Sh. Ramesh Batta, Meerut V. CIT, Kanpur

ITA 2767/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81904 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 20-10-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 07-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK WADEKAR
• Keywords: Opportunity of being heard; Documents seized
• Section: 143(3); 153A; 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F NEW DELHI BEFORE SHRI H.S.SIDHU, JM AND SHRI J.SUDHAKAR REDDY, AM ITA NOS. 2766 - 2767 - 2768 - AND 2769 /DEL/201 3 AY : - 2005 - 06 TO 2008 - 09 SH. RAMESH BATTA VS. CIT, KANPUR 81/210, KAULAGARH ROAD MEERUT PAN: ABGPB 1527 N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SALIL KAPOOR & SH.VIKAS JAIN, ADV. RESPONDENT BY : SH. VIVEK WADEKAR, CIT, DR O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER ALL THESE APPEALS ARE FILED BY THE ASSESSEE PERTAINING TO DIFFERENT AYS AND ARE DIRECTED AGAINST THE ORDER OF THE LD.CIT (CENTRAL), KANPUR U/S 263 OF THE ACT ON 15 TH MARCH, 2013 . 2. THE CONCLUSIONS OF LD.CIT(A) ARE AS FOLLOWS. 7 . T HE ASSESSEE HAS, IN HIS RESPONSE, ALSO CLAIMED THAT THE AMOUNT MENTIONED ON THE REVERSE MAY BE QUOTED BY THE BROKERS. THIS. HOWEVER, AGAIN DOES NOT HOLD WATER A THERE IS NO SUCH MENTION OF THE AMOUNT BEING CHARGED BEING DIFFERENCE FROM WHAT HAS BEEN AUTHENT ICATED BY SHRI RAKESH BATTA ON THE REVERSE OF THESE PAPERS. IT IS THUS BE SEEN THAT THE A.O. WHILE FRAMING THE ASSESSMENT ORDER WITHOUT ANY BASIS, DOCUMENTS BEING FOUND EITHER DURING THE COURSE OF SEARCH OR BEING SUBMITTED DURING THE COURSE OF ASSESSMENT P ROCEEDINGS WRONGLY ALLOWED REBATE OF 35% ON SUCH UNRECORDED, UNFOUNDED EXPENDITURE. ANY EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE ITA NOS. 2766 - 2767 - 2768 AND 2769/DEL/2013 AYS: 2005 - 06 TO 2008 - 09 SH.RAMESH BATTA, MEERUT 2 OF EARNING AN INCOME IS TO BE ALLOWED AS A DEDUCTION. HOWEVER, THE BASIC CONDITION IS THAT SUCH EXPENDITURE SHOULD HAVE BEEN INCURRED. AS ALREADY INDICATED NO SUCH EXPENDITURE HAS EITHER BEEN DEBITED IN THE BOOKS OR SUPPORTED BY ANY DOCUMENTS SEIZED DURING THE SEARCH OR OTHERWISE. THE ORDER OF THE AO IS, THEREFORE, CLEARLY ERRONEOUS AS WELL AS PREJUDICIAL TO T HE INTEREST OF REVENUE AS NO SUCH DEDUCTION WAS ALLOWABLE WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE, AS PER THE PROVISIONS OF THE ACT. 8. THE ASSESSEE HAS ALSO, IN RESPONSE TO THE SECOND ISSUE REGARDING CAPITAL GAIN, MENTIONED THAT THE ALLEGED U NEXPLAINED INVESTMENT IN THE HANDS OF THE FIRM M/S R.B.ENTERPRISES DOES NOT MAKE THE ORDER PREJUDICIAL TO THE INTEREST OF REVENUE AS IT WAS TAXED ON HIGHER RATE OF TAX I.E.30%. EVEN IF THIS WAS SHIFTED TO INDIVIDUAL HANDS THEN THE TAX QUANTUM WOULD NOT E XCEED THE HIGHEST RATE OF 30%. ON THIS BASIS, THE ASSESSEE CLAIMED THE ADDITION IN THE HANDS OF M/S R.B.ENTERPRISES WAS NOT ERRONEOUS AS IT WAS BASED ON THE PAST AND ACCEPTED PATTERN ADOPTED BY THE ASSESSEE. THE ASSESSEE FURTHER CLAIMED THAT THIS ADDITION WAS ALSO NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE AND DOES NOT INVOLVE ANY REDUCTION/LEAKAGE OF TAX. AT THIS POINT, IT IS IMPORTANT TO NOTE THAT AS PER PROVISIONS OF THE INCOME TAX ACT, THE INCOME HAS TO BE CHARGED TO TAX AT CORRECT RATE IN THE CO RRECT ASSESSMENT YEAR AND IN THE HANDS OF THE EARNING, IF THE INCOME CHARGEABLE TO TAX IN THE HANDS OF THE PARTNER (EVEN IF 30%). IF IT IS CHARGED IN THE HANDS OF THE FIRM WILL CONSTITUTE AN ORDER ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE . 9. IN VIEW OF THE ABOVE AND AFTER HAVING CONSIDERED ALL THE FACTS, ARGUMENTS RAISED BY THE ASSESSEE, IT IS CLEAR THAT THE ORDER PASSED BY THE A.O. IS ERRONEOUS AS INDICATED ABOVE AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. THEREFORE, THE ORDER PA SSED BY THE A.O. IS HEREBY SET ASIDE U/S 263 OF THE IT ACT 1961 TO BE FRAMED AFRESH AFTER TAKING INTO ACCOUNT THE POINTS MADE ABOVE ON THE MERITS OF THE CASE AS WELL AS THE DOCUMENTS SUBMITTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, DO CUMENTS AND OTHER INFORMATION FOUND DURING THE COURSE OF SEARCH AND AFTER GIVING THE ASSESSEE DUE OPPORTUNITY OF BEING HEARD. 3. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS. ITA NOS. 2766 - 2767 - 2768 AND 2769/DEL/2013 AYS: 2005 - 06 TO 2008 - 09 SH.RAMESH BATTA, MEERUT 3 1. THAT THE NOTICE ISSUED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961, AND THE ORDER PASSED UNDER SAID SECTION ARE ILLEGAL, BA D IN LAW AND WITHOUT JURISDICTION. 2. THAT THE NOTICE BY THE CIT UNDER SECTION 263 DOES NOT SHOW THAT THE ASSESSING OFFICER COMMITTED ANY ERROR IN PASSING THE ASSESSMENT ORDER U NDER SECTION 153A R.W.S. 143 (3). THEREFORE, THE JURISDICTION ASSUMED BY THE CIT UNDER SECTION 263 IS ILLEGAL AND WITHOUT JURISDICTION AND IS LIABLE TO BE QUASHED. 3. THAT THE ORDER PASSED UNDER SECTION 153A1143 (3) BY THE ASSESSING OFFICER IS NEITHER ER RONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE AND AS SUCH THE ORDER PASSED BY THE CIT ORDER UNDER SECTION 263 IN CANCELLING THE ASSESSMENT IS ILLEGAL AND BAD IN LAW. 4. THAT THE CIT HAS FAILED TO APPRECIATE THAT ALL THE ISSUES REFERRED IN HIS ORDER U NDER SECTION 263 HAVE BEEN DULY CONSIDERED AND THE VIEW TAKEN BY THE ASSESSING OFFICER IS A POSSIBLE VIEW. ALL NECESSARY ENQUIRES/INVESTIGATIONS RELATING TO ALL THE ISSUES REFERRED IN THE ORDER OF THE CIT UNDER SECTION 263 WERE MADE AND PARTLY ACCEPTED BY THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT UNDER SECTION 153A / 143(3). THUS, THE NOTICE ISSUED AND THE IMPUGNED ORDER ARE BEYOND THE PREVIEW OF SECTION 263 AND HENCE, THE ORDER PASSED UNDER SECTION 263 IS L IABLE TO BE QUASHED. 5. THAT THE CIT HAS AGREED WITH THE SUBMISSIONS OF THE APPELLANT THAT THE ASSESSING OFFICER HAS TAKEN THE VIEW AFTER CONSIDERING ALL THE ASPECTS. MOREOVER THE VIEW TAKEN BY THE ASSESSING OFFICER IS A POSSIBLE VIEW. HENCE, THE CIT HAS ERRED IN LAW AND ON FACTS IN SETTING ASIDE THE ASSESSMENT TO BE REDONE AFRESH. 6. THAT THE WITHOUT PREJUDICE TO OUR APPEAL FILED BEFORE THE CIT(A), THERE IS NO ERROR COMMITTED BY THE ASSESSING OFFICER IN ALLOWING THE REBATE OF 35% ON ACCOUNT OF NEGOTIATION IN PROPERTY DEALS AND THE C I T HAS NO JUR ISDICTION TO INVOKE SECTION 263 ON THE GROUND THAT HE IS HOLDING A DIFFERENT VIEW. 7. THAT THE OBSERVATIONS OF THE C I T ARE BASED ON SURMISES AND CONJECTURES AND ON THE BASIS OF THE DIFFERENT VIEW TAKEN BY THE ASSESSING OFFICER AFTER FRAMING THE ASSESSMENT ORDER SECTION 153A / 143(3) AND DO NOT AFFORD ANY LEGAL JUSTIFICATION TO THE FINDINGS GIVEN. 8. THAT THE PROCEEDING UNDER SECTION 263 ARE INITIATED AT THE INSTANCE OF ASSESSING OFFICER AND THE ORDER PASSED BY THE C I T IS CLEARLY WITHOUT APPLICATION OF MIND AS IT REFER TO MANY IRRELEVANT ISSUES HENCE THE ORDER UNDER SECTION 263 IS LIABLE TO BE QUASHED. 9. THAT THE C I T HAVE ERRED IN NOT PROVIDING PROPER AND ADEQUATE OPPORTUNITY TO APPELLANT TO PLACE THE MATERIAL ON RECORD AND THE IMPUGNED ORDER PASSED IS AGAINST THE PRINCIPLE OF NATURAL OF JUSTICE. 10. THAT THE C I T HAVE ERRED IN NOT CONFRONTING THE REPORTS MENTIONED I N SHOW CAUSE NOTICE AND ORDER U/S 263 OF THE ACT OF THE ASSESSING OFFICER IN ITA NOS. 2766 - 2767 - 2768 AND 2769/DEL/2013 AYS: 2005 - 06 TO 2008 - 09 SH.RAMESH BATTA, MEERUT 4 SPITE OF REQUEST MADE BY THE APPELLANT. HENCE THE IMPUGNED ORDER PASSED BY THE C I T IS ILLEGAL, BAD IN LAW AND LIABLE TO BE SET - A - SIDE. 11. THAT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE MATERIAL AVAILABLE ON RECORD HAVE NOT BEEN PROPERLY CONSIDERED BY THE C I 'T WHILE PASSING THE ORDER UNDER SECTION 263. THE IMPUGNED ORDER IS ILLEGAL, ARBITRARY AND BAD IN LAW. 12.THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER AND OR MODI FY THE GROUNDS OF APPEAL OF THE SAID APPEAL. ALL OF THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE AND ARE MUTUALLY EXCLUSIVE TO EACH OTHER. 4. WE HAVE HEARD MR. SALIL KAPOOR, T HE LD.COUNSEL FOR THE ASSESSEE AND SHRI VIVEK WADEKAR, THE LD . CIT, DR O N BEHALF OF THE REVENUE. 5. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF PAPERS ON RECORD AND ORDERS OF AUTHORITIES BELOW, CASE LAWS CITED, WE HOLD AS FOLLOWS. 6. THE DELHI B BENCH OF THE TRIBUNAL IN ITA NOS. 2340 TO 2346/DEL/2013 IN THE CASE OF M/S R . B . ENTERPRISES VS. CIT FOR THE AYS 2003 - 04 TO 2009 - 10 AND IN ITA 508 5 TO 50 92 /DEL/13 VIDE ORDER DT. 31 ST MARCH, 2014 ADMITTEDLY CONSIDERED THE VERY SAME ISSUE OF WHETHER THE AO HAS COMMITTED AN ERROR WHICH IS P REJUDICIAL TO THE INTEREST OF REVENUE IN HIS ORDER PASSED U/S 143(3), BY ALLOWING A REBATE OF 35%, AFTER TAKING INTO CONSIDERATION THE ARGUMENTS OF THE ASSESSEE AND ALSO CONSIDERING THAT THERE IS A DEFINITE POSSIBILITY FOR SOME NEGOTIATIONS IN THE FINAL SETTLEMENT OF RATES ETC., WHILE WORKING OUT THE SALE PROCEEDS OUT OF BOOKS OF ACCOUNTS. THE ASSESSMENTS OF THE PRESENT ASSESSEE AS WELL AS THE ASSESSMENTS IN THE CASE OF M/S R . B . ENTERPRISES ARE BASED ON THE SAME MATERIAL FACTS. THE LD.CIT(A) HAS PASSE D A SIMILAR ORDER U/S 263 OF THE ACT IN THE CASE OF M/S ITA NOS. 2766 - 2767 - 2768 AND 2769/DEL/2013 AYS: 2005 - 06 TO 2008 - 09 SH.RAMESH BATTA, MEERUT 5 R . B . ENTERPRISES. THE TRIBUNAL IN THE CASE OF M/S R . B . ENTERPRISES IN ORDER DT. 31.3.2014, QUASHED THE ORDER U/S 263 BY HOLDING AS UNDER. 20. IN THE LIGHT OF ABOVE, LET US EXAMINE THE ISSUES BEFORE US. THE FIRST ASPECT IS WHETHER EXPLANATION C APPENDED TO SEC. 263 PROHIBITS THE LEARNED COMMISSIONER IN THE PRESENT APPEALS TO TAKE ACTION UNDER SEC. 263. THE CONTENTIONS OF THE LEARNED DR ON THE STRENGTH OF AUTHORITATIVE PRONOUNCEMENTS WAS THAT THE IS SUE TO THE EXTENT OF 35% SALES CONSIDERATION WHICH HAVE NOT BEEN ADDED BY THE ASSESSING OFFICER ON THE GROUNDS THAT THIS MUCH EXPENDITURE MUST HAVE BEEN INCURRED BY THE ASSESSEE IS CONCERNED, DOES NOT TRAVEL TO THE LEARNED CIT(APPEALS). HE EMPHASIZED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF PRINTER HOUSE AS WELL AS OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF RATI LAL BACHERI LAL (SUPRA). IN THE CASE OF PRINTER HOUSE, THE ASSESSEE HAS IMPORTED TWO MACHINES FROM ABROAD AND CLAIMED DEDUCTI ON UNDER SEC. 35. LEARNED ASSESSING OFFICER ACCEPTED THE CLAIM OF ASSESSEE IN RESPECT OF ONE MACHINE BUT DISALLOWED A SIMILAR CLAIM IN RESPECT OF MACHINE NO.2. THE ASSESSEE HAS CHALLENGED THIS DISALLOWANCE BEFORE THE LEARNED CIT(APPEALS) IN AN APPEAL. WHIL E THE APPEAL OF THE ASSESSEE WAS PENDING, LEARNED COMMISSIONER TOOK COGNIZANCE UNDER SEC. 263 OF THE ACT AND SET ASIDE THE ASSESSMENT ORDER. LEARNED COMMISSIONER, HOWEVER, REALIZING HIS MISTAKE, RECTIFIED THE ORDER UNDER SEC. 154 AND RESTRICTED ITS OPERATI ON QUA MACHINE NO.1 FOR WHICH ALLOWANCE HAS BEEN GRANTED. THE SIMPLE REASON FOR THIS EXERCISE OF POWERS, THERE THAT ACCEPTANCE OF CLAIM BY THE ASSESSING OFFICER WAS NEVER THE SUBJECT MATTER OF APPEAL BEFORE THE LEARNED CIT(APPEALS). LEARNED CIT(APPEALS) WO ULD ONLY EXAMINE THE DENIAL OF CLAIM QUA MACHINE NO.2. THUS, LEARNED COMMISSIONER CAN EXERCISE HIS POWERS UNDER SEC. 263 ON SUCH AN ISSUE. BUT IN THE PRESENT CASE, WE ARE FACING SOMEWHAT A DIFFERENT CHALLENGE. 21. LEARNED ASSESSING OFFICER HAS ESTIMATED T HE UNACCOUNTED SALES ON THE BASIS OF BOOKING FORMS FOUND DURING THE COURSE OF SEARCH. WHILE QUANTIFYING THE UNACCOUNTED SALES, HE MADE AN ANALYSIS OF THE SEIZED MATERIAL AND OBSERVED THAT ON ESTIMATE BASIS, 65% OF THE TOTAL AMOUNT CALCULATED ON THE BASIS O F THESE DOCUMENTS IS TO BE CONSIDERED AS UNACCOUNTED SALES OF THE ASSESSEE. IN OTHER WORDS, HE HAS GRANTED REBATE OF 35%. THIS IS AN INTEGRATED ISSUE, WHEN ASSESSEE CHALLENGE ESTIMATION OF UNACCOUNTED SALES AT 65% BEFORE THE LEARNED CIT(APPEALS), THE TOTAL ISSUE TRAVELED TO THE LEARNED CIT(APPEALS). LEARNED CIT(APPEALS) MAY ITA NOS. 2766 - 2767 - 2768 AND 2769/DEL/2013 AYS: 2005 - 06 TO 2008 - 09 SH.RAMESH BATTA, MEERUT 6 HOLD; (A) THAT ESTIMATION OF THE ASSESSING OFFICER AT 65% OF THE TOTAL AMOUNT AS SUPPRESSED SALES IS JUSTIFIED; (B) NO SUPPRESSED SALES IS TO BE ESTIMATED BECAUSE, IT IS NOT FLOWING FROM THE SEIZED MATERIAL; (C) LEARNED CIT(APPEALS) MAY ESTIMATE THAT IT IS ONLY 50% OF THE TOTAL AMOUNT COMPUTED; (D) LEARNED CIT(APPEALS) MAY FORM AN OPINION THAT IT SHOULD BE 100%. IN THAT EVENTUALITY, THE POWERS, CO - TERMINUS WITH THAT OF ASSESSING OFFICER V ESTED IN THE LEARNED CIT(APPEALS) MAY BE EXERCISED AND LEARNED CIT(APPEALS) CAN ISSUE NOTICE FOR ENHANCEMENT OF INCOME. THE OTHER SCENARIO COULD BE THAT LEARNED COMMISSIONER HAS TAKEN COGNIZANCE UNDER SEC. 263 OF THE ACT. HE HAS SET ASIDE THE ASSESSMENT OR DER AND REMITTED THE ISSUE TO THE ASSESSING OFFICER FOR CONSIDERING AS TO WHY A REBATE OF 35% HAS BEEN ALLOWED TO THE ASSESSEE AS EXPENDITURE WHILE QUANTIFYING THE SUPPRESSED SALES LD ASSESSING OFFICER AFTER HEARING THE ASSESSEE MAY DENY THIS REBATE AND MA DE THE ADDITION, BUT IN THE APPEALS PENDING BEFORE THE LEARNED CIT(APPEALS) MAY BE PARTLY ALLOWED. IN THAT SITUATION, THE CONTRADICTORY OPINION AND DECISIONS WOULD COME. THE OBJECT OF INSERTING EXPLANATION C WITH SEC. 263 IS TO AVOID THIS CONTRADICTION AMO NG AUTHORITIES HAVING IDENTICAL POWERS. THEY MAY NOT BE CALLED FOR TO EXERCISE THEIR POWERS SIMULTANEOUSLY BECAUSE EXERCISE OF SUCH POWERS BY TWO AUTHORITIES MAY LEAD TO DIFFERENT OPINION. THEREFORE, IN OUR OPINION THE ACTION TAKEN BY THE LEARNED COMMISSIO NER UNDER SEC. 263 IS NOT SUSTAINABLE ON THIS FOLD OF SUBMISSIONS. 22. THE NEXT FOLD OF SUBMISSIONS RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE WAS BASED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF ITO VS. DC HOUSING PROJECT (SUPRA). LEARNED COMMISSIONER HAS SET ASIDE THE ASSESSMENT ORDER AND REMITTED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. LD ASSESSING OFFICER HAS ALREADY MADE AN ANALYSIS OF THE RECORD. HE HAS ESTIMATED THE UNACCOUNTED SALES ON THE BASIS OF SEIZED MATERIAL. NO THING HAS TO BE BROUGHT ON THE RECORD APART FROM THOSE MATERIAL. THEY ARE ALREADY ON THE RECORD. THEREFORE, LEARNED COMMISSIONER OUGHT TO HAVE NOT SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITHOUT RECORDING A FIRM FINDING. HON'BLE DELHI HIGH COURT IN THE CASE OF DC HOUSING (SUPRA) HAS APPRAISED THE ADJUDICATING AUTHORITIES THE APPROACH REQUIRED TO BE ADOPTED WHILE TAKING ACTION UNDER SEC. 263 OF THE ACT, BY MAKING FOLLOWING OBSERVATIONS: 6. THUS, IN CASES OF WRONG OPINION OR FINDING ON MERIT S, THE CIT HAS TO COME TO THE CONCLUSION AND HIMSELF DECIDE THAT THE ORDER IS ERRONEOUS, BY CONDUCTING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY, BEFORE THE ORDER UNDER SECTION 263 IS PASSED. IN SUCH CASES, THE ORDER OF THE ASSESSING OFFICER WILL BE ERR ONEOUS BECAUSE THE ORDER ITA NOS. 2766 - 2767 - 2768 AND 2769/DEL/2013 AYS: 2005 - 06 TO 2008 - 09 SH.RAMESH BATTA, MEERUT 7 PASSED IS NOT SUSTAINABLE IN LAW AND THE SAID FINDING MUST BE RECORDED. CIT CANNOT REMAND THE MATTER TO THE ASSESSING OFFICER TO DECIDE WHETHER THE FINDINGS RECORDED ARE ERRONEOUS. IN CASES WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT THE ORDER/INQUIRY MADE IS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTAKE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASES POSSIBLY THOUGH RARELY, THE CIT CAN ALSO SHOW AND ESTABLISH THAT THE FACTS ON RECORD OR INFERENCES DRAWN FROM FACTS ON RECORD PER SE JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT T HE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, UNAMBIGUOUS AND NOT DEBATABLE. THE MATTER CANNOT BE REMITTED FOR A FRESH DECISION TO THE ASSESSING OFFICER TO CONDUCT FURTHER ENQUIRIES WITHOUT A FINDING THAT THE ORDER IS ERRONEOUS. FINDING THAT THE ORDER IS ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER SECTION 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IM PLY AND MEAN THE CIT HAS NOT EXAMINED AND DECIDED WHETHER OR NOT THE ORDER IS ERRONEOUS BUT HAS DIRECTED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. 7. THIS DISTINCTION MUST BE KEPT IN MIND BY THE CIT WHILE EXERCISING JURISDICTION UNDER SECTION 263 OF THE ACT AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, EXERCISE OF JURISDICTION UNDER THE SAID SECTION IS NOT SUSTAINABLE. IN MOST CASES OF ALLEGED INADEQUATE INVESTIGATION , IT WILL BE DI FFICULT TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS ERRONEOUS, WITHOUT CIT CONDUCTING VERIFICATION/INQUIRY. THE ORDER OF THE ASSESSING OFFICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRE CT RECONSIDERATION ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. AN ORDER OF REMIT CANNOT BE PASSED BY THE CIT TO ASK THE ASSESSING OFFICER TO DECIDE WHETHER THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECOME ERRONEOUS BECAUSE ON REMIT, THE ASSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFTER RECORDING REASONS HOLD THAT THE ORDER IS ERRONEOUS. THE JURISDICTIONA L PRECONDITION STIPULATED IS THAT THE CIT MUST COME TO THE ITA NOS. 2766 - 2767 - 2768 AND 2769/DEL/2013 AYS: 2005 - 06 TO 2008 - 09 SH.RAMESH BATTA, MEERUT 8 CONCLUSION THAT THE ORDER IS ERRONEOUS AND IS UNSUSTAINABLE IN LAW. WE MAY NOTICE THAT THE MATERIAL WHICH THE CIT CAN RELY INCLUDES NOT ONLY THE RECORD AS IT STANDS AT THE TIME WHEN THE ORDER IN QU ESTION WAS PASSED BY THE ASSESSING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATION BY THE CIT [SEE CIT VS. SHREE MANJUNATHESWARE PACKING PRODUCTS, (1998) 231 ITR 53 (SC)]. NOTHING BARS/PROHIBITS THE CIT FROM COLLECTING AND RELYING UPON NEW/ADDITIONAL MATERIAL/EVIDENCE TO SHOW AND STATE THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS . 23. LEARNED CIT(APPEALS) HAS FAILED TO ARRIVE AT A FIRM CONCLUSION AS TO HOW THE ASSESSMENT ORDERS ARE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF T HE REVENUE. THEREFORE, THE ORDERS UNDER SEC. 263 ARE NOT SUSTAINABLE ON THIS FOLD OF SUBMISSIONS ALSO. SINCE, WE HAVE ARRIVED AT A CONCLUSION THAT THE ISSUE AGITATED IN THE APPEALS OF ASSESSEE BEFORE THE LEARNED CIT(APPEALS) IS AN INTEGRATED COMMON ISSUE, IT CANNOT BE SEGREGATED IN TWO DIFFERENT PROCEEDINGS I.E. PARTLY BEFORE THE LEARNED CIT(APPEALS) AND PARTLY BEFORE THE LEARNED COMMISSIONER UNDER SEC. 263, THE APPREHENSION OF REVENUE IS CONCERNED THAT 35% AMOUNT OF THE ALLEGED UNRECORDED SALES HAS NOT BEE N ADDED BY THE ASSESSING OFFICER, IT WILL NOT TRAVEL TO THE LEARNED CIT(APPEALS) IS CONCERNED, THE LEARNED CIT(APPEALS) HAS POWERS CO - TERMINUS WITH THAT OF ASSESSING OFFICER AND WHILE EVALUATING THE EVIDENCE DEMONSTRATING THE APPROPRIATE AMOUNT OF UNACCOUN TED SALES, IF ANY, TO BE CONSIDERED IN THE HANDS OF THE ASSESSEE, WOULD AUTHORIZE HIM TO CONSIDER THE TOTAL AMOUNT AND IN THAT SITUATION LEARNED CIT(APPEALS) HAS JURISDICTION TO ISSUE NOTICE FOR ENHANCEMENT. SUB - SECTION(6) OF SECTION 250 PROVIDES THAT; TH E ORDER OF THE LEARNED CIT(APPEALS) DISPOSING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION BUT THERE CANNOT BE TWO PARALLEL PROCEEDINGS ON ONE COMMON ISSUE. A BARE PER USAL OF THE ABOVE WOULD REVEAL THAT AN APPEAL FILED BY AN ASSESSEE AFTER DUE COMPLIANCE OF OTHERS PROVISIONS E.G. LIMITATION 249(3); PAYMENT OF TAXES ON RETURNED INCOME 259(4), THE LEARNED CIT(APPEALS) HAS TO DECIDE THE APPEAL ON MERIT. SHE CANNOT RETURN A NY APPEAL UNDECIDED OR CANNOT SAY THAT IT IS DISMISSED BEING INFRUCTUOUS. THE MOMENT A VALID APPEAL IS FILED BEFORE LEARNED CIT(APPEALS) THEN IT WOULD BE CONSTRUED THAT ANY ISSUE RAISED IN THE APPEAL WOULD BECOME SUBJECT MATTER AS CONTEMPLATED IN EXPLANATI ON C TO SECTION 263. AFTER FILING OF A VALID APPEAL AND LEARNED CIT(APPEALS) HAD ISSUED NOTICE FOR ENHANCEMENT THEN EVEN IF ASSESSEE WITHDRAW ITS APPEAL, THE NOTICE WOULD REMAIN LIVE AND ITA NOS. 2766 - 2767 - 2768 AND 2769/DEL/2013 AYS: 2005 - 06 TO 2008 - 09 SH.RAMESH BATTA, MEERUT 9 WOULD NOT BECOME INFRUCTUOUS, BECAUSE LEARNED CIT(APPEALS) HAD OPTE D TO EXERCISE HER POWER UNDER SEC. 251(1) WHICH IS CO - TERMINUS WITH THAT OF ASSESSING OFFICER. THIS PROCEDURE CAN EASILY TAKE CARE OF REVENUE S APPREHENSION. THUS, THERE CANNOT BE TWO PARALLEL PROCEEDINGS ON ONE COMMON ISSUE. 25. AS FAR AS APPEALS BEARING NOS. 5085 TO 5092/DEL/2013 ARE CONCERNED, SUB - SECTION (6) OF SECTION 250 MANDATES LEARNED CIT(APPEALS) TO DETERMINE THE POINTS IN DISPUTE AND THEREAFTER RECORD REASONS IN WRITING IN SUPPORT OF THE CONCLUSIONS ARRIVED ON THOSE POIN TS. LEARNED CIT(APPEALS) HAS FAILED TO FOLLOW THIS PROCEDURE WHILE DISMISSING THE APPEALS OF ASSESSEE. THEREFORE, THESE ORDERS ARE NOT SUSTAINABLE IN THE EYES OF LAW. WE SET ASIDE ALL THE ORDERS IMPUGNED IN THESE APPEALS AND REMIT ALL THE APPEALS TO THE FI LE OF THE LEARNED CIT(APPEALS) FOR CONSIDERATION AFRESH. THE OBSERVATIONS MADE BY US WHILE CONSIDERING THE APPEALS OF ASSESSEE UNDER SEC. 263 FOR ISSUING NOTICE FOR ENHANCEMENT WILL NOT BE CONSIDERED AS EXPRESSION OF ANY OPINION ON THE MERITS OF THE ISSUES . WE HAVE MADE OBSERVATIONS JUST FOR BRINGING THE POINTS AT HOME WHICH MAY NOT BE CONSIDERED ANY INDICATION TOWARDS ANY DIRECTION. OUR OBSERVATIONS WILL NOT IMPAIR OR INJURE THE CASE OF THE ASSESSING OFFICER AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/ EXPLANATION OF THE ASSESSEE. LEARNED CIT(APPEALS) SHALL GRANT DUE OPPORTUNITY OF HEARING TO THE ASSESSEE AND DECIDE ALL THE GROUNDS OF APPEALS RAISED BEFORE HER IN ACCORDANCE WITH LAW. 26. IN THE RESULT, ITA NOS. 5085 TO 5092/DEL/2013 ARE ALLOWED FOR STAT ISTICAL PURPOSES AND ITA NOS. 2340 TO 2364/DEL/2013 ARE ALLOWED . 6.1. IN THE CASE ON HAND THE LD.CIT(A) HAS DELETED THE ADDITION OF 65% MADE FOR THE AYS 2005 - 06, 2006 - 07 AND 2 007 - 08. THE APPEAL FOR THE AY 2008 - 09 IS PENDING BEFORE THE LD.CIT(A). CONSI STENT WITH THE VIEW TAKEN IN THE CASE OF M/S R.B.E NTERPRISES (SUPRA) WE QUASH ALL THESE ORDERS PASSED U/S 263 OF THE ACT AND ALLOW THE APPEALS OF THE ASSESSEE. ITA NOS. 2766 - 2767 - 2768 AND 2769/DEL/2013 AYS: 2005 - 06 TO 2008 - 09 SH.RAMESH BATTA, MEERUT 10 7 . IN THE RESULT ALL THESE APPEALS FILED BY THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER,2014. SD/ - SD/ - (H.S. SIDHU) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 30 TH OCTOBER, ,2014 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR