Vegesine Kamala, Palakol V. THE ITO, WARD - 1, Palakol

ITA 268/VIZ/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2167 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 21-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G GURUSWAMY
• Assessee Lawyers: S RAMA RAO
• Keywords: Opportunity of being heard; Assessment record
• Section: 143(3); 54F; 142(1); 54; 263; 12

Judgement Text

ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , ' BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.268/VIZAG/2014 ( / ASSESSMENT YEAR : 2009-10) VEGESINA KAMALA, PALAKOL VS. ITO, WARD-1, PALAKOL [ PAN: ABUPV 1717E] / APPELLANT) ( / RESPONDENT ) / APPELLANT BY : SRI S. RAMA RAO, AR #$ / RESPONDENT BY : SRI G. GURUSWAMY, DR ( / DATE OF HEARING : 06.01.2016 ( / DATE OF PRONOUNCEMENT : 22.01.2016 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF COMMISSIONER OF INCOME TAX, RAJAHMUNDRY DATED 13.3. 2014 U/S 263 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED AS TH E ACT) AND IT PERTAINS TO THE ASSESSMENT YEAR 2009-10. ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 2 2. THE BRIEF FACTS OF THE CASE, ARE THAT THE ASSESS EE IS AN INDIVIDUAL DERIVING INCOME FROM BUSINESS, INCOME FROM CAPITAL GAINS AND OTHER SOURCES, HAS FILED HER RETURN OF INCOME FOR THE ASS ESSMENT YEAR 2009-10 ON 29.9.2009 DECLARING A TOTAL INCOME OF RS.5,41,68 0/-. THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY NOTICE U/S 14 3(2) & 142(1) OF THE ACT WERE ISSUED. IN RESPONSE TO NOTICE, THE ASSESS EES AUTHORIZED REPRESENTATIVE APPEARED FROM TIME TO TIME AND FURNI SHED THE INFORMATION CALLED FOR ALONG WITH BOOKS OF ACCOUNTS, BILLS AND VOUCHERS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS SOLD A PROPERTY AND COMPUTED CAPITAL GAINS AFTE R CLAIMING EXEMPTION U/S 54F OF THE ACT. TO ASCERTAIN THE CORRECTNESS O F THE CLAIM MADE BY THE ASSESSEE, THE A.O. ISSUED A SHOW CAUSE NOTICE D ATED 29.7.2011 AND ASKED TO FURNISH THE DETAILS WITH REGARD TO SALE OF PROPERTY, INVESTMENT MADE IN RESIDENTIAL HOUSE PROPERTY SO AS TO CLAIM E XEMPTION U/S 54F OF THE ACT. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASS ESSEE HAS FILED THE RELEVANT DETAILS BEFORE THE ASSESSING OFFICER. THE A.O., AFTER CONSIDERING THE EXPLANATIONS OFFERED BY THE ASSESSEE ACCEPTED T HE CLAIM OF EXEMPTION U/S 54F OF THE ACT AND COMPLETED THE ASSE SSMENT. 3. THE CIT, RAJAHMUNDRY ISSUED A SHOW CAUSE NOTICE U/S 263 OF THE ACT DATED 28.11.2013 AND PROPOSED TO REVISE THE ASS ESSMENT ORDER. ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 3 THE CIT PROPOSED TO REVISE THE ASSESSMENT ORDER FOR THE REASON THAT ON EXAMINATION OF THE ASSESSMENT RECORD, CERTAIN OMISS IONS AND COMMISSIONS WERE NOTICED, WHICH RENDERED THE ASSESS MENT ORDER ERRONEOUS, IN SO FAR AS IT IS PREJUDICIAL TO THE IN TEREST OF THE REVENUE, IN TERMS OF SECTION 263 OF THE ACT. THE CIT, IN THE S AID SHOW CAUSE NOTICE, OBSERVED THAT THE A.O. HAS NOT VERIFIED ALL THE BAN K ACCOUNTS OPERATING BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION . THE CIT FURTHER OBSERVED THAT THE A.O. HAS ALLOWED EXEMPTION U/S 54 F OF THE ACT FOR RE- INVESTMENT IN PURCHASE/CONSTRUCTION OF RESIDENTIAL HOUSE PROPERTY WHICH IS OTHERWISE NOT ALLOWABLE TO THE ASSESSEE. WITH TH ESE OBSERVATIONS, THE CIT WAS OF THE OPINION THAT THE ORDER U/S 143(3) OF THE ACT PASSED BY THE A.O., IS ERRONEOUS IN SO FAR AS IT IS PREJUDICI AL TO THE INTEREST OF THE REVENUE, ON THESE COUNTS. THEREFORE, ISSUED A SHOW CAUSE NOTICE AND ASKED AS TO WHY THE ORDER SHOULD NOT BE REVISED U/S 263 OF THE ACT. 4. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS VIDE HER LETTER DATED 19.12.2015 AND CO NTENDED THAT THE ORDER PASSED BY THE A.O. IS NOT ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, AS THE A.O. HAS VERIFI ED ALL THE ISSUES AT THE TIME OF ASSESSMENT PROCEEDINGS. THE ASSESSEE FURTH ER SUBMITTED THAT THE A.O. HAS ISSUED A SHOW CAUSE NOTICE AND ASKED D ETAILS ABOUT ALL THE ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 4 BANK ACCOUNTS OPERATED BY THE ASSESSEE AND CHOSE TO VERIFY THE BANK ACCOUNTS AT THE TIME OF ASSESSMENT PROCEEDINGS. 5. AS FAR AS THE ISSUE OF EXEMPTION U/S 54F OF THE ACT IS CONCERNED, THE ASSESSEE SUBMITTED THAT DURING THE RELEVANT FIN ANCIAL YEAR, SHE HAS SOLD A PROPERTY AND RE INVESTED THE SALE CONSIDERAT ION FOR PURCHASE OF ANOTHER RESIDENTIAL SITE AND ALSO MADE INVESTMENTS IN CAPITAL GAIN DEPOSIT SCHEME, BEFORE THE DUE DATE OF FURNISHING T HE RETURN OF INCOME U/S 139(1) OF THE ACT. THEREFORE, THE CLAIM MADE B Y HER U/S 54F OF THE ACT WAS CORRECT AND WHICH WAS VERIFIED BY THE A.O. AT THE TIME OF ASSESSMENT PROCEEDINGS. THE ASSESSEE FURTHER SUBMI TTED THAT THOUGH SHE MADE INVESTMENT IN CAPITAL GAIN DEPOSIT SCHEME, BECAUSE OF UNFORESEEN REASONS SHE COULD NOT COMPLETE THE CONST RUCTION OF THE HOUSE PROPERTY WITHIN THE SPECIFIED PERIOD ALLOWED UNDER THE ACT. SHE FURTHER SUBMITTED THAT SINCE, SHE COULD NOT CONSTRU CT THE HOUSE PROPERTY, THE ENTIRE CAPITAL GAIN WAS OFFERED TO TAX FOR THE ASSESSMENT YEAR 2012- 13 AS PER PROVISO TO SUB SECTION 4 OF SECTION 54F O F THE ACT. 6. THE CIT, HOWEVER, DID NOT SATISFIED WITH THE EXP LANATION FURNISHED BY THE ASSESSEE, REVISED THE ASSESSMENT ORDER. WHIL E DOING SO, THE CIT OBSERVED THAT THE A.O. DID NOT EXAMINED THE ISSUES AS DISCUSSED ABOVE AT THE TIME OF COMPLETING THE ASSESSMENT U/S 143(3) OF THE ACT, ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 5 THEREFORE, THE ASSESSMENT ORDER NEEDS TO BE REVISED U/S 263 OF THE ACT. ACCORDINGLY, THE CIT REVISED THE ASSESSMENT ORDER U /S 263 OF THE ACT AND DIRECTED THE A.O. TO PASS CONSEQUENTIAL ORDER W ITHIN THE TIME ALLOWED AND AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AGGRIEVED BY THE CIT ORDER, THE ASSESSEE IS IN APPE AL BEFORE US. 7. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SU BMITTED THAT THE ASSESSMENT ORDER IS NOT ERRONEOUS IN SO FAR AS IT I S PREJUDICIAL TO THE INTEREST OF THE REVENUE, AS THE A.O. HAS MADE DETAI LED ENQUIRIES WITH REGARD TO THE ISSUES RAISED BY THE CIT. THE A.R. F URTHER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A. O. HAS ISSUED A DETAILED QUESTIONNAIRE, WHEREIN HE HAS EXAMINED THE ISSUE WITH REGARD TO EXEMPTION U/S 54F OF THE ACT. THE A.R. FURTHER SUBMITTED THAT THE A.O. HAS PASSED A CONSEQUENTIAL ORDER GIVING EFFECT TO CITS DIRECTIONS U/S 263 OF THE ACT AND HAS ACCEPTED ALL THE ISSUES RAISED BY THE CIT, EXCEPT THE ISSUE WITH REGARD TO THE EXEMPTION U/S 5 4F OF THE ACT. THEREFORE, IT IS ABUNDANTLY CLEAR THAT THE CIT HAS REVISED THE ASSESSMENT ORDER PURELY ON SUSPICIOUS AND SURMISES, WITHOUT BE ING ANY VALID REASONS. 8. THE A.R. FURTHER SUBMITTED THAT AS FAR AS THE IS SUE OF EXEMPTION U/S 54F OF THE ACT IS CONCERNED, THE A.O. HAS EXAMI NED THE ISSUE AND ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 6 CALLED FOR THE DETAILS OF REINVESTMENT MADE IN PURC HASE OF RESIDENTIAL SITE AND ALSO THE AMOUNT DEPOSITED UNDER CAPITAL GAIN DE POSIT SCHEME. THE A.R. FURTHER SUBMITTED THAT THE ASSESSEE HAS SOLD A PROPERTY AND REINVESTED THE SALE CONSIDERATION IN PURCHASE OF AN OTHER RESIDENTIAL SITE FOR CONSTRUCTION OF RESIDENTIAL HOUSE. SINCE, SHE COULD NOT UTILIZED THE FULL SALE CONSIDERATION BEFORE THE DUE DATE OF FILI NG OF RETURN U/S 139(1) OF THE ACT, SHE HAS DEPOSITED THE UNUTILIZED SALE C ONSIDERATION UNDER CAPITAL GAIN DEPOSIT SCHEME AND FURNISHED THE PROOF OF SUCH DEPOSIT ALONG WITH RETURN OF INCOME. HOWEVER, SHE COULD NO T COMPLETE THE CONSTRUCTION OF THE RESIDENTIAL HOUSE WITHIN THE TI ME ALLOWED UNDER THE ACT, THEREFORE, OFFERED THE ENTIRE CAPITAL GAIN FOR TAXATION FOR THE ASSESSMENT YEAR 2012-13. THE A.R. FURTHER SUBMITTE D THAT THIS FACT CLEARLY INDICATES THAT THERE IS NO LOSS OF REVENUE, TO BRAND THE ASSESSMENT ORDER AS PREJUDICIAL TO THE INTEREST OF REVENUE. THEREFORE, FOR THE SAME REASONS, THE CIT WAS NOT CORRECT IN DIRECT ING THE A.O. TO REDO THE ASSESSMENT. ON THE OTHER HAND, THE LD. D.R. STR ONGLY SUPPORTED THE ORDER OF CIT. 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIE S BELOW. THE CIT ASSUMED THE JURISDICTION TO REVISE THE ASSESSMENT O RDER FOR THE REASON ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 7 THAT THE A.O. HAS NOT CONDUCTED PROPERTY ENQUIRY AT THE TIME OF ASSESSMENT, THEREBY THE ASSESSMENT ORDER IS ERRONEO US IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE CI T HAS RAISED NUMBER OF ISSUES IN THE REVISION PROCEEDINGS, RIGHT FROM NON VERIFICATION OF BANK ACCOUNTS TO EXEMPTION U/S 54F OF THE ACT. ON PERUS AL OF THE SHOW CAUSE NOTICE ISSUED BY THE CIT, ASSESSMENT ORDER AN D PAPER BOOK FILED BY THE ASSESSEE, WE FIND THAT ALL THE ISSUES QUESTI ONED BY THE CIT IN THE REVISION PROCEEDINGS, WERE ALREADY EXAMINED BY THE A.O. AT THE TIME OF ASSESSMENT PROCEEDINGS. THEREFORE, THE CIT IS NOT CORRECT IN OBSERVING THAT THE A.O. DID NOT CONDUCT PROPER ENQUIRY ON THE ISSUES BEFORE COMPLETION OF ASSESSMENT. 10. THE CIT ASSUMED THE JURISDICTION TO REVISE THE ASSESSMENT ORDER ON THE SOLE GROUND THAT THERE IS A LACK OF ENQUIRY ON THE PART OF A.O. IN EXAMINING THE ISSUES WITH REGARD TO EXEMPTION U/S 5 4F OF THE ACT. THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THE A.O. HA S EXAMINED THE EXEMPTION U/S 54F OF THE ACT AT THE TIME OF ASSESSM ENT PROCEEDINGS AND ALLOWED THE CLAIM OF THE ASSESSEE. THEREFORE, THE CIT WAS NOT CORRECT IN COMING TO THE CONCLUSION THAT THE A.O. DID NOT COND UCT ANY ENQUIRY. THE CIT QUESTIONED THE ALLOWABILITY OF EXEMPTION U/ S 54F OF THE ACT. THE CIT WAS OF THE OPINION THAT THE ASSESSEE HAS IN VESTED THE SALE ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 8 CONSIDERATION FOR PURCHASE OF LAND AND THE CONSTRUC TION WAS NOT COMPLETED WITHIN THE TIME ALLOWED U/S 54F OF THE AC T, THEREFORE, SHE IS NOT ELIGIBLE FOR EXEMPTION FOR THE ASSESSMENT YEAR 2009-10. THE CONTENTION OF THE ASSESSEE WAS THAT THE A.O. HAS RI GHTLY ALLOWED THE EXEMPTION U/S 54F OF THE ACT, AS SHE HAS COMPLIED W ITH THE PROVISIONS OF SECTION 54F OF THE ACT BY REINVESTING THE SALE CONS IDERATION IN PURCHASE OF ANOTHER RESIDENTIAL SITE AND DEPOSITED THE UNUTI LIZED SALE CONSIDERATION IN CAPITAL GAIN DEPOSIT SCHEME. 11. THE QUESTION BEFORE US IS WHETHER EXEMPTION U/S 54F OF THE ACT CAN BE DENIED FOR THE ASSESSMENT YEAR 2009-10, FOR FAILURE TO CONSTRUCT THE PROPERTY WITHIN THE PERIOD OF 3 YEARS FROM THE DATE OF SALE OF ORIGINAL ASSET. BEFORE WE PROCEED, LET US UNDERSTAND THE POS ITION OF LAW AS EXPLAINED UNDER PROVISO TO SUB SECTION 4 OF SECTION 54F OF THE ACT. PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTION IS NOT UTILIZED WHOLLY OR PARTLY FOR THE PURCHASE OR CONSTRUCTION O F THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1), THEN,-- (I) THE AMOUNT BY WHICH A. THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFE R OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF THE NEW ASSET AS PROVIDED IN CLAUSE (A) OR, AS THE CASE MAY BE, CLAUSE (B) OF SUB-SECTION (1), EXCEEDS B. THE AMOUNT THAT WOULD NOT HAVE BEEN SO CHARGED HAD THE AMOUNT ACTUALLY UTILIZED BY THE ASSESSEE FOR THE P URCHASE OR CONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SP ECIFIED IN SUB- SECTION (1) BEEN THE COST OF THE NEW ASSET, ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 9 SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF TH E TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND (II) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW TH E UNUTILIZED AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. 12. ON CAREFUL CONSIDERATION OF THE PROVISIONS OF S ECTION 54F OF THE ACT, IT IS ABUNDANTLY CLEAR THAT SUB SECTION 4 OF S ECTION 54F OF THE ACT, PROVIDES FOR, WHERE THE ASSESSEE HAS NOT UTILIZED T HE FULL VALUE OF CONSIDERATION FOR PURCHASE/CONSTRUCTION OF RESIDENT IAL HOUSE PROPERTY WITHIN THE DUE DATE SPECIFIED U/S 139(1) OF THE ACT , THEN THE ASSESSEE SHALL INVEST THE UNUTILIZED PORTION OF SALE CONSIDE RATION UNDER THE CAPITAL GAIN DEPOSIT SCHEME AND FURNISHED THE PROOF ALONG W ITH RETURN OF INCOME. THE PROVISO TO SUB SECTION 4 OF SECTION 54 F OF THE ACT PROVIDES THAT IN CASE THE ASSESSEE FAILED TO UTILIZE THE AMO UNT INVESTED UNDER SUB SEC. 4 FOR CONSTRUCTION OF HOUSE PROPERTY WITHIN A PERIOD OF 3 YEARS FROM THE DATE OF SALE OF ORIGINAL ASSET, THEN THE ASSESS EE IS REQUIRED TO PAY THE TAX ON THE WHOLE CAPITAL GAIN IN THE PREVIOUS Y EAR IN WHICH THE PERIOD OF 3 YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET EXPIRES. IN THE PRESENT CASE ON HAND, ON PERUSAL OF THE FACT S, IT IS CLEAR THAT THE ASSESSEE HAS PURCHASED ANOTHER RESIDENTIAL SITE WIT HIN A PERIOD OF 3 YEARS AND THE BALANCE AMOUNT WAS ALSO INVESTED UNDE R CAPITAL GAIN DEPOSIT ACCOUNT SCHEME. ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 10 13. IT WAS THE CONTENTION OF THE ASSESSEE THAT SHE COULD NOT COMPLETE THE CONSTRUCTION OF HOUSE PROPERTY, BECAUSE OF VARI OUS REASONS THEREFORE, SHE HAS OFFERED THE ENTIRE CAPITAL GAIN FOR TAX FOR THE ASSESSMENT YEAR 2012-13 AND FURNISHED THE COPY OF R ETURN FILED FOR THE ASSESSMENT YEAR 2012-13 FOR HAVING PROOF OF OFFERIN G THE CAPITAL GAIN. ON EXAMINATION OF THE PAPER BOOK FILED BY THE ASSES SEE, WE FIND THAT THE ASSESSEE HAS OFFERED THE ENTIRE CAPITAL GAIN FOR TH E ASSESSMENT YEAR 2012-13. THE CONTENTION OF THE CIT WAS THAT AS PER SECTION 54F OF THE ACT, ONLY UNUTILIZED PORTION OF SALE CONSIDERATION IS TAXABLE IN THE PREVIOUS YEAR IN WHICH THE PERIOD OF 3 YEARS EXPIRE S FROM THE DATE OF SALE OF ORIGINAL ASSET. BUT, THE INVESTMENT MADE I N VACANT SITE IS TO BE TAXED IN THE YEAR IN WHICH THE CAPITAL GAIN ARISES. WE DO NOT SEE ANY MERITS IN THE ARGUMENTS OF THE CIT FOR THE REASON T HAT THE OPINION OF THE CIT IS QUITE CONTRARY TO LAW SPECIFIED UNDER SECTIO N 54F OF THE ACT. IN THE PRESENT CASE ON HAND, FROM THE FACTS IT IS VERY CLEAR THAT THE ASSESSEE HAS OFFERED THE CAPITAL GAIN, TO TAX AFTER COMPLETION OF 3 YEARS FROM THE DATE OF SALE OF THE ORIGINAL ASSETS AND WH ICH IS IN ACCORDANCE WITH LAW. THEREFORE, WE ARE OF THE OPINION THAT TH E CIT WAS NOT CORRECT IN COMING TO THE CONCLUSION THAT THE CLAIM MADE BY THE ASSESSEE U/S 54F OF THE ACT IS NOT CORRECT. ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 11 14. HAVING SAID THAT LET US NOW EXAMINE, WHETHER TH E ORDER PASSED BY THE A.O. U/S 143(3) OF THE ACT IS ERRONEOUS IN SO F AR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ASSESSMENT ORDER IS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE AS THERE IS NO LOSS OF REVENUE BECAUSE, THE A.O. HAS ACCEPTED THE CLAIM OF ASSESSEE WHICH IS IN ACCORDANCE WITH LAW. WE FURTHER OBSERVED THAT THE A.O. HAS EXAMINED THE I SSUE AT THE TIME OF ASSESSMENT AND CHOSE TO ALLOW THE CLAIM OF THE ASSE SSEE. ONCE, THE A.O. HAS ALLOWED THE CLAIM AFTER BEING SATISFIED WI TH THE EXPLANATION OF THE ASSESSEE, THEN THE, CIT CANNOT REVISE THE ASSES SMENT ORDER FOR THE SAME REASON WITH A DIFFERENT OPINION. AS FAR AS TH E OTHER ISSUES WHICH LEADS TO REVISION U/S 263 OF THE ACT IS CONCERNED, THE A.O. HAS PASSED CONSEQUENTIAL ORDER AS PER THE DIRECTIONS OF THE CI T U/S 263 OF THE ACT AND HAS ACCEPTED THE ISSUES WHICH LEADS TO THE REVI SION. FROM THIS, IT IS CLEAR THAT THERE IS NO REASON OF WHATSOEVER FOR THE CIT TO REVISE THE ASSESSMENT ORDER. 15. THE CIT, U/S 263 OF THE ACT HAS POWER TO REVISE THE ASSESSMENT ORDER. BUT, TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT, THE TWIN CONDITIONS MUST BE SATISFIED. (1) THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS (2) IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. UNLESS BOTH CONDITIONS ARE SATISFIED, THE CIT CANNO T ASSUME JURISDICTION ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 12 U/S 263 OF THE ACT. IT IS NOT NECESSARY THAT EVERY ORDER WHICH IS ERRONEOUS MAY NOT BE PREJUDICIAL TO THE INTEREST OF THE REVENUE OR VICE VERSA. UNLESS THE A.O.S ORDER IS NOT ERRONEOUS, NO ACTION CAN BE TAKEN BY THE CIT U/S 263 OF THE ACT. THIS IS BECAUSE THE TWIN CONDITIONS I.E. THE ORDER IS ERRONEOUS AND THE SAME IS ALSO PREJUDI CIAL TO THE INTEREST OF THE REVENUE ARE CO EXIST. IN THE PRESENT CASE ON H AND, THE A.O. HAS CONDUCTED DETAILED ENQUIRY AND ALSO EXAMINED THE PO INTS ON WHICH THE CIT WANTS FURTHER VERIFICATION. THE ASSESSING OFFI CER, AFTER VERIFICATION OF BOOKS OF ACCOUNTS AND RELEVANT DETAILS FURNISHED BY THE ASSESSEE, ALLOWED THE CLAIM OF ASSESSEE U/S 54F OF THE ACT. THE CONTENTION OF THE CIT WAS THAT THE A.O. HAS NOT CONDUCTED PROPER ENQU IRY AND ALSO NOT APPLIED HIS MIND BEFORE ALLOWING THE EXEMPTION. WE DO NOT SEE ANY MERITS IN THE CONTENTION OF THE CIT FOR THE REASON THAT THERE IS A DISTINCTION BETWEEN LACK OF ENQUIRY AND INADEQUATE ENQUIRY. IF THERE IS INADEQUATE ENQUIRY, THAT WOULD NOT BY ITSELF GIVE O CCASION TO THE CIT TO ASSUME JURISDICTION U/S 263 OF THE ACT, MERELY BECA USE HE HAS A DIFFERENT OPINION ON THE ISSUE. THE CIT CAN DO THI S, WHEN THERE IS A LACK OF ENQUIRY BY THE ASSESSING OFFICER. IN THE PRESEN T CASE ON HAND, THERE IS NO REASON OF WHATSOEVER FOR THE COMMISSIONER TO REVISE ASSESSMENT ORDER, AS ON BOTH COUNTS I.E. THE ORDER IS NOT ERRO NEOUS AS THE A.O. HAS VERIFIED THE ISSUES AND ALLOWED THE CLAIM MADE BY T HE ASSESSEE U/S 54F ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 13 OF THE ACT. THE ORDER IS ALSO NOT PREJUDICIAL TO T HE INTEREST OF THE REVENUE, AS THE ISSUE OF EXEMPTION U/S 54F OF THE A CT CLAIMED BY THE ASSESSEE WAS IN ACCORDANCE WITH LAW. THEREFORE, WE ARE OF THE OPINION THAT THE CIT WITHOUT ANY JUSTIFICATION ASSUMED THE JURISDICTION TO REVISE THE ASSESSMENT ORDER WHICH IS NOT PERMISSIBLE UNDER THE LAW. 16. NOW, IT IS PERTINENT TO MENTION HERE THE CASE L AWS RELIED UPON BY THE ASSESSEE. THE ASSESSEE RELIED UPON THE COORDIN ATE BENCH DECISION OF THIS TRIBUNAL IN THE CASE OF SRI SAI CONTRACTORS VS. ITO IN ITA NO.109/VIZAG/2012, WHEREIN THE TRIBUNAL, AFTER CONS IDERING THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF ANDHRA PRADESH IN THE CASE OF SPECTRA SHARES AND SCRIPS PVT. LTD. VS. CIT (2013) 354 ITR 35 AND HONBLE DELHI HIGH COURT DECISION IN THE CASE OF CI T VS. SUN BEAM AUTO LIMITED (2011) 332 ITR 167, HELD THAT ONCE THE A.O. EXAMINED THE ISSUES, THE CIT CANNOT ASSUME JURISDICTION ON THE S AME ISSUES WHICH IS ALREADY CONSIDERED BY THE A.O., BY STATING THAT THE A.O. HAS CONDUCTED INADEQUATE ENQUIRY OR THERE IS A LACK OF ENQUIRY. THE RELEVANT PORTION IS REPRODUCED AS UNDER: 10. TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT, THE TWIN CONDITIONS MUST BE SATISFIED I.E. THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND FURTHER IT MUST BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. UNLESS BOTH CONDITIONS ARE SATISFIED, THE CIT CANNO T ASSUME JURISDICTION TO PASS ORDER U/S 263 OF THE ACT. IT IS NOT NECESSARY THAT EVERY ORDER WHICH IS PREJUDICIAL TO THE INTEREST OF REVENUE IS ALSO E RRONEOUS. UNLESS THE A.OS ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 14 ORDER IS NOT ERRONEOUS, NO ACTION CAN BE TAKEN BY T HE CIT U/S 263 OF THE ACT, THIS IS BECAUSE THE TWIN CONDITIONS I.E. (1) T HE ORDER IS ERRONEOUS AND (2) THE SAME IS ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE NOT CO- EXISTS. IN THE PRESENT CASE, THE A.O. HAS CONDUCTE D ENQUIRY BEFORE ALLOWING DEDUCTION TOWARDS WAGES AND CENTERING EXPE NSES AND ALSO EXAMINED THE POINTS ON WHICH THE CIT WANTS FURTHER VERIFICATION. THE ASSESSING OFFICER AFTER CAREFULLY EXAMINED THE BOOK S OF ACCOUNTS AND RELEVANT VOUCHERS FURNISHED BY THE ASSESSEE PASSED THE ASSESSMENT ORDER AS INDICATED IN HIS ORDER, WHICH IS CLEARLY EVIDENT FROM THE ASSESSMENT ORDER. THE CONTENTION OF THE CIT WAS THAT THE A.O. HAS NOT CONDUCTED PROPER ENQUIRY AND ALSO NOT APPLIED HIS MIND BEFORE ALLOWING THE DEDUCTION. BUT, WE DO NOT AGREE WITH THE CIT FOR T HE REASON THAT THERE IS A DISTINCTION BETWEEN LACK OF ENQUIRY AND INADEQUAT E ENQUIRY. IF THERE IS AN INADEQUATE ENQUIRY THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE CIT TO ASSUME JURISDICTION U/S 263 OF THE ACT, MERELY BECA USE HE HAS A DIFFERENT OPINION IN THE MATTER. THE CIT CAN DO THIS ONLY, W HEN THERE IS A LACK OF ENQUIRY BY THE ASSESSING OFFICER. IN THE PRESENT CA SE, THE ASSESSMENT ORDER IS DETAILED ONE AND ALSO, THE A.O. HAS PASSED A REMARKS IN THE ASSESSMENT ORDER ON TWO ISSUES, ON WHICH THE CIT AS SUMED JURISDICTION, I.E. DISALLOWANCE OF ROUND SOME EXPENDITURE OF RS. 1,00,000/- UNDER THE HEAD WAGES AND CENTERING CHARGES AND ALSO PARTNERS CAPITAL ACCOUNTS, WHERE THE ADDITION WAS RS. 66,825/-.THE A.O. HAD CA LLED FOR EXPLANATION AND THE ASSESSEE HAS FURNISHED ITS EXPLANATION. BU T, THE CIT WAS OF THE OPINION THAT THE ASSESSING OFFICER COULD HAVE DO WE LL TO EXPLORE THE POSSIBILITY OF REJECTING THE BOOKS OF ACCOUNTS AND ESTIMATE THE PROFIT. ACCORDING TO CIT, THE ASSESSING OFFICER HAS CONDUCT ED ENQUIRY BUT, IN ADEQUATE, THEREFORE HE WANTED FURTHER ENQUIRY ON TH E ISSUE ON WHICH HE ASSUMED JURISDICTION. THIS FACT HAD NOT BEEN DISPUT ED BY THE REVENUE. THE COMMISSIONER CANNOT INITIATE REVISION PROCEEDINGS, WITH A VIEW TO CONDUCT FISHING AND REVOLVING ENQUIRY IN THE MATTERS WHICH ARE ALREADY EXAMINED BY THE A.O. THE DEPARTMENT CANNOT DO FRESH ASSESSME NT IN THE GUISE OF REVISION ON THE MATTERS WHICH ARE EXAMINED AND CONC LUDED BY THE A.O. THE A.O. BEING A QUASI JUDICIAL AUTHORITY, SHALL HA VE THE AUTHORITY TO EXERCISE RIGHT JUDGEMENT AND DISCRETION ON THE BASI S OF INFORMATION AVAILABLE BEFORE HIM. IN THE PRESENT CASE ON HAND, THE ASSESSING OFFICER AFTER CONSIDERING VOUCHERS, MADE AN ROUND SOME ADDI TION OF RS.1,00,000/- WHICH IS ONE OF THE POSSIBLE VIEW AVAILABLE FOR HIM , WHICH THE CIT SHALL NOT TERM IT AS LACK OF ENQUIRY OR NON APPLICATION OF MI ND. THUS, IT CANNOT BE SAID THAT IT IS A CASE OF LACK OF ENQUIRY OR NON AP PLICATION OF MIND. 17. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO APPLYING THE RATIO OF THE COORDINATE BENCH, WE ARE OF THE OPINION THAT THE ASSESSMENT ORDER U/S 143(3) OF THE ACT PASSED B Y THE A.O. IS NOT ITA NO.268/VIZAG/2014 VEGESINA KAMALA, PALAKOL 15 ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE. THEREFORE, WE QUASHED THE ORDER PASSED BY THE CIT U /S 263 OF THE ACT AND RESTORE THE ASSESSMENT ORDER. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22 ND JAN16. SD/- SD/- (. ) ( . ) ( V. DURGA RAO ) ( G. MANJUNATHA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER , /VISAKHAPATNAM: 0 / DATED : 22.1.2016 VG/SPS # 2, 3,/ COPY OF THE ORDER FORWARDED TO :- 1. / THE APPELLANT SMT. VEGESINA KAMALA, W/O SRI RANGA RAJU, D.NO.6- 10-1/1, SUGAR COLONY, PALAKOL-534 260, WEST GODAVAR I DISTRICT. 2. #$ / THE RESPONDENT THE ITO WARD-1, PALAKOL 3. 5 / THE CIT, RAJAHMUNDRY 4. 5 () / THE CIT (A), RAJAHMUNDRY 5. , # :, ( : , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // >? : ( SR.PRIVATE SECRETARY ) ( : , , / ITAT, VISAKHAPATNAM