CIT -10, KOLKATA FROM THE ASSESSING OFFICER THAT THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, LOOKED THE LD. PR. CIT EXTRACTED THE SHOWCAUSE NOTICE A PAGE 2 & 3 OF HIS ORDER. THE . THEREAFTER, THE LD. PR. CIT GAVE HIS PAGES 3 TO 12 OF HIS ORDER. IN AND MADE GENERAL OBSERVATIONS BE SUMMARISED THAT THE AFORESAID TWIN CONDITIONS OF RENDERING AN ASSESSMENT ERRONEOUS IN SO FAR IT IS PREJUDICIAL TO THE DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DID NOT CONDUCT NQUIRIES REGARDING THE ISSUE OF TRANSFER OF SHARES OF THE ASSESSING OFFICER WHATSOEVER, IN THE ORIGINAL ASSESSMENT ORDER ACCEPTED THE RETURN OF INCOME FILED BY THE ASSESSEE, MORE PARTICULARLY ON THE ISSUE OF THE ASSESSEE IN HIS SUBMISSION HAD REFERRED TO VARIOUS ITAT JUDGMENTS. IN THIS REGARD, I WOULD LIKE TO SAY THAT ALTHOUGH, SOME OF THESE DECISIONS ARE IN THE FAVOUR OF THE ASSESSEE, BUT THE REVENUE HAS NOT YET ACCEPTED SUCH DECISIONS AS THE SAME ARE YET NOT ON OF POWERS U/S 263 OF T WAS FOR THE LD. PR. CIT TO CALL FOR AND VERIFY THE RECORDS AND AFTER BEING SATISFIED HIMSELF THAT THERE IS AN ERROR WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE SHALL ISSUE ASSESSING OFFICER H AS TRIGGERED THE INITIATION OF REVISIONARY PROCEEDINGS U/ 263 OF THE ACT, HE ARGUED THAT THE ORDER PASSED U/S 263 OF THE ACT IS ILLEGAL. (B) THAT THE CASE SCRUTINY THROUGH CASS FOR THE REASON THAT SHARES BASED ON THE INPUT FROM THE INVESTIGATION WING. THE ASSESSING OFFICER CALLED FOR DETAILS AND AFTER MAKING ENQUIRIES ACCEPTED THE CLAIM OF THE ASSESSEE THAT THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES GAINS WERE GENUINE. HE SUBMITTED THAT THIS IS A POSSIBLE VIEW BASED ON EVIDENCE AND HENCE, THE ASSESSMENT CANNOT BE REVISED BY INV ACT, AS THERE IS NO ERROR IN THE ORDER. (C) THAT T HE LD. PR. CIT WAS WRON ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DID NOT CONDUCT EXTENSIVE NECESSARY ENQUIRIES. THE EXTENT OF ENQUIRY WAS NOT ELABORATED. IT IS NOT A CASE OF NON APPLICATION OF MIND OR NON (D) THAT T HE LD. PR. CIT ACKNOWLEDGES THE FACT THAT THE DECISION OF THE ITAT ON THIS ISSUE ARE IN FAVOUR OF THE ASSESSEE LAW LAID DOWN IN THESE ORDERS. (E) THAT THE LD. PR. CIT DID NOT MAKE ANY ENQUIRY OR VERIFICATION ON H SIMPLY BASED ON SUSPICION, HAS DIRECTED ADDITIONS IN HIS ORDER PASSED U/S 263 OF THE ACT. (F) THAT THE ORDER PASSED U/S 263 OF THE ACT WAS AGAINST THE PRINCIPLES OF LAW LAID DOWN BY VARIOUS COURTS OF LAW OR NON- VERIFICATION AND AS A POSSIBLE VIEW WAS TAKEN BY THE ASSESSING OFFICER. (G) THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT C BENCH IN THE CASE OF ITA NO. 01- 04/KOL/2019, ORDER DT. 20/09/2019 THE CASE OF USHA DEVI MODI VS. ITO IN ITA NO. 874/KOL/2019, ORDER DT. 12/01/2021. 3 HIMSELF THAT THERE IS AN ERROR WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE SHALL ISSUE NOTICE TO INVOKE POWERS U/S 263 OF THE ACT. AS TRIGGERED THE INITIATION OF REVISIONARY PROCEEDINGS U/ 263 OF THE ACT, HE ARGUED THAT THE ORDER PASSED U/S 263 OF THE ACT IS ILLEGAL. THAT THE CASE OF THE ASSESSEE FOR THIS ASSESSMENT YEAR SCRUTINY THROUGH CASS FOR THE REASON THAT SUSPICIOUS LONG TERM CAPITAL GAIN ON BASED ON THE INPUT FROM THE INVESTIGATION WING. THE ASSESSING OFFICER CALLED FOR DETAILS AND AFTER MAKING ENQUIRIES ACCEPTED THE CLAIM OF THE ASSESSEE THAT THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES RESULT ING IN LONG TERM CAPITAL WERE GENUINE. HE SUBMITTED THAT THIS IS A POSSIBLE VIEW BASED ON EVIDENCE AND HENCE, THE ASSESSMENT CANNOT BE REVISED BY INV OKING POWERS U/S 263 OF THE ACT, AS THERE IS NO ERROR IN THE ORDER. HE LD. PR. CIT WAS WRON G IN COMING TO THE CONCLUSION THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DID NOT CONDUCT EXTENSIVE NECESSARY THE EXTENT OF ENQUIRY WAS NOT ELABORATED. IT IS NOT A CASE OF NON APPLICATION OF MIND OR NON -VERIFICATION. HE LD. PR. CIT ACKNOWLEDGES THE FACT THAT THE DECISION OF THE ITAT ON THIS ISSUE ARE IN FAVOUR OF THE ASSESSEE , BUT HE HAS NOT FOLLOWED THE LAW LAID DOWN IN THESE ORDERS. THAT THE LD. PR. CIT DID NOT MAKE ANY ENQUIRY OR VERIFICATION ON H SIMPLY BASED ON SUSPICION, HAS DIRECTED ADDITIONS IN HIS ORDER PASSED U/S 263 OF THAT THE ORDER PASSED U/S 263 OF THE ACT WAS AGAINST THE PRINCIPLES OF LAW LAID DOWN BY VARIOUS COURTS OF LAW , AS THIS IS NOT A CASE OF NON - VERIFICATION AND AS A POSSIBLE VIEW WAS TAKEN BY THE ASSESSING OFFICER. THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT C BENCH IN THE CASE OF GITESH TIKMANY & M/S. GITSH TIKMANI, HUF VS. ITO IN 04/KOL/2019, ORDER DT. 20/09/2019 AND BY DECISION OF ITAT A BENCH IN USHA DEVI MODI VS. ITO IN ITA NO. 874/KOL/2019, ORDER DT. 12/01/2021. ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA HIMSELF THAT THERE IS AN ERROR WHICH IS PREJUDICIAL TO THE INTEREST OF THE NOTICE TO INVOKE POWERS U/S 263 OF THE ACT. AS THE AS TRIGGERED THE INITIATION OF REVISIONARY PROCEEDINGS U/ 263 OF THE ACT, HE ARGUED THAT THE ORDER PASSED U/S 263 OF THE ACT IS ILLEGAL. OF THE ASSESSEE FOR THIS ASSESSMENT YEAR WAS SELECTED FOR SUSPICIOUS LONG TERM CAPITAL GAIN ON BASED ON THE INPUT FROM THE INVESTIGATION WING. THE ASSESSING OFFICER CALLED FOR DETAILS AND AFTER MAKING ENQUIRIES ACCEPTED THE CLAIM OF THE ASSESSEE ING IN LONG TERM CAPITAL WERE GENUINE. HE SUBMITTED THAT THIS IS A POSSIBLE VIEW BASED ON EVIDENCE OKING POWERS U/S 263 OF THE COMING TO THE CONCLUSION THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DID NOT CONDUCT EXTENSIVE NECESSARY THE EXTENT OF ENQUIRY WAS NOT ELABORATED. IT IS NOT A CASE OF NON - HE LD. PR. CIT ACKNOWLEDGES THE FACT THAT THE DECISION OF THE ITAT ON HAS NOT FOLLOWED THE PROPOSITION OF THAT THE LD. PR. CIT DID NOT MAKE ANY ENQUIRY OR VERIFICATION ON H IS OWN AND SIMPLY BASED ON SUSPICION, HAS DIRECTED ADDITIONS IN HIS ORDER PASSED U/S 263 OF THAT THE ORDER PASSED U/S 263 OF THE ACT WAS AGAINST THE PRINCIPLES OF LAW - APPLICATION OF MIND VERIFICATION AND AS A POSSIBLE VIEW WAS TAKEN BY THE ASSESSING OFFICER. THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE GITESH TIKMANY & M/S. GITSH TIKMANI, HUF VS. ITO IN AND BY DECISION OF ITAT A BENCH IN USHA DEVI MODI VS. ITO IN ITA NO. 874/KOL/2019, ORDER DT. 12/01/2021. 6. THE LD. D/R, ON THE OTHER HAND, SUBMITTED THAT THE AS SESSING OFFICER IGNORED THE INPUT RECEIVED FROM THE INVESTIGATION WING THAT THE TRANSACTIONS OF PURCHASE AND SALES WERE SUSPICIOUS AND THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAINS, WHICH IS A SUSPICIOUS CLAIM. HE RELIED ON THE ORDER OF THE LD. PR. C IT U/S 263 OF THE ACT AND SUBMITTED THAT EXTENSIVE ENQUIRIES WERE NOT MADE BY THE ASSESSING OFFICER AS REQUIRED BY HIM AND HENCE THE ORDER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ON A QUERY FROM THE BENCH, HE AGREED THAT T ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY CERTAIN NEVERTHELESS, HE RELIED ON THE DECISION CITED BY THE LD. PR. CIT IN HIS ORDER PASSED U/S 263 OF THE ACT, AND PRAYED THAT THE ORDER OF THE LD. PR. CIT, BE UPHELD AS THE REQUIRED WERE NOT DONE BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS 7. 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 AUTHORIT BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS: 8. THE ASSESSING OFFICER IN THE IMPUGNED ORDER PASSED U/S 143(3) OF THE ACT ON 27/07/2016, CLEARLY STATED THAT HE HAS EXAMINED THE CLAIM OF THE ASSESSEE THAT HE HAS DERIVED INCOME FROM LONG TERM C 133(6) OF THE ACT TO M/S. DYNAMIC EQUITIES PVT. LTD. FOR VERIFICATION OF THE SAID TRANSACTIONS OF SALE OF SHARES. THE REPLIES RECEIVED CONFIRMED THE TRANSACTIONS. THE ASSESSEE HAS FILED CONTRACT NOTES, AND D- MAT DETAILS BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER RECORDS THAT THE TRANSACTIONS WERE MADE THROUGH PROPER BANKING CHANNELS AND NO DISCREPANCIES WERE FOUND. THUS, IT IS EVIDENT THAT VERIFIED THE DOCUMENTS FILED BY THE ASSESSEE AND THEREAFTER TOOK A VIEW THAT THE TRANSACTIONS OF SALE AND PURCHASE OF SHARES WERE GENUINE. THIS VIEW OF THE ASSESSING OFFICER IS SUPPORTED BY A NUMB CASE OF ARUNA BANSAL VS. ITO IN ITA NO. 976/KOL/2018, ORDER DT. 08/11/2018 OF THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF 16/JP/2018, ORDER DT. 29/08/2018, 9. THE LD. PR. CIT HIMSELF STATES THAT THE ASSESSING OFFICER DID NOT CONDUCT EXTENSIVE/NECESSARY ENQUIRIES. HE DOES NOT SPECIFY WHAT ARE THE ENQUIRIES 4 THE LD. D/R, ON THE OTHER HAND, SUPPORTED THE ORDER OF THE LD. PR. CIT AND SESSING OFFICER IGNORED THE INPUT RECEIVED FROM THE INVESTIGATION WING THAT THE TRANSACTIONS OF PURCHASE AND SALES WERE SUSPICIOUS AND THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAINS, WHICH IS A SUSPICIOUS CLAIM. HE RELIED ON THE ORDER OF IT U/S 263 OF THE ACT AND SUBMITTED THAT EXTENSIVE ENQUIRIES WERE NOT MADE BY THE ASSESSING OFFICER AS REQUIRED BY HIM AND HENCE THE ORDER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ON A QUERY FROM THE BENCH, HE AGREED THAT T ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY CERTAIN DECISIONS OF THE TRIBUNAL. NEVERTHELESS, HE RELIED ON THE DECISION CITED BY THE LD. PR. CIT IN HIS ORDER PASSED U/S 263 PRAYED THAT THE ORDER OF THE LD. PR. CIT, BE UPHELD AS THE REQUIRED WERE NOT DONE BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS 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 AUTHORIT BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS: - THE ASSESSING OFFICER IN THE IMPUGNED ORDER PASSED U/S 143(3) OF THE ACT ON 27/07/2016, CLEARLY STATED THAT HE HAS EXAMINED THE CLAIM OF THE ASSESSEE THAT HE HAS DERIVED INCOME FROM LONG TERM C APITAL GAINS. THE ASSESSING OFFICER ISSUED NOTICE U/S 133(6) OF THE ACT TO M/S. DYNAMIC EQUITIES PVT. LTD. FOR VERIFICATION OF THE SAID TRANSACTIONS OF SALE OF SHARES. THE REPLIES RECEIVED CONFIRMED THE TRANSACTIONS. THE ASSESSEE HAS FILED CONTRACT NOTES, COPIES OF THE BANK STATEMENTS, COPIES OF LEDGER ACCOUNTS MAT DETAILS BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER RECORDS THAT THE TRANSACTIONS WERE MADE THROUGH PROPER BANKING CHANNELS AND NO DISCREPANCIES WERE FOUND. THUS, IT IS EVIDENT THAT THE ASSESSING OFFICER HAS CONDUCTED INDEPENDENT VERIFIED THE DOCUMENTS FILED BY THE ASSESSEE AND THEREAFTER TOOK A VIEW THAT THE TRANSACTIONS OF SALE AND PURCHASE OF SHARES WERE GENUINE. THIS VIEW OF THE ASSESSING OFFICER IS SUPPORTED BY A NUMB ER OF DECISIONS OF THE ITAT, INCLUDING THE DECISIONS IN THE ARUNA BANSAL VS. ITO IN ITA NO. 976/KOL/2018, ORDER DT. 08/11/2018 OF THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. SOURABH MITTAL IN ITA NO. 29/08/2018, ETC. THE LD. PR. CIT HIMSELF STATES THAT THE ASSESSING OFFICER DID NOT CONDUCT EXTENSIVE/NECESSARY ENQUIRIES. HE DOES NOT SPECIFY WHAT ARE THE ENQUIRIES ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA SUPPORTED THE ORDER OF THE LD. PR. CIT AND SESSING OFFICER IGNORED THE INPUT RECEIVED FROM THE INVESTIGATION WING THAT THE TRANSACTIONS OF PURCHASE AND SALES WERE SUSPICIOUS AND THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAINS, WHICH IS A SUSPICIOUS CLAIM. HE RELIED ON THE ORDER OF IT U/S 263 OF THE ACT AND SUBMITTED THAT EXTENSIVE ENQUIRIES WERE NOT MADE BY THE ASSESSING OFFICER AS REQUIRED BY HIM AND HENCE THE ORDER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ON A QUERY FROM THE BENCH, HE AGREED THAT T HE DECISIONS OF THE TRIBUNAL. NEVERTHELESS, HE RELIED ON THE DECISION CITED BY THE LD. PR. CIT IN HIS ORDER PASSED U/S 263 PRAYED THAT THE ORDER OF THE LD. PR. CIT, BE UPHELD AS THE ENQUIRIES AS REQUIRED WERE NOT DONE BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS . 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 AUTHORIT IES THE ASSESSING OFFICER IN THE IMPUGNED ORDER PASSED U/S 143(3) OF THE ACT ON 27/07/2016, CLEARLY STATED THAT HE HAS EXAMINED THE CLAIM OF THE ASSESSEE THAT HE HAS APITAL GAINS. THE ASSESSING OFFICER ISSUED NOTICE U/S 133(6) OF THE ACT TO M/S. DYNAMIC EQUITIES PVT. LTD. FOR VERIFICATION OF THE SAID TRANSACTIONS OF SALE OF SHARES. THE REPLIES RECEIVED CONFIRMED THE TRANSACTIONS. THE COPIES OF THE BANK STATEMENTS, COPIES OF LEDGER ACCOUNTS MAT DETAILS BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER RECORDS THAT THE TRANSACTIONS WERE MADE THROUGH PROPER BANKING CHANNELS AND NO DISCREPANCIES WERE INDEPENDENT ENQUIRIES, VERIFIED THE DOCUMENTS FILED BY THE ASSESSEE AND THEREAFTER TOOK A VIEW THAT THE TRANSACTIONS OF SALE AND PURCHASE OF SHARES WERE GENUINE. THIS VIEW OF THE ASSESSING INCLUDING THE DECISIONS IN THE ARUNA BANSAL VS. ITO IN ITA NO. 976/KOL/2018, ORDER DT. 08/11/2018 AND THE ORDER DCIT VS. SOURABH MITTAL IN ITA NO. THE LD. PR. CIT HIMSELF STATES THAT THE ASSESSING OFFICER DID NOT CONDUCT EXTENSIVE/NECESSARY ENQUIRIES. HE DOES NOT SPECIFY WHAT ARE THE ENQUIRIES THAT THE ASSESSING OFFICER HAS FAILED TO DO, NOR WHAT ARE THE ENQUIRIES THAT HE IS OF T HAD TO BE DONE IN THIS CASE SIMPLY MAKES CERTAIN GENERAL STATEMENTS AND REFERS TO CERTAIN MATERIAL FORWARDED BY THE INVESTIGATION WING AND DIRECTS THE ASSESSING OFFICER TO MAKE ADDITION LEVIED ON ASSUMPTIONS. ADDITIONS CANNOT BE THIS IS TOTALLY ARBITRARY. IN OUR VIEW, THE LD. PR. CIT HAS EXCEEDED HIS POWERS CONFERRED HIM U/S 263 OF THE ACT. 10. THIS BENCH OF THE TRIBUNAL IN THE CASE OF VS. ITO (SUPRA) HELD AS FOLLOWS: 8. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS. THE SOLE ISSUE THAT ARISES FOR OUR APT ADJUDICATION IN FACTS OF INSTAN EXERCISED HIS REVISION JURISDICTION VESTED U/S 263 OR NOT. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER ACCEPTED THE ASSESSEE'S LTCG AS GENUINE AS PER HIS DISCUSSION IN THE ASSESSMENT ORDER THAT HE HAD VERIFIE SUFFICE TO SAY, THE ITA NOS.01 WED- 28(4) KOL. PAGE 14 SAME FACT VERY MUCH EMERGES NOT ONLY FROM ASSESSEE'S DETAILED PAPER BOOK RUNNING INTO 98 PAGES PART OF RECORD (SUPRA). THIS TRIBUNAL'S CO SAREGAMA INDIA LTD. VS. CIT REITERATED THE FOLLOWING SETTLED PRINCIPLES IN CASE OF SEC. 263 REVISION JURISDICTION: '11. NOW WE SHALL DISCUSS THE PROPOSITIONS OF LAW AS LAID DOWN BY VARIOUS COURTS ON THE ISSUE OF REVISIONARY JURISDICTION OF THE COMMISSIONER OF I HONE'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SPECTRA SHARES AND SCRIPS PVT. LTD. V CIT (AP) 354 ITR 35 HAD CONSIDERED A NUMBER OF JUDGMENTS ON THIS ISSUE OF EXERCISE OF JURISDICITON U/S 263 OF THE ACT BY THE PRINCIPAL THE PRINCIPLES LAID DOWN IN THE JUDGMENTS AS BELOW: 24. IN MALABAR INDUSTRIAL CO.LTD. ( 2 SUPRA), THE SUPREME COURT HELD THAT A BARE READING OF SEC.263 MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JUR COMMISSIONER SUO MOTU UNDER IT, IS THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSES ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENT IF THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT I (1) OF THE ACT. IT ALSO HELD AT PG 'THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING O OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EXAMPLE, WHEN AN INCOME IN LAW AND IT HAS RESULTED 5 ASSESSING OFFICER HAS FAILED TO DO, NOR WHAT ARE THE ENQUIRIES THAT HE IS OF T HAD TO BE DONE IN THIS CASE . THE LD. PR. CIT DOES NOT CONDUCT ANY ENQUIRY HIMSELF. HE SIMPLY MAKES CERTAIN GENERAL STATEMENTS AND REFERS TO CERTAIN MATERIAL FORWARDED BY THE INVESTIGATION WING AND DIRECTS THE ASSESSING OFFICER TO MAKE ADDITION LEVIED ON ASSUMPTIONS. ADDITIONS CANNOT BE MADE BASED ON SURMISES THIS IS TOTALLY ARBITRARY. IN OUR VIEW, THE LD. PR. CIT HAS EXCEEDED HIS POWERS CONFERRED THIS BENCH OF THE TRIBUNAL IN THE CASE OF GITESH TIKMANY & M/S. GITSH TIKMANI, HUF HELD AS FOLLOWS: - 8. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS. THE SOLE ISSUE THAT ARISES FOR OUR APT ADJUDICATION IN FACTS OF INSTAN T CASE IS AS TO WHETHER THE PCIT HAS RIGHTLY EXERCISED HIS REVISION JURISDICTION VESTED U/S 263 OR NOT. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER ACCEPTED THE ASSESSEE'S LTCG AS GENUINE AS PER HIS DISCUSSION IN THE ASSESSMENT ORDER THAT HE HAD VERIFIE D ALL NECESSARY FACTS DURING THE COURSE OF SCRUTINY. SUFFICE TO SAY, THE ITA NOS.01 -05 & 13-15/KOL/2019 A.Y. 2014- 15 TIKMANI, HUF VS. ITO 28(4) KOL. PAGE 14 SAME FACT VERY MUCH EMERGES NOT ONLY FROM ASSESSEE'S DETAILED PAPER BOOK RUNNING INTO 98 PAGES BUT ALSO FROM THE RELEVANT ASSESSMENT NOTINGS FORMING PART OF RECORD (SUPRA). THIS TRIBUNAL'S CO - ORDINATE BENCH'S DECISION IN CASE OF SAREGAMA INDIA LTD. VS. CIT -1, KOLKATA ITA NO .1254/KOL/2014 DECID ED ON 20.09.2017 HAS REITERATED THE FOLLOWING SETTLED PRINCIPLES IN CASE OF SEC. 263 REVISION JURISDICTION: '11. NOW WE SHALL DISCUSS THE PROPOSITIONS OF LAW AS LAID DOWN BY VARIOUS COURTS ON THE ISSUE OF REVISIONARY JURISDICTION OF THE COMMISSIONER OF I NCOME TAX U/S 263 OF THE ACT. THE HONE'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SPECTRA SHARES AND SCRIPS PVT. LTD. V CIT (AP) 354 ITR 35 HAD CONSIDERED A NUMBER OF JUDGMENTS ON THIS ISSUE OF EXERCISE OF JURISDICITON U/S 263 OF THE ACT BY THE PRINCIPAL COMMISSIONER OF INCOME TAX AND CULLED OUT THE PRINCIPLES LAID DOWN IN THE JUDGMENTS AS BELOW: 24. IN MALABAR INDUSTRIAL CO.LTD. ( 2 SUPRA), THE SUPREME COURT HELD THAT A BARE READING OF SEC.263 MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JUR COMMISSIONER SUO MOTU UNDER IT, IS THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSES SING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENT IF THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT I T IS PREJUDICIAL TO THE REVENUE - RECOURSE CANNOT BE HAD TO SEC.263 (1) OF THE ACT. IT ALSO HELD AT PG -88 AS FOLLOWS: 'THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING O FFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL 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 ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA ASSESSING OFFICER HAS FAILED TO DO, NOR WHAT ARE THE ENQUIRIES THAT HE IS OF T HE VIEW THAT . THE LD. PR. CIT DOES NOT CONDUCT ANY ENQUIRY HIMSELF. HE SIMPLY MAKES CERTAIN GENERAL STATEMENTS AND REFERS TO CERTAIN MATERIAL FORWARDED BY THE INVESTIGATION WING AND DIRECTS THE ASSESSING OFFICER TO MAKE ADDITION S. TAX CANNOT BE ON SURMISES AND CONJECTURES. THIS IS TOTALLY ARBITRARY. IN OUR VIEW, THE LD. PR. CIT HAS EXCEEDED HIS POWERS CONFERRED ON GITESH TIKMANY & M/S. GITSH TIKMANI, HUF 8. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS. THE SOLE ISSUE THAT T CASE IS AS TO WHETHER THE PCIT HAS RIGHTLY EXERCISED HIS REVISION JURISDICTION VESTED U/S 263 OR NOT. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER ACCEPTED THE ASSESSEE'S LTCG AS GENUINE AS PER HIS DISCUSSION IN THE D ALL NECESSARY FACTS DURING THE COURSE OF SCRUTINY. 15 TIKMANI, HUF VS. ITO 28(4) KOL. PAGE 14 SAME FACT VERY MUCH EMERGES NOT ONLY FROM ASSESSEE'S DETAILED BUT ALSO FROM THE RELEVANT ASSESSMENT NOTINGS FORMING ORDINATE BENCH'S DECISION IN CASE OF M/S ED ON 20.09.2017 HAS REITERATED THE FOLLOWING SETTLED PRINCIPLES IN CASE OF SEC. 263 REVISION JURISDICTION: - '11. NOW WE SHALL DISCUSS THE PROPOSITIONS OF LAW AS LAID DOWN BY VARIOUS COURTS ON THE NCOME TAX U/S 263 OF THE ACT. THE HONE'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SPECTRA SHARES AND SCRIPS PVT. LTD. V CIT (AP) 354 ITR 35 HAD CONSIDERED A NUMBER OF JUDGMENTS ON THIS ISSUE OF EXERCISE OF COMMISSIONER OF INCOME TAX AND CULLED OUT 24. IN MALABAR INDUSTRIAL CO.LTD. ( 2 SUPRA), THE SUPREME COURT HELD THAT A BARE READING OF SEC.263 MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JUR ISDICTION BY THE COMMISSIONER SUO MOTU UNDER IT, IS THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED SING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENT - IF THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF RECOURSE CANNOT BE HAD TO SEC.263 'THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' HAS TO BE READ IN CONJUNCTION WITH FFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LOSS OF REVENUE: OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME- TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY T COURT THAT WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HIS HANDS ON HIS SO OFFERING, THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME AS SUCH WILL BE ERRONE OUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. (1968) 67 ITR 84 (SC) AND IN 25. IN MAX INDIA LTD. (3 SUPRA), REITERATED THE VIEW IN MALABAR INDUSTRIAL CO.LTD. (2 SUPRA) AND OBSERVED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE IN 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 DOES NOT AGREE, IT CANNO T BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME TAX OFFICER IS UNSUSTAINABLE IN LAW. ON THE FACTS OF THAT CASE, SEC.80HHC(3) AS IT THEN STOOD WAS INTERPRETED BY THE ASSESSING OFFICER BUT T WHICH IS CLARIFICATORY AND RETROSPECTIVE IN NATURE, THE VIEW OF THE ASSESSING OFFICER WAS UNSUSTAINABLE IN LAW AND THE COMMISSIONER WAS CORRECT IN INVOKING SEC.263. BUT THE SUPREME COURT REJECTED THE COMMISSIONER PASSED HIS ORDER DISAGREEING WITH THE VIEW OF THE ASSESSING OFFICER, THERE WERE TWO VIEWS ON THE WORD 'PROFITS' IN THAT SECTION; THAT THE SAID SECTION WAS AMENDED ELEVEN TIMES; THAT DIFFERENT VIEWS EXISTE COMMISSIONER PASSED HIS ORDER; THAT THE MECHANICS OF THE SECTION HAD BECOME SO COMPLICATED OVER THE YEARS THAT TWO VIEWS WERE INHERENTLY POSSIBLE; AND THEREFORE, THE SUBSEQUENT AMENDMENT IN 2005 EVEN THOUGH RETROSPECTIVE WILL NOT ATTR PROVISION OF SEC.263. 26. IN VIKAS POLYMERS (4 SUPRA), THE DELHI HIGH COURT HELD THAT THE POWER OF SUO MOTU REVISION EXERCISABLE BY THE COMMISSIONER UNDER THE PROVISIONS OF SEC.263 IS SUPERVISORY IN NATURE; THAT AN 'ERRONEOUS JUDGMENT' MEANS ONE W ACCORDANCE WITH LAW; THAT 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 BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN D IFFERENTLY OR MORE ELABORATELY; THAT THE SECTION DOES NOT VISUALIZE THE SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE INCOME TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISION IS NOT IN ACCORDANCE WITH THE LAW; THAT TO INVOKE SUO MOTU SEC.263, THE COMMISSIONER MUST GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WILL THAT THE ENHANCEMENT OR MODIFICATION OF THE ASSESSMENT OR CANCELLATION OF THE ASSESSMENT OR DIRECTIONS ISSUED FOR A FRESH ASSESSMENT WERE CALLED FOR, AND MUST IRRESISTIBLY LEAD TO THE CONCLUSION THAT T ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE 6 TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY T HE INCOME- TAX OFFICER IS UNSUSTAINABLE IN LAW. IT HAS BEEN HELD BY THIS COURT THAT WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HIS HANDS ON HIS SO OFFERING, THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME AS SUCH WILL BE OUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. RAMPYARIDEVI SARAOGI V. CIT (1968) 67 ITR 84 (SC) AND IN SMT. TARA DEVI AGGARWAL V. CIT (1973) 88 ITR 323 (SC)'. 25. IN MAX INDIA LTD. (3 SUPRA), REITERATED THE VIEW IN MALABAR INDUSTRIAL CO.LTD. (2 SUPRA) AND OBSERVED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE IN TERESTS 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 DOES NOT T BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME TAX OFFICER IS UNSUSTAINABLE IN LAW. ON THE FACTS OF THAT CASE, SEC.80HHC(3) AS IT THEN STOOD WAS INTERPRETED BY THE ASSESSING OFFICER BUT T HE REVENUE CONTENDED THAT IN VIEW OF THE 2005 AMENDMENT WHICH IS CLARIFICATORY AND RETROSPECTIVE IN NATURE, THE VIEW OF THE ASSESSING OFFICER WAS UNSUSTAINABLE IN LAW AND THE COMMISSIONER WAS CORRECT IN INVOKING SEC.263. BUT THE SUPREME COURT REJECTED THE SAID CONTENTION AND HELD THAT WHEN THE COMMISSIONER PASSED HIS ORDER DISAGREEING WITH THE VIEW OF THE ASSESSING OFFICER, THERE WERE TWO VIEWS ON THE WORD 'PROFITS' IN THAT SECTION; THAT THE SAID SECTION WAS AMENDED ELEVEN TIMES; THAT DIFFERENT VIEWS EXISTE D ON THE DAY WHEN THE COMMISSIONER PASSED HIS ORDER; THAT THE MECHANICS OF THE SECTION HAD BECOME SO COMPLICATED OVER THE YEARS THAT TWO VIEWS WERE INHERENTLY POSSIBLE; AND THEREFORE, THE SUBSEQUENT AMENDMENT IN 2005 EVEN THOUGH RETROSPECTIVE WILL NOT ATTR PROVISION OF SEC.263. 26. IN VIKAS POLYMERS (4 SUPRA), THE DELHI HIGH COURT HELD THAT THE POWER OF SUO MOTU REVISION EXERCISABLE BY THE COMMISSIONER UNDER THE PROVISIONS OF SEC.263 IS SUPERVISORY IN NATURE; THAT AN 'ERRONEOUS JUDGMENT' MEANS ONE W ACCORDANCE WITH LAW; THAT 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 BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN IFFERENTLY OR MORE ELABORATELY; THAT THE SECTION DOES NOT VISUALIZE THE SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE INCOME TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISION IS NOT IN ACCORDANCE WITH THE LAW; THAT TO INVOKE SUO MOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER SEC.263, THE COMMISSIONER MUST GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WILL NOT SUFFICE; THAT THE REASONS MUST BE SUCH AS TO SHOW THAT THE ENHANCEMENT OR MODIFICATION OF THE ASSESSMENT OR CANCELLATION OF THE ASSESSMENT OR DIRECTIONS ISSUED FOR A FRESH ASSESSMENT WERE CALLED FOR, AND MUST IRRESISTIBLY LEAD TO THE CONCLUSION THAT T HE ORDER OF THE INCOME TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS TAX OFFICER IS UNSUSTAINABLE IN LAW. IT HAS BEEN HELD BY THIS COURT THAT WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HIS HANDS ON HIS SO OFFERING, THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME AS SUCH WILL BE RAMPYARIDEVI SARAOGI V. CIT (1973) 88 ITR 323 (SC)'. 25. IN MAX INDIA LTD. (3 SUPRA), REITERATED THE VIEW IN MALABAR INDUSTRIAL CO.LTD. (2 SUPRA) AND OBSERVED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING TERESTS 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 DOES NOT T BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME TAX OFFICER IS UNSUSTAINABLE IN LAW. ON THE FACTS OF THAT CASE, SEC.80HHC(3) AS IT THEN STOOD WAS INTERPRETED BY THE HE REVENUE CONTENDED THAT IN VIEW OF THE 2005 AMENDMENT WHICH IS CLARIFICATORY AND RETROSPECTIVE IN NATURE, THE VIEW OF THE ASSESSING OFFICER WAS UNSUSTAINABLE IN LAW AND THE COMMISSIONER WAS CORRECT IN INVOKING SEC.263. SAID CONTENTION AND HELD THAT WHEN THE COMMISSIONER PASSED HIS ORDER DISAGREEING WITH THE VIEW OF THE ASSESSING OFFICER, THERE WERE TWO VIEWS ON THE WORD 'PROFITS' IN THAT SECTION; THAT THE SAID SECTION D ON THE DAY WHEN THE COMMISSIONER PASSED HIS ORDER; THAT THE MECHANICS OF THE SECTION HAD BECOME SO COMPLICATED OVER THE YEARS THAT TWO VIEWS WERE INHERENTLY POSSIBLE; AND THEREFORE, THE SUBSEQUENT AMENDMENT IN 2005 EVEN THOUGH RETROSPECTIVE WILL NOT ATTR ACT THE 26. IN VIKAS POLYMERS (4 SUPRA), THE DELHI HIGH COURT HELD THAT THE POWER OF SUO MOTU REVISION EXERCISABLE BY THE COMMISSIONER UNDER THE PROVISIONS OF SEC.263 IS SUPERVISORY IN NATURE; THAT AN 'ERRONEOUS JUDGMENT' MEANS ONE W HICH IS NOT IN ACCORDANCE WITH LAW; THAT 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 BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN IFFERENTLY OR MORE ELABORATELY; THAT THE SECTION DOES NOT VISUALIZE THE SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE INCOME TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISION IS NOT IN ACCORDANCE WITH THE LAW; REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER SEC.263, THE COMMISSIONER MUST GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE NOT SUFFICE; THAT THE REASONS MUST BE SUCH AS TO SHOW THAT THE ENHANCEMENT OR MODIFICATION OF THE ASSESSMENT OR CANCELLATION OF THE ASSESSMENT OR DIRECTIONS ISSUED FOR A FRESH ASSESSMENT WERE CALLED FOR, AND MUST HE ORDER OF THE INCOME TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE INCOME TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVING DETAILED REASONS IN RESPECT OF EACH AND EVERY DISALLO INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE ASSESSING OFFICER, WHICH WAS SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED FOR INTERFERENCE AND REVISION 27. IN SUNBEAM AUTO LTD.( 5 SUPRA), THE DELHI HIGH COURT HELD THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS NOT REQUIRED TO GIVE A DETAILED REASON IN RESPECT OF EACH AND EVERY ITEM OF DEDUCTION, ETC.; THAT WHETHER THERE WAS APPLICATION OF MIND B EFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT I ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTE PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT THE TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATION, A LESSER TAX THAN W IMPOSED. IN THAT CASE, THE DELHI HIGH COURT HELD THAT THE COMMISSIONER IN THE EXERCISE OF REVISIONAL POWER COULD NOT HAVE OBJECTED TO THE FINDING OF THE ASSESSING OFFICER THAT EXPENDITURE ON TOOLS AND DIES BY THE ASSESSEE, A MANUFACT PARTS, IS REVENUE EXPENDITURE WHERE THE SAID CLAIM WAS ALLOWED BY THE LATTER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND WHERE THE SAME ACCOUNTING PRACTICE FOLLOWED BY THE ASSESSEE FOR NUMBER OF YEARS WITH THE APPROVAL OF THE IN COME TAX AUTHORITIES. IT HELD THAT THE ASSESSING OFFICER HAD CALLED FOR EXPLANATION ON THE VERY ITEM FROM THE ASSESSEE AND THE ASSESSEE HAD FURNISHED ITS EXPLANATION. MERELY BECAUSE THE ASSESSING OFFICER IN HIS ORDER DID NOT MAKE AN ELABORATE DISCUSSION IN OPINION OF THE ASSESSING OFFICER IS ONE OF THE POSSIBLE VIEWS AND THERE WAS NO MATERIAL BEFORE THE COMMISSIONER TO VARY THAT OPINION AND ASK FOR FRESH INQUIRY. 28. IN GABRIEL INDIA LTD. (6 SUPRA), CONSIDERATION OF THE COMMISSIONER AS TO WHETHER AN ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, MUST BE BASED ON MATERIALS ON THE RECORD OF THE PROCEEDINGS CALLED FOR BY HIM. IF THERE THE BASIS OF WHICH IT CAN BE SAID THAT THE COMMISSIONER ACTING IN A REASONABLE MANNER COULD HAVE COME TO SUCH A CONCLUSION, THE VERY INITIATION OF PROCEEDINGS BY HIM WILL BE ILLEGAL AND WITHOUT JURISDICTION. IT HELD THAT THE INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF NEW VIEWS THEY ENTERTAIN ON FACTS OR N WHICH THEY PRESENT AS TO WHAT SHOULD BE THE INFERENCE OR PROPER INFERENCE EITHER OF 7 INCOME TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVING DETAILED REASONS IN RESPECT OF EACH AND EVERY DISALLO WANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE ASSESSING OFFICER, WHICH WAS SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED FOR INTERFERENCE AND REVISION 27. IN SUNBEAM AUTO LTD.( 5 SUPRA), THE DELHI HIGH COURT HELD THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS NOT REQUIRED TO GIVE A DETAILED REASON IN RESPECT OF EACH AND EVERY ITEM OF DEDUCTION, ETC.; THAT WHETHER THERE WAS APPLICATION OF EFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT I T IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTE N MORE ELABORATELY; THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT THE TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATION, A LESSER TAX THAN W HAT WAS JUST, HAS BEEN IMPOSED. IN THAT CASE, THE DELHI HIGH COURT HELD THAT THE COMMISSIONER IN THE EXERCISE OF REVISIONAL POWER COULD NOT HAVE OBJECTED TO THE FINDING OF THE ASSESSING OFFICER THAT EXPENDITURE ON TOOLS AND DIES BY THE ASSESSEE, A MANUFACT PARTS, IS REVENUE EXPENDITURE WHERE THE SAID CLAIM WAS ALLOWED BY THE LATTER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND WHERE THE SAME ACCOUNTING PRACTICE FOLLOWED BY THE ASSESSEE FOR NUMBER OF YEARS WITH THE APPROVAL OF THE COME TAX AUTHORITIES. IT HELD THAT THE ASSESSING OFFICER HAD CALLED FOR EXPLANATION ON THE VERY ITEM FROM THE ASSESSEE AND THE ASSESSEE HAD FURNISHED ITS EXPLANATION. MERELY BECAUSE THE ASSESSING OFFICER IN HIS ORDER DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD, HIS ORDER CANNOT BE TERMED AS ERRONEOUS. THE OPINION OF THE ASSESSING OFFICER IS ONE OF THE POSSIBLE VIEWS AND THERE WAS NO MATERIAL BEFORE THE COMMISSIONER TO VARY THAT OPINION AND ASK FOR FRESH INQUIRY. 28. IN GABRIEL INDIA LTD. (6 SUPRA), THE BOMBAY HIGH COURT HELD THAT A CONSIDERATION OF THE COMMISSIONER AS TO WHETHER AN ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, MUST BE BASED ON MATERIALS ON THE RECORD OF THE PROCEEDINGS CALLED FOR BY HIM. IF THERE ARE NO MATERIALS ON RECORD ON THE BASIS OF WHICH IT CAN BE SAID THAT THE COMMISSIONER ACTING IN A REASONABLE MANNER COULD HAVE COME TO SUCH A CONCLUSION, THE VERY INITIATION OF PROCEEDINGS BY HIM WILL BE ILLEGAL AND WITHOUT JURISDICTION. IT HELD THAT THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF NEW VIEWS THEY ENTERTAIN ON FACTS OR N WHICH THEY PRESENT AS TO WHAT SHOULD BE THE INFERENCE OR PROPER INFERENCE EITHER OF ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA INCOME TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVING WANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE ASSESSING OFFICER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED FOR INTERFERENCE AND REVISION . 27. IN SUNBEAM AUTO LTD.( 5 SUPRA), THE DELHI HIGH COURT HELD THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS NOT REQUIRED TO GIVE A DETAILED REASON IN RESPECT OF EACH AND EVERY ITEM OF DEDUCTION, ETC.; THAT WHETHER THERE WAS APPLICATION OF EFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT T IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO N MORE ELABORATELY; THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT THE TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN HAT WAS JUST, HAS BEEN IMPOSED. IN THAT CASE, THE DELHI HIGH COURT HELD THAT THE COMMISSIONER IN THE EXERCISE OF REVISIONAL POWER COULD NOT HAVE OBJECTED TO THE FINDING OF THE ASSESSING OFFICER THAT EXPENDITURE ON TOOLS AND DIES BY THE ASSESSEE, A MANUFACT URER OF CAR PARTS, IS REVENUE EXPENDITURE WHERE THE SAID CLAIM WAS ALLOWED BY THE LATTER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND WHERE THE SAME ACCOUNTING PRACTICE FOLLOWED BY THE ASSESSEE FOR NUMBER OF YEARS WITH THE APPROVAL OF THE COME TAX AUTHORITIES. IT HELD THAT THE ASSESSING OFFICER HAD CALLED FOR EXPLANATION ON THE VERY ITEM FROM THE ASSESSEE AND THE ASSESSEE HAD FURNISHED ITS EXPLANATION. MERELY BECAUSE THE ASSESSING OFFICER IN HIS ORDER DID NOT MAKE AN THAT REGARD, HIS ORDER CANNOT BE TERMED AS ERRONEOUS. THE OPINION OF THE ASSESSING OFFICER IS ONE OF THE POSSIBLE VIEWS AND THERE WAS NO MATERIAL BEFORE THE COMMISSIONER TO VARY THAT OPINION AND ASK FOR FRESH INQUIRY. THE BOMBAY HIGH COURT HELD THAT A CONSIDERATION OF THE COMMISSIONER AS TO WHETHER AN ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, MUST BE BASED ON MATERIALS ON THE ARE NO MATERIALS ON RECORD ON THE BASIS OF WHICH IT CAN BE SAID THAT THE COMMISSIONER ACTING IN A REASONABLE MANNER COULD HAVE COME TO SUCH A CONCLUSION, THE VERY INITIATION OF PROCEEDINGS BY COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF NEW VIEWS THEY ENTERTAIN ON FACTS OR N EW VERSIONS WHICH THEY PRESENT AS TO WHAT SHOULD BE THE INFERENCE OR PROPER INFERENCE EITHER OF THE FACTS DISCLOSED OR THE WEIGHT OF THE CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED; THAT TO SO IS TO DIVIDE ONE ARGUMENT INTO TWO AND MULTIPLY THE LITIGATION. IT HELD THAT CASES MAY BE VISUALIZED WHERE THE INCOME TAX OFFICER WHILE MAKING AN ASSESSMENT EXAMINES THE ACCOUNTS, MAKES INQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF T ACCOUNT OR BY MAKING SOME ESTIMATE HIMSELF; THAT THE COMMISSIONER, ON PERUSAL OF THE RECORD, MAY BE OF THE OPINION THAT THE ESTIMATE MADE BY THE OFFICER CONCERNED WAS ON THE LOWER SIDE AND LEFT TO T INCOME AT A FIGURE HIGHER THAN THE ONE DETERMINED BY THE INCOME TAX OFFICER; BUT THAT WOULD NOT VEST THE COMMISSIONER WITH POWER TO REEXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIMSELF AT A HIGHER FIGURE; THER ON THE RECORD CALLED FOR BY THE COMMISSIONER TO SATISFY HIM PRIMA FACIE THAT THE ORDER IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. OTHERWISE, IT WOULD AMOUNT TO GIVING UNBRIDLED AND ARBITRARY POWER TO THE TO INITIATE PROCEEDINGS FOR REVISION IN EVERY CASE AND START RE FRESH INQUIRY IN MATTERS WHICH HAVE ALREADY BEEN CONCLUDED UNDER LAW. 29. IN M.S. RAJU (15 SUPRA), THIS COURT HAS HELD THAT THE POWER OF THE COMMISSIONER U NDER SEC.263(1) IS NOT LIMITED ONLY TO THE MATERIAL WHICH WAS AVAILABLE BEFORE THE ASSESSING OFFICER AND, IN ORDER TO PROTECT THE INTERESTS OF THE REVENUE, THE COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE AVAILABLE AT THE TIME OF EXAMINA AROSE SUBSEQUENT TO THE ORDER OF ASSESSMENT. 30. IN RAMPYARI DEVI SARAOGI (21 SUPRA), THE COMMISSIONER IN EXERCISE OF REVISIONAL POWERS CANCELLED ASSESSEE'S ASSESSMENT FOR THE YEARS 1952 61 BECAUSE HE FOUND THAT THE INCOME TAX OFFICER WAS NOT JUSTIFIED IN ACCEPTING THE INITIAL CAPITAL, THE GIFT RECEIVED AND SALE OF JEWELLERY, THE INCOME FROM BUSINESS ETC., WITHOUT ANY ENQUIRY OR EVIDENCE WHATSOEVER . HE DIRECTED THE INCOME TAX DO FRESH ASSESSMENT AFTER MAKING PROPER ENQUIRY AND INVESTIGATION IN REGARD TO THE JURISDICTION. THE ASSESSEE COMPLAINED BEFORE THE SUPREME COURT THAT NO FAIR OR REASONABLE OPPORTUNITY WAS GIVEN TO HER. SUPREME COURT HELD THAT THERE WAS AMPLE MA TERIAL TO SHOW THAT THE INCOME TAX OFFICER MADE THE ASSESSMENTS IN UNDUE HURRY; THAT HE HAD PASSED A SHORT STEREO TYPED ASSESSMENT ORDER FOR EACH ASSESSMENT YEAR; THAT ON THE FACE OF THE RECORD, THE ORDERS WERE PRE REVENUE; AND NO PREJUDICE WAS CAUSED TO THE ASSESSEE ON ACCOUNT OF FAILURE OF THE COMMISSIONER TO INDICATE THE RESULTS OF THE ENQUIRY MADE BY HIM, AS SHE WOULD HAVE A FULL OPPORTUNITY FOR SHOWING TO THE INCOME TAX OFFICER WHETHER HE HAD JURISDICTION OR NOT AND WHET ORIGINALLY PASSED WERE CORRECT OR NOT' 31. FROM THE ABOVE DECISIONS, THE FOLLOWING PRINCIPLES AS TO EXERCISE OF JURISDICTION BY THE COMMISSIONER U/S.263 OF THE ACT CAN BE CULLED OUT: A) THE C OMMISSIONER HAS TO 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 8 THE FACTS DISCLOSED OR THE WEIGHT OF THE CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED; THAT TO SO IS TO DIVIDE ONE ARGUMENT INTO TWO AND MULTIPLY THE LITIGATION. IT HELD THAT CASES MAY BE VISUALIZED WHERE THE INCOME TAX OFFICER WHILE MAKING AN ASSESSMENT EXAMINES THE ACCOUNTS, MAKES INQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF T HE CASE AND DETERMINES THE INCOME EITHER BY ACCEPTING THE ACCOUNT OR BY MAKING SOME ESTIMATE HIMSELF; THAT THE COMMISSIONER, ON PERUSAL OF THE RECORD, MAY BE OF THE OPINION THAT THE ESTIMATE MADE BY THE OFFICER CONCERNED WAS ON THE LOWER SIDE AND LEFT TO T HE COMMISSIONER HE WOULD HAVE ESTIMATED THE INCOME AT A FIGURE HIGHER THAN THE ONE DETERMINED BY THE INCOME TAX OFFICER; BUT THAT WOULD NOT VEST THE COMMISSIONER WITH POWER TO REEXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIMSELF AT A HIGHER FIGURE; THER E MUST BE MATERIAL AVAILABLE ON THE RECORD CALLED FOR BY THE COMMISSIONER TO SATISFY HIM PRIMA FACIE THAT THE ORDER IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. OTHERWISE, IT WOULD AMOUNT TO GIVING UNBRIDLED AND ARBITRARY POWER TO THE TO INITIATE PROCEEDINGS FOR REVISION IN EVERY CASE AND START RE FRESH INQUIRY IN MATTERS WHICH HAVE ALREADY BEEN CONCLUDED UNDER LAW. 29. IN M.S. RAJU (15 SUPRA), THIS COURT HAS HELD THAT THE POWER OF THE COMMISSIONER NDER SEC.263(1) IS NOT LIMITED ONLY TO THE MATERIAL WHICH WAS AVAILABLE BEFORE THE ASSESSING OFFICER AND, IN ORDER TO PROTECT THE INTERESTS OF THE REVENUE, THE COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE AVAILABLE AT THE TIME OF EXAMINA TION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE SUBSEQUENT TO THE ORDER OF ASSESSMENT. 30. IN RAMPYARI DEVI SARAOGI (21 SUPRA), THE COMMISSIONER IN EXERCISE OF REVISIONAL POWERS CANCELLED ASSESSEE'S ASSESSMENT FOR THE YEARS 1952 61 BECAUSE HE FOUND THAT THE INCOME TAX OFFICER WAS NOT JUSTIFIED IN ACCEPTING THE INITIAL CAPITAL, THE GIFT RECEIVED AND SALE OF JEWELLERY, THE INCOME FROM BUSINESS ETC., WITHOUT ANY ENQUIRY OR EVIDENCE WHATSOEVER . HE DIRECTED THE INCOME TAX DO FRESH ASSESSMENT AFTER MAKING PROPER ENQUIRY AND INVESTIGATION IN REGARD TO THE JURISDICTION. THE ASSESSEE COMPLAINED BEFORE THE SUPREME COURT THAT NO FAIR OR REASONABLE OPPORTUNITY WAS GIVEN TO HER. SUPREME COURT HELD THAT THERE WAS AMPLE TERIAL TO SHOW THAT THE INCOME TAX OFFICER MADE THE ASSESSMENTS IN UNDUE HURRY; THAT HE HAD PASSED A SHORT STEREO TYPED ASSESSMENT ORDER FOR EACH ASSESSMENT YEAR; THAT ON THE FACE OF THE RECORD, THE ORDERS WERE PRE - JUDICIAL TO THE INTEREST OF THE AND NO PREJUDICE WAS CAUSED TO THE ASSESSEE ON ACCOUNT OF FAILURE OF THE COMMISSIONER TO INDICATE THE RESULTS OF THE ENQUIRY MADE BY HIM, AS SHE WOULD HAVE A FULL OPPORTUNITY FOR SHOWING TO THE INCOME TAX OFFICER WHETHER HE HAD JURISDICTION OR NOT AND WHET HER THE INCOME TAX ASSESSED IN THE ASSESSMENT YEARS WHICH WERE ORIGINALLY PASSED WERE CORRECT OR NOT' 31. FROM THE ABOVE DECISIONS, THE FOLLOWING PRINCIPLES AS TO EXERCISE OF JURISDICTION BY THE COMMISSIONER U/S.263 OF THE ACT CAN BE CULLED OUT: OMMISSIONER HAS TO 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 ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA THE FACTS DISCLOSED OR THE WEIGHT OF THE CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED; THAT TO DO SO IS TO DIVIDE ONE ARGUMENT INTO TWO AND MULTIPLY THE LITIGATION. IT HELD THAT CASES MAY BE VISUALIZED WHERE THE INCOME TAX OFFICER WHILE MAKING AN ASSESSMENT EXAMINES THE ACCOUNTS, MAKES INQUIRIES, APPLIES HIS MIND TO THE FACTS AND HE CASE AND DETERMINES THE INCOME EITHER BY ACCEPTING THE ACCOUNT OR BY MAKING SOME ESTIMATE HIMSELF; THAT THE COMMISSIONER, ON PERUSAL OF THE RECORD, MAY BE OF THE OPINION THAT THE ESTIMATE MADE BY THE OFFICER CONCERNED HE COMMISSIONER HE WOULD HAVE ESTIMATED THE INCOME AT A FIGURE HIGHER THAN THE ONE DETERMINED BY THE INCOME TAX OFFICER; BUT THAT WOULD NOT VEST THE COMMISSIONER WITH POWER TO REEXAMINE THE ACCOUNTS AND E MUST BE MATERIAL AVAILABLE ON THE RECORD CALLED FOR BY THE COMMISSIONER TO SATISFY HIM PRIMA FACIE THAT THE ORDER IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. OTHERWISE, IT WOULD AMOUNT TO GIVING UNBRIDLED AND ARBITRARY POWER TO THE REVISING AUTHORITY TO INITIATE PROCEEDINGS FOR REVISION IN EVERY CASE AND START RE -EXAMINATION AND FRESH INQUIRY IN MATTERS WHICH HAVE ALREADY BEEN CONCLUDED UNDER LAW. 29. IN M.S. RAJU (15 SUPRA), THIS COURT HAS HELD THAT THE POWER OF THE COMMISSIONER NDER SEC.263(1) IS NOT LIMITED ONLY TO THE MATERIAL WHICH WAS AVAILABLE BEFORE THE ASSESSING OFFICER AND, IN ORDER TO PROTECT THE INTERESTS OF THE REVENUE, THE COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE AVAILABLE AT THE TION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH 30. IN RAMPYARI DEVI SARAOGI (21 SUPRA), THE COMMISSIONER IN EXERCISE OF REVISIONAL POWERS CANCELLED ASSESSEE'S ASSESSMENT FOR THE YEARS 1952 -1953 TO 1960- 61 BECAUSE HE FOUND THAT THE INCOME TAX OFFICER WAS NOT JUSTIFIED IN ACCEPTING THE INITIAL CAPITAL, THE GIFT RECEIVED AND SALE OF JEWELLERY, THE INCOME FROM BUSINESS ETC., WITHOUT ANY ENQUIRY OR EVIDENCE WHATSOEVER . HE DIRECTED THE INCOME TAX OFFICER TO DO FRESH ASSESSMENT AFTER MAKING PROPER ENQUIRY AND INVESTIGATION IN REGARD TO THE JURISDICTION. THE ASSESSEE COMPLAINED BEFORE THE SUPREME COURT THAT NO FAIR OR REASONABLE OPPORTUNITY WAS GIVEN TO HER. SUPREME COURT HELD THAT THERE WAS AMPLE TERIAL TO SHOW THAT THE INCOME TAX OFFICER MADE THE ASSESSMENTS IN UNDUE HURRY; THAT HE HAD PASSED A SHORT STEREO TYPED ASSESSMENT ORDER FOR EACH ASSESSMENT YEAR; JUDICIAL TO THE INTEREST OF THE AND NO PREJUDICE WAS CAUSED TO THE ASSESSEE ON ACCOUNT OF FAILURE OF THE COMMISSIONER TO INDICATE THE RESULTS OF THE ENQUIRY MADE BY HIM, AS SHE WOULD HAVE A FULL OPPORTUNITY FOR SHOWING TO THE INCOME TAX OFFICER WHETHER HE HAD JURISDICTION HER THE INCOME TAX ASSESSED IN THE ASSESSMENT YEARS WHICH WERE 31. FROM THE ABOVE DECISIONS, THE FOLLOWING PRINCIPLES AS TO EXERCISE OF JURISDICTION OMMISSIONER HAS TO 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 INTERESTS OF THE REVENUE. IF ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IT IS PREJUDICIAL TO THE REVENUE SEC.263 (1) OF THE ACT. B) EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EX 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 DOES NOT AGREE, IT CANNOT BE T REATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME C) TO INVOKE SUO MOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER SEC.263, THE COMMISSIONER MUS THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WILL NOT SUFFICE; THAT THE REASONS MUST BE SUCH AS TO SHOW THAT THE AND MUST IRRESISTIBLY L TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE INCOME TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVING DETAILED REASONS IN RESPE DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE A OFFICER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED F INTERFERENCE AND REVISION. E) THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF THEY ENTERTAIN ON FACTS OR NEW CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED F) WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; TH NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT IT IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF A BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY; THERE MUST BE SOME PRIMA FACIE MATERIAL O TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATION, A LESSER TAX THAN WHAT WAS JUST, HAS BEEN IMPOSED. 9 THE INTERESTS OF THE REVENUE. IF ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF NOT ERRONEOUS BUT IT IS PREJUDICIAL TO THE REVENUE - RECOURSE CANNOT BE HAD TO SEC.263 (1) OF THE ACT. B) EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EX 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 DOES NOT AGREE, IT CANNOT REATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME - TAX OFFICER IS UNSUSTAINABLE IN LAW. C) TO INVOKE SUO MOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER SEC.263, THE COMMISSIONER MUS T GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WILL NOT SUFFICE; THAT THE REASONS MUST BE SUCH AS TO SHOW THAT THE AND MUST IRRESISTIBLY L EAD TO THE CONCLUSION THAT THE ORDER OF THE INCOME TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE INCOME TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVING DETAILED REASONS IN RESPE CT OF EACH AND EVERY DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE A OFFICER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED F INTERFERENCE AND REVISION. E) THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF THEY ENTERTAIN ON FACTS OR NEW CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED F) WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; TH AT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT IT IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF A CTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY; THERE MUST BE SOME PRIMA FACIE MATERIAL O N RECORD TO SHOW THAT THE TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATION, A LESSER TAX THAN WHAT WAS JUST, HAS BEEN IMPOSED. ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA THE INTERESTS OF THE REVENUE. IF ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF RECOURSE CANNOT BE HAD TO B) EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EX AMPLE, WHEN 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 DOES NOT AGREE, IT CANNOT REATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS TAX OFFICER IS UNSUSTAINABLE IN LAW. C) TO INVOKE SUO MOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER T GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WILL NOT SUFFICE; THAT THE REASONS MUST BE SUCH AS TO SHOW EAD TO THE CONCLUSION THAT THE ORDER OF THE INCOME TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE INCOME TAX OFFICER IS NOT CALLED UPON TO WRITE AN CT OF EACH AND EVERY DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE A SSESSING OFFICER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED F OR E) THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF NEW VIEWS THEY ENTERTAIN ON FACTS OR NEW CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION F) WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN AT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT IT IS ONLY IN CASES OF LACK OF CTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE N RECORD TO SHOW THAT THE TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATION, A LESSER TAX THAN G) THE POWER OF THE COMMISSI ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE AVAILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE SUBSEQUENT TO THE ORDER OF ASSESSMENT. WE NOW EXAMINE TH DIRECTOR OF INCOME TAX VS. JYOTI FOUNDATION COURT) IT WAS HELD THAT REVISIONARY POWER U/S 263 IS CONFERRED ON THE COMMISSIONER/DIRECTOR OF I AUTHORITY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ORDERS WHICH ARE PASSED WITHOUT INQUIRY OR INVESTIGATION ARE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT ORDERS INQUIRY/INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQU DEEPER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN. INCOME TAX OFFICER VS. DG HOUSING PROJECTS LTD343 ITR REVENUE DOES NOT HAVE ANY RIGHT TO APPEAL TO THE FIRST APPELLATE AUTHORITY AGA 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 ARE SATISFIED. FIRSTLY, THE ORDER SOUGHT TO BE REVISE D 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/INCORRE CT 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 MAK 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 C 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 BECOMES ERRONEOUS BECAUSE ENQUIRY OR VERIFICATION HAS N 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 ERRONEOUS, BY CONDUCTING NECESSARY ENQUIRY, IF REQUIRED 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 RECORDED. CIT CANNOT REMAND THE MATTER TO THE ASSESSING OFFICER TO DECIDE WHETHER THE FINDINGS R 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 MADE IS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT 10 G) THE POWER OF THE COMMISSI ONER UNDER SEC.263 (1) IS NOT COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE AVAILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE SUBSEQUENT TO THE ORDER OF ASSESSMENT. WE NOW EXAMINE TH E FOLLOWING JUDGMENTS ON THIS ISSUE:- 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 I NCOME TAX WHEN AN ORDER PASSED BY THE LOWER AUTHORITY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ORDERS WHICH ARE PASSED WITHOUT INQUIRY OR INVESTIGATION ARE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT ORDERS WHICH ARE 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 BECAUSE THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQU DEEPER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN. INCOME TAX OFFICER VS. DG HOUSING PROJECTS LTD343 ITR REVENUE DOES NOT HAVE ANY RIGHT TO APPEAL TO THE FIRST APPELLATE AUTHORITY AGA 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 ARE SATISFIED. FIRSTLY, THE ORDER SOUGHT TO BE D 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 CT 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 MAK ES 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 C OMPUTE 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 BECOMES ERRONEOUS BECAUSE ENQUIRY OR VERIFICATION HAS N OT 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 ERRONEOUS, BY CONDUCTING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY, BEFORE THE ORDER UNDER S. 263 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 RECORDED. CIT CANNOT REMAND THE MATTER TO THE ASSESSING OFFICER TO DECIDE WHETHER THE FINDINGS R 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 MADE IS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA ONER UNDER SEC.263 (1) IS NOT COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE AVAILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE 357 ITR 388 (DELHI HIGH COURT) IT WAS HELD THAT REVISIONARY POWER U/S 263 IS CONFERRED ON THE NCOME TAX WHEN AN ORDER PASSED BY THE LOWER AUTHORITY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ORDERS WHICH ARE PASSED WITHOUT INQUIRY OR INVESTIGATION ARE TREATED AS ERRONEOUS AND 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 BECAUSE THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQU IRED OR INCOME TAX OFFICER VS. DG HOUSING PROJECTS LTD343 ITR 329 (DELHI) REVENUE DOES NOT HAVE ANY RIGHT TO APPEAL TO THE FIRST APPELLATE AUTHORITY AGA INST 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 ARE SATISFIED. FIRSTLY, THE ORDER SOUGHT TO BE D 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 CT 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 ES 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 OMPUTE 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 OT BEEN MADE AND NOT 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 ERRONEOUS, BY CONDUCTING NECESSARY 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 RECORDED. CIT CANNOT REMAND THE MATTER TO THE ASSESSING OFFICER TO DECIDE WHETHER THE FINDINGS R ECORDED 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 MADE 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 POSSIBLY THOUGH RARELY, THE CIT CAN ALSO SHOW AND ESTABLISH THAT THE FACTS ON RECORD OR INFERENCES DRAWN FROM FACTS ON RE INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, UNAMBIGUOUS AND NOT DEBATABLE. THE MATTER CANNOT BE REMITTED FOR A FRESH DECISIO FURTHER ENQUIRIES WITHOUT A FINDING THAT THE ORDER IS ERRONEOUS. FINDING THAT THE ORDER IS ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY ITA NOS.01 15/KOL/2019 A.Y. 2014 THE CIT HAS NOT EXAMINED AND DECIDE HAS DIRECTED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. THIS DISTINCTION MUST BE KEPT IN MIND BY THE CIT WHILE EXERCISING JURISDICTION UNDER AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST 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 ORDER OF THE ASSESSING OFFICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECO ERRONEOUS. AN ORDER OF REMIT CANNOT BE PASSED 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 A ORDER WILL NOT BECOME ERRONEOUS BECAUSE ON REMIT, THE ASSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFTER RECORDING REASONS HOLD THAT THE ORDER IS ERRONEOUS. THE JURISDICTIONAL PRECO 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 QUEST ASSESSING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATION 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 ASSESSI NG OFFICER IS ERRONEOUS. COMMISSIONER OF INCOME TAX VS. J. L. MORRISON (INDIA) LTD REGARD THE SUBMISSION ON BEHALF OF THE REVENUE THAT POWER UNDER THE ACT CAN BE EXERCISED EVEN IN A CASE WHERE THE ISSUE IS DEBATABLE, IT WAS HELD THAT THE CASE OF THAT THE COMMISSION CASE WERE THE ISSUE IS DEBATABLE WAS A MERE PASSING REMARK WHICH IS AGAIN CONTRARY TO THE VIEW TAKEN BY THE APEX COURT IN THE CASE OF MALABAR I 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 11 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 RE CORD PER SE JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, UNAMBIGUOUS AND NOT DEBATABLE. THE MATTER CANNOT BE REMITTED FOR A FRESH DECISIO N 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 REQUIREMENT 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 ITA NOS.01 15/KOL/2019 A.Y. 2014 -15 TIKMANI, HUF VS. ITO WED- 28(4) KOL. PAGE 19 AND MEAN THE CIT HAS NOT EXAMINED AND DECIDE D WHETHER OR NOT THE ORDER IS ERRONEOUS BUT HAS DIRECTED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. THIS DISTINCTION MUST BE KEPT IN MIND BY THE CIT WHILE EXERCISING JURISDICTION UNDER AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST 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 ORDER OF THE ASSESSING OFFICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECO NSIDERATION ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. AN ORDER OF REMIT CANNOT BE PASSED 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 A ND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECOME ERRONEOUS BECAUSE ON REMIT, THE ASSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFTER RECORDING REASONS HOLD THAT THE ORDER IS ERRONEOUS. THE JURISDICTIONAL PRECO NDITION 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 QUEST ION WAS PASSED BY THE ASSESSING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATION 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 NG OFFICER IS ERRONEOUS. COMMISSIONER OF INCOME TAX VS. J. L. MORRISON (INDIA) LTD REGARD THE SUBMISSION ON BEHALF OF THE REVENUE THAT POWER UNDER 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 COMMISSION ER CAN EXERCISE POWER UNDER SECTION 263 CASE WERE THE ISSUE IS DEBATABLE WAS A MERE PASSING REMARK WHICH IS AGAIN CONTRARY TO THE VIEW TAKEN BY THE APEX COURT IN THE CASE OF MALABAR I 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 ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA 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 CORD PER SE JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, UNAMBIGUOUS AND NOT DEBATABLE. THE N 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 REQUIREMENT WHICH MUST BE SATISFIED FOR OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY ITA NOS.01 -05 & 13- 28(4) KOL. PAGE 19 AND MEAN D WHETHER OR NOT THE ORDER IS ERRONEOUS BUT HAS 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 INTEREST 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 ORDER OF THE ASSESSING OFFICER MAY BE OR MAY NOT BE NSIDERATION ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. AN ORDER OF REMIT CANNOT BE PASSED BY THE CIT TO ASK THE ASSESSING OFFICER TO DECIDE WHETHER THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ORDER ND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECOME ERRONEOUS BECAUSE ON REMIT, THE ASSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFTER RECORDING REASONS HOLD NDITION 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 ION WAS PASSED BY THE ASSESSING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATION 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 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 WAS NOT APPLICABLE. THE OBSERVATION 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 IN THE CASE OF MALABAR I NDUSTRIAL 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 UNMIS TAKABLY 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. VS. RAISON INDUSTRIES LTD INDUSTRIAL CO. LTD. V. CIT THIRD QUESTION AS TO WHETHER THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND, IT WAS HELD THAT THE COURT HAS TO START WI 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 FILE DOCUMENTS IN REGARD THERETO. IT IS DIFFICULT TO PROCEED ON THE BASIS THAT T HE 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) 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 ACCO UNDER NO OBLIGATION TO JUSTIFY AS TO WHY WAS HE SATISFIED. ON THE TOP OF THAT THE ASSESSING OFFICER BY HIS ORDER DATED 28TH MARCH, 2008 DID NOT ADVERSELY AFFECT ANY RIGHT OF THE ASSESSEE NOR WAS ANY CIVIL RIGHT OF THE ASSESSEE PREJU 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 SHOWN BY THE REVENUE TO BE ERR ONEOUS AND WAS ALSO CONSIDERED BOTH BY THE TRIBUNAL AS ALSO BY US TO BE A POSSIBLE VIEW, STRENGTHENS THE PRESUMPTION UNDER CLAUSE (E) OF EVIDENCE ACT. A PRIMA FACIE EVIDENCE, ON THE BASI THUS CONVERTED INTO A CONCLUSIVE PROOF OF THE FACT THAT THE ORDER WAS PASSED BY THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND. VS. C.I.T., ITA NO (KARNATAKA); S.N. MUKHERJEE VS. UNION OF INDIA JCIT , 256 ITR 685; HINDUSTHAN TIN WORKS LTD. VS. CIT, 275 ITR 43 (DEL), DISTINGUISHED. (PARAS 90 WOOLLEN MILLS SHOWS THAT JURISDICTION THEREUNDER CAN BE EXERCISED IF THE CIT FINDS THAT THE ORDER OF THE AO WAS ER OBJECTION AND MERELY BECAUSE A DIFFERENT VIEW COULD BE TAKEN, WERE NOT ENOUGH TO SAY THAT THE ORDER OF THE AO WAS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE JURISDICTION COULD FOR EXERCISE OF JURISDICTION EXISTED. NO RIGID RULE COULD BE LAID DOWN ABOUT THE SITUATION WHEN THE JURISDICTION CAN BE EXERCISED. WHETHER SATISFACTION OF THE CIT FOR EXERCISING JURISDICTION WAS CALLED GIVEN FACT SITUATION. IN THE PRESENT CASE, THE TRIBUNAL HAS HELD THAT THE ASSESSEE HAD DISCLOSED THAT OUT OF SALE CONSIDERATION, A SUM OF RS. 1 LAKH WAS TO BE RECEIVED FOR SALE OF PERMIT. IF THAT IS SO, THER CASE WAS MADE OUT FOR INVOKING JURISDICTION UNDER 12 TAKABLY THAT THE ORDER OF THE ASSESSING OFFICER IS UNSUSTAINABLE. ANYTHING SHORT OF THAT WOULD NOT CLOTHE THE CIT WITH JURISDICTION TO EXERCISE POWER UNDER OF THE ACT. CIT VS. M. M. KHAMBHATWALA REPORTED IN 198 ITR 144; VS. RAISON INDUSTRIES LTD . REPORTED IN 288 ITR 322 (SC), NOT APPLICABLE; INDUSTRIAL CO. LTD. V. CIT REPORTED IN 243 ITR 83, RELIED ON. (PARA 72) AS REGARD THE THIRD QUESTION AS TO WHETHER THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND, IT WAS HELD THAT THE COURT HAS TO START WI 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 FILE DOCUMENTS IN REGARD THERETO. IT IS DIFFICULT TO PROCEED ON THE BASIS THAT HE 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 OF THE ACT COULD NOT HAVE BEEN FOR MULATED. 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 ACCO RDANCE 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 28TH MARCH, 2008 DID NOT ADVERSELY AFFECT ANY RIGHT OF THE ASSESSEE NOR WAS ANY CIVIL RIGHT OF THE ASSESSEE PREJU 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 SHOWN BY THE REVENUE TO BE ONEOUS AND WAS ALSO CONSIDERED BOTH BY THE TRIBUNAL AS ALSO BY US TO BE A POSSIBLE VIEW, STRENGTHENS THE PRESUMPTION UNDER CLAUSE (E) OF EVIDENCE ACT. A PRIMA FACIE EVIDENCE, ON THE BASI S OF THE AFORESAID PRESUMPTION, 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 S.N. MUKHERJEE VS. UNION OF INDIA , AIR 1990 SC 1984; , 256 ITR 685; HINDUSTHAN TIN WORKS LTD. VS. CIT, 275 ITR 43 (DEL), DISTINGUISHED. (PARAS 90 -92, 102) COMMISSIO NER OF INCOME TAX VS. SOHANA WOOLLEN MILLS 296 ITR 238 (P&H HC) A REFERENCE TO THE PROVISIONS OF SHOWS THAT JURISDICTION THEREUNDER CAN BE EXERCISED IF THE CIT FINDS THAT THE ORDER OF THE AO WAS ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. MERE AUDIT OBJECTION AND MERELY BECAUSE A DIFFERENT VIEW COULD BE TAKEN, WERE NOT ENOUGH TO SAY THAT THE ORDER OF THE AO WAS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE JURISDICTION COULD BE EXERCISED IF THE CIT WAS SATISFIED THAT THE BASIS FOR EXERCISE OF JURISDICTION EXISTED. NO RIGID RULE COULD BE LAID DOWN ABOUT THE SITUATION WHEN THE JURISDICTION CAN BE EXERCISED. WHETHER SATISFACTION OF THE CIT FOR EXERCISING JURISDICTION WAS CALLED FOR OR NOT, HAS TO BE DECIDED HAVING REGARD TO A GIVEN FACT SITUATION. IN THE PRESENT CASE, THE TRIBUNAL HAS HELD THAT THE ASSESSEE HAD DISCLOSED THAT OUT OF SALE CONSIDERATION, A SUM OF RS. 1 LAKH WAS TO BE RECEIVED FOR SALE OF PERMIT. IF THAT IS SO, THER E WAS NO ERROR IN THE VIEW TAKEN BY THE AO AND NO CASE WAS MADE OUT FOR INVOKING JURISDICTION UNDER S. 263 . ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA TAKABLY THAT THE ORDER OF THE ASSESSING OFFICER IS UNSUSTAINABLE. ANYTHING SHORT OF THAT WOULD NOT CLOTHE THE CIT WITH JURISDICTION TO EXERCISE POWER UNDER REPORTED IN 198 ITR 144; CIT . REPORTED IN 288 ITR 322 (SC), NOT APPLICABLE; MALABAR REPORTED IN 243 ITR 83, RELIED ON. (PARA 72) AS REGARD THE THIRD QUESTION AS TO WHETHER THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND, IT WAS HELD THAT THE COURT HAS TO START WI TH 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 FILE DOCUMENTS IN REGARD THERETO. IT IS DIFFICULT TO PROCEED ON THE BASIS THAT HE 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 MULATED. 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 RDANCE 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 28TH MARCH, 2008 DID NOT ADVERSELY AFFECT ANY RIGHT OF THE ASSESSEE NOR WAS ANY CIVIL RIGHT OF THE ASSESSEE PREJU DICED. 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 SHOWN BY THE REVENUE TO BE ONEOUS 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 S OF THE AFORESAID PRESUMPTION, IS THUS CONVERTED INTO A CONCLUSIVE PROOF OF THE FACT THAT THE ORDER WAS PASSED BY THE MEERUT ROLLER FLOUR MILLS PVT. LTD . CIT VS. INFOSYS TECHNOLOGIES LTD ., 341 ITR 293 , AIR 1990 SC 1984; A. A. DOSHI VS. , 256 ITR 685; HINDUSTHAN TIN WORKS LTD. VS. CIT, 275 ITR 43 (DEL), NER OF INCOME TAX VS. SOHANA 296 ITR 238 (P&H HC) A REFERENCE TO THE PROVISIONS OF S. 263 SHOWS THAT JURISDICTION THEREUNDER CAN BE EXERCISED IF THE CIT FINDS THAT THE ORDER RONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. MERE AUDIT OBJECTION AND MERELY BECAUSE A DIFFERENT VIEW COULD BE TAKEN, WERE NOT ENOUGH TO SAY THAT THE ORDER OF THE AO WAS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE BE EXERCISED IF THE CIT WAS SATISFIED THAT THE BASIS FOR EXERCISE OF JURISDICTION EXISTED. NO RIGID RULE COULD BE LAID DOWN ABOUT THE SITUATION WHEN THE JURISDICTION CAN BE EXERCISED. WHETHER SATISFACTION OF THE CIT FOR FOR OR NOT, HAS TO BE DECIDED HAVING REGARD TO A GIVEN FACT SITUATION. IN THE PRESENT CASE, THE TRIBUNAL HAS HELD THAT THE ASSESSEE HAD DISCLOSED THAT OUT OF SALE CONSIDERATION, A SUM OF RS. 1 LAKH WAS TO BE RECEIVED FOR E WAS NO ERROR IN THE VIEW TAKEN BY THE AO AND NO COMMISSIONER OF INCOME TAX VS. LEISURE WEAR (DEL) THE PREREQUISITE TO THE EXERCISE OF SUO MOTU JURISDICTION UNDER CIT IS THAT THE ORDER OF THE AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE. TWO CONDITIONS ARE TO BE SATISFIED, NAMELY, (I) THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) THE ERROR COMMITTED BY THE AO IN THE ORDER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. BOTH THESE CONDITIONS ARE TO BE SATISFIED SIMULTANEOUSLY. IT IS ALSO WELL WOULD NOT BE INVOKED MERELY TO CORRECT A MISTAKE OR ERROR COMMITTED BY THE AO UNLESS IT HAS CAUSED PREJUDICE TO THE INTEREST OF INCORRECT ASSUMPTION OF FACTS OR ON INCORRECT APPLICATION OF LAW OR WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE AND WITHOUT APPLICATION OF MIND, IT WOULD BE TREATED AS ERRONEOUS. LIKEWISE, THE EXPRESSION 'PREJUDI REVENUE' IS OF WIDE IMPORT AND IS NOT CONFINED TO LOSS OF TAX. IF DUE TO AN ERRONEOUS ORDER OF THE AO THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WOULD BE CERTAINLY PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE MEANT TO BE EXERCISED FOR THE PURPOSE OF DIRECTING THE AO TO HOLD ANOTHER INVESTIGATION WITHOUT DESCRIBING AS TO HOW THE ORDER OF THE AO IS ERRONEOUS. FROM THIS IT ALSO FOLLOWS THAT WHERE THE ASSESSMENT ORDER HAS BEEN PASSED BY THE TAKING INTO ACCOUNT THE ASSESSEE'S SUBMISSIONS AND DOCUMENTS FURNISHED BY HIM AND NO MATERIAL WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE CIT WHICH SHOWED THAT THERE WAS ANY DISCREPANCY OR FALSITY IN EVIDENCES FURNISHED BY THE ASSESSEE, THE ORDE R OF THE AO CANNOT BE SET ASIDE FOR MAKING DEEP INQUIRY ONLY ON THE PRESUMPTION AND ASSUMPTION THAT SOMETHING NEW MAY COME OUT. FOR MAKING A VALID ORDER UNDER TO THE EFFECT THAT ORDER PASSED BY THE AO IS ERRONEOUS WHICH HAS CAUSED LOSS TO THE REVENUE. FURTHERMORE, WHERE ACTING IN ACCORDANCE WITH LAW THE AO FRAMES CERTAIN ASSESSMENT ORDER, SAME CANNOT BE BRANDED AS ERRONEOUS SIMPLY BECAUSE TO THE CIT, THE ORDER SHOULD BE WRITTEN MORE ELABORATELY. LTD. VS. CIT (2000) 159 CTR (SC) 1 : (2000) 243 ITR 83 (SC), GEE VEE ENTERPRISES VS. ADDL. CIT 1975 CTR (DEL) 6 BOARDS LTD . (2000) 242 ITR ITA NOS.01 TIKMANI, HUF VS. ITO WED (1991) 98 CTR (DEL) 216 : (1993) 199 ITR 424 (DEL) AND J.P. SRIVASTAVA& SONS (KANPUR) LTD. VS. CIT (1978) 111 ITR 326 (ALL) RELIED ON. (PARAS 6 & 7) IN THE ENTIRE ORDER EMPHASIS LAID BY THE CIT IS THAT IN RESPECT OF FOUR ISSUES MENTIONED BY HIM, NO QUE IT IS OBSERVED THAT THERE WAS NO APPLICATION OF MIND ON THE PART OF THE AO AND THE AO HAS NOT RECORDED ANY REASONS TO JUSTIFY THE OMISSION TO CONSIDER THE SAID FACTS, THE CIT DOES NOT TAKE THE SAID ORDER DUTY OF THE CIT IN ORDER TO JUSTIFY EXERCISE OF POWER UNDER WHISPER THAT THE ORDER IS ERRONEOUS. EVEN IF IT IS INFERRED THAT NON THE ISSUES POINTED OUT BY THE CIT WOULD AMOUNT TO AN ERRONEOUS ORDER, IT IS NOT STATED AS TO HOW THIS ORDER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE PENULTIMATE PARAS OF THE ORDER, AT BEST, CONTAIN THE OBSERVATIONS THAT THE AO WAS SATISFIED WITH MAKING FLIMSY ADDITIONS WHICH WERE DELETED BY THE CIT(A). THERE IS 13 COMMISSIONER OF INCOME TAX VS. LEISURE WEAR EXPORTS LTD (DEL) THE PREREQUISITE TO THE EXERCISE OF SUO MOTU JURISDICTION UNDER CIT IS THAT THE ORDER OF THE AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST HE REVENUE. TWO CONDITIONS ARE TO BE SATISFIED, NAMELY, (I) THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) THE ERROR COMMITTED BY THE AO IN THE ORDER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. BOTH THESE CONDITIONS ARE TO BE SIMULTANEOUSLY. IT IS ALSO WELL - SETTLED PRINCIPLE THAT PROVISIONS OF WOULD NOT BE INVOKED MERELY TO CORRECT A MISTAKE OR ERROR COMMITTED BY THE AO UNLESS IT HAS CAUSED PREJUDICE TO THE INTEREST OF THE REVENUE. IF AN ORDER IS BASED ON INCORRECT ASSUMPTION OF FACTS OR ON INCORRECT APPLICATION OF LAW OR WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE AND WITHOUT APPLICATION OF MIND, IT WOULD BE TREATED AS ERRONEOUS. LIKEWISE, THE EXPRESSION 'PREJUDI CIAL TO THE INTEREST OF THE REVENUE' IS OF WIDE IMPORT AND IS NOT CONFINED TO LOSS OF TAX. IF DUE TO AN ERRONEOUS ORDER OF THE AO THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WOULD BE CERTAINLY PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE POWER OF REVISION IS NOT MEANT TO BE EXERCISED FOR THE PURPOSE OF DIRECTING THE AO TO HOLD ANOTHER INVESTIGATION WITHOUT DESCRIBING AS TO HOW THE ORDER OF THE AO IS ERRONEOUS. FROM THIS IT ALSO FOLLOWS THAT WHERE THE ASSESSMENT ORDER HAS BEEN PASSED BY THE TAKING INTO ACCOUNT THE ASSESSEE'S SUBMISSIONS AND DOCUMENTS FURNISHED BY HIM AND NO MATERIAL WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE CIT WHICH SHOWED THAT THERE WAS ANY DISCREPANCY OR FALSITY IN EVIDENCES FURNISHED BY THE ASSESSEE, THE R OF THE AO CANNOT BE SET ASIDE FOR MAKING DEEP INQUIRY ONLY ON THE PRESUMPTION AND ASSUMPTION THAT SOMETHING NEW MAY COME OUT. FOR MAKING A VALID ORDER UNDER S. 263 IT IS ESSENTIAL THAT THE CIT HAS TO RE CORD AN EXPRESS FINDING TO THE EFFECT THAT ORDER PASSED BY THE AO IS ERRONEOUS WHICH HAS CAUSED LOSS TO THE REVENUE. FURTHERMORE, WHERE ACTING IN ACCORDANCE WITH LAW THE AO FRAMES CERTAIN ASSESSMENT ORDER, SAME CANNOT BE BRANDED AS ERRONEOUS SIMPLY BECAUSE TO THE CIT, THE ORDER SHOULD BE WRITTEN MORE ELABORATELY. -- MALABAR INDUSTRIAL CO. (2000) 159 CTR (SC) 1 : (2000) 243 ITR 83 (SC), GEE VEE ENTERPRISES VS. ADDL. CIT 1975 CTR (DEL) 6 1 : (1975) 99 ITR 375 ( DEL), CIT VS. SESHASAYEE PAPER & . (2000) 242 ITR ITA NOS.01 -05 & 13- 15/KOL/2019 A.Y. 2014 TIKMANI, HUF VS. ITO WED - 28(4) KOL. PAGE 21 490 (MAD), CWT VS. PRITHVI RAJ & C (1991) 98 CTR (DEL) 216 : (1993) 199 ITR 424 (DEL) AND J.P. SRIVASTAVA& SONS (KANPUR) LTD. VS. CIT (1978) 111 ITR 326 (ALL) RELIED ON. (PARAS 6 & 7) IN THE ENTIRE ORDER EMPHASIS LAID BY THE CIT IS THAT IN RESPECT OF FOUR ISSUES MENTIONED BY HIM, NO QUE RIES WERE RAISED BY THE AO. ON THIS PREMISE, THOUGH IT IS OBSERVED THAT THERE WAS NO APPLICATION OF MIND ON THE PART OF THE AO AND THE AO HAS NOT RECORDED ANY REASONS TO JUSTIFY THE OMISSION TO CONSIDER THE SAID FACTS, THE CIT DOES NOT TAKE THE SAID ORDER TO ITS LOGICAL CONCLUSION WHICH WAS THE PRIME DUTY OF THE CIT IN ORDER TO JUSTIFY EXERCISE OF POWER UNDER S. 263 WHISPER THAT THE ORDER IS ERRONEOUS. EVEN IF IT IS INFERRED THAT NON THE ISSUES POINTED OUT BY THE CIT WOULD AMOUNT TO AN ERRONEOUS ORDER, IT IS NOT STATED AS TO HOW THIS ORDER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE PENULTIMATE PARAS OF THE ORDER, AT BEST, CONTAIN THE OBSERVATIONS THAT THE AO WAS SATISFIED WITH MAKING FLIMSY ADDITIONS WHICH WERE DELETED BY THE CIT(A). THERE IS ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA EXPORTS LTD . 341 ITR 166 (DEL) THE PREREQUISITE TO THE EXERCISE OF SUO MOTU JURISDICTION UNDER S. 263 BY THE CIT IS THAT THE ORDER OF THE AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST HE REVENUE. TWO CONDITIONS ARE TO BE SATISFIED, NAMELY, (I) THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) THE ERROR COMMITTED BY THE AO IN THE ORDER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. BOTH THESE CONDITIONS ARE TO BE SETTLED PRINCIPLE THAT PROVISIONS OF S. 263 WOULD NOT BE INVOKED MERELY TO CORRECT A MISTAKE OR ERROR COMMITTED BY THE AO THE REVENUE. IF AN ORDER IS BASED ON INCORRECT ASSUMPTION OF FACTS OR ON INCORRECT APPLICATION OF LAW OR WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE AND WITHOUT APPLICATION OF MIND, IT WOULD CIAL TO THE INTEREST OF THE REVENUE' IS OF WIDE IMPORT AND IS NOT CONFINED TO LOSS OF TAX. IF DUE TO AN ERRONEOUS ORDER OF THE AO THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WOULD BE POWER OF REVISION IS NOT MEANT TO BE EXERCISED FOR THE PURPOSE OF DIRECTING THE AO TO HOLD ANOTHER INVESTIGATION WITHOUT DESCRIBING AS TO HOW THE ORDER OF THE AO IS ERRONEOUS. FROM THIS IT ALSO FOLLOWS THAT WHERE THE ASSESSMENT ORDER HAS BEEN PASSED BY THE AO AFTER TAKING INTO ACCOUNT THE ASSESSEE'S SUBMISSIONS AND DOCUMENTS FURNISHED BY HIM AND NO MATERIAL WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE CIT WHICH SHOWED THAT THERE WAS ANY DISCREPANCY OR FALSITY IN EVIDENCES FURNISHED BY THE ASSESSEE, THE R OF THE AO CANNOT BE SET ASIDE FOR MAKING DEEP INQUIRY ONLY ON THE PRESUMPTION AND ASSUMPTION THAT SOMETHING NEW MAY COME OUT. FOR MAKING A CORD AN EXPRESS FINDING TO THE EFFECT THAT ORDER PASSED BY THE AO IS ERRONEOUS WHICH HAS CAUSED LOSS TO THE REVENUE. FURTHERMORE, WHERE ACTING IN ACCORDANCE WITH LAW THE AO FRAMES CERTAIN ASSESSMENT ORDER, SAME CANNOT BE BRANDED AS ERRONEOUS SIMPLY BECAUSE ACCORDING MALABAR INDUSTRIAL CO. (2000) 159 CTR (SC) 1 : (2000) 243 ITR 83 (SC), GEE VEE ENTERPRISES VS. DEL), CIT VS. SESHASAYEE PAPER & 15/KOL/2019 A.Y. 2014 -15 28(4) KOL. PAGE 21 490 (MAD), CWT VS. PRITHVI RAJ & C O. (1991) 98 CTR (DEL) 216 : (1993) 199 ITR 424 (DEL) AND J.P. SRIVASTAVA& SONS (PARAS 6 & 7) IN THE ENTIRE ORDER EMPHASIS LAID BY THE CIT IS THAT IN RESPECT OF FOUR RIES WERE RAISED BY THE AO. ON THIS PREMISE, THOUGH IT IS OBSERVED THAT THERE WAS NO APPLICATION OF MIND ON THE PART OF THE AO AND THE AO HAS NOT RECORDED ANY REASONS TO JUSTIFY THE OMISSION TO CONSIDER THE SAID FACTS, TO ITS LOGICAL CONCLUSION WHICH WAS THE PRIME S. 263 . THERE IS NOT EVEN A WHISPER THAT THE ORDER IS ERRONEOUS. EVEN IF IT IS INFERRED THAT NON -CONSIDERATION OF THE ISSUES POINTED OUT BY THE CIT WOULD AMOUNT TO AN ERRONEOUS ORDER, IT IS NOT STATED AS TO HOW THIS ORDER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE PENULTIMATE PARAS OF THE ORDER, AT BEST, CONTAIN THE OBSERVATIONS THAT THE AO WAS SATISFIED WITH MAKING FLIMSY ADDITIONS WHICH WERE DELETED BY THE CIT(A). THERE IS NOT A WHISPER AS TO HOW THIS ORDER WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THAT APART, THE APPROACH OF THE TRIBUNAL IN DISCARDING THE OBSERVATION OF THE CIT ABOUT NO T MAKING PROPER INQUIRIES IN RESPECT OF THE SAID FOUR ISSUES IS ALSO JUSTIFIED AND WITHOUT BLEMISH. (PARAS 12 TO 14) FIRST COMMENT OF THE CIT WAS IN RESPECT OF FINISHED GOODS IN THE CLOSING STOCK. THE CIT FOUND THAT THESE WERE TO THE TUNE OF RS. 5.28 CROR ACCORDING TO THE CIT, WHEN THE TOTAL TURNOVER OF THE ASSESSEE WAS RS. 6.13 CRORES, THE AO SHOULD HAVE SATISFIED HIMSELF BY CALLING FOR MORE DETAILS AS TO HOW THERE WAS CLOSING STOCK OF SUCH A MAGNITUDE OF RS. 5.28 CRORES. THUS, THE CIT HAS NOT DOUBTED THE STATEMENT OF FINISHED GOODS IN THE CLOSING STOCK FURNISHED BY THE ASSESSEE. HE HAS ONLY REMARKED THAT THERE SHOULD HAVE BEEN A DEEPER PROBE BY CALLING FOR MORE DETAILS. THIS IS NEITHER HERE NOR THERE, WHEN ONE KEEPS IN VIEW THE INGREDIENTS OF S. 263. (PARA 15) INSOFAR AS THE INSURANCE CLAIM IS CONCERNED, THE CIT OBSERVED THAT THE ASSESSEE HAD SHOWN RECEIVABLE ON THIS ACCOUNT TO THE TUNE OF RS. 1.21 CRORES BUT NO DETAILS HAD BEEN FURNISHED. THE AO HAD ALSO NOT MADE ANY INQUIRIES. IN THE DETAILED DISCUSS WAS LODGED FOR THE GOODS LOST IN TRANSIT. THE ASSESSEE AT THAT TIME HAD MERELY FILED A CLAIM WITH THE INSURANCE COMPANY. THIS CLAIM HAD NOT BEEN APPROVED AS THE INSURANCE COMPANY HAD NEITHE MAKING PAYMENT. THEREFORE, NO INCOME HAD 'ACCRUED' WHICH COULD BE TAXED. THE TRIBUNAL RIGHTLY HELD THAT ORDINARILY THE INCOME IS SAID TO HAVE ACCRUED TO A PERSON WHEN HE ACQUIRES THE RIGHT TO INCOME AND THIS ACTUAL QUANTIFICATION OR RECEIPT MAY FOLLOW IN DUE COURSE. THE MERE CLAIM TO INCOME WITHOUT ANY ENFORCEABLE RIGHT CANNOT BE REGARDED AS AN ACCRUED INCOME FOR THE PURPOSE OF (PARA 16) COMING TO THE CLAIM UNDER PART OF THE CIT TO SAY THAT THE AO DID NOT MAKE REQUISITE INQUIRIES BECAUSE OF THE SIMPLE REASON THAT THE AO HAD, IN FACT, DECLINED AND REJECTED THIS CLAIM OF THE ASSESSEE. IF THE AO HIMSELF DISALLOWED THE DEDUCTION CLA ACCOUNT UNDER S. 80HHC, ONE FAILS TO UNDERSTAND WHAT FURTHER INQUIRIES WERE NEEDED BY THE AO. (PARA 17) LASTLY, THE OBSERVATIONS OF THE CIT ARE IN RESPECT OF THE INCOME OF RS. 1.61 CRORES SHOWN BY THE ASSESSEE ON ACCOUNT OF VA ONLY OBSERVED THAT IN THE IMMEDIATE PREVIOUS YEAR NO SUCH GAIN WAS SHOWN AND THEREFORE, IT NEEDED EXAMINATION BY THE AO. HOWEVER, THE MOOT QUESTION WOULD BE EXAMINATION FOR WHAT PURPOSE ? IT IS AN INCOME SHOWN BY THE A CIT WAS OF THE OPINION THAT THERE WAS NO SUCH INCOME OR HE WAS NURTURING AN IMPRESSION THAT INCOME ON THIS ACCOUNT AS SHOWN WAS LESSER ? THERE IS NO SUCH INDICATION IN THE ORDER. THE CIT ALSO DOES NOT AT ALL STATE AS TO WHAT WAS THE RE FOR DOUBTING THE INCOME OFFERED BY THE ASSESSEE. EVEN IF IT IS FOUND THAT PART OF SUCH INCOME WAS CLAIMED AS DEDUCTION UNDER ON THIS ACCOUNT AS CLAIM UNDER ALL OBSERVED AS TO HOW THE ORDER OF THE AO ON THIS ACCOUNT WAS ERRONEOUS AND 14 NOT A WHISPER AS TO HOW THIS ORDER WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THAT APART, THE APPROACH OF THE TRIBUNAL IN DISCARDING THE OBSERVATION OF THE CIT T MAKING PROPER INQUIRIES IN RESPECT OF THE SAID FOUR ISSUES IS ALSO JUSTIFIED AND WITHOUT BLEMISH. (PARAS 12 TO 14) FIRST COMMENT OF THE CIT WAS IN RESPECT OF FINISHED GOODS IN THE CLOSING STOCK. THE CIT FOUND THAT THESE WERE TO THE TUNE OF RS. 5.28 CROR ACCORDING TO THE CIT, WHEN THE TOTAL TURNOVER OF THE ASSESSEE WAS RS. 6.13 CRORES, THE AO SHOULD HAVE SATISFIED HIMSELF BY CALLING FOR MORE DETAILS AS TO HOW THERE WAS CLOSING STOCK OF SUCH A MAGNITUDE OF RS. 5.28 CRORES. THUS, THE CIT HAS NOT DOUBTED THE STATEMENT OF FINISHED GOODS IN THE CLOSING STOCK FURNISHED BY THE ASSESSEE. HE HAS ONLY REMARKED THAT THERE SHOULD HAVE BEEN A DEEPER PROBE BY CALLING FOR MORE DETAILS. THIS IS NEITHER HERE NOR THERE, WHEN ONE KEEPS IN VIEW THE INGREDIENTS OF S. (PARA 15) INSOFAR AS THE INSURANCE CLAIM IS CONCERNED, THE CIT OBSERVED THAT THE ASSESSEE HAD SHOWN RECEIVABLE ON THIS ACCOUNT TO THE TUNE OF RS. 1.21 CRORES BUT NO DETAILS HAD BEEN FURNISHED. THE AO HAD ALSO NOT MADE ANY INQUIRIES. IN THE DETAILED DISCUSS ION ON THIS ASPECT, THE TRIBUNAL HAS OBSERVED THAT INSURANCE CLAIM WAS LODGED FOR THE GOODS LOST IN TRANSIT. THE ASSESSEE AT THAT TIME HAD MERELY FILED A CLAIM WITH THE INSURANCE COMPANY. THIS CLAIM HAD NOT BEEN APPROVED AS THE INSURANCE COMPANY HAD NEITHE R ACCEPTED THE SAME NOR GIVEN ANY ASSURANCE FOR MAKING PAYMENT. THEREFORE, NO INCOME HAD 'ACCRUED' WHICH COULD BE TAXED. THE TRIBUNAL RIGHTLY HELD THAT ORDINARILY THE INCOME IS SAID TO HAVE ACCRUED TO A PERSON WHEN HE ACQUIRES THE RIGHT TO INCOME AND THIS SHOULD BE ENFORCEABLE RIGHT, THOUGH ACTUAL QUANTIFICATION OR RECEIPT MAY FOLLOW IN DUE COURSE. THE MERE CLAIM TO INCOME WITHOUT ANY ENFORCEABLE RIGHT CANNOT BE REGARDED AS AN ACCRUED INCOME FOR THE PURPOSE OF IT ACT . (PARA 16) COMING TO THE CLAIM UNDER S. 80HHC , IT WAS TOTALLY UNCALLED FOR ON THE PART OF THE CIT TO SAY THAT THE AO DID NOT MAKE REQUISITE INQUIRIES BECAUSE OF THE SIMPLE REASON THAT THE AO HAD, IN FACT, DECLINED AND REJECTED THIS CLAIM OF THE ASSESSEE. IF THE AO HIMSELF DISALLOWED THE DEDUCTION CLA IMED BY THE ASSESSEE ON THIS ACCOUNT UNDER S. 80HHC, ONE FAILS TO UNDERSTAND WHAT FURTHER INQUIRIES WERE NEEDED BY THE AO. (PARA 17) LASTLY, THE OBSERVATIONS OF THE CIT ARE IN RESPECT OF THE INCOME OF RS. 1.61 CRORES SHOWN BY THE ASSESSEE ON ACCOUNT OF VA RIATION IN EXCHANGE RATE. THE CIT HAS ONLY OBSERVED THAT IN THE IMMEDIATE PREVIOUS YEAR NO SUCH GAIN WAS SHOWN AND THEREFORE, IT NEEDED EXAMINATION BY THE AO. HOWEVER, THE MOOT QUESTION WOULD BE EXAMINATION FOR WHAT PURPOSE ? IT IS AN INCOME SHOWN BY THE A SSESSEE. WHETHER THE CIT WAS OF THE OPINION THAT THERE WAS NO SUCH INCOME OR HE WAS NURTURING AN IMPRESSION THAT INCOME ON THIS ACCOUNT AS SHOWN WAS LESSER ? THERE IS NO SUCH INDICATION IN THE ORDER. THE CIT ALSO DOES NOT AT ALL STATE AS TO WHAT WAS THE RE FOR DOUBTING THE INCOME OFFERED BY THE ASSESSEE. EVEN IF IT IS FOUND THAT PART OF SUCH INCOME WAS CLAIMED AS DEDUCTION UNDER S. 80HHC , NO BENEFIT ENURED TO THE ASSESSEE ON THIS ACCOUNT AS CLAIM UNDER S. 80HHC WAS FULLY DISALLOWED BY THE AO. IT IS NOT AT ALL OBSERVED AS TO HOW THE ORDER OF THE AO ON THIS ACCOUNT WAS ERRONEOUS AND ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA NOT A WHISPER AS TO HOW THIS ORDER WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THAT APART, THE APPROACH OF THE TRIBUNAL IN DISCARDING THE OBSERVATION OF THE CIT T MAKING PROPER INQUIRIES IN RESPECT OF THE SAID FOUR ISSUES IS ALSO JUSTIFIED (PARAS 12 TO 14) FIRST COMMENT OF THE CIT WAS IN RESPECT OF FINISHED GOODS IN THE CLOSING STOCK. THE CIT FOUND THAT THESE WERE TO THE TUNE OF RS. 5.28 CROR ES. ACCORDING TO THE CIT, WHEN THE TOTAL TURNOVER OF THE ASSESSEE WAS RS. 6.13 CRORES, THE AO SHOULD HAVE SATISFIED HIMSELF BY CALLING FOR MORE DETAILS AS TO HOW THERE WAS CLOSING STOCK OF SUCH A MAGNITUDE OF RS. 5.28 CRORES. THUS, THE CIT HAS NOT DOUBTED THE STATEMENT OF FINISHED GOODS IN THE CLOSING STOCK FURNISHED BY THE ASSESSEE. HE HAS ONLY REMARKED THAT THERE SHOULD HAVE BEEN A DEEPER PROBE BY CALLING FOR MORE DETAILS. THIS IS NEITHER HERE NOR THERE, WHEN ONE KEEPS IN VIEW THE INGREDIENTS OF S. (PARA 15) INSOFAR AS THE INSURANCE CLAIM IS CONCERNED, THE CIT OBSERVED THAT THE ASSESSEE HAD SHOWN RECEIVABLE ON THIS ACCOUNT TO THE TUNE OF RS. 1.21 CRORES BUT NO DETAILS HAD BEEN FURNISHED. THE AO HAD ALSO NOT MADE ANY INQUIRIES. IN THE ION ON THIS ASPECT, THE TRIBUNAL HAS OBSERVED THAT INSURANCE CLAIM WAS LODGED FOR THE GOODS LOST IN TRANSIT. THE ASSESSEE AT THAT TIME HAD MERELY FILED A CLAIM WITH THE INSURANCE COMPANY. THIS CLAIM HAD NOT BEEN APPROVED AS THE R ACCEPTED THE SAME NOR GIVEN ANY ASSURANCE FOR MAKING PAYMENT. THEREFORE, NO INCOME HAD 'ACCRUED' WHICH COULD BE TAXED. THE TRIBUNAL RIGHTLY HELD THAT ORDINARILY THE INCOME IS SAID TO HAVE ACCRUED TO A PERSON SHOULD BE ENFORCEABLE RIGHT, THOUGH ACTUAL QUANTIFICATION OR RECEIPT MAY FOLLOW IN DUE COURSE. THE MERE CLAIM TO INCOME WITHOUT ANY ENFORCEABLE RIGHT CANNOT BE REGARDED AS AN ACCRUED INCOME , IT WAS TOTALLY UNCALLED FOR ON THE PART OF THE CIT TO SAY THAT THE AO DID NOT MAKE REQUISITE INQUIRIES BECAUSE OF THE SIMPLE REASON THAT THE AO HAD, IN FACT, DECLINED AND REJECTED THIS CLAIM OF THE IMED BY THE ASSESSEE ON THIS ACCOUNT UNDER S. 80HHC, ONE FAILS TO UNDERSTAND WHAT FURTHER INQUIRIES WERE (PARA 17) LASTLY, THE OBSERVATIONS OF THE CIT ARE IN RESPECT OF THE INCOME OF RS. 1.61 RIATION IN EXCHANGE RATE. THE CIT HAS ONLY OBSERVED THAT IN THE IMMEDIATE PREVIOUS YEAR NO SUCH GAIN WAS SHOWN AND THEREFORE, IT NEEDED EXAMINATION BY THE AO. HOWEVER, THE MOOT QUESTION WOULD BE SSESSEE. WHETHER THE CIT WAS OF THE OPINION THAT THERE WAS NO SUCH INCOME OR HE WAS NURTURING AN IMPRESSION THAT INCOME ON THIS ACCOUNT AS SHOWN WAS LESSER ? THERE IS NO SUCH INDICATION IN THE ORDER. THE CIT ALSO DOES NOT AT ALL STATE AS TO WHAT WAS THE RE ASON FOR DOUBTING THE INCOME OFFERED BY THE ASSESSEE. EVEN IF IT IS FOUND THAT PART OF SUCH , NO BENEFIT ENURED TO THE ASSESSEE WAS FULLY DISALLOWED BY THE AO. IT IS NOT AT ALL OBSERVED AS TO HOW THE ORDER OF THE AO ON THIS ACCOUNT WAS ERRONEOUS AND FURTHER AS TO HOW IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THUS, O THE CIT WAS RIGHTLY SET ASIDE BY THE TRIBUNAL. IN THE CASE ON HAND THE LD. CIT FINDS FAULT WITH THE AO FOR NOT INVOKING RULE 8D WHILE MAKING DISALLOWANCE U/S 14A. THE HON'BLE DELHI HIGH COURT IN THE CASE OF MAXOP INVESTMENTS LTD. VS CIT (SUPRA) HEL THAT THE AO CANNOT PROCEED TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME WITHOUT RECORDING A FINDING THAT HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE. THIS IS A CONDITION PRECEDENT WHILE REJECTING THE CLAIM OF THE ASSESSEE, WITH REGARD TO INCURRING OF EXPENDITURE OR NO EXPENDITURE IN RELATION TO EXEMPT INCOME. THE AO WILL HAVE TO INDICATE COGENT REASONS FOR THE SAME AND RULE 8D COMES INTO PLAY ONLY WHEN THE AO RECORDS A FINDING THAT HE IS NOT SATISF AO HAS NOT MADE ANY SUCH RECORDING OF SATISFACTION AND HAS ACCEPTED THE DISALLOWANCE MADE U/S 14A BY THE ASSESSEE. IN SUCH CIRCUMSTANCES IT IS NOT OPEN FOR THE LD. CIT TO COME TO A CONCLUSION THAT THE WITHOUT HIMSELF RECORDING THE SATISFACTION THAT THE CALCULATION GIVEN BY THE ASSESSEE IN ITS DISALLOWANCE MADE SUO MOTO U/S 14A IS NOT CORRECT. COMING TO THE OTHER EXPENSES CLAIMED, THE LD. CIT HAS SIMPLY COLLECTED INFORMAT QUERIES AND HAS NOT GIVEN ANY FINDING WHATSOEVER THAT THERE IS AN ERROR MADE BY THE AO OR THAT THE CIRCUMSTANCES WAS SUCH THAT WOULD REQUIRE AND WARRANT FURTHER INQUIRY OR INVESTIGATION. NO ERROR IN THE ASSESSMENT ORDER HAS BEEN POINTED O IT IS NOT STATED AS TO HOW PREJUDICE WAS CAUSED TO THE REVENUE. THE FINDING THAT THE AO HAD FAILED TO PROPERLY SCRUTINISE THE ABOVE ASPECTS DOES NOT GIVE POWERS TO THE LD. CIT TO REVISE THE ASSESSMENT U/S 263 OF THE ACT. MAKING ROWING ENQUIRIES IS N FINDING OF AN ERROR. ASSESSMENTS CANNOT BE SET ASIDE FOR FRESH ENQUIRIES UNLESS A SPECIFIC ERROR IS POINTED OUT AT NOT MAKING PROPER ENQUIRY CANNOT BE EQUATED WITH NO ENQUIRY. IN VIEW OF THE ABOVE WE QUASH THE ORDER PASSED U/S 263 OF THE ACT AND ALLOW THE APPEAL OF THE ASSESSEE. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED' KEEPING IN MIND THE FOREGOING DETAILED DISCUSSION THAT AN ASSESSMENT HAS TO BE BOTH ERRONEOUS AS WELL AS PREJUDICIAL IN INTEREST OF THE REVENUE SIMULTANEOUSLY BEFORE TH IS SOUGHT TO BE REVISED AND IT IS NOT PERMISSIBLE FOR THE CIT OR THE PCIT TO EXERCISE HIS REVISION JURISDICTION IN CASE THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEW, WE PROCEED TO DEAL WITH THE RELEVANT FACTS OF THE CASE. IT HAS COME ON OFFICER HAD ISSUED SEC. 133(6) LETTER / NOTICE TO THE M/S SHCL DURING THE COURSE OF SCRUTINY WHICH STOOD ADEQUATELY REPLIED IN ASSESSEE'S FAVOUR. COUPLED WITH THIS, ALL THE RELEVANT FACTUAL DETAILS IN SUPPORT OF THE ASSESSEE'S SHA STATEMENT, (SUPRA) ALREADY IN THE CASE RECORDS. COUPLED WITH THIS, LEARNED CIT REBUT THE CLINCHING FACT THAT ALTHOUGH THE PCIT'S DETAILED DISCUSSION EXTRACTED IN THE PRECEDING PARAGRAPHS HAS SOUGHT TO ASSESSEE, PROMOTERS ENTRY OPERATORS OF THE ENTITY IN LIGHT OF MINISTRY OF FINANCE'S LETTER DATED 24.07.2015 FIGURES, THERE IS NOT EVEN AN IOTA OF MATERIAL QUOTED AGAINST THE ASSESSEE TO HAVE BEEN ENGA GED IN ALL THE FOREGOING ARTIFICIAL PRICE RIGGING. WE ARE OBSERVING IN VIEW OF ALL THESE FACTS THAT THE ASSESSING OFFICER HAD RIGHTLY ACCEPTED THE ASSESSEE'S LTCG KEEPING IN MAKING THE OVERWHELMING EVIDENCE FORMING PART OF RECORDS. THIS TRIBUNAL'S CO 15 FURTHER AS TO HOW IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THUS, O THE CIT WAS RIGHTLY SET ASIDE BY THE TRIBUNAL. IN THE CASE ON HAND THE LD. CIT FINDS FAULT WITH THE AO FOR NOT INVOKING RULE 8D WHILE MAKING DISALLOWANCE U/S 14A. THE HON'BLE DELHI HIGH COURT IN THE CASE OF MAXOP INVESTMENTS LTD. VS CIT (SUPRA) HEL THAT THE AO CANNOT PROCEED TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME WITHOUT RECORDING A FINDING THAT HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE. THIS IS A CONDITION PRECEDENT WHILE THE CLAIM OF THE ASSESSEE, WITH REGARD TO INCURRING OF EXPENDITURE OR NO EXPENDITURE IN RELATION TO EXEMPT INCOME. THE AO WILL HAVE TO INDICATE COGENT REASONS FOR THE SAME AND RULE 8D COMES INTO PLAY ONLY WHEN THE AO RECORDS A FINDING THAT HE IS NOT SATISF IED WITH THE ASSESSEE'S METHOD. IN THE CASE IN HAND THE AO HAS NOT MADE ANY SUCH RECORDING OF SATISFACTION AND HAS ACCEPTED THE DISALLOWANCE MADE U/S 14A BY THE ASSESSEE. IN SUCH CIRCUMSTANCES IT IS NOT OPEN FOR THE LD. CIT TO COME TO A CONCLUSION THAT THE AO SHOULD HAVE INVOKED RULE 8D, WITHOUT HIMSELF RECORDING THE SATISFACTION THAT THE CALCULATION GIVEN BY THE ASSESSEE IN ITS DISALLOWANCE MADE SUO MOTO U/S 14A IS NOT CORRECT. COMING TO THE OTHER EXPENSES CLAIMED, THE LD. CIT HAS SIMPLY COLLECTED INFORMAT QUERIES AND HAS NOT GIVEN ANY FINDING WHATSOEVER THAT THERE IS AN ERROR MADE BY THE AO OR THAT THE CIRCUMSTANCES WAS SUCH THAT WOULD REQUIRE AND WARRANT FURTHER INQUIRY OR INVESTIGATION. NO ERROR IN THE ASSESSMENT ORDER HAS BEEN POINTED O IT IS NOT STATED AS TO HOW PREJUDICE WAS CAUSED TO THE REVENUE. THE FINDING THAT THE AO HAD FAILED TO PROPERLY SCRUTINISE THE ABOVE ASPECTS DOES NOT GIVE POWERS TO THE LD. CIT TO REVISE THE ASSESSMENT U/S 263 OF THE ACT. MAKING ROWING ENQUIRIES IS N FINDING OF AN ERROR. ASSESSMENTS CANNOT BE SET ASIDE FOR FRESH ENQUIRIES UNLESS A SPECIFIC ERROR IS POINTED OUT AT NOT MAKING PROPER ENQUIRY CANNOT BE EQUATED WITH NO ENQUIRY. IN VIEW OF THE ABOVE WE QUASH THE ORDER PASSED U/S 263 OF THE ACT AND THE APPEAL OF THE ASSESSEE. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED' KEEPING IN MIND THE FOREGOING DETAILED DISCUSSION THAT AN ASSESSMENT HAS TO BE BOTH ERRONEOUS AS WELL AS PREJUDICIAL IN INTEREST OF THE REVENUE SIMULTANEOUSLY BEFORE TH IS SOUGHT TO BE REVISED AND IT IS NOT PERMISSIBLE FOR THE CIT OR THE PCIT TO EXERCISE HIS REVISION JURISDICTION IN CASE THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEW, WE PROCEED TO DEAL WITH THE RELEVANT FACTS OF THE CASE. IT HAS COME ON RECORD THAT THE ASSESSING OFFICER HAD ISSUED SEC. 133(6) LETTER / NOTICE TO THE M/S SHCL DURING THE COURSE OF SCRUTINY WHICH STOOD ADEQUATELY REPLIED IN ASSESSEE'S FAVOUR. COUPLED WITH THIS, ALL THE RELEVANT FACTUAL DETAILS IN SUPPORT OF THE ASSESSEE'S SHA RE PURCHASE DOCUMENT, CONTRACT NOTES, BANK STATEMENT, (SUPRA) ALREADY IN THE CASE RECORDS. COUPLED WITH THIS, LEARNED CIT REBUT THE CLINCHING FACT THAT ALTHOUGH THE PCIT'S DETAILED DISCUSSION EXTRACTED IN THE PRECEDING PARAGRAPHS HAS SOUGHT TO MAKE OUT A CASE OF ARTIFICIAL PRICE RIGGING BETWEEN THE ASSESSEE, PROMOTERS ENTRY OPERATORS OF THE ENTITY IN LIGHT OF MINISTRY OF FINANCE'S LETTER DATED 24.07.2015 FIGURES, THERE IS NOT EVEN AN IOTA OF MATERIAL QUOTED AGAINST THE ASSESSEE GED IN ALL THE FOREGOING ARTIFICIAL PRICE RIGGING. WE ARE OBSERVING IN VIEW OF ALL THESE FACTS THAT THE ASSESSING OFFICER HAD RIGHTLY ACCEPTED THE ASSESSEE'S LTCG KEEPING IN MAKING THE OVERWHELMING EVIDENCE FORMING PART OF RECORDS. THIS TRIBUNAL'S CO ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA FURTHER AS TO HOW IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THUS, O RDER OF THE CIT WAS RIGHTLY SET ASIDE BY THE TRIBUNAL. IN THE CASE ON HAND THE LD. CIT FINDS FAULT WITH THE AO FOR NOT INVOKING RULE 8D WHILE MAKING DISALLOWANCE U/S 14A. THE HON'BLE DELHI HIGH COURT IN THE CASE OF MAXOP INVESTMENTS LTD. VS CIT (SUPRA) HEL D THAT THE AO CANNOT PROCEED TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME WITHOUT RECORDING A FINDING THAT HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE. THIS IS A CONDITION PRECEDENT WHILE THE CLAIM OF THE ASSESSEE, WITH REGARD TO INCURRING OF EXPENDITURE OR NO EXPENDITURE IN RELATION TO EXEMPT INCOME. THE AO WILL HAVE TO INDICATE COGENT REASONS FOR THE SAME AND RULE 8D COMES INTO PLAY ONLY WHEN THE AO RECORDS A IED WITH THE ASSESSEE'S METHOD. IN THE CASE IN HAND THE AO HAS NOT MADE ANY SUCH RECORDING OF SATISFACTION AND HAS ACCEPTED THE DISALLOWANCE MADE U/S 14A BY THE ASSESSEE. IN SUCH CIRCUMSTANCES IT IS NOT OPEN FOR AO SHOULD HAVE INVOKED RULE 8D, WITHOUT HIMSELF RECORDING THE SATISFACTION THAT THE CALCULATION GIVEN BY THE ASSESSEE IN ITS DISALLOWANCE MADE SUO MOTO U/S 14A IS NOT CORRECT. COMING TO THE OTHER EXPENSES CLAIMED, THE LD. CIT HAS SIMPLY COLLECTED INFORMAT ION AFTER RAISING QUERIES AND HAS NOT GIVEN ANY FINDING WHATSOEVER THAT THERE IS AN ERROR MADE BY THE AO OR THAT THE CIRCUMSTANCES WAS SUCH THAT WOULD REQUIRE AND WARRANT FURTHER INQUIRY OR INVESTIGATION. NO ERROR IN THE ASSESSMENT ORDER HAS BEEN POINTED O UT AND IT IS NOT STATED AS TO HOW PREJUDICE WAS CAUSED TO THE REVENUE. THE FINDING THAT THE AO HAD FAILED TO PROPERLY SCRUTINISE THE ABOVE ASPECTS DOES NOT GIVE POWERS TO THE LD. CIT TO REVISE THE ASSESSMENT U/S 263 OF THE ACT. MAKING ROWING ENQUIRIES IS N OT A FINDING OF AN ERROR. ASSESSMENTS CANNOT BE SET ASIDE FOR FRESH ENQUIRIES UNLESS A SPECIFIC ERROR IS POINTED OUT AT NOT MAKING PROPER ENQUIRY CANNOT BE EQUATED WITH NO ENQUIRY. IN VIEW OF THE ABOVE WE QUASH THE ORDER PASSED U/S 263 OF THE ACT AND KEEPING IN MIND THE FOREGOING DETAILED DISCUSSION THAT AN ASSESSMENT HAS TO BE BOTH ERRONEOUS AS WELL AS PREJUDICIAL IN INTEREST OF THE REVENUE SIMULTANEOUSLY BEFORE TH E SAME IS SOUGHT TO BE REVISED AND IT IS NOT PERMISSIBLE FOR THE CIT OR THE PCIT TO EXERCISE HIS REVISION JURISDICTION IN CASE THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEW, WE RECORD THAT THE ASSESSING OFFICER HAD ISSUED SEC. 133(6) LETTER / NOTICE TO THE M/S SHCL DURING THE COURSE OF SCRUTINY WHICH STOOD ADEQUATELY REPLIED IN ASSESSEE'S FAVOUR. COUPLED WITH THIS, ALL THE RELEVANT RE PURCHASE DOCUMENT, CONTRACT NOTES, BANK STATEMENT, (SUPRA) ALREADY IN THE CASE RECORDS. COUPLED WITH THIS, LEARNED CIT -DR FAILS TO REBUT THE CLINCHING FACT THAT ALTHOUGH THE PCIT'S DETAILED DISCUSSION EXTRACTED IN THE MAKE OUT A CASE OF ARTIFICIAL PRICE RIGGING BETWEEN THE ASSESSEE, PROMOTERS ENTRY OPERATORS OF THE ENTITY IN LIGHT OF MINISTRY OF FINANCE'S LETTER DATED 24.07.2015 FIGURES, THERE IS NOT EVEN AN IOTA OF MATERIAL QUOTED AGAINST THE ASSESSEE GED IN ALL THE FOREGOING ARTIFICIAL PRICE RIGGING. WE ARE OBSERVING IN VIEW OF ALL THESE FACTS THAT THE ASSESSING OFFICER HAD RIGHTLY ACCEPTED THE ASSESSEE'S LTCG KEEPING IN MAKING THE OVERWHELMING EVIDENCE FORMING PART OF RECORDS. THIS TRIBUNAL'S CO - ORDIN ATE BENCH DECISION (SUPRA) AS WELL AS HON'BLE JURISDICTIONAL HIGH COURT'S DECISIONS VS. RATAN ITA NO .105/2016, M/S CLASSIC GROWERS LTD VS. CIT ITA 129/ LAKSHMARGARH ESTATE & TRADING CO. LTD SHREYASHI GANGULY ITA 196/ 34738/CAL IN 22/2009 29.04.2009 HA ISSUE IS COVERED BY ALL THE FOREGOING DECISIONS OF HON'BLE JURISDICTIONAL HIGH COURT, WE OBSERVE THAT THE ASSESSING OFFICER HAD RIGHTLY TREATED THE ASSESSEE'S FOREGOING LTCG DERIVED FROM SALE OF SHARES TO REVISION JURISDICTION MERELY ON SUSPICIOUS CIRCUMSTANCES BY INVOKING IN SEC. 263 EXPLANATION (SUPRA) WITH EFFECT FROM 01.06.2015 IS NOT SUSTAINING. WE THEREFORE REVERSE THE PCIT'S ORDER UNDER CHALLENGE AND RESTORE THE IMPUGNED ASSESSMENT FRAMED BY THE ASSESSING OFFICER ON 29.07.2016. IT IS MADE CLEAR THAT WE HAVE DEALT WITH AN INSTANCE OF ASSESSING OFFICER HIMSELF HAVING ACCEPTED ASSESSEE'S LTCG AFTER EXAMINING ALL THE RELEVANT FACTS OF THE CA SE. WE THEREFORE DO NOT DEEM IT APPROPRIATE TO RESTORE THE VERY ISSUE BACK TO HIM FOR YET ANOTHER ROUND OF ASSESSMENT. THE ASSESSE'S SOLE SUBSTANTIVE GRIEVANCE AS WELL AS THIS 'LEAD' APPEAL ITA NO.01/KOL/2019 IS ACCEPTED THEREFORE. 9. SAME ORDER TO FOLLOW 15/KOL/2019 IN CASE OF SEVEN OTHER ASSESSEES SINCE IT HAS COME ON RECORD THAT THEY HAD ALSO FILED ALL THE RELEVANT EVIDENCE IN SUPPORT OF THEIR RESPECTIVE LTCG DURING THE COURSE OF ASSESSMENT / WHICH STO OD ACCEPTED BY THE ASSESSING OFFICER. 10. ALL THESE EIGHT ASSESSEES' AS MANY APPEALS ARE ALLOWED IN ABOVE TERMS. A COPY OF COMMON ORDER BE PLACED IN THE RESPECTIVE CASE FILES. 11. SIMILAR VIEW WAS TAKEN BY THE KOLKATA A BENCH OF THE TRIBUNAL IN THE CAS DEVI MODI VS. ITO (SUPRA). PROPOSITIONS OF LAW LAID DOWN IN THE ABOVE CASE HAVE TO NECESSARILY QUASH THE ORDER PASSED U/S 263 OF THE ACT. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE SD/- [ ABY T. VARKEY ] JUDICIAL MEMBER DATED: 30.04.2021 {SC SPS} 16 ATE BENCH DECISION (SUPRA) AS WELL AS HON'BLE JURISDICTIONAL HIGH COURT'S DECISIONS .105/2016, M/S CLASSIC GROWERS LTD VS. CIT ITA 129/ LAKSHMARGARH ESTATE & TRADING CO. LTD . (2013) 40 TAXMAN 439 (CAL), CIT VS. SMT. SHREYASHI GANGULY ITA 196/ 2012, CIT VS. BHAGWATI PRASAD AGARWAL 34738/CAL IN 22/2009 29.04.2009 HA VE ACCEPTED GENUINENESS OF SIMILAR LTCG. SINCE THE ISSUE IS COVERED BY ALL THE FOREGOING DECISIONS OF HON'BLE JURISDICTIONAL HIGH COURT, WE OBSERVE THAT THE ASSESSING OFFICER HAD RIGHTLY TREATED THE ASSESSEE'S FOREGOING LTCG DERIVED FROM SALE OF SHARES TO BE GENUINE. THAT BEING THE CASE, WE HOLD THAT PCIT'S EXERCISE OF REVISION JURISDICTION MERELY ON SUSPICIOUS CIRCUMSTANCES BY INVOKING IN SEC. 263 EXPLANATION (SUPRA) WITH EFFECT FROM 01.06.2015 IS NOT SUSTAINING. WE THEREFORE REVERSE THE CHALLENGE AND RESTORE THE IMPUGNED ASSESSMENT FRAMED BY THE ASSESSING OFFICER ON 29.07.2016. IT IS MADE CLEAR THAT WE HAVE DEALT WITH AN INSTANCE OF ASSESSING OFFICER HIMSELF HAVING ACCEPTED ASSESSEE'S LTCG AFTER EXAMINING ALL THE RELEVANT SE. WE THEREFORE DO NOT DEEM IT APPROPRIATE TO RESTORE THE VERY ISSUE BACK TO HIM FOR YET ANOTHER ROUND OF ASSESSMENT. THE ASSESSE'S SOLE SUBSTANTIVE GRIEVANCE AS WELL AS THIS 'LEAD' APPEAL ITA NO.01/KOL/2019 IS ACCEPTED THEREFORE. 9. SAME ORDER TO FOLLOW IN ALL REMAINING CASES ITA NO.02- 05/KOL/2019 AND 13 15/KOL/2019 IN CASE OF SEVEN OTHER ASSESSEES SINCE IT HAS COME ON RECORD THAT THEY HAD ALSO FILED ALL THE RELEVANT EVIDENCE IN SUPPORT OF THEIR RESPECTIVE LTCG DURING THE COURSE OF OD ACCEPTED BY THE ASSESSING OFFICER. 10. ALL THESE EIGHT ASSESSEES' AS MANY APPEALS ARE ALLOWED IN ABOVE TERMS. A COPY OF COMMON ORDER BE PLACED IN THE RESPECTIVE CASE FILES. SIMILAR VIEW WAS TAKEN BY THE KOLKATA A BENCH OF THE TRIBUNAL IN THE CAS DEVI MODI VS. ITO (SUPRA). CONSISTENT WITH THE VIEW TAKEN THEREIN AND APPLYING THE PROPOSITIONS OF LAW LAID DOWN IN THE ABOVE CASE - LAW TO THE FACTS OF THE CASE ON HAND, WE HAVE TO NECESSARILY QUASH THE ORDER PASSED U/S 263 OF THE ACT. RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE 30 TH DAY OF APRIL, 2021. [ J. SUDHAKAR REDDY ACCOUNTANT MEMBER ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA ATE BENCH DECISION (SUPRA) AS WELL AS HON'BLE JURISDICTIONAL HIGH COURT'S DECISIONS CIT .105/2016, M/S CLASSIC GROWERS LTD VS. CIT ITA 129/ 2012, CIT VS. . (2013) 40 TAXMAN 439 (CAL), CIT VS. SMT. 2012, CIT VS. BHAGWATI PRASAD AGARWAL (2009/ TMI VE ACCEPTED GENUINENESS OF SIMILAR LTCG. SINCE THE ISSUE IS COVERED BY ALL THE FOREGOING DECISIONS OF HON'BLE JURISDICTIONAL HIGH COURT, WE OBSERVE THAT THE ASSESSING OFFICER HAD RIGHTLY TREATED THE ASSESSEE'S FOREGOING LTCG DERIVED BE GENUINE. THAT BEING THE CASE, WE HOLD THAT PCIT'S EXERCISE OF REVISION JURISDICTION MERELY ON SUSPICIOUS CIRCUMSTANCES BY INVOKING IN SEC. 263 EXPLANATION (SUPRA) WITH EFFECT FROM 01.06.2015 IS NOT SUSTAINING. WE THEREFORE REVERSE THE CHALLENGE AND RESTORE THE IMPUGNED ASSESSMENT FRAMED BY THE ASSESSING OFFICER ON 29.07.2016. IT IS MADE CLEAR THAT WE HAVE DEALT WITH AN INSTANCE OF ASSESSING OFFICER HIMSELF HAVING ACCEPTED ASSESSEE'S LTCG AFTER EXAMINING ALL THE RELEVANT SE. WE THEREFORE DO NOT DEEM IT APPROPRIATE TO RESTORE THE VERY ISSUE BACK TO HIM FOR YET ANOTHER ROUND OF ASSESSMENT. THE ASSESSE'S SOLE SUBSTANTIVE GRIEVANCE AS WELL AS 05/KOL/2019 AND 13 - 15/KOL/2019 IN CASE OF SEVEN OTHER ASSESSEES SINCE IT HAS COME ON RECORD THAT THEY HAD ALSO FILED ALL THE RELEVANT EVIDENCE IN SUPPORT OF THEIR RESPECTIVE LTCG DURING THE COURSE OF 10. ALL THESE EIGHT ASSESSEES' AS MANY APPEALS ARE ALLOWED IN ABOVE TERMS. A COPY OF SIMILAR VIEW WAS TAKEN BY THE KOLKATA A BENCH OF THE TRIBUNAL IN THE CAS E OF USHA CONSISTENT WITH THE VIEW TAKEN THEREIN AND APPLYING THE LAW TO THE FACTS OF THE CASE ON HAND, WE SD/- J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER COPY OF THE ORDER FORWARDED TO: 1. ANKIT GUPTA 49B, BLOCK-C NEW ALIPORE KOLKATA 700 053 2. PR. COMMISSIONER OF INCOME TAX 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 17 PR. COMMISSIONER OF INCOME TAX -10, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES ITA NO. 233/KOL/2019 ASSESSMENT YEAR: 2014-15 ANKIT GUPTA TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES