BIMAL V. PALA LEGAL HEIR OF LATE SMT. RANJANA VRAJLAL PALA, MUMBAI V. ITO 15(2)(3), MUMBAI

ITA 2735/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7793 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1996-1997
• Appeal Filed On: 13-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MAN JUNATHA SWAMYCIT
• Keywords: Revision of order; Residential status; Opportunity of being heard; Period of limitation; Deemed to accrue or arise in india; Assessment record
• Section: 143(3); 5(2); 148; 263

Judgement Text

B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.2735/ MUM/2016 ( / ASSESSMENT YEAR : 1996-97) SH.BIMAL V. PALA(LEGAL HEIR OF LATE SMT. RANJANA VRAJLAL PALA) C/O H H PARMER &CO. 512, MAKER CHAMBERS V 221, NARIMAN POINT MUMBAI 400 021. / V. PRINCIPAL COMMISSIONER OF INCOME TAX 26 BKC , BANDRA EAST MUMBAI ./ PAN : APMPP6636G ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI RAJESH P. SHAH REVENUE BY : SH. MANJUNATHA SWAMY,CIT- DR / DATE OF HEARING : 26-12-2016 / DATE OF PRONOUNCEMENT : 17.03.2017 / O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 2735/MUM/2016, IS DIRECTED AGAINST THE ORDER DATED 16 TH MARCH, 2016 PASSED BY LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX-26, MUMBAI (HEREINAFTER CALLED THE PR. CIT) U/S 263 OF INCOME-TAX ACT, 1961(HEREINAFTER CALLED THE ACT), FOR ASSESSMENT YEAR 1996-97. ITA 2735/MUM/2016 2 2. THE GROUNDS OF APPEAL RAISED BY ASSESSEE IN MEM O OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI (HEREINAF TER CALLED THE TRIBUNAL) READ AS UNDER:- 1. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT ERRED IN PASSING ORDER U/S 263 AND SETTING ASIDE THE ORDER DATED 19/03/2014 U/S 143(3) R.W.S. 147 ON THE GROUND THAT IT WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT ERRED IN PASSING ORDER U/S 263 WITHOUT TA KING ON RECORD THE DETAILS SUBMITTED AND EXPECTING TO DO IMPOSSIBLE OF BRING ON RECORD THE LOST PASSPORT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT ERRED IN PASSING ORDER U/S 263 RELYING ON DECIS ION OF RAMPYARIDEVI SARAOGI VS. CIT 67 ITR 84(SC) , TARADEVI AGGARWAL V S. CIT 88 ITR 323(SC) AND RAMASWAMY CHETTIYAR VS. CIT 220 ITR 657, 665(MAD) WHICH ARE NOT RELEVANT TO THE APPELLANT. 3. IN THE INSTANT CASE , PROCEEDINGS U/S 147 OF THE ACT WERE INITIATED BY AO AGAINST THE ASSESSEE BASED ON INFORMATION RECEIV ED FROM INVESTIGATION WING THAT ASSESSEE HAD AN OPERATING BANK ACCOUNT WI TH HSBC BANK, GENEVA, SWITZERLAND. THE AO WHILE FRAMING ASSESSMENT VIDE O RDERS DATED 19.03.2014 PASSED U/S 143(3) R.W.S. 147 OF THE ACT ACCEPTED N IL INCOME DECLARED IN RETURN OF INCOME FILED WITH REVENUE ON 18-04-2013 IN RESPONSE TO NOTICE DATED 26-03-2013 U/S 148 OF THE ACT. THE AO ALSO AC CEPTED NON RESIDENT STATUS OF THE ASSESSEE, VIDE ASSESSMENT ORDER DATED 19.03.2014 PASSED BY THE AO U/S 143(3) R.W.S. 147 OF THE ACT. 4. THE PR. CIT RECEIVED PROPOSAL U/S 263 FROM ACIT, 26(1), MUMBAI THROUGH JCIT, RANGE 26(1), MUMBAI ON 08.01.2016. THE PR. CI T CALLED FOR RECORDS AND ON GOING THROUGH THE ASSESSMENT RECORDS AND ORDERS, OBSERVED THAT THE STATUS OF ASSESSEE BEING NON RESIDENT DURING THE IM PUGNED ASSESSMENT YEAR WAS ACCEPTED BY AO AS PER CLAIM OF THE ASSESSEE WIT HOUT ANY SUBMISSIONS BY ITA 2735/MUM/2016 3 ASSESSEE WITH RESPECT TO STAY IN INDIA DURING PREVI OUS YEAR RELEVANT TO THE ASSESSMENT YEAR BY OBSERVING AS UNDER : ON GOING THROUGH THE ASSESSMENT RECORDS AND THE A SSESSMENT ORDER PASSED , IT WAS OBSERVED THAT THE ASSESSE HAD SUBMITTED THAT IN 2007 SHE LOST HER PASSPORT AND SUBMITTED A COPY OF PASSPORT DATED 11.12.2007 ISSUED AT BAHRAIN, ON THE OBSERVATION PAGE OF WHICH IT WAS WRITTEN: THIS PASSPORT IS DUP LICATE. ISSUED IN LIEU OF LOST PASSPORT NO. Z003983 DATED 26.12.2006 ISSUED AT BAHRAIN. THUS, NO SUBMISSION WAS MADE WITH REGARD TO HER STAY IN INDIA, BUT THE ASSESSMENT WAS COMPLETED TAKING T HE STATUS AS NON-RESIDENT , AS PER THE CLAIM OF THE ASSESSEE. THUS, IT WAS OBSERVED BY PR. CIT THAT ASSESSMENT OR DER DATED 19.03.2014 PASSED BY THE AO U/S 143(3) R.W.S. 147 OF THE ACT I S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE PR. CIT ISSUED SHOW CAUSE NOTICE DATED 15.02.2016 U/S 263 OF THE ACT TO THE ASSESSEE , WHI CH WAS NOT REPLIED WITH BY THE ASSESSEE. FURTHER, NOTICE DATED 26.02.2016 WAS ISSUED AND SERVED ON THE ASSESSEE BY PR. CIT. THE ASSESSEE IN RESPONSE SUBMITTED BEFORE PR. CIT , A COPY OF AFFIDAVIT DATED 31.01.2015 EXPLAINING THE FACTS OF ASSESSEE BEING R ESIDENT OF BAHRAIN AND LOSS OF PASSPORT ETC. . THE ASSESSEE ALSO SUBMITTE D COPY OF CERTIFICATE RECEIVED FROM HEAD OF HUMAN & FINANCIAL RESOURCES DIRECTORAT E , BAHRAIN DATED 12.11.2014 AND COPY OF POLICE COMPLAINT FOR THE COM PLAINT LODGED FOR LOST PASSPORT DATED 2.12.2007. THE ASSESSEE ALSO SUBMITT ED LETTER DATED 15.03.2016 THAT THE ASSESSEE WAS NRI IN ASSESSMENT YEAR 1996-97. IT WAS SUBMITTED THAT IN YEAR 2007, SHE ALONG WITH HER FA MILY MEMBERS LOST PASSPORT. THE ASSESSEE DID NOT SUBMITTED PASSPORT F OR RELEVANT PREVIOUS YEAR. THE PR. CIT OBSERVED THAT AO HAS SIMPLY ACCEPTED TH E CONTENTIONS OF THE ASSESSEE WITHOUT MAKING ANY ENQUIRY WHICH WERE CALL ED FOR IN THE CIRCUMSTANCES. THE PR. CIT RELIED UPON DECISION OF HONBLE SUPREME COURT IN ITA 2735/MUM/2016 4 THE CASE OF RAMPYARI DEVI SAROGI V. CIT (1968) 67 I TR 84(SC) , TARA DEVI AGARAWAL V. CIT (1973) 88 ITR 323(SC) AND K.A.RAMAS WAMY CHETTIAR V. CIT (1996) 220 ITR 657, 665(MAD.) . THE PR. CIT OBSERVE D THAT THE AO SHOULD HAVE ASKED FOR DETAILS OF ASSESSEE STAY IN INDIA AL ONG WITH DOCUMENTARY EVIDENCES AND THE SAME SHOULD HAVE BEEN THOROUGHLY VERIFIED , WHICH WAS NOT DONE BY AO. THE PR. CIT OBSERVED THAT AO SIMPLY PLA CED THE SUBMISSIONS MADE BY THE ASSESSEE ON RECORD AND THE ASSESSMENT W AS COMPLETED SIMPLY TAKING STATUS OF THE ASSESSEE AS NON-RESIDENT AS PER CLAIM OF THE ASSESSEE. THUS, THE ASSESSMENT ORDER DATED 19.03.2014 PASSED BY THE AO U/S 143(3) R.W.S. 147 OF THE ACT WAS HELD TO BE ERRONEOUS SO F AR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE ON THE SAID ISSUE AND WAS SET A SIDE BY PR. CIT VIDE ORDERS DATED 16.03.2016 PASSED U/S 263 OF THE ACT AND DIRE CTIONS WERE ISSUED TO AO FOR DECIDING THE ISSUE AFRESH, AFTER DUE VERIFICATI ON. 5. AGGRIEVED BY THE ORDER DATED 16.03.2016 PASSED B Y PR. CIT U/S 263 OF THE ACT, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT CHALLENGE IN PRESENT APPEAL IS TO THE ORDER DATED 16.03.2016 PASSED BY P R. CIT U/S 263 OF THE ACT . IT WAS SUBMITTED THAT INFORMATION WAS RECEIVED BY R EVENUE THAT ASSESSEE HAS AN ACCOUNT WITH HSBC BANK AT GENEVA, SWITZERLAND , WHICH LED TO RE-OPENING OF ASSESSMENT U/S 147 OF THE ACT , WHEREIN NOTICE D ATED 26-03-2013 U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE BY AO. IT WAS SUBMITTED THAT ASSESSEE WAS RESIDENT OF BAHRAIN DURING THE RELEVANT PREVIOU S YEAR. IT WAS SUBMITTED THAT INDIAN PASSPORT NO. Z003983 ISSUED IN BAHRAIN ISSUED ON 26-12-2006 BY INDIAN CONSULATE , BAHRAIN IN THE NAME OF ASSESSEE WAS LOST IN BAHRAIN ON 02-12-2007. THE LEARNED COUNSEL SUBMITTED THAT COMP LAINT WAS FILED WITH MINISTRY OF INTERIOR, KINGDOM OF BAHRAIN ON 02-12-2 007 INTIMATING LOSS OF ABOVE PASSPORT HELD BY ASSESSEE. THE COPIES OF CERT IFICATE ISSUED BY MINISTRY OF INTERIOR IS ENCLOSED IN PAPER BOOK 20-21 FILED W ITH THE TRIBUNAL.. IT WAS ITA 2735/MUM/2016 5 SUBMITTED THAT NEW INDIAN PASSPORT WAS ISSUED AT BA HRAIN BEARING NO. F9275653 DATED 11/12/2007 BY INDIAN CONSULATE OFFIC E WHICH IS ALSO ENCLOSED IN PAPER BOOK/PAGE 23. THE ASSESSEE HAS AL SO EXECUTED AFFIDAVIT DATED 01-02-2015 TO SUPPORT ITS CONTENTIONS AND WAS FILED BEFORE THE LD PR. CIT WHICH IS PLACED IN PAPER BOOK/PAGE 17-18. 7. LD CIT DR SUBMITTED THAT AO SHOULD HAVE VERIFIED THE CONTENTION OF THE ASSESSEE BEFORE ACCEPTING THE SAME, WHICH WAS NOT D ONE BY THE AO IN THE INSTANT CASE. IT WAS SUBMITTED THAT AO MERELY ACCEP TED THE CONTENTIONS OF THE ASSESSEE WITHOUT VERIFICATION AND HENCE RE-ASSESSME NT ORDER DATED 19-03- 2014 PASSED BY THE AO IS ERRONEOUS SO FAR IT IS PRE JUDICIAL TO THE INTEREST OF REVENUE AND WAS RIGHTLY SET ASIDE BY PR. CIT U/S 26 3 OF THE ACT. THUS , IT WAS SUBMITTED THAT IT IS A CASE OF COMPLETE LACK OF EN QUIRY. THE LD CIT DR RELIED UPON DECISION OF HONBLE APEX COURT IN THE CASE OF CIT V. AMITABH BACHCHAN (2016) 69 TAXMANN.COM 170(SC). 8. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD INCLUDING CASE LAWS CITED BEFORE US. THE AO RECEIVE D INFORMATION FROM INVESTIGATION WING THAT ASSESSEE HAS AN ACCOUNT DUR ING THE RELEVANT PREVIOUS YEAR IN SWITZERLAND WITH HSBC BANK AT GENEVA. THE A O BASED ON SUCH INFORMATION REOPENED THE ASSESSMENT U/S 147 OF THE ACT FOR ASSESSMENT YEAR 1996-97 BY ISSUING NOTICE DATED 26-03-2013 U/S 148 OF THE ACT. THE ASSESSEE WAS CONFRONTED WITH THE SAID INFORMATION DURING RE- ASSESSMENT PROCEEDINGS U/S 147 R.W.S. 143(3) OF THE ACT. THE ASSESSEE IN R E-ASSESSMENT PROCEEDINGS SUBMITTED THAT SHE IS AN OLD LADY OF 74 YEARS SUFFE RING FROM ARTHRITICS. IT WAS SUBMITTED THAT SHE RESIDED IN BAHRAIN FOR MORE THAN 40 YEARS AND ACCORDINGLY WAS NON-RESIDENT DURING THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR 1996-97. IT WAS SUBMITTED THAT SINC E SHE WAS NON-RESIDENT AT THAT TIME, SHE WAS UNDER NO OBLIGATION TO FILE R ETURN OF INCOME WITH REVENUE DURING THE IMPUGNED ASSESSMENT AND HENCE NO RETURN OF INCOME ITA 2735/MUM/2016 6 WAS ORIGINALLY FILED BY HER FOR THE IMPUGNED ASSESS MENT YEAR WITH REVENUE . IN RE-ASSESSMENT PROCEEDING , SHE FILED RETURN OF INCOME DECLARING NIL INCOME, UNDER PROTEST. IT WAS SUBMITTED THAT SHE I S NOT ABLE TO RECOLLECT TRANSACTION FOR ASSESSMENT YEAR 1996-97 NOR SHE HAD ANY BANK STATEMENT OR ANY OTHER DOCUMENTS OF THOSE TIMES TO HELP HER RECO LLECT THE TRANSACTIONS. IT WAS SUBMITTED THAT FROM THE ASSESSMENT YEAR 2009-10 , SHE WAS FILING RETURN OF INCOME IN INDIA AS RESIDENT. IT WAS SUBMITTED THAT IN 2007, IN BAHRAIN , THE ASSESSEE LOST HER PASSPORT WHICH BORE THE NUMBE R Z003983 ISSUED ON 26- 12-2006, WHICH IS REFLECTED IN THE PRESENT PASSPORT ISSUED AT BAHRAIN ON 09- 01-2012 WHICH REFERRED TO OLD PASSPORT DATED 11.12. 2007 AND 26.12.2006. . IT WAS SUBMITTED THAT THE ASSESSEE DID NOT HAVE COPY O F OLD PASSPORT. IT WAS SUBMITTED THAT ASSESSEE DID NOT HAD ANY TAXABLE INC OME IN INDIA DURING THE RELEVANT PREVIOUS YEAR . IT WAS SUBMITTED THAT THE ASSESSEE HAD INVESTMENT INCOME IN BAHRAIN BUT SINCE THERE WAS NO TAX IN BAH RAIN, SHE DID NOT PRESERVE ANY DOCUMENTARY PROOF OF INVESTMENT. THE AO ACCEPTED CONTENTIONS OF THE ASSESSEE AND ACC EPTED NON RESIDENT STATUS OF THE ASSESSEE FOR THE RELEVANT PREVIOUS YE AR , WITHOUT ANY ENQUIRY AND VERIFICATIONS BASED ON SUBMISSIONS AND CLAIMS MADE BY THE ASSESSEE IN HER SUBMISSIONS BEFORE THE AO, FOR WHICH RE-ASSESSM ENT ORDER DATED 19.03.2014 WAS PASSED BY THE AO U/S 143(3) R.WS. 14 7 OF THE ACT. WE HAVE GONE THROUGH THE ASSESSMENT ORDER DATED 19.03.2014 PASSED BY THE AO U/S 143(3) R.W.S. 147 OF THE ACT AS WELL SUBMISSIONS MA DE BY THE ASSESSEE BEFORE THE AO. THE ASSESSMENT WAS RE-OPENED AS INFORMATION WAS RECEIVED THAT ASSESSEE WAS HOLDING AN BANK ACCOUNT IN SWITZERLAND WITH HSBC BANK AT GENEVA. THE ASSESSEE DURING RE-ASSESSMENT PROCEEDIN GS DID NOT COMMENTED WHETHER SHE IS HOLDING THE SAID BANK ACCOUNT WITH H SBC, GENEVA OR NOT AS NO COMMENTS WERE OFFERED TOWARDS THE EXISTENCE OF S AID BANK ACCOUNT. THE ASSESSEE MERELY STATED THAT SHE DOES NOT HAVE ANY B ANK STATEMENT WITH HER FOR RELEVANT PERIOD. THE ASSESSEE HAD CONTENDED THA T THE ASSESSEE IS NON ITA 2735/MUM/2016 7 RESIDENT DURING THE RELEVANT PERIOD BUT NO EVIDENCE WAS PROVIDED TO THAT EFFECT. IT IS MERELY STATED THAT THE ASSESSEE RESID ED IN BAHRAIN FOR LAST MORE THAN 40 YEARS AND BEING NON RESIDENT, THE ASSESSEE DOES NOT HAVE TAXABLE INCOME IN INDIA AND HENCE NO RETURNS WERE FILED TIL L ASSESSMENT YEAR 2009-10. NO DETAILS OF ACTUAL PERIOD OF STAY OUT OF INDIA AN D SPECIFICALLY DURING THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT Y EAR AS ALSO NO DETAILS AS TO FULFILLING OF THE REQUIREMENTS AS PROVIDED UNDER SECTION 6 OF THE ACT WAS FURNISHED BY THE ASSESSEE BEFORE THE AO. IT WAS MER ELY STATED THAT PASSPORT WAS LOST AND NO DETAILS ARE AVAILABLE. EVEN , IF T HE ASSESSEE IS HELD TO BE NON RESIDENT , THEN ALSO BY VIRTUE OF INCOME RECEIVED I N INDIA OR DEEMED TO BE RECEIVED IN INDIA OR INCOME ACCRUED IN INDIA OR INC OME DEEMED TO ACCRUE OR ARISE IN INDIA , THE SAID INCOME SHALL BE TAXABLE I N INDIA , BY VIRTUE OF PROVISIONS OF SECTION 5(2) OF THE ACT. THESE ASPECT S WERE NOT GONE INTO BY THE AO AND HE MERELY ACCEPTED THE CONTENTIONS OF THE AS SESSEE WITHOUT VERIFICATIONS AND ENQUIRY. THUS, IT IS A CASE WHICH IS NOT SUFFERING FROM INADEQUATE ENQUIRY BUT RATHER THE RE-ASSESSMENT IS VITIATED BY COMPLETE LACK OF ENQUIRY WHEREIN THE AO CHOSE NOT TO MAKE ANY ENQ UIRY OR VERIFICATIONS WHATSOEVER . THE AO WHILE PASSING RE-ASSESSMENT ORD ER DATED 19-03-2014 DID NOT MADE ANY ENQUIRY AND MERELY ACCEPTED THE CONTEN TIONS OF THE ASSESSEE WITHOUT ANY VERIFICATION AND ENQUIRY. THE RE-ASSESS MENT ORDER DATED 19-03- 2014 PASSED BY THE AO THUS CANNOT BE UPHELD AS IT I S NOT BASED ON ANY COGENT MATERIAL ON RECORD TO SUBSTANTIATE THAT ASSE SSEE WAS INFACT NON RESIDENT IN THE RELEVANT YEAR AS PER PROVISIONS OF SECTION 6 OF THE ACT AND ALSO EVEN IF SHE IS HELD TO NON RESIDENT , THERE WAS NO INCOME FALLING WITHIN PURVIEW OF SECTION 5(2) OF THE ACT TO TAKE HER OUT OF CLUTCHES OF TAXABILITY AS PROVIDED UNDER PROVISIONS OF THE ACT. THUS, THE ASS ESSMENT ORDER OF THE AO CANNOT BE SUSTAINED AS IT IS ERRONEOUS SO FAR AS PR EJUDICIAL TO THE INTEREST OF REVENUE AND WAS RIGHTLY SET ASIDE BY LD. PR. CIT U/ S 263 OF THE ACT. THE AO EVEN DID NOT BROUGHT ON RECORD WHETHER THE ASSESSEE WAS IN-FACT HOLDING BANK ACCOUNT WITH HSBC , GENEVA OR NOT DURING THE RELEVA NT PREVIOUS YEAR OR NO ITA 2735/MUM/2016 8 SUCH BANK ACCOUNT WAS HELD BY HER . THE ASSESSEE HA S MERELY STATED THAT SHE DOES NOT HAVE BANK STATEMENT. EVEN THE PASSPORT WAS STATED TO BE LOST AND STATUS OF THE ASSESSEE BEING NON RESIDENT FOR PREVI OUS YEAR RELEVANT TO ASSESSMENT YEAR WAS ACCEPTED BY THE AO ON SELF DECL ARATION BY THE ASSESSEE. ATTENTION IS DRAWN TO PROVISIONS OF SECTION 263 OF THE ACT WHICH S TIPULATES AS UNDER: E.REVISION BY THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER REVISION OF ORDERS PREJUDICIAL TO REVENUE. 