Ellora Inratech Pvt. Ltd., New Delhi V. Pr.CIT- 3, New Delhi

ITA 258/DEL/2019

AI Insights

The case revolves around the revisional order passed by the Pr. CIT under Section 263 of the Income Tax Act, 1961, which sought to set aside the original assessment order passed under Section 143(3) for the Assessment Year 2013-14. The Pr. CIT's revisional order was based on the premise that the original assessment was erroneous and prejudicial to the interest of the revenue, particularly concerning unsecured loans received by the assessee. The assessee contested the revisional order, arguing that it was passed without proper inquiry and without providing a fair opportunity to contest the allegations. The tribunal, after examining the submissions and the procedural lapses, concluded that the revisional order was not sustainable in law due to the lack of adequate opportunity provided to the assessee and the absence of independent inquiry by the Pr. CIT.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121530 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-07-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 13-01-2019
• Other Referred Cases: Collector of Land Acquisition vs. M/s. Katiji & Ors., Tata Chemicals Limited vs. DCIT, Maneka Gandhi vs. Union of India, Kamlesh Jain & Sons HUF vs. ITO, CIT vs. Goetze (India) Ltd., ITO vs. DGHousing Projects Ltd, CIT vs. Sunbeam Auto Ltd, CIT vs. Reeta Lakshmi & Ors., Rohini Builders, Nemi Chand Kothari, ITO vs. Diza Holdings (P) Ltd, CIT vs. Jain Brothers, CIT vs. Surendra Kumar Jain, CIT vs. Virendra Kumar Jain
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audi alteram partem
• Section: 32; 131; 68; 132; 143(3); 142(1); 201; 43; 73; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.258/DEL/2019 Assessment Year 2013-14 Ellora Infratech Pvt. Ltd., D-22/5, Okhla Industrial Area Ph-I, New Delhi-110020 Vs. Principal Commissioner of Income Tax-03, New Delhi TAN/PAN: AACCE6491J (Appellant) (Respondent) Appellant by: Mrs. Prem Lata Bansal, Sr.Adv. Shri Shivang Bansal, Adv. Respondent by: Shri T. James Singson, CIT-DR Date of hearing: 31 07 2023 Date of pronouncement: 12 10 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he c a pt i o ne d a p p e al h a s be en fi l e d a t th e i n s t a n c e o f t he a ss es se e a g a i ns t t h e r e v i si o na l o r d e r o f t h e P r i nc ip a l Co m m i s s i o n e r o f In c o me T ax -0 3, N e w D el h i ( ‘P r . C I T ’ in s ho rt ) d a te d 2 8. 03 . 2 01 8 pa s se d u nd er S e c t i o n 2 63 o f t he I nc o m e T a x A c t , 1 9 63 ( t he A c t ) w he re by t he a ss e s s m e nt o r de r pa ss e d by t he A s s es si ng O f fi c e r ( A O ) un d e r S e c t i on 14 3( 3 ) o f t h e A ct da te d 2 1. 0 6 . 2 0 1 6 c on c er n i n g A Y 20 1 3- 14 w a s s ou g h t t o b e s e t a sid e fo r r e fr a m i ng t he a s se ss me nt a fr e s h i n e x e r ci se o f s up e r v i s o ry ju ri sd i c t i o n. 2. T he a ss es see h a s r a i s e d mu l t i p l e g ro un ds a n d h as e ss e nt i al l y c ha ll e n g e d t h e a s su m p t io n o f j u ri s di c ti on by t he P r. C IT u n d e r S ec t i on 2 6 3 o f t he A ct on t h e g ro un d t h at t he a s sess m e n t or d e r u n d e r re v i s i o n i s ne i th er er r o n e o us n o r pr e j ud i c i a l t o t he i n te r es t o f t he I.T.A. No.258/Del/2019 2 re v e n u e. A s a c or o l l a r y , th e a ss e s se e h as so ug h t t o i m p u g n t h e re v i s i o n a l or d e r p a sse d b y t h e P r. CI T un d e r Se c t i o n 26 3 o f t h e A ct . Th e G r ou n d s ra i s ed by t he a ss e s se e t o c ha l l e n ge t he r e v i s i on a l o r de r a re r e pr o d u c e d h er e u n de r : “ 1 . Th a t t h e L d. P r . C I T ha s e r r e d i n p as s i ng t he or de r u / s . 2 63 of th e A c t o n t he g r o un d t h a t t he or d e r p a s s e d b y t he A s s e s s i n g O f f i c e r u/ s 1 4 3 ( 3 ) of t h e A c t w a s f o u n d t o be e r r one ou s a n d pr e j u d ic i a l t o t h e i nt e r e s t o f R e v e nu e . 2. Th a t t h e L d . P r . C I T ha s e r r e d i n i nv o k i ng t he pr ov i s i o n s of s e c t io n 26 3 o f t he A c t on t he g r o un d t h at t h e As s e ss i n g O f f i c e r h a d fa i l e d t o m a k e s u f f i c i e n t i nq u i r ie s w hi l e p as s i ng th e r e g ul a r as s e s s m e n t o r de r . 3. Th at t he Ld . P r . C I T h a s e r r e d i n h o l d i n g t ha t th e l o an o f R s . 4 c r or e r e c e i v e d by t h e as s e s s e e f r o m M / s Tr a ns n a t i o nal G r ow t h L t d. an d o f R s . 2 c r o r e f r o m M/ s R K G F i nv e s t Lt d . w a s a n ac c o m m o da t i on e n t r y a n d t he A s s e s s i n g O f f i c e r h a d no t m a d e a ny pr o p e r i nq ui r y a n d h ad n o t ta k e n c o gn i z a nc e o f s e arc h m a t e r i al c ir c ul a t e d by In v e s t i ga t i o n W i n g i n t he c as e o f J a in B r o s . I n f ac t , no m a te r i al i n r e s pe c t of t h e s e lo a ns c o u l d ha v e bee n fo u nd d u r i n g s e ar c h i n t h e c a s e o f J ai n B r os a nd t he r e f o r e , ap p re he n s i o n o f P r . C I T in i n v o k i n g t he pr ov i s i o ns o f s e c t i o n 26 3 of t he A c t i s b a d i n la w . 4 T h a t t he L d. P r . C I T h as no t a p p l ie d h i s m i n d w h ile i n i t i at i n g pr o c e e di n g u / s 2 6 3 o f t h e A c t a s t h e s e a r c h w as c ond uc t e d i n t he c as e of J a i n B r os o n 1 9 . 0 4 . 20 10 w h e r e as t he l o a n s in i s s u e w e r e r ai s e d b y t he a s s e s s e e i n t h e F Y 2 01 2 - 1 3 . 5. Th a t t h e L d . P r . C I T ha s e r r e d i n i nv o k i ng t he pr ov i s i o n s of s e c t io n 26 3 of t h e A c t on t h e gr ou n d t h at n o p r o p e r i nq u i r y w a s m a de b y t h e A s s e s s i n g O f f i c e r d u r i n g t he a s s e s s m e n t p r o c e e d i n g w h e r e a s t h e e x t e n s i v e i n qu i r y h a d be e n m a de by t h e A s s e s s i n g O f f i c e r d u r i n g t h e or i gi n al a s s e s s m e n t p r o c e e di n g. 6. T h a t t he L d . P r . C I T h a s n ot c o ns id e r e d t ha t i nad e qu at e / in s u f f i c ie n t i n q ui r y d oe s n ot a m o u n t t o l ac k of i nqu i r y s o a s t o at t r a c t t h e pr ov i s i o n s o f s e c t io n 2 6 3 o f t h e i n c om e T ax A c t i n v i e w of e v e n n e w l y in s e r t e d p r o v i s i on s of E x p l an a t i o n 2 t o s e c t i o n 2 6 3 of t h e A c t. 7. T ha t t he L d . P r . C I T hi m s e l f h a d n o t e x a m i n e d a s t o w h e t he r l o a n of R s . 8 c r o r e r a is e d by t he a s s e s s e e w e r e a c c om m od ati o n e n t r y s o as t o m ak e t h e o r d e r pa s s e d by t h e A s s e s s i n g O ff i c er e r r o n e ou s w i t h i n t h e a m b i t o f s e c t i on 26 3 o f t he A c t ; h e nc e th e d i r e c t i on s gi v e n b y t he P r . C I T t o f r a m e t h e f r e s h a s s e s s m e n t i s c o nt r ar y t o la w . 8. T h a t t h e L d . P r . C I T h as e r r e d i n i nv o k i ng t he pow e r s u / s 2 63 of I.T.A. No.258/Del/2019 3 th e A c t on t h e b a s i s o f s e a r c h c o n d uc t e d i n t he c ase of J ai n B r o s de s p i t e t h e f a c t t h a t n o m a t e r i al c o u l d h a v e be e n fo u nd du r i n g t he s e ar c h i n r e s p e c t of l o a n o f R s . 8 c r o r e r e c e i v e d b y t h e as s e s s e e . E v e n o th e r w i s e , i t w a s he l d by t h e v a r i o us C o u r ts th a t th e m a t e r i al fo u nd d ur in g s e a r c h c a n no t be ad m i t t e d i n e v i de n c e qu a t hi r d pa r t y . 9. Th a t t h e o r d e r p a s s e d b y L d. P r . C I T u / s 2 6 3 of th e A c t i s b ad in la w a s no s uf f i c i e nt op po r t u n i t y h a s b e e n a f fo r d e d t o t he as s e s s e e to de f e n d hi s c a s e p ar t ic u l a r l y w he n t h e a s s e s s e e ha d r e s e r v e d i t s r i gh t t o f i l e r e pl y on m e r i t s a n d ha d c o nc l u de d t h e p r o c e e d i n g m e r e l y w i t h i n 0 7 d a y s . H e n c e p r i n c i p l e s of n a t u r al j u s t i c e h av e be e n v i ol a t e d i n t hi s c a s e . 10 . Th at t h e L d. P r . C I T ha s p as s e d t h e o r d e r u / s 26 3 o f t he A c t on s ur m i s e s a n d c o nj e c t u r e s a nd t he r e f o r e , i s l i a bl e to be s e t a s i d e . ” 3. Br iefl y st at ed, the case of the asses see was assessed under Secti on 143( 3) of the Act vi de ord er dat ed 21.01.2016 r elevant to Assess me nt Ye ar 2013- 14. The assessee had fi l ed t he r et ur n at loss of Rs.3,44, 964/- w hi ch was assessed at a l oss of Rs.2,63,933/- . Subse quent t o t he assess ment , t he Pr. CI T receive d a pr opos al fr o m t he ne w i ncu mbe nt AO [ I T OWar d ( 2) New Delhi] vide i t s communi cati on dat ed 20. 03. 2018 seeki ng invocati on of super visor y jur is di ct i on under S ecti on 263 of t he Act . Thereaf ter, in exer ci se of pow ers conf err ed under Secti on 263 of t he Act , t he Pr . CIT i ssue d S how Ca use Not i ce (SCN) t o the Assessee on t he next dat e i. e. dat ed 2 1.0 3.2 018 under Secti on 263 of the Act al legi ng t hat t he i mpugned assess ment or der i s erroneous i n so far as i t is prej udi ci al to the i nt erest of the Revenue for the reasons me nt i one d t he S CN. A s per the conte nts of t he S CN, the Pr. CI T sought co mpli a nce of t he SCN on 26 t h March, 2018 at 3. 30 a. m. The hear ing was thus all owed to be avail ed b y a sol it ar y noti ce in a gap of 1 eff ecti ve wor ki ng da y f ro m ser vi ce. As per t he SCN, t he Pr. CIT ma de al l egati ons to assai l t he assess me nt or der. The Pr. CIT all ege d t hat t he AO I.T.A. No.258/Del/2019 4 has fai l ed t o carr y out necessar y ver i fi cati on towar ds unsecur ed loans aggre gat i ng t o Rs. 8 cror e recei ved fr o m cer tain par ti es. The SC N issued in t his regard is repr oduced her eunder : “O F F I C E O F T H E P R I N C I P A L C O M M I S S I O N E R O F I N C O M E T A X , D E L H I - 0 3 R O O M N O . 3 9 4 A , C . R . B U I L D I N G , I P E S T A T E , N E W D E L H I ( E m a i l – d e l h i . c i t 3 @ i n c o m e t a x . g o v . i n) T e l – 2 3 3 7 8 7 5 0 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - F . N o . P r . C I T - 3 / R e v i s i o n / D L F / 2 0 1 7 - 1 8 D a t e d : 2 1 . 0 3 .2 0 1 8 T o T h e P r i n c i p a l O f f i c e r , M / s E l l o r a I n f r a t e c h P r i v a t e L i m i t e d , D - 2 2 / 5 , O k h l a I n d u s t r i a l A r e a , P h a s e - I , N e w D e l h i - 1 1 0 0 2 0 . S u b : S h o w C a u s e N o t i c e w / s 2 6 3 o f t h e I n c o m e T a x A ct , 1 9 6 1 , A Y . 2 0 1 3 - 1 4 - r e g a r d i n g . R e f : A s s e s s m e n t O r d e r u / s 1 4 3 ( 3 ) o f t h e I T A c t , 1 9 61 d a t e d 2 1 . 0 1 . 2 0 1 6 f o r A Y . 2 0 1 3 - 1 4 * * * * * * * * * * * * * K i n d l y r e f e r t o t h e s u b j e c t m e n t i o n e d a b o v e . 2 . T h e c a s e o f M / s . E l l o r a I n f r a t e c h P u t . L t d . f o r t h e A . Y . 2 0 1 3 - 1 4 h a s b e e n s e l e c t e d f o r c o m p l e t e s c r u t i n y u n d e r C A S S o n t h e f ol l o w i n g r e a s o n s : ( i ) L a r g e i n c r e a s e o f U n s e c u r e d L o a n s . T h e c a s e w a s c o m p l e t e d u / s . 1 4 3 ( 3 ) o f t h e I T . A c t , 1 9 6 1 d a t e d 2 1 . 0 1 . 2 0 1 6 a t a r e t u r n l o s s o f R s . 2 , 6 3 , 9 3 3 / - w i t h o u t d r a w i n g a n y a dv e r s e i n f e r e n c e . D u r i n g t h e y e a r , t h e c o m p a n y h a d r e c e i v e d u n s e c u r ed l o a n o f R s . 8 c r o r e f r o m t h e f o l l o w i n g c o m p a n i e s : S . N o . S . N o . N a m e o f t h e c o m p a n y A m o u n t 1 M / s B a i l l e y F o o d s P v t . L t d R s . 4 7 , 0 0 , 0 0 0 / - 2 M / s L e s s u r e B u i l d c o n P v t . L t d : R s . 7 5 , 0 0 , 0 0 0 /- 3 M / s S a n d c e p C r e d i t P v t . L t d . R s . 2 3 , 0 0 , 0 0 0 /- 4 M / s T r a n s N a t i o n a l G r o w t h F u n d L t d . R s . 4 , 0 0 , 0 0 , 0 00 / - 5 M / s R K G F i n v e s t P v t . L t d . R s . 2 , 0 0 , 0 0 , 0 0 0 /- 6 M / s W h i t e H o u s e B u i l d t e c h P v t . L t d . R s . 5 5 , 0 0 , 0 0 0 / T o t a l R s . 8 , 0 0 , 0 0 , 0 0 0 / - D u r i n g t h e a s s e s s m e n t p r o c e e d i n g s , t h e a s s e s s e e c om p a n y v i d e l e t t e r d a t e d 1 6 . 1 0 . 2 0 1 5 f i l e d l o a n c o n f i r m a t i o n o f t h e f o l l o w i n g i n v e s t o r s : - S . N o . S . N o . N a m e o f t h e c o m p a n y A m o u n t 1 M / s B a i l l e y F o o d s P v t . L t d R s . 4 7 , 0 0 , 0 0 0 / - 2 M / s L e s s u r e B u i l d c o n P v t . L t d : R s . 7 5 , 0 0 , 0 0 0 / - I.T.A. No.258/Del/2019 5 3 M / s S a n d e e p C r e d i t P v t . L t d . R s . 2 3 , 0 0 , 0 0 0 / - 4 M / s W h i t e H o u s e B u i l d t e c h P v t . L t d . R s . 5 5 , 0 0 , 0 0 0 /- 5 . M / s . v i n s a n Cr e d i t & S e c u r i t i e s P v t . L t d . R s . 2 0 , 0 0 , 0 0 0 /- I n t h e c o n f i r m a t i o n , c o m p a n i e s m e n t i o n e d S . N o . 1 to 4 w e r e o p e r a t i n g f r o m d i f f e r e n t a d d r e s s e s . H o w e v e r , c o n f i r m a t i o n l e t t e r ha v e b e e n g e n e r a t e d o r t h e s a m e d a t e i . e . 0 9 . 0 9 . 2 0 1 5 . L a n g u a g e o f t h e c o n f i r m a t i o n i s a l s o w o r d t o w o r d s a m e a l t h o u g h n o a u t h o r i z e d s i g n a t o r y w a s c o m m o n . T h e s e f a c t s s i g n i f i e s t h a t i t w a s o n l y a c o v e r u p e x e r c i s e b y t h e a s s e s s e e c o m p a n y . N o t i c e s u / s 1 3 3 ( 6 ) o f t h e I T A c t , 1 9 6 1 w e r e i s s u e d o n 1 8 . 1 0 . 2 0 1 5 t h r o u g h s p e e d p o s t i n t h e n a m e o f M / s B a i l l e y F o o d s P v t . L t d . , M /s L e s s u r e B u i l d c o n P v t . L t d . , M / s . S a n d e e p C r e d i t s P v t . L t d . & M / s . W h i t e H o u s e Bu i l d t e c h P v t . L t d . t o f u r n i s h d e t a i l s o f t r a n s a c t i o n h e l d w i t h t h e a s s e s s e e c o m p an y a l o n g w i t h s u p p o r t i n g d o c u m e n t s i n o r d e r t o j u s t i f y i d e n t i t y c r e d i t w o r t h in e s s a n d g e n u i n e n e s s o f t h e t r a n s a c t i o n s . T h e i n f o r m a t i o n w a s r e q u i r e d t o b e f ur n i s h e d b y 3 0 . 1 0 . 2 0 1 5 . I n t h e f o l l o w i n g c a s e s n o t i c e s r e t u r n e d u n s e r v e d w i t h p o s ta l r e m a r k ‘ l e f t ' : S . N o . S . N o . N a m e o f t h e c o m p a n y A m o u n t 1 M / s B a i l l e y F o o d s P v t . L t d R s . 4 7 , 0 0 , 0 0 0 / - 2 M / s L e s s u r e B u i l d c o n P v t . L t d : R s . 7 5 , 0 0 , 0 0 0 /- 4 M / s W h i t e H o u s e B u i l d t e c h P v t . L t d . R s . 5 5 , 0 0 , 0 0 0 /- F u r t h e r , I n c a s e o f M / s S a n d e e p C r e d i t s P v t . L t d , no i n f o r m a t i o n w a s f u r n i s h e d i n c o m p l i a n c e t o n o t i c e i s s u e d u / s 1 3 3 ( 6 ) o f t h e I T A ct , 1 9 6 1 . C o n f i r m a t i o n w a s f i l e d o n 2 8 . 1 0 . 2 0 1 5 b y M / s V i n s a n C r e d i t s & S e c u r i t i e s P vt . L t d v i d e l e t t e r d a t e d 2 1 . 1 0 . 2 0 1 5 e v e n t h o u g h n o n o t i c e u / s . 1 3 3 ( 6 ) o f t h e I . T . A c t , 1 9 6 1 w a s i s s u e d t o t h e c o m p a n y b y t h e t h e n A O . T h e s e f a c t s f u r t h e r s t r e n g t h e n t h e f a c t t h a t l o a n r e c e i v e d f r o m t h e s e c o m p a n i e s w a s m e r e l y a n a c c o m m od a t i o n e n t r y . I n v i e w o f t h e a b o v e f a c t s , n o t i c e u / s . 1 3 3 ( 6 ) o f th e I . T . A c t , 1 9 6 1 w a s i s s u e d a g a i n o n 1 0 . 1 2 . 2 0 1 5 i n t h e n a m e o f M / s R K G F i n v e s t P v t . L t d . , M / S a n d e e p C r e d i t s P v t . L t d . , M / s B a i l l e y F o o d s P v t . L t d . , M / s W h i t e H o u s e B u i l d t e c h P v t . L t d . & M / s L e s s u r e B u i l d c o n P v t . L t d . M / s V i n s a n C re d i t s & S e c u r i t i e s P v t . L t d w a s a l s o a s k e d t o c l a r i f y t r a n s a c t i o n s h e l d w i t h t he a s s e s e e c o m p a n y u / s . 1 3 3 ( 6 ) o f t h e I . T . A c t , 1 9 6 1 . M / s S a n d e e p C r e d i t s P v t . L t d . , M / s B a i l l e y F o o d s P vt . L t d . , M / s W h i t e H o u s e B u i l d t e c h P v t . L t d . & M / s L e s s u r e B u i l d c o n P v t . L t d m a d e c o m p l i a n c e s t h r o u g h p o s t . A l l t h e p o s t w e r e m a d e o n t h e s a m e d a t e i . e . 1 5 . 1 2 . 2 0 1 5 a t t h e s a m e t i m e i . e . 1 4 : 4 3 P M a n d f r o m t h e s a m e p o s t o f f i c e i . e . K r i s h n a N a g a r . F u r t h e r , a l l c o n f i r m a t i o n h a v e s a m e p a t t e r n s u c h a s d a t e l a n g u a ge e t c . E x c e p t f r o m t h e a b o v e v e r i f i c a t i o n m a d e u / s 1 3 3 ( 6 ) o f t h e I . T . A c t , t h e t h e n A . O . m a d e n o i n d e p e n d e n t i n q u i r y . T h e A . O . h a s n o t i s s u ed s u m m o n s f o r p e r s o n a l d e p o s i t i o n t o t h e p r i n c i p a l o f f i c e r o f t h e s e i n v e s to r c o m p a n i e s f o r v e r i f i c a t i o n o f l o a n . I n s p e c t o r o f t h e w a r d w a s a l s o n o t d e p u t e d m ak e f i e l d i n q u i r i e s t o a s c e r t a i n e x i s t e n c e l o a n i n v e s t o r . D u r i n g t h e y e a r , t h e a s s e s s e e c o m p a n y h a s r e c e i v e d l o a n o f R s . 6 c r o r e f r o m M / s R K G F i n v e s t P v t . L t d . & M / s . T r a n s N a t i o n a l G r o w t h F u n d L t d . i n w h i c h S h . S u r e n d e r J a i n & S h . V i r e n d e r J a i n , r e n o w n e d a c c o m m od a t i o n e n t r y o p e r a t o r s w e r e w o r k i n g a s d i r e c t o r o f t h e c o m p a n y . I t m a y b e m e n t i o n e d h e r e t h a t s e a r c h / s u r v e y o p e r a t i o n u s 1 3 2 / 1 3 3 A o f t h e I . T . A c t, 1 9 6 1 w a s c o n d u c t e d b y I n v e s t i g a t i o n W i n g o f I n c o m e T a x D e p a r t m e n t D e l h i on 1 9 . 0 4 . 2 0 1 0 a t t h e r e s i d e n t i a l a n d b u s i n e s s p r e m i s e s o f S h r i S u r e n d e r K u m a r J a i n a n d h i s b r o t h e r S h r i V i r e n d e r J a i n . V a r i o u s i n c r i m i n a t i n g d o c u m e n t s w e r e s e i z e d a n d i m p o u n d e d . D u r i n g p o s t s e a r c h / s u r v e y o p e r a t i o n o f t h e s e i z e d /i m p o u n d e d d o c u m e n t s a n d s p o t i n q u i r i e s c o n d u c t e d , i t w a s r e v e a l e d t h a t S h r i S u r en d e r K u m a r J a i n a n d S h r i V i r e n d e r K u m a r J a i n w e r e e n g a g e d i n t h e b u s i n e s s o f p r o v i d i n g a c c o m m o d a t i o n I.T.A. No.258/Del/2019 6 e n t r i e s - b y m a k i n g p a y m e n t s i n f o r m o f R T G S / C h e q u e s /P O D D i n l i e u o f c a s h t o a l a r g e n u m b e r o f b e n e f i c i a r y c o m p a n i e s t h r o u g h m o r e t h a n 1 0 0 p a p e r a n d d u m m y c o m p a n i e s / f i r m s / p r o p r i e t o r s h i p c o n c e r n s f l o a t e d a nd c o n t r o l l e d b y t h e m t h r o u g h v a r i o u s p e r s o n s b y a p p o i n t i n g t h e m a s d i r e c t o r s / pa r t n e r s / p r o p r i e t o r s . P o s t s e a r c h , & s e i z u r e o p e r a t i o n c a r r i e d b y t h e D e pa r t m e n t , b o t h J a i n b r o t h e r s c o n t i n u e d t h e i r o l d a c t i v i t y o f a c c o m m o d a t i o n e n t r y p r o v i d e r i n s h a p e o f s h a r e c a p i t a l / p r e m i u m , l o a n e t c . a n d a l s o f o r m e d n e w c o r po r a t e e n t i t y s o t h a t n o b o d y k e e p t r a c k o n t h e m . B e s i d e s , i n t h e a s s e s s m e n t o r d e r f o r A Y . 2 0 0 5 - 0 6 i n t h e c a s e o f S h . V i r e n d r a K u m a r J a i n , t h e A O c o n f r o n t e d v a r i o u s m a t e r i a l s i m po u n d e d d u r i n g t h e s e a r c h & s e i z u r e o p e r a t i o n , a n d h e l d t h a t J a i n b r o t h e r s a r e a c c o m m o d a t i o n e n t r y p r o v i d e r . D u r i n g t h e a s s e s s m e n t p r o c e e d i n g s , b o t h o f t h e m c h os e n o t , t o e x p l a i n t h e s o u r c e o f c a s h d e p o s i t s , t h e r e f o r e , e n t i r e c a s h r e c e i v e d wa s h e l d a s u n a c c o u n t e d i n c o m e a n d f u r t h e r c o m m i s s i o n o f 1 . 8 % w a s a l s o c h a r g e d t o t a x a s i n c o m e e a r n e d f r o m c o m m i s s i o n f o r p r o v i d i n g a c c o m m o d a t i o n e n t r i e s . I n s e c o n d a p p e a l , t h e J a i n B r o t h e r s a d m i t t e d b e f o re t h e H o n ' b l e I T A T t h a t t h e y a r e e n g a g e d i n t h e b u s i n e s s o f p r o v i d i n g a c c o m m o d a ti o n e n t r i e s a n d c h a r g i n g c o m m i s s i o n a t c e r t a i n p e r c e n t a g e f r o m t h e b e n e f i c i ar i e s . A c c o r d i n g l y , t h e H o n ' b l e I T A ' T i n t h e i r c a s e i n I T A N o s . 6 9 9 1 t o 6 9 9 7 / D e l / 2 01 4 & I T A N o s . 6 9 9 8 t o 7 0 0 4 / D e l / 2 0 1 4 v i d e o r d e r d a t e d 0 3 . 0 2 . 2 0 1 6 d e c i d e d to s e t a s i d e t h e o r d e r t o t h e A . O . a s k i n g h i m t o a s s e s s J a i n b r o t h e r s i n l i g h t o f c e r t a i n j u d i c i a l p r o n o u n c e m e n t s a l l o f w h i c h p e r t a i n t o a s s e s s i n g a cc o m m o d a t i o n e n t r y o p e r a t o r s o n t h e b a s i s o f t h e i r c o m m i s s i o n i n c o m e . I n t h e n u ts h e l l , I T A T h a s n o t i n t e r f e r e d w i t h t h e f i n d i n g o f t h e d e p a r t m e n t t h a t J a i n b r o t h er s a r e a c c o m m o d a t i o n e n t r y p r o v i d e r s . I n v i e w o f C o m p a n i e s A c t , 2 0 1 3 , S e r i o u s F r a u d I n v e st i g a t i o n O f f i c e ( S F I O ) h a s b e e n e s t a b l i s h e d t h r o u g h t h e G o v e r n m e n t o f I n d i a v id e N o t i f i c a t i o n N o . S . 0 . 2 0 0 5 ( E ) d a t e d 2 1 . 0 7 . 2 0 1 5 . I t i s a m u l t i - d i s c i p li n a r y o r g a n i z a t i o n u n d e r t h e M i n i s t r y o f C o r p o r a t e A f f a i r s , c o n s i s t i n g o f e x p e r ts i n t h e f i e l d o f a c c o u n t a n c y , f o r e n s i c a u d i t i n g , b a n k i n g , l a w , i n f o r m a t i o n t e c h n ol o g y , i n v e s t i g a t i o n , c o m p a n y l a w , c a p i t a l m a r k e t a n d t a x a t i o n e t c . f o r d e t e c t i n g a n d p r o s e c u t i n g o r r e c o m m e n d i n g f o r p r o s e c u t i o n w h i t e c o l l a r c r i m e s / fr a u d s . O n t h e r e c o m m e n d a t i o n o f t h e G o v e r n m e n t o f I n d i a , S F I O h a s a l s o i n v e s t i g a t e d t h e c o m p a n i e s c o n t r o l l e d a n d m a n a g e d b y S h r i S u r e n d r a Ku m a r J a i n a n d S h r i V i r e n d e r K u m a r J a i n . O n t h e b a s i s o f S F I O r e p o r t , i n M a r c h , 2 0 1 6 , E n f o r ce m e n t D i r e c t o r a t e a r r e s t e d S u r e n d r a K u m a r J a i n a n d V i r e n d r a J a i n i n c o n n e c t i o n w i t h i t s p r o b e i n a R s . 8 , 0 0 0 / - c r o r e m o n e y l a u n d e r i n g a n d , b l a c k m o n e y r a c k e t . T h e E n f o r c e m e n t D i r e c t o r a t e f i l e d a c r i m i n a l c o m p l a i n t u n d e r t h e P re v e n t i o n o f M o n e y L a u n d e r i n g A c t ( P M L A ) b a s e d o n a c h a r g e s h e e t f i l e d b y t h e S e ri o u s F r a u d I n v e s t i g a t i o n O f f i c e a g a i n s t c e r t a i n i n d i v i d u a l s a n d f i r m s " f o r pr o v i d i n g a c c o m m o d a t i o n e n t r i e s b y a c c e p t i n g f u n d s , f r o m t h e i r b e n e f i c i a r i e s t h r o u gh m e d i a t o r s a n d c o n v e r t i n g t h e s a m e i n t o s h a r e p r e m i u m t r a n s a c t i o n s i n t h e b e n e f i ci a r y c o m p a n y " I t s u s p e c t s t h e e n t i r e r a c k e t t o b e w o r t h a b o u t R s . 8 , 0 0 0 / - c r o r e o f s l u s h f u n d s a n d h a s d e t e c t e d a b o u t h a l f o f i t a s p e r i t s l a t e s t p r o b e . T h e E n f o rc e m e n t D i r e c t o r a t e a l s o c o n f i r m e d t h a t t h e m o d u s o p e r a n d i o f J a i n b r o t h e r s w a s t o l a u n d e r t h e u n a c c o u n t e d m o n e y t h r o u g h t h e p r o c e s s o f p l a c e m e n t o f f u n d s , l a y e r i n g o f t r a n s a c t i o n s a n d t h e f i n a l i n t e g r a t i o n o f l a u n d e r i ng m o n e y i n t o t h e b a n k i n g c h a r n e l c a m o u f l a g e d a s l e g i t i m a t e s h a r e p r e m i u m t r an s a c t i o n s . F u n d s w e r e b r o u g h t i n b y t h e m e d i a t o r s o n b e h a l f o f t h e b e n e f ic i a r i e s t h r o u g h t h e m e d i a t o r s . J a i n B r o t h e r s w e r e p r o v i d i n g a c c o m m o d a t i o n e n t r i e s b y a c c e p t i n g f u n d s f r o m t h e i r b e n e f i c i a r i e s t h r o u g h m e d i a t o r s a n d c o n v e r t i ng t h e s a m e i n t o s h a r e p r e m i u m t r a n s a c t i o n s i n t h e b e n e f i c i a r y c o m p a n y . I n t h i s p ro c e s s J a i n B r o t h e r s e a r n e d m o n e y a s a c e r t a i n p e r c e n t a g e o f t h e u n a c c o u n t e d m on e y c o n v e r t e d i n t o s h a r e c a p i t a l & s h a r e p r e m i u m . T h e E n f o r c e m e n t D i r e c t o r a t e a l s o a r r e s t e d o n e o f t h e m e d i a t o r s o f t h i s g r o u p S h r i R a j e s h A g g a r w a l w h o f ac i l i t a t e a c c o m m o d a t i o n e n t r y I.T.A. No.258/Del/2019 7 f o r t h e e n d u s e r s . I n v i e w o f t h e a b o v e f a c t , l o a n o f R s . 6 c r o r e r e c e iv e d f r o m M / s R K G F i n v e s t L t d . a n d M / s T r a n s N a t i o n a l G r o w t h L t d . i s m e r e l y a n a c co m m o d a t i o n e n t r y a n d t h e A . O . h a s n o t m a d e a n y p r o p e r e n q u i r y a n d a l s o n o t ta k e c o g n i z a n c e o f t h e s e a r c h m a t e r i a l c i r c u l a t e d b y t h e I n v e s t i g a t i o n W i n g o f t he D e p a r t m e n t i n c a s e o f J a i n B r o t h e r s . F u r t h e r , l o a n o f R s . 2 c r o r e r e c e i v e d f r o m o t h e r c o m p a n i e s a l s o p a p e r c o m p a n i e s e n g a g e d i n t h e b u s i n e s s o f p r o v i d i n g a c c om m o d a t i o n e n t r i e s a s d i s c u s s e d a b o v e . Y o u a r e , t h e r e f o r e ; d i r e c t e d t o s ho w c a u s e a s t o w h y a n o r d e r I n t e r m s o f p r o v i s i o n s o f s e c t i o n 2 6 3 m a y n o t b e p a s s ed f o r A Y 2 0 1 3 - 1 4 s e t t i n g a s i d e t h e o r d e r p a s s e d u / s 1 4 3 ( 3 ) d a t e d 2 1 . 1 . 2 0 1 6 i n y o ur c a s e . Y o u a r e a f f o r d e d a i l o p p o r t u n i t y o f b e i n g h e a r d t o c o n t e s t t h e c h a r g e m a d e i n t h i s n o t i c e b y a p p e a r i n g p e r s o n a l l y o r t h r o u g h a n a u t h o ri s e d r e p r e s e n t a t i v e o n t h e 2 6 t h M a r c h , 2 0 1 8 a t 3 . 3 0 A M i n R o o m N o . 3 9 4 A , C . R . B u i l d i n g , I . P . E s t a t e , N e w D e l h i - 1 1 0 0 0 2 o r M e a w r i t t e n , s u b m i s s i o n b y t h e a p po i n t e d d a t e , f a i l i n g w h i c h i t w i l l b e p r e s u m e d t h a t y o u h a v e n o s u b m i s s i o n t o m a ke i n t h i s r e g a r d a n d t h e m a t t e r w i l l b e d e c i d e d w i t h o u t f u r t h e r n o t i c e . P r . C o m m i s s i o n e r o f I n c o m e T a x - 0 3 N e w D e l h i ” [ U N D E R L I N E I S O U R S ] 4. A pr oposal under Sect i on 263 of t he Act f or war ded by t he substi t uted AO whi ch l ed t he P r. CIT t o invoke revisi onal jurisdi cti on is also reproduced here unde r for eas y refer ence: “ O f f i c e O f T h e I n c o m e T a x O f f i c e r , W a r d - 8 ( 2 ) R o o m N o . 4 1 3 A , C . R B u i l d i n g , I P E s t a t e , N e w D e l h i ( E m a i l – d e l h i . i t o 8 . 2 @g m a i l . c o m ) T e l – 2 3 7 0 5 5 7 4 F . N o . I T O / W a r d - 8 ( 2 ) / 2 0 1 7 - 1 8 D a t e d : 2 0 . 0 3 . 2 01 8 T o T h e P r i n c i p a l O f f i c e r D e l h i - 3 , N e w D e l h i . S u b : P r o p o s a l u / s 2 6 3 o f t h e I T A c t , 1 9 6 1 i n t h e c as e o f M / s . E l l o r a I n f r a t e c h P v t . L t d . ( A A C C E 6 4 9 1 J ) f o r t h e A . Y . 2 0 1 3 - 1 4 – r e g . K i n d l y r e f e r t o t h e s u b j e c t m e n t i o n e d a b o v e . 2 . T h e c a s e o f M / s . E l l o r a I n f r a t e c h P u t . L t d . f o r t h e A . Y . 2 0 1 3 - 1 4 h a s b e e n s e l e c t e d f o r c o m p l e t e s c r u t i n y u n d e r C A S S o n t h e f o l l o w i n g re a s o n s : ( i ) L a r g e i n c r e a s e o f U n s e c u r e d L o a n s . T h e c a s e w a s c o m p l e t e d u / s . 1 4 3 ( 3 ) o f t h e I T . A c t , 1 9 6 1 d a t e d 2 1 . 0 1 . 2 0 1 6 a t a r e t u r n l o s s o f R s . 2 , 6 3 , 9 3 3 / - w i t h o u t d r a w i n g a n y a dv e r s e i n f e r e n c e . D u r i n g t h e y e a r , t h e c o m p a n y h a d r e c e i v e d u n s e c u r ed l o a n o f R s . 8 c r o r e f r o m t h e f o l l o w i n g c o m p a n i e s : S . N o . S . N o . N a m e o f t h e c o m p a n y A m o u n t 1 M / s B a i l l e y F o o d s P v t . L t d R s . 4 7 , 0 0 , 0 0 0 / - I.T.A. No.258/Del/2019 8 2 M / s L e s s u r e B u i l d c o n P v t . L t d : R s . 7 5 , 0 0 , 0 0 0 / - 3 M / s S a n d c e p C r e d i t P v t . L t d . R s . 2 3 , 0 0 , 0 0 0 /- 4 M / s T r a n s N a t i o n a l G r o w t h F u n d L t d . R s . 4 , 0 0 , 0 0 , 0 00 / - 5 M / s R K G F i n v e s t P v t . L t d . R s . 2 , 0 0 , 0 0 , 0 0 0 / - 6 M / s W h i t e H o u s e B u i l d t e c h P v t . L t d . R s . 5 5 , 0 0 , 0 0 0 / T o t a l R s . 8 , 0 0 , 0 0 , 0 0 0 / - D u r i n g t h e a s s e s s m e n t p r o c e e d i n g s , t h e a s s e s s e e c om p a n y v i d e l e t t e r d a t e d 1 6 . 1 0 . 2 0 1 5 f i l e d l o a n c o n f i r m a t i o n o f t h e f o l l o w i n g i n v e s t o r s : - S . N o . S . N o . N a m e o f t h e c o m p a n y A m o u n t 1 M / s B a i l l e y F o o d s P v t . L t d R s . 4 7 , 0 0 , 0 0 0 / - 2 M / s L e s s u r e B u i l d c o n P v t . L t d : R s . 7 5 , 0 0 , 0 0 0 / - 3 M / s S a n d e e p C r e d i t P v t . L t d . R s . 2 3 , 0 0 , 0 0 0 / - 4 M / s W h i t e H o u s e B u i l d t e c h P v t . L t d . R s . 5 5 , 0 0 , 0 0 0 /- 5 . M / s . V i n s a n C r e d i t & S e c u r i t i e s P v t . L t d . R s . 2 0 ,0 0 , 0 0 0 / - I n t h e c o n f i r m a t i o n , c o m p a n i e s m e n t i o n e d S . N o . 1 to 4 w e r e o p e r a t i n g f r o m d i f f e r e n t a d d r e s s e s . H o w e v e r , c o n f i r m a t i o n l e t t e r h a v e b e e n ge n e r a t e d o r t h e s a m e d a t e i . e . 0 9 . 0 9 . 2 0 1 5 . L a n g u a g e o f t h e c o n f i r m a t i o n i s a l s o w or d t o w o r d s a m e a l t h o u g h n o a u t h o r i z e d s i g n a t o r y w a s c o m m o n . T h e s e f a c t s s i g n i fi e s t h a t i t w a s o n l y a c o v e r u p e x e r c i s e b y t h e a s s e s s e e c o m p a n y . N o t i c e s u / s 1 3 3 ( 6 ) o f t h e I T A c t , 1 9 6 1 w e r e i s s u e d o n 1 8 . 1 0 . 2 0 1 5 t h r o u g h s p e e d p o s t i n t h e n a m e o f M / s B a i l l e y F o o d s P v t . L t d . , M / s L e ss u r e B u i l d c o n P v t . L t d . , M / s . S a n d e e p C r e d i t s P v t . L t d . & M / s . W h i t e H o u s e B u i l d te c h P v t . L t d . t o f u r n i s h d e t a i l s o f t r a n s a c t i o n h e l d w i t h t h e a s s e s s e e c o m p a n y a l o n g w i t h s u p p o r t i n g d o c u m e n t s i n o r d e r t o j u s t i f y i d e n t i t y c r e d i t w o r t h i n e s s a n d g e n ui n e n e s s o f t h e t r a n s a c t i o n s . T h e i n f o r m a t i o n w a s r e q u i r e d t o b e f u r n i s h e d b y 3 0 . 1 0 . 20 1 5 . I n t h e f o l l o w i n g c a s e s n o t i c e s r e t u r n e d u n s e r v e d w i t h p o s t a l r e m a r k ‘ l e f t ': S . N o . S . N o . N a m e o f t h e c o m p a n y A m o u n t 1 M / s B a i l l e y F o o d s P v t . L t d R s . 4 7, 0 0 , 0 0 0 /- 2 M / s L e s s u r e B u i l d c o n P v t . L t d : R s . 7 5 , 0 0 , 0 0 0 / - 4 M / s W h i t e H o u s e B u i l d t e c h P v t . L t d . R s . 5 5 , 0 0 , 0 0 0 /- F u r t h e r , I n c a s e o f M / s S a n d e e p C r e d i t s P v t . L t d , no i n f o r m a t i o n w a s f u r n i s h e d i n c o m p l i a n c e t o n o t i c e i s s u e d u / s 1 3 3 ( 6 ) o f t h e I T A ct , 1 9 6 1 . C o n f i r m a t i o n w a s f i l e d o n 2 8 . 1 0 . 2 0 1 5 b y M / s V i n s a n C r e d i t s & S e c u r i t e P v t . L td v i d e l e t t e r d a t e d 2 1 . 1 0 . 2 0 1 5 e v e n t h o u g h n o n o t i c e u / s . 1 3 3 ( 6 ) o f t h e I . T . A c t , 19 6 1 w a s i s s u e d t o t h e c o m p a n y b y t h e t h e n A O . T h e s e f a c t s f u r t h e r s t r e n g t h e n t h e f a c t t h a t l o a n r e c e i v e d f r o m t h e s e c o m p a n i e s w a s m e r e l y a n a c c o m m o d a t i o n e n t r y . I n v i e w o f t h e a b o v e f a c t s , n o t i c e u / s . 1 3 3 ( 6 ) o f th e I . T . A c t , 1 9 6 1 w a s i s s u e d a g a i n o n 1 0 . 1 2 . 2 0 1 5 i n t h e n a m e o f M / s R K G F i n v e s t P v t . Lt d . , M / S a n d e e p C r e d i t s P v t . L t d . , M / s B a i l l e y F o o d s P v t . L t d . , M / s W h i t e H o u s e B u i l d t e c h P v t . L t d . & M / s L e s s u r e B u i l d c o n P v t . L t d . M / s V i n s a n C r e d i t s & S e c u r i t i e s P v t . L t d w a s a l s o a s k e d t o c l a r i f y t r a n s a c t i o n s h e l d w i t h t h e a s s e s e e c o m p a n y u / s . 1 3 3( 6 ) o f t h e I . T . A c t , 1 9 6 1 . M / s S a n d e e p C r e d i t s P v t . L t d . , M / s B a i l l e y F o o d s P vt . L t d . , M / s W h i t e H o u s e B u i l d t e c h P v t . L t d . & M / s L e s s u r e B u i l d c o n P v t . L t d m a d e c o m p l i a n c e s t h r o u g h p o s t . A l l t h e p o s t w e r e m a d e o n t h e s a m e d a t e i . e . 1 5 . 1 2 .2 0 1 5 a t t h e s a m e t i m e i . e . 1 4 : 4 3 P M a n d f r o m t h e s a m e p o s t o f f i c e i . e . K r i s h n a N a g a r. F u r t h e r , a l l c o n f i r m a t i o n h a v e s a m e p a t t e r n s u c h a s d a t e l a n g u a g e e t c . E x c e p t f r o m t h e a b o v e v e r i f i c a t i o n m a d e u / s 1 3 3 ( 6 ) o f t h e I . T . A c t , t h e t h e n A . O . m a d e n o i n d e p e n d e n t i n q u i r y . T h e A . O . h a s n o t i s s u ed s u m m o n s f o r p e r s o n a l d e p o s i t i o n t o t h e p r i n c i p a l o f f i c e r o f t h e s e i n v e s to r c o m p a n i e s f o r v e r i f i c a t i o n o f l o a n . I n s p e c t o r o f t h e w a r d w a s a l s o n o t d e p u t e d m ak e f i e l d i n q u i r i e s t o a s c e r t a i n e x i s t e n c e l o a n i n v e s t o r . I.T.A. No.258/Del/2019 9 D u r i n g t h e y e a r , t h e a s s e s s e e c o m p a n y h a s r e c e i v e d l o a n o f R s . 6 c r o r e f r o m M / s R K G F i n v e s t P v t . L t d . & M / s . T r a n s N a t i o n a l G r o w t h F u n d L t d . i n w h i c h S h . S u r e n d e r J a i n & S h . V i r e n d e r J a i n , r e n o w n e d a c c o m m o d a t i o n e nt r y o p e r a t o r s w e r e w o r k i n g a s d i r e c t o r o f t h e c o m p a n y . I t m a y b e m e n t i o n e d h e r e th a t s e a r c h / s u r v e y o p e r a t i o n u s 1 3 2 / 1 3 3 A o f t h e I . T . A c t , 1 9 6 1 w a s c o n d u c t e d b y I n ve s t i g a t i o n W i n g o f I n c o m e T a x D e p a r t m e n t D e l h i o n 1 9 . 0 4 . 2 0 1 0 a t t h e r e s i d e n t i a l an d b u s i n e s s p r e m i s e s o f S h r i S u r e n d e r K u m a r J a i n a n d h i s b r o t h e r S h r i V i r e n d e r Ja i n . V a r i o u s i n c r i m i n a t i n g d o c u m e n t s w e r e s e i z e d a n d i m p o u n d e d . D u r i n g p o s t s ea r c h / s u r v e y o p e r a t i o n o f t h e s e i z e d / i m p o u n d e d d o c u m e n t s a n d s p o t i n q u i r i e s c o n du c t e d , i t w a s r e v e a l e d t h a t S h r i S u r e n d e r K u m a r J a i n a n d S h r i V i r e n d e r K u m a r J a i n w er e e n g a g e d i n t h e b u s i n e s s o f p r o v i d i n g a c c o m m o d a t i o n e n t r i e s - b y m a k i n g p a y m e n t s i n f o r m o f R T G S / C h e q u e s / P O D D i n l i e u o f c a s h t o a l a r g e n u m b e r o f b e n e f i c i a r y c o m p a n i e s t h r o u g h m o r e t h a n 1 0 0 p a p e r a n d d u m m y c o m p a n i e s / f i r m s / p r o p r i e t o r s h i p c o nc e r n s f l o a t e d a n d c o n t r o l l e d b y t h e m t h r o u g h v a r i o u s p e r s o n s b y a p p o i n t i n g t h e m a s d i r e c t o r s / p a r t n e r s / p r o p r i e t o r s . P o s t s e a r c h , & s e i z u r e o p e r a t i o n c a r r i e d b y t h e D e pa r t m e n t , b o t h J a i n b r o t h e r s c o n t i n u e d t h e i r o l d a c t i v i t y o f a c c o m m o d a t i o n e n t r y p r o v i d e r i n s h a p e o f s h a r e c a p i t a l / p r e m i u m , l o a n e t c . a n d a l s o f o r m e d n e w c o r po r a t e e n t i t y s o t h a t n o b o d y k e e p t r a c k o n t h e m . B e s i d e s , i n t h e a s s e s s m e n t o r d e r f o r A Y . 2 0 0 5 - 0 6 i n t h e c a s e o f S h . V i r e n d r a K u m a r J a i n , t h e A O c o n f r o n t e d v a r i o u s m a t e r i a l s i m p o u n d e d d u r i n g t h e s e a r c h & s e i z u r e o p e r a t i o n , a n d h e l d t h a t J a i n b r o t h e r s a r e a c c o m m o da t i o n e n t r y p r o v i d e r . D u r i n g t h e a s s e s s m e n t p r o c e e d i n g s , b o t h o f t h e m c h o s e n o t , t o e x p l a i n t h e s o u r c e o f c a s h d e p o s i t s , t h e r e f o r e , e n t i r e c a s h r e c e i v e d w a s h e l d a s u n a c c o u n t e d i n c o m e a n d f u r t h e r c o m m i s s i o n o f 1 . 8 % w a s a l s o c h a r g e d t o t a x a s i n c o me e a r n e d f r o m c o m m i s s i o n f o r p r o v i d i n g a c c o m m o d a t i o n e n t r i e s . I n s e c o n d a p p e a l , t h e J a i n B r o t h e r s a d m i t t e d b e f o re t h e H o n ' b l e I T A T t h a t t h e y a r e e n g a g e d i n t h e b u s i n e s s o f p r o v i d i n g a c c o m m o d a t i o n e n t r i e s a n d c h a r g i n g c o m m i s s i o n a t c e r t a i n p e r c e n t a g e f r o m t h e b e n e f i c i ar i e s . A c c o r d i n g l y , t h e H o n ' b l e I T A ' T i n t h e i r c a s e i n I T A N o s . 6 9 9 1 t o 6 9 9 7 / D e l / 2 01 4 & I T A N o s . 6 9 9 8 t o 7 0 0 4 / D e l / 2 0 1 4 v i d e o r d e r d a t e d 0 3 . 0 2 . 2 0 1 6 d e c i d e d to s e t a s i d e t h e o r d e r t o t h e A . O . a s k i n g h i m t o a s s e s s J a i n b r o t h e r s i n l i g h t o f c e r ta i n j u d i c i a l p r o n o u n c e m e n t s a l l o f w h i c h p e r t a i n t o a s s e s s i n g a c c o m m o d a t i o n e n t r y o p e ra t o r s o n t h e b a s i s o f t h e i r c o m m i s s i o n i n c o m e . I n t h e n u t s h e l l , I T A T h a s n o t i nt e r f e r e d w i t h t h e f i n d i n g o f t h e d e p a r t m e n t t h a t J a i n b r o t h e r s a r e a c c o m m o d a t i o n e n tr y p r o v i d e r s . I n v i e w o f C o m p a n i e s A c t , 2 0 1 3 , S e r i o u s F r a u d I n v e st i g a t i o n O f f i c e ( S F I O ) h a s b e e n e s t a b l i s h e d t h r o u g h t h e G o v e r n m e n t o f I n d i a v i d e N ot i f i c a t i o n N o . S . 0 . 2 0 0 5 ( E ) d a t e d 2 1 . 0 7 . 2 0 1 5 . I t i s a m u l t i - d i s c i p l i n a r y o r g a n i z a t i o n u n d e r t h e M i n i s t r y o f C o r p o r a t e A f f a i r s , c o n s i s t i n g o f e x p e r t s i n t h e f i e l d o f a c c ou n t a n c y , f o r e n s i c a u d i t i n g , b a n k i n g , l a w , i n f o r m a t i o n t e c h n o l o g y , i n v e s t i g a t i o n , c o m p a n y l a w , c a p i t a l m a r k e t a n d t a x a t i o n e t c . f o r d e t e c t i n g a n d p r o s e c u t i n g o r r e c o m m e n d i n g f o r p r o s e c u t i o n w h i t e c o l l a r c r i m e s / f r a u d s . O n t h e r e c o m m e n d a t i o n o f t h e G o v e r nm e n t o f I n d i a , S F I O h a s a l s o i n v e s t i g a t e d t h e c o m p a n i e s c o n t r o l l e d a n d m a n a g e d by S h r i S u r e n d r a K u m a r J a i n a n d S h r i V i r e n d e r K u m a r J a i n . O n t h e b a s i s o f S F I O r e p o r t , i n M a r c h , 2 0 1 6 , E n f o r ce m e n t D i r e c t o r a t e a r r e s t e d S u r e n d r a K u m a r J a i n a n d V i r e n d r a J a i n i n c o n n e c t i o n w i t h i t s p r o b e i n a R s . 8 , 0 0 0 / - c r o r e m o n e y l a u n d e r i n g a n d , b l a c k m o n e y r a c k e t . T h e E n f o r c e m e n t D i r e c t o r a t e f i l e d a c r i m i n a l c o m p l a i n t u n d e r t h e P r e v e n t i o n o f M o n e y L au n d e r i n g A c t ( P M L A ) b a s e d o n a c h a r g e s h e e t f i l e d b y t h e S e r i o u s F r a u d I n v e s t i g a t io n O f f i c e a g a i n s t c e r t a i n i n d i v i d u a l s a n d f i r m s " f o r p r o v i d i n g a c c o m m o d a t i o n e n t r i e s b y a c c e p t i n g f u n d s , f r o m t h e i r b e n e f i c i a r i e s t h r o u g h m e d i a t o r s a n d c o n v e r t i ng t h e s a m e i n t o s h a r e p r e m i u m t r a n s a c t i o n s i n t h e b e n e f i c i a r y c o m p a n y " I t s u s p e c ts t h e e n t i r e r a c k e t t o b e w o r t h a b o u t R s . 8 , 0 0 0 / - c r o r e o f s l u s h f u n d s a n d h a s d e t e ct e d a b o u t h a l f o f i t a s p e r i t s l a t e s t p r o b e . T h e E n f o r c e m e n t D i r e c t o r a t e a l s o c o n fi r m e d t h a t t h e m o d u s o p e r a n d i o f J a i n b r o t h e r s w a s t o l a u n d e r t h e u n a c c o u n t e d m o n e y t h r o u g h t h e p r o c e s s o f p l a c e m e n t o f f u n d s , l a y e r i n g o f t r a n s a c t i o n s a n d t he f i n a l i n t e g r a t i o n o f l a u n d e r i n g m o n e y i n t o t h e b a n k i n g c h a r n e l c a m o u f l a g e d a s l e g i ti m a t e s h a r e p r e m i u m t r a n s a c t i o n s . F u n d s w e r e b r o u g h t i n b y t h e m e d i a t o rs o n b e h a l f o f t h e b e n e f i c i a r i e s t h r o u g h t h e m e d i a t o r s . J a i n B r o t h e r s w e r e p r o v i d i n g a c c o m m o d a t i o n e n t r i e s b y a c c e p t i n g f u n d s f r o m t h e i r b e n e f i c i a r i e s t h r o u g h m ed i a t o r s a n d c o n v e r t i n g t h e s a m e I.T.A. No.258/Del/2019 10 i n t o s h a r e p r e m i u m t r a n s a c t i o n s i n t h e b e n e f i c i a r y c o m p a n y . I n t h i s p r o c e s s J a i n B r o t h e r s e a r n e d m o n e y a s a c e r t a i n p e r c e n t a g e o f t he u n a c c o u n t e d m o n e y c o n v e r t e d i n t o s h a r e c a p i t a l &s h a r e p r e m i u m . T h e E n f o r c e m e n t D i r e c t o r a t e a l s o a r r e s t e d o n e o f t h e m e d i a t o r s o f t h i s g r o u p S h r i R a j e s h A g g a r w a l w ho f a c i l i t a t e a c c o m m o d a t i o n e n t r y f o r t h e e n d u s e r s . I n v i e w o f t h e a b o v e f a c t , l o a n o f R s . 6 c r o r e r e c e iv e d f r o m M / s R K G F i n v e s t L t d . a n d M / s T r a n s N a t i o n a l G r o w t h L t d . i s m e r e l y a n a c c o m m od a t i o n e n t r y a n d t h e A . O . h a s n o t m a d e a n y p r o p e r e n q u i r y a n d a l s o n o t t a k e c o g n iz a n c e o f t h e s e a r c h m a t e r i a l c i r c u l a t e d b y t h e I n v e s t i g a t i o n W i n g o f t h e D e p a r t me n t i n c a s e o f J a i n B r o t h e r s . F u r t h e r , l o a n o f R s . 2 c r o r e r e c e i v e d f r o m o t h e r c o mp a n i e s a l s o p a p e r c o m p a n i e s e n g a g e d i n t h e b u s i n e s s o f p r o v i d i n g a c c o m m o d a t i o n e n t r i e s a s d i s c u s s e d a b o v e . T h e r e f o r e , t h e o r d e r p a s s e d u / s . 1 4 3 ( 3 ) o f t h e I T A ct d a t e d 2 1 . 0 1 . 2 0 1 3 b y t h e t h e n A . O . i s a p p e a r s t o b e e r r o n e o u s a n d p r e j u d i c i a l t o t h e i n t e r e s t o f r e v e n u e m a y k i n d l y b e a n n u l l e d . S u b m i t t e d f o r k i n d c o n s i d e r a t i o n p l e a s e . I n c o m e T a x O f f i c e r , W a r d - 8 ( 2 ) , N e w D e l h i 5. I n r es ponse t o t he SCN, t he asses see f il ed a repl y dated 26. 03. 2018 i n the offi ce of Pr. CIT. As per t he a fore sai d r epl y dat ed 26. 03. 2018, t he assessee r ai sed t he c ont ent i on of l ac k of jurisdi cti on under s. 263 owi ng t o bar of l i mi tati on and f ur t her reserve d it s ri ght t o fi l e repl y on mer it s if needed, i n case t he obj ecti on on bar of li mi t at ion i s t reat ed as def icient and unfounded. The Pr . CIT di sposed of t he obj ecti on of t he assessee as unte nabl e and obser ved t hat the powe r has been exer ci sed wi t hin st at ut or y ti me l i mit . In tandem, t he Pr. CI T al so observ ed that the assessee has not fi led an y sub missions on meri t s. The Pr. CIT rel ied upo n t he SC N which accor di ng to Pr. C IT i s ver y el aborat i ve and cr yst al clear. It was obser ved i n the revisi onal or der t hat t he l oans of Rs. 2 cr ore recei ved f ro m R KG Fi nvest Pvt. Lt d. and Rs. 4 cr or e receive d f ro m Tra ns Nat i onal Gr owt h Fund Lt d. are me r el y an acc o mmodat ion entr y and the Assessi ng Of fi cer has f ai led t o make pr oper inquir y a nd has also not t aken cog nizance of search mat er ial ci rcul at ed b y I nvestiga ti on Wi ng of t he Depart ment i n case of Jain br others. The Pr.CI T fur ther I.T.A. No.258/Del/2019 11 obser ved t hat l oan of Rs. 2 cr ores received fro m ot her co mp ani es ar e al so not genu ine i nasmuch as t hese c o mpanies wer e paper co mpani es engage d i n t he busi ness of pr ovi di ng ac com modati on ent ri es. The Pr. C IT concl uded that ‘t he Assessi ng O ff i cer has fail ed t o mak e suf fi ci ent i nqui ry in t hi s regard’ whi l e fr a mi ng the assess ment . T he Pr. CI T t hus hel d that t he or der pa ssed under Secti on 143(3) i s errone ous and pre judicial t o t he i nt erest of t he revenue and conseque nt l y cancel led and set asi de t he a ssess ment or der wit h a di rect ion t o t he Asse ssing Of fi cer t o pass a fr esh reasoned assess ment or der based on fact s and i ssues discussed in t he r evi sional o rder . 6. At t he t i me of heari ng, t he Ld. C ounsel at t he out set poi nt ed that t he pr esent appeal i s fi l ed bel at edl y b y a bout 230 da ys. An appli cati on for con donat i on of de la y dated 14/ 09/ 2021 was adv ert ed t o i n t hi s rega rd to de mons t rat e exist ence of mi ti gati ng ci rcu mstances. I t was essent iall y poi nte d out t hat t he dela y is at tr ibutabl e t o l apse on t he part of hi s l egal a dvisors t o co mmuni cate t he or der in ti me. Coupl ed wit h thi s, so me t i me was spent t o visual ize as t o whet her to opt f or re me d y b y wa y Wri t bef ore Hon’ ble Hi gh C ourt or prefer appeal befor e IT AT. I t was poi nte d out that t he assessee has a prim a faci e case t o di sl odge t he re visi onal or der and thus no presumption of ma lafi de can be i mpute d. It w a s f u r t he r po i nt e d o ut t h a t t h e de l a y oc c ur r e d i s n o t i nt e nt i o n a l o r d e l i b e r a te a nd th e af or e s a id d e l a y o f 23 0 da ys o c c ur r e d h a s n o t c a us ed a n y s er i o u s pr e j u d i c e t o t he R e v en u e T he l ea r ne d c o u n s e l r e f e r r e d t o t he d e c i s io n r e nd e r e d by t h e H o n’ bl e S up r e m e C o ur t in t he c a se of C ol l e c t o r of L a n d A c q ui si t i on v s. M s t . Ka t ij i & O r s. 1 6 7 I T R 47 1 (S C ) t o c on t en d t h a t t h e s u b st a n t i a l j u st ic e I.T.A. No.258/Del/2019 12 de se r ve s t o b e p r e f e r r e d o v e r t h e te c h ni c a l g li t c h c om m i t t e d b y t h e a s s e s se e i n b e l at e d f i li n g f o r p l a u si bl e r e a so n s. Havi ng r egar d to t he conte nts of t he appl icat i on and kee pi ng i n mi nd negl igi bl e prejudice t hat may have occurr ed t o t he re venue b y such del a y, we a dopt j usti ce ori ent ed appr oach t o weigh t he plea of exi stence of ‘suff i ci ent cause’ f or dela y. Hence, in exerci se of powers conf err ed under S. 253( 5) of t he Act, the dela y i n present ing appeal befor e ITA T st ands condoned and the appeal is admi tt ed for adj udi cati on. 7. The l d. counse l for t he assessee made exte nsi ve sub mi ssi ons and assai led t he r evi si onal a ct ion o f the Pr .CI T asser ti vel y. The ld. Counsel made wide r angi ng submi ssi ons on fact s and l aw and cit ed judi cial pr ecede nts t o suppor t it s case. We shall deal wi t h these ar gu me nt s at appr op riat e pl ace i n t he succee din g para gr aphs. The l d. counsel esse nt iall y sub mi tt ed; (i ) that t he r evi sional or der passed b y t he Pr. CI T suffer s f ro m the vice of ar bit rari ness and non-a ppl icat i on of mind i n as much as search i n Jai n Gr oup to ok place much pr i or t o raisi ng of l oans in questi on and t hus not hi ng i ncr i mi nat i ng q ua t he assessee coul d be pl ausi bl e (i i) that the revi sional act i on lacks jurisdi ct i on for anot her re ason t hat t he r evi sional acti on was taken at t he behest of t he new i ncumbe nt A O; the proposal ma de under Sect i on 263 b y t he AO dat ed 20. 03. 2018, t he Pr . CI T hurr iedl y issue d t he SCN on 21. 03. 2018 b y a dopt i ng the conte nts of t he pr oposal of t he AO i n verbat im wi thout incor porat i ng an y thought s of hi s own w hat soever( i i i) t hat the Pr. CIT e xer ci sed j uri sdi ct ion solel y on t he basis of t he opi ni on of the A O and the re i s no r eference an ywhere as to whet her the I.T.A. No.258/Del/2019 13 Pr. CIT was pri v y t o the assessmen t reco rds hi ms el f bef or e exercisi ng the jur isdi ct ion under Sec ti on 263 of t he Act ( iv) t hat the order of t he Pr. CIT appar ent l y gr ossl y s uff er s f ro m t he intri nsi c l ack of opport uni t y i n thi s regar d as can be seen f r o m the dat e of i ssue of SC N and t i me of one worki ng day ma de avai lable t o t he assessee for co mpli ance there on ( v) t hat a soli t ar y n oti ce was issued ef fect ivel y g ivi ng one cl ear wor ki ng da y t o respond (excl udi ng date of servi ce pres uma bly on 22/ 03/ 2 018, Sat ur da y & Su nda y fal l ing in bet ween and t he dat e of heari ng) . N onet heless, t he assessee swi ft l y r es ponded on i ts par t and rai se d prel i mi nar y chal lenge of bar of li mi tati on ( vi ) the Pr. CIT has vaguel y refer r ed to so me ne w mat erial di scovered post assess ment i n t he SCN wi t hout an y mi ni mu m enq uir y t her eon hi msel f nor s howing th e c ont ent s t her eof to t he Assessee at an y p oi nt of t i me despi te t he struct ured ma ndat e of s. 263 and co dif ie d safeguar d of opport uni t y. 7. 1 As f urt her sub mit ted, whi l e the Pr . CI T br ushe d asi de t he bar of li mi tati on raised o n behalf of t he assessee but how eve r di d not care t o pr ovi de a n y oppor t unit y t o meet the al l egati ons of show-ca use on meri ts. 7. 2 The Ld. Counsel contends that t he Pr. CIT has brushed asi de the assessme nt or der on fl i ms y gr ounds sol el y at t he inst ance of t he new inc u mbent i n assess ment wi t hout gi vi ng a n y oppor tuni t y to de fend the assess ment or der and t o bri ng the per specti ve of t he assessee on t he subject matt er . As fur t her qui pped, t he r evi s ional acti on of s uch wi de a mpl it ude carr yi ng adv erse c onsequ ences has been exe r ci sed casual l y at t he fa g e nd of the l i mi tati on (despit e ti me l i mi t of 2 lo ng year s avai labl e I.T.A. No.258/Del/2019 14 fro m t he end of t he fi na nci al year i n whi ch assessme nt or der under re vi ew was passed) in tot al di sregar d t o t he canons of judicial pr opri et y and th us has f astened ci vil conse quences on the assessee b y i mpi ngi ng upon t he sal utar y ri ght s of the assessee of bei ng hear d. T he Pr. CIT procee ded t o set aside t he co mplet ed assessme nt wi t hout conf ront ing f resh mat eri al gi vi ng ri se to f oundati on for all egat ions ref erred in show ca us e. 7. 3 The Ld. C ounsel next cont ende d that i t is pal pable f ro m the sequence of event s t hat t he P CI T has su mma ril y r el i ed upon the rec o mmendati on of new AO to di splace the assessme nt or der passed b y t he t hen AO i n di schar ge of quasi j udi ci al functi on under st at ute. Whi le doi ng so, t he Pr . CIT has neither bot her ed to pr ovi de an y eff ect i ve opport unit y to t he Assessee n or cared t o ma ke an y mi ni ma l enquir y h i mself even i nt o newer aspects of the case purpor te dl y ca me t o l ig ht aft er passi ng t he assess ment or der. The a d mi tt ed fact t hat t he th en AO di d make enqui r y o n the subject mat t er and accept ed t he credit ent ri es aft er obt aini ng doc u ment ati ons and sett ing i n mot i on enquir ies under S. 133( 6) of t he A ct , has been conve ni ent l y glossed over. Fr om t he recor ds, i t i s evi dent t hat the Pr . CI T merel y responded t o t he reco mmendati on of new Assessi ng Of ficer as gospe l trut h a nd acted at once on dot te d l i ne b y i ssuing s how cause t o Assessee. The contents of the SC N are i dent i cal to t he reas ons percei ved in t he pr oposal of AO wi thout an y in dulgence of his own. Nei ther an y enq ui r y w ere made b y t he Pr. CI T no r any ti me was gi ven to the Assessee. The re vi sional or der was passed on 28. 03. 2018 agai nst a compl i ance dat e of 26-03- 2018 mi d night 3. 30 am. I t i s thus self evi dent t hat t he Pr. CIT sought to t ake I.T.A. No.258/Del/2019 15 acti on at the f ag end i .e. a week bef ore t he bar of l i mi t at i on and hurr iedl y cl osed the pr ocee di ngs of suc h a dver sari al natur e a nd carr yi ng ci vi l co nseque nces based on a t oken oppor tuni t y o f one da y t o t he t ax pa yer. 7. 4 The sequence of eve nt also gi ve ri se t o i nfer ence t hat assess ment re cor ds wer e exa mi ned b y t he ne wer AO at t he beh est of t he Pr. CI T an d the Pr. CIT hi msel f was not pri v y t o such recor ds. The ver bat i m re pr oduct ion of pr oposal i nt o show- cause vouc hes for such i mpr essi on. 7. 5 Advert ing t o fact ual aspect s, t he l d. counsel vocif er ousl y poi nted out t hat to t he ow n ad mi ss ion of Pr. CIT i n t he show cause as wel l i n t he proposal of A O f or re visi on, the assessee di d fil e confi r ma t ions fr o m var i ou s l enders vi de l et t er dat ed 16. 10. 2015 t o as suage t he bonafi des of loa ns in r esponse t o not ice issued under s. 142(1) of t he Act. The AO also la unched indepe ndent enqui r y b y one of t he s tatutor y met hods and i ssued not ice under s. 133( 6) t o the l ender s t o e nqui re i nt o t he ver acit y of loa ns pr ovi ded to t he assessee. To obt ain i ndependent ver if icat ions of lo ans and col l ecti on of s upport ing docu ment s i n relati on t o cre dit ent ri es, not ices under Se ct i on 133( 6) wer e issued on 10. 12. 2015 i n t he na me of all le nde rs n ame l y, RKG Finvest Pvt . Lt d. , Sandee p Cre dit P vt. Ltd. , Bai l ley Foods Pvt. Lt d. , Whi te Hous e Bui ldt ech Pvt . Ltd. , Lessure Bui ldcon P vt. Lt d. a nd Vi nsan C r edi t & S ecuri ti es Pvt . Lt d. It can al so be seen fro m t he pr oposal of the AO addr essed t o the Pr. CIT t hat lende rs have dul y responde d to s uc h noti ces and furni shed t he desi red i nf or mat i on and confi r med t he f act u m of le ndi ng t o t he assessee. The sour ce of t he l oans w ere thus exa mi ned b y t he A O I.T.A. No.258/Del/2019 16 to f or m a cre di bl e view on pr opr ie t y of loa ns in questi on. The AO t hus acted wit h de gree of caut i on and ci rc u ms pecti on. Hence, t he al legat ion t hat adequat e i nqui r y c ont e mplated was not made on t he poi nt i n i ssue is contradi ct or y t o t he assessment recor ds i tsel f and does not hol d an y wat er . Also, the case of t he Pr. CIT is nowher e about t he ‘l ac k o f i nqui r y’ per se but i s bui lt on ‘i nade qua c y of i nqui r y’ as i s evi dent fr o m t he SC N as well as the r evi sional or der . The l d. Counsel th us sub mi t ted t hat revisi on based on i nade quac y or insuf ficienc y o f enqui r y wi t hout maki ng any en quir y hi mself t o rai se pr o babili t ies of an y mi sde me anor is contr ar y t o the plet hora of judi cial pre cedents. 7. 5 The l d. c ounsel advert ed t o the SC N and s ub mi tted t ha t the SCN i s ma rre d wi th mult i ple defect s whi ch are s quarel y opposed to pre-c ondi ti on f or ini t iati on of r evi sional proceedi ngs. The ld. Counsel c ull ed out the obser vati ons ma de i n t he SC N t o advert that the pri mar y gr oun ds for suc h acti ons such as; summons under s. 131 shoul d have bee n i ssued t o lenders for personal dep osit ion; I nspec tor of the War d shoul d have been deput ed t o ma ke fi el d i nqui r i es t o ascert ain e xi st ence of l oan i nvestor s; fi ndi ngs of sear ch on 19. 04. 2010 at t he pre mis es of Jai n br ot hers not t ake n i nt o acc ount ; obser vat ions of assessment or der f or AY 2005- 06 i n t he case o f Jai n br oth ers that t he y ar e ent r y pr ovi ders w hi ch or der was app rove d b y I TAT not t aken into account is devoi d of an y s ound basi s in as much an y fi ndi ngs in relati on t o A Y 2005- 0 6 or i n t he sea rc h i n April 2010 has no r at ional nexus wi th loans raised i n F Y 201 2- 13 under revisi on. 7. 6 A ref er ence t o SFIO report of Marc h 2016 and I.T.A. No.258/Del/2019 17 conse quence i ndul ge nce of ED t hereaft er, ca me i n t he possessi on of t he deptt . af ter the compl et i on of assessment . The conte nts of such r eport i s nei ther ment ioned i n the show ca use nor such r epor t w as made avai la bl e t o t he assessee f or nua nced understa ndi ng of obser vat i ons. 8. Per contr a, t he Revenue support ed t he re vi sional acti on i n the abse nce of adequat e or s uff ic ient i nqui ri es on the poi nt recor ded b y t he Pr . CIT. The ld. CIT- DR sub mit t ed that no seri ous prej udi ce has been cause d t o t he assessee as t he Assessee woul d be ent it l ed t o counter all al l egati ons and pl ac e al l evi dences in t he cou rse of assess ment post revisi onal or der. Besi des, t he SC N is sel f expl anat or y and the assessee oug ht t o hav e avai l ed t he oppor tuni t y provi ded t o re but the observati ons of s uch not i ce. The Ld. CI T- DR t hus s ub mi tt ed th at no interference wi th t he revi si onal act io n i s call ed for. 9. We have c aref ul ly consi der ed t he r ival sub missi ons an d pe r u s ed t he r ev is io na l o r d e r o f t h e P CIT a s w e l l a s t he S C N i ss ue d fo r a ss u m pt i o n o f j ur i s di ct i o n as w e l l as t h e c a se l a w s c i t e d. T he a ss u m pt io n o f j ur is d i c t i on u nd er s. 26 3 o f t he A c t by t he P C I T a n d re v i s i o n a l o r de r pa sse d a s a se q ue l t h e re t o s e e ki ng t o se t asi de t he c o mp l et e d a ss e s s me nt u n d e r s. 1 4 3( 3) o f t h e A ct i s in c on t ro ve rs y . 10 . S u pe r v i so ry j ur i s di c ti on v e s t e d un d er S ec t i o n 26 3 o f t h e A ct e na bl es t he c on c e r ne d P r . C IT / C I T t o re vi e w th e r e c or ds o f an y pr o c e e d i n g s a n d o r d er p a s se d t he r e i n b y t h e A O . It e m p ow e r s t h e Re vi s i o na l Co m m i s si o n e r c on c e r n e d to c a l l for a n d exa mi n e t he re c or d s o f a no t h e r p ro c e ed i n g u n de r t he A c t a n d i f h e c o ns i d e r s t h a t a ny o rd e r p a ss ed t h er ei n by t h e A O i s er r o n e o us i n so fa r a s i t i s I.T.A. No.258/Del/2019 18 pr e j u d i c i a l t o th e i nt e re st o f t h e R e v e nu e, t h e n h e m ay ( a ft er g i v i n g t he a ss e s se e a n o pp or t u n i t y o f be i n g h ea rd a n d a ft er ma ki ng o r c au si n g t o b e m a d e su c h in qu i r y a s h e de e m s n e c e s sar y ), pa ss su c h or d e r t h er e o n as t h e c i r c u m s t a n ce s o f t he c a s e j us ti fy , i n c l u di ng t he or d e r e nh an ci n g o r mo di f yi ng t h e a ss e s s m en t or c a n ce l in g t h e a ss es s m e n t a n d d ir ec t i n g a f re sh a ss es s me nt . T h us, t h e re v i s i o n a l po w e r s co n fe r re d o n th e P r. C I T/ CI T u nde r s. 2 6 3 o f the A c t a r e o f ve r y w i d e a m p l i t u d e w i t h a vi e w t o a d d re ss t h e re venu e r i sk s w hi c h a re o bj e ct i v e l y j u st i fi a b l e. 11 . I n th e b a c kd r o p o f fa c t u a l m at r ix , su b si st i n g in t h e c a s e i n ha n d , t h e su bst a n t i v e i s sue t h at e m e r g e s f or a d j u d ic a t i o n is w h e t he r t he P r . CI T u nd e r t h e u m b r e l l a o f re v i so na ry p o w er s is e nt i t l e d t o up s et th e f in al i t y o f a ss e s s me n t p r o c ee d i n gs co mp l et e d be for e t he A O o n t he gr ou n d t ha t A O c o m mi t t e d e r ro r i n pa ss i n g a ss e s s me n t or d e r w i t h ou t p r o p e r ve r i f ic a t io n o f pr o pr i e t y o f loa n s r e ce i ve d. I m pl i ci t i n t h e qu e s t i o n i s t he s c o p e o f po w er s a n d at t e nd a nt du ty o f Re vi s i o na l Co m m i ssi on e r in t h e e v e nt o f a l le ge d i nad e qu ac y o f e nq u i r y i nt o v ar io u s a sp e c ts o f a n i s su e . 12 . O n pe r u sa l o f t he S C N da t ed 2 6. 0 2 . 2 02 0 i ss u e d by t he P r . CIT pr o po si n g t o set a si d e t h e a ss e s s m en t or d e r d a t e d 20. 0 4. 2 0 1 7 p a s se d by A O u nd e r s. 1 4 3 (3 ) o f th e A c t , w e n o t i ce t h a t t h e P r. CI T i s e ss en ti a l ly di ss at i s fi e d w i t h t h e d eg r e e o f i n qu ir y ma d e i n re sp e c t o f i ss ue s ra i se d th er e i n . 13 . A s n ot e d e x t e ns i v e l y, mu l t i p ro ng at t a ck ha s b ee n fl ag g e d o n be h a l f o f t he a ss e s se e t o a s sa i l t he i m p u g ne d r e v i si o na l ord e r. We sha l l t hu s de l ve i n t o e ac h o f su c h p oi n t hi t he rt o; 14 . T he a sse ss ee h a s i nt e r al i a c ha l le n g e d t h e r e vi si on o n t h e gr o un ds o f la c k o f op por tu ni t y. I.T.A. No.258/Del/2019 19 14 . 1 P e rt i ne nt l y, t h e s up e r v i s or y j u ri sd i c t i o n c o n fer r e d u n de r s . 26 3 ha s be e n i n v o ke d b y t he P r. C I T t o se t a s i d e t he ass e s s m e nt or de r pa s se d b y t he A O u n de r s. 1 43 ( 3 ) o f t h e A c t fo r A Y 201 3 - 14 ba se d on S C N d a t e d 21 . 0 3. 20 1 8. N o ot h er o pp o rt un it y o t h er t h an S C N w a s pr o vi de d t o th e a ss e ss e e . T he a d e q u a c y o f o pp o r t u n it y t o me e t t h e S CN is o ne o f t h e fo re m o st bo n e o f c o n t e n t i o n. A s rep e a t e dl y c on t e nd e d , a s o l it a ry o pp or tu ni t y w a s gi v e n t o t he as s e s se e fo r t h e pr o po se d re v i s i o n a t a v e r y f a g e nd o f l i m i ta t i on fo r c l o s ure o f re v i s i o n a l p ro ce e di ng s. A S C N da t e d 2 1. 0 3 . 20 1 8 ( W e d ne sd ay ) w a s se r ve d fo r c o m p l i a nc e o n 2 2 . 0 3. 2 0 1 8 ( T h ur sd a y ) . T he w o rk in g da y t hu s a v a i l a bl e fo r re t r i e v i n g t h e fa c t s i s o nl y 2 3.0 3. 2 0 1 8. In t r i g u i n g l y , t he he a r i n g for r e s p o n se t o S C N w a s fi x e d o n 26 . 0 3. 2 0 1 8 a t 1 2 a m i. e . S und ay m i d ni g h t . N e ve r t he le s s, t he a ss es se e , how e ve r o n i t s p a r t , sw u n g i nt o a c t i o n s wif t l y an d re s po nd e d t o t he S C N by fi l i ng i ts obj e c ti o n t o in it i a t io ns o f pr o c e e d i n g s o n t h e poi nt o f ba r o f li m i t a t i o n. Th e P r. C IT d is p o se d t he ob j ec t i o n a g ai n s t t h e a s ses se e b u t h ow e ve r no fu r t he r op p or tu ni t y w a s p r ov i d e d t o r e s po n d on c or re c t n e s s o f a l l e g a t io ns i n t he S CN on fa c t s. 14 . 2 I t m a y b e pe r t i ne n t t o t a k e n ot e o f t h e r e l e van t o b se r v at i o n s o f t he c o-o rd in at e b e n ch i n t h e c a s e o f K a m le s h Ja i n & S o n s H U F v s. IT O [ IT A N o. 26 / RP R / 2 0 2 1 or de r d a te d 2 9/ 0 9 / 2 02 1] w he rei n t h e ov e r r i d i n g i mp o rt a nc e o f e f fe c t i v e a nd re a l o pp or t un i t y t o t he a ss es se e i n t h e co ur se o f r e vi si on al p r o c e e d i n g s w as un d er sc o re d: 14. We now also advert to the vehement opposition on behalf of the assessee on the ground of non-issuance of notice and on total lack of opportunity while concluding the proceedings under section 263 of the Act. It has been demonstrated on facts that only show cause notice issued to the assessee was for attendance on 15.03.2021 calling the assessee at earlier point of time i.e. 11.15 A.M on the same date, whereas the notice itself was issued at 1.49 PM. We are constraint to observe that such casual approach of a very senior functionary of the Department does not augur well in the eyes of the public. As stated in the bar, no such notice was served at all on the email id. as claimed. No other notice was served. Palpably, it is a case of total lack of opportunity to the assessee to defend its case. A question would arise as to whether a failure to give a reasonable opportunity to the assessee of being heard was only a I.T.A. No.258/Del/2019 20 procedural irregularity in such gross circumstances and thus curable and did not render the order passed by the PCIT ab initio void and nonest in law per se ? 15. In the case of Tata Chemicals Limited vs. DCIT, ITA No.3127/Mum/, order dated 30.06.2011, the co-ordinate bench after making reference to the decision in the judgement in Maneka Gandhi vs. Union of India AIR 1978 SC 597 and other judgments observed that the order which infringes the fundamental principle, passed in violation of audi alteram partem rule, is a nullity. When a competent Court or authority holds such an order as invalid or sets it aside, the impugned order becomes null and void. Once it is concluded that the order in question is null and void, it is not for the adjudicating authority to advise the Commissioner as to what should he do. He is always at liberty to do whatever action he can take in accordance with the law, but a life to null and void order by remitting it back to the Commissioner for giving a fresh opportunity of passing the order after giving the assessee an opportunity of hearing cannot be given. In a case where it is possible for the Commissioner to pass a fresh order at this stage in accordance with the scheme of the Act, he can very well do so but in case the time limit for passing such order has already expired, such time limit cannot be extended by directing him to pass the order after giving an opportunity of hearing to the assessee. Otherwise, this would tantamount to give premium to the person committing default. The finality of the assessment cannot be disturbed for the failure of the PCIT to obdurately adhere to the explicitly prescribed requirement of opportunity to assessee. Hence, in the absence of any opportunity to the assessee for which the fault is attributable squarely to the PCIT, is fatal and such defect being incurable, the revisionary order passed under section 263 of the Act is also required to be quashed independently on this ground also. 14 . 3 T he fa c t s i n t h e pr e se n t c a s e a l so r es o n a t e w it h t he f a c t s a va il a b l e i n K a m l e sh Ja i n’ s c a se ( s upr a ) a n d h e n c e w a r ra nt a s i mi l a r t re at m e n t . A s not e d i n th e pr e ce e d i n g p ar ag ra ph s, the P r. CI T in t he i ns t a n t c a se h a s r e so rt e d t o a n e mp ty a n d i ll us o r y f o r ma l i t y o f op p or tu ni t y o f o n e w ork i n g d ay t o de f en d t he S CN . We a re i n de e d ba ff l e d b y su ch o st en si bl y i n i q u i t o u s a p p r oa ch . Th e i mp ug ne d re v i s i o n a l or d e r p a sse d w i th ou t gi vi n g a n y de m o ns t rab le op por t u ni t y i s a n u l l i t y i n v i e w o f e x p re ss e n a c t m e nt e m bo d i e d i n s. 26 3 o f t he A ct . T h e re v i s i o na l or de r pa ss e d w i t ho u t o p p or tu ni ty d ese r v e s t o me r ge i n v o i d. T h e l a c k o f o pp o r t u n it y h as v it i a te d t he re vi si on al or d e r o n a st a nd a l o n e b a si s w i t h ou t a n y th i ng m or e. 15 . T he a s se s se e ha s a l so q ue st i o ne d t h e a ssu m p t i on o f r e v i s i on a l j ur i s d i c t io n u n d e r s . 2 63 a l le g i n g t h a t suc h a c ti on i s a t t h e b e h e s t o f t he n e w i n c u mb e n t A O . 15 . 1 A s no t e d , t he su b s t it ut e d i n c u m b e n t o f t he o f fi c e o f t h e A O mo ve d a p ro po sa l t o P r . CI T fo r e x e r c i se o f p ow e r s un de r s. 26 3 vi de I.T.A. No.258/Del/2019 21 c o mm u n i ca t i o n d a t ed 2 0/ 0 3 / 2 0 18 . T h e P r. CI T i s su e d S CN on t h e ve r y n e xt d a y i . e. 2 1 / 0 3/ 20 18. O n r e a d in g t he c o n t en t s o f t he S CN i n c on j u n c t i on w i t h a fo r e s a i d p r o p o sa l, i t i s s e e n t h at t h e l i ne o f re a so ni n g s in t h e pr o po sa l i s r e p r o d uc e d in v e rb a t i m i n t h e S CN . In t e r e s t i n gl y , t h e A O in it s pr op osa l ma de r e fe r e n ce t o ‘ t he n A O ’ t w i c e t o d i s o w n t h e a ll e ge d mi st a ke o f pr e d e c e ss or A O , w h i ch i s qu i t e u nd e r s ta nd ab l e. Wh a t i s n ot u nde rs t a nd ab le i s t he us e o f si mi l ar ex pr e ss i o n o f ‘t h e n A O’ c o pi e d i n t he S CN t oo. T h e a c t i on o f t he P r. CI T i s o v e r t l y o n do t t e d l i ne a n d a me re c op y pa st e . T he S CN e x- f a c i e r e fl e c t s g r os s l a c k o f a p pl i ca t i on o f m i nd b y t h e P r. CI T. I t c an be sa f e l y i n fe r r e d t h a t t h e p ro p o s a l w a s m ad e by t he A O a t t h e be h e s t o f P r. C I T i n de ed w h ic h w a s t hu s c o p i e d i n th e S CN w i th ou t c ha ng e o f e v e n a c o m a. A s a r es u l t , t h e ge ne r a l iz e d an d e x t r a n e o u s ob s er va t i o n s o f A O [v i z. su mm o n s u nd e r s. 13 1 o u gh t t o ha v e be e n i ss ue d i n a d d i t io n t o e n qu ir y c ar ri e d o ut u n d e r s. 13 3 ( 6 ) ; r e l i a nc e o n re p o r t o f in ve st ig at i on w i n g o f d ep t t. mu ch p r i o r to t h e F Y 20 1 2- 1 3 a nd t h u s w hol l y ir re l e v a nt fo r s ub seq ue nt l oa n s i n que st i o n; re fe r e n c e t o fi n d in gs v i s a v is A Y 20 05 - 06 ; S F IO r ep or t i n r el a t i o n t o pe ri o d pr io r t o t ra n s ac t i o na l ye a r F Y 20 12 - 1 3 e tc . ] h a s c re pt i n t he S C N . A do pt i on o f s u c h v ag ue a n d i r r e l e v a n t ob ser v a t io n s o f A O by t he P r. CIT vi ndi c a te s t h e c o n t e nt i on o f t h e A sse s se e t ha t t h e po w e r s ha ve b ee n e x e r c i s e d w i t ho ut a ny a p p l i ca t i o n o f m i nd . It i s a ls o no t k n ow n w h e t h e r t he P r . C IT w a s pr i v y t o ‘ c as e re c o r d s’ a t t he t i me o f h u r ri e d i s su a nc e o f S C N a t t he i ns t a nc e o f A O . T he c on t e nt s o f p r o po sa l a nd i n t u r n, t h at o f S C N o n a ll e ga ti o n s to w a r d s c on t e nt s o f i n v e s t i g a t i o n e t c . a r e a l s o de l i g h t fu l ly va g u e a nd no n de s c r i p t . It i s c l a s si c c a s e o f e x e r c i s i ng th e su perv is o ry p ow e r s o f dr a st i c n a t u r e at t he i n s t a n ce o f A O w i t ho ut s h ow i ng an y i nd e p e n d e n t i n d ul g e n c e . 15 . 2 T he H o n’ bl e Ca l cu tt a H i g h C ou r t i n t h e c a s e o f P r. C IT v s. I.T.A. No.258/Del/2019 22 Si n h o t i a Me t a l s a n d Mi ne ral s Pv t . L t d. (2 02 3 ) 4 5 5 IT R 73 6 (C al . ) di s m i ss e d t h e ap pe al o f t h e re ve nu e a nd e n do rse d t he f i nd i n g s o f IT A T t ha t p o w e r s un de r s. 26 3 c a nn o t be e x e r c i s e d at t h e st a n ce o f t he A O w i t h ou t s how i ng i nd ep en de n t a p p l i c at i on o f min d o n t h e ma t e r i a l a va i l ab l e t o ju st i fy s u c h a ct i on . S i mi l a r v i e w ha s a ga i n be e n e ch oe d i n P r. CI T v s. Re e t a L ak hm a n i & O r s. (2 0 2 3) 45 7 IT R 60 3 (C a l . ) 15 . 3 A s o bs e r ve d , i t i s ap p a r e n t l y di sc e r ni bl e t h a t t he e xe rc i se o f po w e r s un de r s. 2 6 3 t o d i s l o dg e a c o m p l et e d as se ss me nt i s f o un de d on v ie w e xp r e s se d b y t he A O w i t h o u t an y i n de pe nd e nt a s c e r t a in me nt o f ob se r v a t i o n s. S uc h a c t o ff e n d s t h e b as i c p r in ci pl e s g o ve rn in g e xe rc is e o f po w e r s un de r s. 2 6 3 a n d t hu s i s n ot su st a i n a bl e i n la w e it he r . T he re v i si on a l o r de r f a i l s o n th i s c o u nt t oo. 16 . T he re i s a n o t he r a s pe c t t o put c ha l l e ng e t o s uper vi s or y j ur i s d i c t io n. F ro m t he t e xt a n d t e n o r o f th e r ev is io na l or d e r, i t i s ma ni f es t t ha t t he tr a ns a c t i on s o f l oa ns fr o m v a r i ous l e n de rs r eq ui re d pr o pe r a nd ful l e r i nq u i ry a nd ex a m i na t io n b y th e A O i n t he e xp e c ta t i on o f t h e P r . CI T. In t h i s r e g a r d, w e no ti ce t ha t i t i s de mo nst ra t e d o n be ha l f o f t he a s se ss e e t h a t re q u i sit e e n q u i ri e s w e re ma de b y A sse ss i n g O ff i ce r t o w a r ds i de nt i t y , ca p a c i ty a n d ge n u i n e n e s s o f u ns e c u re d l o a n s re c e i v e d d u r i n g t h e ye ar . Th e i ss ue w as v e r y mu ch p re s en t t o t he m i n d o f t h e A O . T he rel e v a nt do c u me n t s w e r e a l so sh ow n t o h a v e be e n fi l ed i n t he a ss e s s me n t pr o c e e d i n g s. We s i m ul t an e o us l y no t i c e a p e r t i ne n t fa c t t h a t t he l en de rs w er e su bj ec t e d t o e nq ui r y u nd e r s. 133 (6) to o by t he A O fo r t hi s p ur p o se a n d e v i d e n c e s w e r e c ol l e c t ed a n d c ol l ate d t o w e i gh t h e sur ro u n di n g ci r cu m st a nc es . O n su ch f a ct s, on e c a n n ot b e he ar d t o sa y t h a t i t i s a c a s e o f ‘n o e nq u i ry ’ i nt o t h e s u b je c t m a t t e r bu t m a y a t b e st be a ca s e o f ‘ i na de qu ac y i n t he e x t e n t o f en q u i ry ’. O n t h e I.T.A. No.258/Del/2019 23 fa c e o f s uc h e nq u i ri e s c o n d u c t e d, t he A O h a s n ot m ec h a n i c a l l y a cc e p t e d t he a s se s se e ’ s c l ai m b u t ha s e m b a rk e d u po n a n e nq u i r y c on si de r e d n e c e s sa ry t o t h e w i sd o m o f t he A O a l b ei t n o t m a t ch in g fr o m t h e i d e a li st i c po i nt o f vi e w o f t he Re v i s i o n a l Co mm i s si o n e r. Th e r ec o r ds s u g ge s t t h a t t h e A O c a n no t b e b l a m ed t o h a v e a c t e d i n a pe r f u nc t o r y ma n n e r me re l y be c a u se t h e e xp e c t at i o n s o f Re v i s i o n a l Co m m i s s i o n e r a r e p ur p o r t e d l y no t me e t . 16 . 1 N o ti c e a b l y , i t i s a l so n o t t he c a se o f P r. C IT e i t he r t h a t i t i s a c as e o f ‘l a ck o f e n qui r y ’ pe r s e. O n a ba r e pe ru sal o f t he S C N , i t i s se e n t h a t th e P r. CI T h a s a l l e ge d a b se nc e o f ‘ p r o per e nq u i ry ’ . I n pa r a 5 o f t h e r e v i s io n a l o r d e r t o o, t h e P r . CI T a l le ge d a bs e n c e o f ‘p r op er e nq ui r y ’ o r ‘su f fi c i e n t e n q u i r y ’ . T he P r . CI T ha s r ep e a t e dl y a ss er t e d h is ob j ec t i o n on t he su f fi ci e n c y a nd a d e q ua c y o f e nq ui ry a s br o ug ht t o h i m b y t h e p r e se nt A O . T h us, w hi le f or ming op in io n a dv e r se t o t h e a ss e ss ee , t h e P r . C I T h a s e ss e n t i a l l y c h a ll e ng ed t he vo i d in e x t e n t o f e n qu i r y o n t h e bo n a f i d e s o f t h e len de rs. 16 . 2 T he e xp re s si on ‘ l a c k o f en qu i r y’ i s q ui t e d i stin ct fr o m t h e e xp r e ss i o n ‘i ns u ffi c i e n t e nq ui ry ’. We pa u se h e r e t o n ot e t h e p o si t i o n o f l aw en un c i a te d in t he j ud ic i a l d i ct a g ov e r n i n g th e fi e l d . It i s e vo l v e d by j u d i c ia l pr e ce de nt s th at i n th e c a se o f i na d e q u a c y i n i nq u i r y ( u n l i ke l a c k o f i n qu i r y ) on a po i n t i n i ss ue, t h e P r. CI T i s e xp e c te d t o ma k e so m e pr el i mi n a r y i n q ui r y h i ms e l f to b e a bl e t o e st a b l i sh a n d s ho w t h e e r ro r o r m i st a k e w h i c h re nd er s t he or de r o f t he A O un su st a in a b l e i n l aw . I t ma y be p o s si bl e for t h e P r. C IT i n so m e c a se s t o s ho w a nd es t a b l i sh t h a t f a c t s o n re c or d o r i n fe r en c e s dr aw n fr o m fa c t s on r e c o r d pe r s e j us t i fi ed or m a n d a te d fu r t he r i nq u i r y or i n ve st ig a t i on w h i c h t h e A O ha s e r r o n e ou sl y not un d e r t a k e n . H ow e ve r , s u c h fi n d i n g m ust be cl e ar , una mb i gu o u s a n d no t d e ba ta bl e . T h e P r . C IT m u st de m on st r at e t h a t t he or de r i s b o t h I.T.A. No.258/Del/2019 24 e rr o n e o us a s w e ll a s pr e j ud i c i al t o t he in te r e st o f t h e Re ve n u e b y suc h l a ps e on t he pa rt o f t h e A O . T hi s i s t h e po sit i on o f la w e nu n c i a t e d by t h e H o n’b l e D e l h i H i gh Co u rt i n se ve ra l c as e s i nc lu di ng C IT . v. G oe t ze ( I nd i a) L t d. ( 2 0 14 ) 3 6 1 IT R 5 05 ( D el) ; IT O v s. D G H o usi ng Pr oj e c t s L t d, 3 4 3 I T R 3 29; C I T vs . Su n be am A ut o L t d. , 332 I T R 1 6 7 ( D el ). I n t h i s b a ck dro p, a q u e st io n w ou l d a r is e w he t h e r, fi r st l y, t h e a c ti o n o f t h e A O i s u n su sta i na b l e i n l a w o r no t , ow i n g t o su c h a s se r t i o n s o n me r e i n a d e qu a c y a n d se co n dl y, w he t h e r t he ma n d at e u n d e r s. 6 8 o f t he A ct f or ex t e n t o f i nqui ry b y w a y o f c ro ss ve r i f i ca t i o n i s a b s o l u t e o r le f t t o t he d i s cre t i o n t o be re a so na bl y e x e r c i s e d b y t h e A O . 16 . 3 P e rt i ne nt l y, t h e la w d o e s n o t p r e s cr ib e a ny qua n t i t a t i v e t e s t t o fi n d o ut w h e t he r t h e on u s in a p a r t i c ul a r c a s e h a s be e n di sc h a r ge d o r no t. I t a ll de pe nd s on t he fa c t s a nd ci rc u ms t a nc es o f e a c h ca se . I n so m e c as e s, th e o n u s ma y b e h e a v y w he re a s i n o t h e r s i t ma y be no m i na l . T he re is no t hi ng r i g id a bo ut it a s o b se r ve d b y t h e H o n’ b l e S up re me C o u rt i n t he c a se o f C IT v . D urg a Pr a s ad M o r e, [1 9 7 1] 8 2 IT R 54 0 (S C). S i g ni f ic a n t l y, S . 68 o f t h e A ct u s e s t h e e xp r e s sio n ‘ ma y’ an d t hu s e na bl e s t he A O t o e x e rc i se st a t ut o r y d i sc r et i o n i n a pr a g ma t ic a nd j u d i ci o us m an ne r, fo r o r a g a i n s t , th e a ss e ss e e. T he A O i s t h us n o t o bl i ge d t o in vo k e t h e s ph e r e o f S . 6 8 o f t h e A c t i n a ll c as e s w he r e t he s o ur c e i s no t p r o v e d t o t h e l a s t m il e . T h i s a pa r t , it i s w e l l s e t t l e d t ha t w h i le d i s c h a r gi n g t h e o nu s c a st up on t he a s se ss e , i t i s n o t t h e s t r i n ge n t re qu ir e me nt o f l aw t h a t a s se ss ee ne e ds a l s o t o pr o ve t he so u r c e o f so ur ce i . e. m o n ey s ou rc e d by t he l e n d e r t o pr o vi de lo a n t o t h e a ss e s see . O nc e t h e a s se sse e i s a b l e t o es t a bl i sh t ha t t he mo ne y h a s b ee n r ec e i v e d fr o m t he s o ur ce bel o ng i n g t o t h i r d pa r t y, he c a n n o t b e bu r de ne d w i t h a f ur t he r on u s o f e st a bl i sh i n g t he so u rc e fro m w h i c h su c h th i r d pa r t y h a s be e n a b l e t o o bt ai n mo n e y. U se fu l r e fe r e n c e i n t hi s re ga rd ca n b e m a de to th e d ec i s i o n o f I.T.A. No.258/Del/2019 25 H on’ bl e G u j a ra t H i gh Co u r t i n ca se o f R o h i n i Bu il d e rs ( su p r a) a n d al s o N em i Ch an d Ko t h a ri ( su p r a) ; I T O v s. D iza H ol ding s ( P ) L t d. 25 5 IT R 5 73 ( K e r a l a) a n d so o n . T h u s, w h en se e n i n t h e l i g h t o f j ud i c i a l pr e c e de nt s e l u c i d at i ng l a w p e rt a i ni ng t o Se c t i o n 6 8 o f t he A ct , i t a pp ea rs t ha t i t i s n ot o bl i ga to ry o n th e p ar t o f th e a ss e s se e t o st e a d f a s tl y vo u c h t he s ou r ce o f t h e so u rc e a n d t h u s, o nu s i n t he pr e se nt c a s e w as r e a s on a b l y di sc h a r g e d o n a sc e rt a i ni n g t h e f a c t s w it h re a so na bl e d e g re e o f c a r e e xp ec t ed o f a s t at u to r y fun c t i on ar y. Th i s a l so me a n s th at t h e A O is no t c a l l e d up o n in la w t o ob d ur a t e l y a dh e r e t o e x t r a v i g il e xp ec t e d by a s u pe ri or a ut ho ri t y . Th e A O i s t hu s en t i t l e d t o d r aw s a t i s fa c t i o n i n fa v ou r o f t h e ass e s se e i n e xe rc is e o f i t s s t a t u to ry d i s cr e ti on a v a il a b l e un der s. 68 o f t h e A ct . Wh er e t h e A O ha s e xe rc is ed i t s q ua si - j ud ic i a l po w e rs a n d a rr i ve d a t a c o n c lu si o n w i t h r e a s on a b l e a pp l i c a t i on o f m in d, suc h a c t io n c an not be b ru sh e d a si de a s e r r o ne ou s e t c . si mp l y b e c a u se th e Re vi s i o n a l Co m m i s s i o n e r do e s n o t f ee l sa t i s fi e d w i t h e x te nt o f t h e i nq u i r y an d e xp e c ts ob ser va nc e o f h ig he r st a n da r ds i n t h i s re gard . W h e re t h e a ss es se e ha s fur ni s he d r el e v a nt ma t e r i al a n d o ffe r ed e xp l a n a t i on , t he a ss es s m e n t c a n n o t b e or di n a r i l y s e t a s id e o n t h e c oun te r s o f Se c t io n 26 3 f or fr a m i n g b e t t e r a s se ss me nt w i t h o u t sh ow i n g an y o bj e c ti ve ma t e r i a l a va i l a b le o n re c o r d a d v e r se t o th e a ss e s see . 16 . 4 O n fa c t s, th e P r. CI T ha s r e fe r r e d to i n ve st i gat i on r ep or t pu r su a n t t o s ea r c h on 1 9. 04 . 2 01 0 o n Ja i n b ro th er s wh i ch w a s no t a ll e g e d l y t a k e n co g ni z a n c e o f b y t h e A O . Wi th ou t goin g i nt o me r it s, w he re t h e s e a rc h it se l f o c c u r re d i n t h e c a se o f t h ir d p a rt y pr io r t h e l oa n tr an sa ct i o ns , i t i s d i ffi c ul t t o vi s u al i z e an y la p s e on t he p a r t o f A sse s si n g O f fi c e r w i t h r e ga r d to t r a n sa c t i o n s oc c u rr e d a ft e r s e a rc h. S a me i s t h e ca se f or r e fe r e n c e s m a d e t o t he o b s e r vat i on s a r i si n g fr o m a s se ss m e nt o r de r o f Ja i n b ro t h e r r el a t i n g t o AY 200 5- 06. T h e S F IO r ep or t p re p a r ed i n M a r c h 2 01 6 w a s na t u r a l l y n ot a va i la bl e t o I.T.A. No.258/Del/2019 26 A O a t t h e ti m e o f p a s si n g a sse ss m e n t or d e r . Be t ha t a s i t m a y, t h e re p o r t w a s pr e p a r e d b a se d on o b s er v a t i o n s i n sea r c h p r oc ee d i n g s c ar ri e d i n ea rl i e r p oi n t o f t i me . B es i d es, th e co nte nt s o f r ep or t w a s ne v e r co n fr o n t e d t o t he A s se ss e e . B e i n g a fr e s h m a te r i a l, i t w a s i nc u m be nt u p o n t h e P r. CI T t o c o n f r on t t h e s a m e t o A ss e s se e b e f o re t ak in g a ny a d ve rs e v i ew . N o o p p or tu ni t y o n t hi s sc or e ha s b e e n pr o vi de d ei t h e r. W e t h u s c o nc u r w i t h t he pl e a o n b eh a l f o f t h e a ss es se e t h a t S . 263 p r o ce e d i n g s c a nn o t b e i n fl i c te d u p on t h e a ss es se e i n t h e s e c i rc u m s t a n c e s. 16 . 5 W h i l e h ol di ng s o , w e ar e a l i v e t o c l au se ( a ) of E xp l a na t i o n (2 ) t o S e c t i on 26 3 o f th e A c t i n se rt e d by F i n a n c e A c t , 20 1 5 w . e . f. 01 . 0 6. 2 0 1 5 w h ic h s e e k s to c l a ri fy t ha t th e o r de r pass e d by t h e l ow e r a ut ho r i t i e s t o be e r ron eo us in s o fa r a s p re j ud i c ial t o t he i n t e r e s t o f t he R e v e n u e i n t h e e ve nt o f ‘ a b s en ce o f i n q u i ri e s or ve r i f ic a t i o n s w hi c h sh o u l d h a v e b ee n m a de ’. T h e a fo re sa i d c l a us e , t o ou r m in d, on l y pr o v i d e s fo r s i tu a ti on w he re i n q u i r i e s o r v e r ifi c a ti o n s sho ul d be ma de b y r e a s on ab l e a n d pr u de n t o f fi c er i n t h e c on text o f t h e c a se . S uc h c l a u s e c a n n o t be re a d t o au t h or iz e o r g i v e u n fe t te r ed p ow e rs t o t he Re v i si on al Co m m i s si o n e r t o r ev is e ea c h a n d ev ery ty pe o f mi st a ke i n a n or de r i n a p l a n n e r y m a nn e r . T h e a p p l ic a b i l i t y o f t he c la us e i s t h us e s se nt i al l y co nt e x t u a l. A s o bs e rv e d i n t h e p re c ed in g pa r a s, e ve n i f i n q u i ry w i t h r e g a rd t o so u rc e o f s o ur c e o f l oa n i n a pa r t i c u l ar ma n n e r a s s ug ge st ed b y Pr . CI T i s o mi t t ed to be c a r r i e d ou t, t he p ro v is io ns o f S e ct i on 6 8 o f t h e A c t c a nn o t be a u t o m at i ca l l y fa s t e n e d o n t h e a sse ss e e. T o r e it e r a t e, no o b j e c t i ve m a t e r i a l i s di s c e r n i b l e f r o m t h e S CN o r fr o m t he r ev i s io an al ord e r t o i mp l i c a t e t he a ss e s se e p e r s e. 16 . 6 H a vi n g re ga r d t o t he p r e r o g a t i v e v es t e d w i t h th e A O t o w a r ds t he e x t e n t a nd m a nn e r o f i nq ui ry fo r d r aw i ng s at i s fa c t io n, i t i s I.T.A. No.258/Del/2019 27 di ff i c u lt t o h ol d t h a t t h e a c t i o n o f th e A O i s un i nt el l i g i b l e . In o u r vi e w , t h e A O ha s n ot c o m mi t t e d a n y e rr o r i n n ot c h asi n g ‘wi l l o t he wi sp’ i n t h e a b s en c e o f a n y b ra ze n c i r cu mst a n c e s a va il a bl e . I n t h e l ig ht o f a fo r e sai d d is c u ss io n, t h e b a s i s o f i ss ua n ce o f s h ow c a u se no t i c e u nd e r s. 2 63 o f t h e A c t d o e s no t a pp e a r t o be t e n ab le i n l aw i n t he pe c u l i a r s e t o f fa c ts. Co ns e que n t l y, t h e a ss u mp t io n o f j ur i s d i c t io n un d e r s. 26 3 o f t h e A ct o n t h is g r o un d t o o , w i ll ha ve t o be re ga rd e d as w i t h o ut a u t h o r i t y o f l a w . 17 . T h u s, se e n fr o m an y a n gl e, t h e a s se ss me nt o rd e r p a ss e d un de r s. 14 3 (3 ) o f t h e A c t c o ul d no t b e f ru st r at e d i n t h e c i r c u m st a n c e s. Th e i m p u g ne d r e vi s i o na l or d e r p a s se d u nd er S e c t i o n 2 6 3 th us re q u i r e s t o be q ua s he d a nd s et a s i d e . 18 . I n t h e re s ul t , th e a p p e a l o f th e a s se ss e e i s a ll o w ed . Order pronounced in the open court on 12/ 10/ 20 23 Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /10/2023 Prabhat