263. (1) THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER MAY CALL F OR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE [ASSESSING] OFFICER IS ERRONEOUSIN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVE NUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUC H ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDE R ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMEN T AND DIRECTING A FRESH ASSESSMENT. [ EXPLANATION 1. ] FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT, FOR THE PURPOSES OF THIS SUB-SECTION, (A) AN ORDER PASSED [ON OR BEFORE OR AFTER THE 1ST DA Y OF JUNE, 1988] BY THE ASSESSING OFFICER SHALL INCLUDE (I) AN ORDER OF ASSESSMENT MADE BY THE ASSISTANT COMMISSIONER 2 [OR DEPUTY COMMISSIONER] OR THE INCOME-TAX OFFICER ON THE BASIS OF THE DIRECTIONS IS SUED BY THE [JOINT] COMMISSIONER UNDER SECTION 144A ; (II) AN ORDER MADE BY THE [JOINT] COMMISSIONER IN EXERCISE OF THE POWERS OR IN THE PERFORMANCE OF THE FUNCTIONS OF AN ASSESSING OFFICER CONFERRED ON, OR ASSIGNED TO, HIM UNDER THE ORDERS OR DIRECTIONS ISSUED BY THE BOARD OR BY THE [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL DIRECTOR GENERAL OR] DIRECTOR GENERAL OR [PRINCIPAL COMMISSIONER OR] COMMISSIONER AUTHORISED BY THE BOARD IN THIS BEHALF UNDER SECTION 120 ; ITA 2735/MUM/2016 9 (B) 'RECORD' [SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED] ALL RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT AVAILABLE AT THE TIME OF EXAMINATION BY THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER; (C) WHERE ANY ORDER REFERRED TO IN THIS SUB-SECTION AN D PASSED BY THE ASSESSING OFFICER HAD BEEN THE SUBJECT MATTER OF ANY APPEAL [FILED ON OR BEFORE OR AFTER THE 1ST DAY OF J UNE, 1988], THE POWERS OF THE [PRINCIPAL COMMISSIONER OR] COMMISSION ER UNDER THIS SUB-SECTION SHALL EXTEND [AND SHALL BE DEEMED ALWAYS TO HAVE EXTENDED] TO SUCH MATTERS AS HAD NOT BEEN CONSIDERED AND DECIDED IN SUCH APPEAL.] [ EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, IT IS H EREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFIC ER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMI SSIONER OR COMMISSIONER, (A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICA TION WHICH SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIR ING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119 ; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH A NY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASSESSEE OR ANY OTHER PERSON. ] [(2) NO ORDER SHALL BE MADE UNDER SUB-SECTION (1) AFTER TH E EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE O RDER SOUGHT TO BE REVISED WAS PASSED.] (3) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTION (2), AN ORDER IN REVISION UNDER THIS SECTION MAY BE PASSED AT ANY TIM E IN THE CASE OF AN ORDER WHICH HAS BEEN PASSED IN CONSEQUENCE OF, OR TO GIVE EFFECT TO, ANY FINDING OR DIRECTION CONTAINED IN AN ORDER OF THE APPELLA TE TRIBUNAL, [NATIONAL TAX TRIBUNAL,] THE HIGH COURT OR THE SUPREME COURT. EXPLANATION.IN COMPUTING THE PERIOD OF LIMITATION FOR T HE PURPOSES OF SUB-SECTION (2), THE TIME TAKEN IN GIVING AN OPPORTUN ITY TO THE ITA 2735/MUM/2016 10 ASSESSEE TO BE REHEARD UNDER THE PROVISO TO SECTION 129 AND ANY PERIOD DURING WHICH ANY PROCEEDING UNDER THIS SECTION IS STAYED BY AN ORDER OR INJUNCTION OF ANY COURT SHALL BE EXCLUDED. WE HAVE OBSERVED THAT W.E.F. 1ST JUNE, 2015 BY FINAN CE BILL 2015, EXPLANATION 2 TO SECTION 263 WAS INSERTED TO DECLARE THE LAW WHICH RE ADS AS UNDER:- [ EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEM ED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENU E, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, ( A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOU T INQUIRING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119 ; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WIT H ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISD ICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASSESSEE OR ANY OT HER PERSON. ] THUS, EXPLANATION 2 TO SECTION 263(1) OF THE ACT HA S INTRODUCED DEEMING PROVISIONS WHERE, INTER-ALIA, IF THE AO DID NOT MAD E THE ENQUIRIES WHICH IT WAS REQUIRED TO MADE , THE ORDER SHALL BE DEEMED TO BE ERRONEOUS SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. IN THE INST ANT CASE , THE AO DID NOT MADE ANY ENQUIRY OR VERIFICATION WHATSOEVER AND ACC EPTED THE CONTENTIONS OF THE ASSESSEE. EVEN AS TO INCRIMINATING INFORMATION RECEIVED BY AO THAT THE ASSESSEE HAD AN ACCOUNT IN SWITZERLAND WITH HSBC BA NK AT GENEVA DURING THE IMPUGNED ASSESSMENT YEAR WAS NOT ENQUIRED / VER IFIED INTO . THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL COMPANY LIMITED V. CIT (2000)109 TAXMAN 66 (SC) HELD THAT IF THE AO HAS ACCEPTED THE ENTRY IN THE STATEMENT OF ACCOUNT FILED BY THE TAXPAYER WITHOUT MAKING ENQUIRY AND APPLICATION OF MIND , THE SAID ORDER OF THE AO SHAL L BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE . IN OUR CONSIDERED ITA 2735/MUM/2016 11 OPINION, THE FACTS OF THE CASE OF THE INSTANT CASE ARE SIMILAR TO THE FACTS IN THE CASE OF MALABAR INDUSTRIAL CO. LIMITED(SUPRA) WHEREBY NO ENQUIRY/VE RIFICATION IS MADE BY AO WHATSOEVER WITH RESPECT TO RESIDENTIAL STATUS OF TH E ASSESSEE AS WELL AS HIS HOLDING OF THE BANK ACCOUNT IN SWITZERL AND WITH HSBC AT GENEVA DURING RELEVANT PREVIOUS YEAR AND THE SAME WAS ACCE PTED BASED ON SUBMISSIONS OF THE ASSESSEE WITHOUT APPLICATION OF MIND AS WELL WITHOUT ANY VERIFICATION/ENQUIRY BEING MADE BY THE AO. THUS, IN OUR CONSIDERED VIEW LEARNED PR. CIT RIGHTLY INVOKED PROVISIONS OF SECTI ON 263 OF THE ACT FOR SETTING ASIDE RE-ASSESSMENT ORDER DATED 19-03-2014 PASSED B Y AO BEING ERRONEOUS SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE, A S NO ENQUIRY WAS MADE BY AO AS WELL THERE WAS NO APPLICATION OF MIND WHILE ALL THE SUBMISSIONS OF THE ASSESSEE WERE ACCEPTED WITHOUT ANY ENQUIRY/VERIFICA TION. THUS THE VIEW OF THE AO IS NOT A SUSTAINABLE VIEW AS IT WAS NOT SUPPORTE D BY EVIDENCE ON RECORDS AND HENCE WAS A PERVERSE VIEW WHICH COULD NOT BE HE LD TO BE ONE OF THE POSSIBLE VIEW TAKEN BY THE AO TO TAKE THE SAME OUT OF THE PURVIEW OF MANDATE OF SECTION 263 OF THE ACT. IN PROCEEDINGS U/S 263 OF THE ACT , THE ASSESSEE RE ITERATED ITS SUBMISSIONS AS ALSO FILED AN AFFIDAVIT DATED 31.01.2015 (PB/PAGE 1 7-18), WHEREIN SHE ADMITTED TO HAVE OPENED A BANK ACCOUNT IN SWITZERLA ND WITH HSBC BANK AT GENEVA ON 15-12-1989. IT IS THE AVERMENT OF THE ASS ESSEE IN THE SAID AFFIDAVIT THAT SHE IS STAYING WITH HER HUSBAND IN BAHRAIN SIN CE 1957(PB/17) , WHILE CERTIFICATE ( PB/19) DATED 12-11-2014 ISSUED BY HEA D OF THE HUMAN AND RESOURCES DIRECTORATE HAD STATED THAT HER FIRST ENT RY TO THE KINGDOM OF BAHRAIN WAS RECORDED ON 21-07-1994 , AND THE IMPUGN ED ASSESSMENT YEAR IS 1996-97. THE ASSESSEE IN HER AFFIDAVIT HAS AVERRED THAT THE ASSESSEE HAS FILED AN RTI APPLICATION WITH FRRO ON 05-11-2015 TO OBTA IN HER ENTRY INTO AND OUT OF INDIA TO CONFIRM HER RESIDENTIAL STAUS. THE ASSESSEE HAS ALSO AVERRED THAT SHE HAS LOST HER PASSPORT NO Z003983 DATED 26/ 12/2006 ISSUED AT BAHRAIN BY INDIAN CONSULATE WHICH WAS DULY REPORTED TO MINISTRY OF INTERIOR ITA 2735/MUM/2016 12 AT KINGDOM OF BAHRAIN , THEIR CERTIFICATE IS PLACED IN PAGE 20-21, BUT IN OUR CONSIDERED VIEW, THIS IS IRRELEVANT AS HER RESIDENT IAL STATUS IS TO BE DETERMINED U/S 6 OF THE ACT W.R.T. PREVIOUS YEAR RELEVANT TO A SSESSMENT YEAR 1996-97 WHICH IS A RELEVANT ASSESSMENT YEAR AND ANY PASSPOR T WHICH IS ISSUED POST THIS PERIOD I.E. IN THIS CASE PASSPORT NO Z003983 I SSUED ON 26-12-2006 IS TOTALLY IRRELEVANT TO DETERMINE RESIDENTIAL STATUS OF THE ASSESSEE FOR ASSESSMENT YEAR 1996-97 UNDER CONSIDERATION . THUS, KEEPING IN VIEW OF OUR ABOVE DETAILED DISCUSS IONS , WE UPHOLD THE ORDER OF THE LEARNED PR. CIT PASSED U/S 263 OF THE ACT SE TTING ASIDE THE ORDER OF THE AO BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE ABOVE MENTIONED ISSUE AND TO BE SET ASIDE THE SAME TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH , AFTER DUE VERIFICATIONS. WE ORDER ACCORDINGLY. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IN I TA NO. 2735/MUM/2016 FOR ASSESSMENT YEAR 1996-97 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH MARCH, 2017. # $% &' .............. ( ) SD/- SD/- ( RAMIT KOCHAR) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER $ MUMBAI ; & DATED 17.03.2017 ./../ R.K. R.K. R.K. R.K. , EX. SR. PS $%&'()*+,%+) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 0 ( ) / THE CIT(A)- CONCERNED, MUMBAI ITA 2735/MUM/2016 13 4. 0 / CIT- CONCERNED, MUMBAI 5. 34( //56 , 56 , $ / DR, ITAT, MUMBAI H BENCH 6. (89 : / GUARD FILE. $%& / BY ORDER, 3 / //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI