NEPTUNE ENTERPRISES, MUMBAI V. ITO 11(1)-3, MUMBAI

ITA 2852/MUM/2011

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0654 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 11-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR SANJAY
• Keywords: Opportunity of being heard; Audit objection; Question of law; Cost of acquisition; Assessment record; Prejudicial to interest; Reason to believe
• Section: 143(3); 142(1); 263

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -IBEN CH MUMBAI , . . , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBE R AND C. N. PRASAD,JUDICIAL MEMBER ./I.T.A./2852/MUM/2011, /ASSESSMENT YEAR: 2006-07 ./I.T.A./5387/MUM/2015, /ASSESSMENT YEAR: 2006-07 M/S. NEPTUNE ENTERPRISES B/3, PREM SAGAR BUILDING LINKING ROAD, KHAR (W) MUMBAI-400 052. PAN:AAAFN 3167 H VS. INCOME TAX OFFICER-11(1)-3 ROOM NO.437, AAYAKAR BHAVAN MUMBAI-400 020. ( /APPELLANT) ( / RESPONDENT) / REVENUE BY: SHRI KUMAR SANJAY-CIT-DR /ASSESSEE BY: S/SHRI MAYUR KISHNADWALA; SUNIL K. RAMANI / DATE OF HEARING: 15/11/2017 / DATE OF PRONOUNCEMENT: /02/2018 , / PER RAJENDRA A.M. - CHALLENGING THE ORDER,DATED 18/03/2011,PASSED BY TH E CIT-11,MUMBAI U/S. 263 OF THE ACT,THE ASSESSEE HAS FILED ONE OF THE APPEALS.IN THE OTHER APPEAL,THE ORDER OF THE CIT(A)-4, MUMBAI, DATED 03/08/2015 HAS BEEN CHALLENGED.THE ASSESSEE I S ENGAGED IN THE BUSINESS OF DISTRIBUTION, TRADING, EXPORT AND IMPORT OF CINEMATOGRAPHIC FILMS . IT FILED ITS RETURN OF INCOME ON 31/ 10/ 2006,DECLARING TOTAL INCOME OF RS. 1.76 LAKHS.THE A SSESSING OFFICER(AO) COMPLET -ED THE ASSESSMENT U/S.143 (3) OF THE ACT, ON 26/12/2008, D ETERMINING ITS INCOME AT RS. 2.24 LAKHS. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT PASSING ORDER U /S. 263 OF THE ACT AND MAKING ADDITIONS OF RS. 8.39 LAKHS AND RS. 10.91 LAKHS,UNDER THE HEA DS PURCHASE EXPENSES AND INTEREST EXPENSES RESPECTIVELY. AS PER THE CIT,AFTER COMPLETION OF THE ASSESSMENT P ROCEEDINGS,A PROPOSAL WAS RECEIVED FROM THE ADDITIONAL CIT, RANGE 11 (1),MUMBAI REQUESTING FOR REVISION WITH RESPECT TO TREATMENT GIVEN TO PURCHASE EXPENSES OF SOME OF THE FILMS RIG HTS TRADED BY THE ASSESSEE. IN THE PROPOSED THE ADDITIONAL CIT RAISED THE ISSUE OF NON-DISALLOW ANCE OF INTEREST EXPENDITURE WITH RESPECT TO MONEY RECEIVED FROM THE SISTER CONCERN NAMELY NE PTUNE INTERNATIONAL AND ALSO THE CAPITAL- ISATION OF INTEREST. ON 17/01/2011, THE CIT ISSUED A SHOW CAUSE NOTICE AND IT READS AS UNDER: ' FROM THE ABOVE INFORMATION IT IS SEEN THAT YOU HA D CLAIMED THE PURCHASE EXPENSES OF RS. 3,07,839/- ON THE FILM RIGHT 'PAISA VASOOL' AND PUR CHASE EXPENSES OF RS. 5,31,813/- FOR FEATURE FILM 'LOVE AT TIME SQUARE'. BOTH THESE AMOUNTS ARE REPRESENTED THE AMOUNTS WRITTEN OFF BY YOU ON ACCOUNT OF STOCK HELD. HOWEVER IT IS SEEN TH AT 'PAISA VASOOL' HAD BEEN PURCHASED ON 28.6.2002 FOR A PERIOD OF 11 YEARS AND YOU COULD HA VE WRITTEN OFF THE EXPENSES OF UN- M/S. NEPTUNE ENTERPRISES-ITA NO.2852/11; 5387/15 2 RECOUPED COST OF RIGHTS ONLY IN THE A.YR. 2014-15 A ND NOT ANYTIME EARLIER. SIMILARLY, THE RIGHTS OF 'LOVE AT TIME SQUARE' HAD BEEN PURCHASED FOR SEV EN YEARS AND YOU COULD HAVE WRITTEN OFF THE EXPENSES OF UN-RECOUPED COST OF PURCHASE ONLY I N THE A. Y. 2010-11 AND NOT ANY TIME EARLIER. ON ACCOUNT OF REASONS STATED ABOVE, YOU HAVE CLAIME D EXCESS DEDUCTION OF RS.8,39,651/-. TO THIS EXTENT, THE SCRUTINY ASSESSMENT ORDER DATED 26 .12.2008 PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE REVENUE. ' XXXXXX ' FURTHER ON PERUSAL OF THE BALANCE SHEET FILED BY YOU, IT IS SEEN THAT THE COMPANY HAD ADVANCED A LOAN OF RS.30,80,781/- TO ITS SISTER CON CERN M/S. NEPTUNE INTERNATIONAL WITHOUT CHARGING ANY INTEREST. THE ASSESSEE COMPANY HAD ALS O ADVANCED AN AMOUNT OF RS, L,25,00,000/- TO M/S. OM FILMS P. LTD. FOR ACQUIRIN G OVERSEAS AND VIDEO RIGHTS OF FEATURE FILMS PRODUCED BY THE ASSESSEE. YOU HAD DEBITED INTEREST OF RS. 10,91,783/- TO P&L ACCOUNT. THE ASSESSING OFFICER SHOULD HAVE DISALLOWED PART OF TH E SAID INTEREST EXPENDITURE IN VIEW OF THE AMOUNT ADVANCED RS. 30,80, 781/- TO SISTER CONCERN AND ON ACCOUNT OF CAPITALIZATION OF INTEREST ON BORROWED CAPITAL REQUIRED ON ADVANCE MA DE RS.1.25 CRORES FOR PURCHASE OF RIGHTS, AS THE ONUS OF EXPLAINING BORROWED CAPITAL BEING US ED EXCLUSIVELY FOR BUSINESS PURPOSES HAD NOT BEEN DISCHARGED BY YOU. NOT DISALLOWING THE SAI D AMOUNT HAS RESULTED IN THE ASSESSMENT ORDER BEING ERRONEOUS AND PREJUDICIAL TO THE REVENU E. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE MADE ELABORATE SUBMISSIONS BEFORE THE CIT STATING THAT THERE WAS NO CASE FOR REVISING THE ORD ER OF THE AO. AFTER CONSIDERING THE AVAILABLE MATERIAL,HE HELD THAT THE ARGUMENT OF THE ASSESSEE ABOUT APPLICABILITY OF RULE 9B OF THE INCOME TAX RULES,1962 (RULES) WAS NOT TENABLE AS FA R AS THE WRITE-OFF OF EXPENSES FOR THE TWO FILMS WAS CONCERNED, THAT IN THE FY.S.2003-04 A ND 2004-05 THE EXPENSES TO THE EXTENT OF SALE REALISATION OF FILMS HAD BEEN SET OFF, THAT IN THE YEAR UNDER CONSIDERATION A SUM OF RS. 3.07 LAKHS AND RS. 5.31 LAKHS FOR THOSE TWO FILMS H AD BEEN RESPECTIVELY SET OFF WITHOUT THERE BEING CORRESPONDING REALIZATION, THAT IT WAS CLEAR VIOLATION OF RULE 9B OF THE RULES, THAT THERE WAS NO SUBSTANCE IN THE ARGUMENT ADVANCED BY THE AS SESSEE THAT IN THE PRESENT CASE THERE WAS NO MARKET EVEN WITHIN SIX MONTHS OF RELEASE AND HEN CE THE RIGHT OF IN THE THIRD YEAR WAS PROPER, THAT THE ARGUMENTS OF THE ASSESSEE WERE AGA INST THE RULES AND VALID ACCOUNTANCY PRINCIPLES, THAT THERE COULD ALWAYS BE SCOPE OF REA LISATION OF CERTAIN SUMS, THAT ONLY AT THE END OF THE PERIOD WHEN THE RIGHTS WOULD EXPIRE IT COULD BE STATED AS TO WHETHER THE RECORD COSTS HAD RESULTED IN LOSS OR NOT, THAT WRITE OFF COULD T AKE PLACE AT THE TIME ONLY, THAT THE RIGHTS OF FIRST FILM HAD TO EXPIRE AFTER 11 YEARS, THAT THE R IGHTS OF THE FILM LOVE AT TIMES SQUARE WOULD BE EXPIRING AFTER SEVEN YEARS, THAT THE ACTIO N OF THE AO IN ACCEPTING THE STAND OF THE ASSESSEE WAS ERRONEOUS, THAT THERE HAD BEEN HARDLY ANY SCRUTINY OF THE ASPECTS WHEN ALL THE DETAILS WERE AVAILABLE ON RECORD, THAT THE ERRONEOU S ORDER OF THE AO HAD LED TO UNDER ASSESSMENT OF INCOME AND TO THAT EXTENT IT WAS PREJ UDICIAL TO THE INTEREST OF REVENUE. HE SET ASIDE THE ASSESSMENT AND ASKED THE AO TO REFRAME IT . BESIDES THE ISSUE OF WRITE-OFF OF PURCHASE COST HE DIRECTED THE AO TO LOOK INTO THE I SSUE OF INTEREST EXPENDITURE ALSO. M/S. NEPTUNE ENTERPRISES-ITA NO.2852/11; 5387/15 3 3. BEFORE US,THE AUTHORISED REPRESENTATIVE (AR) ARGUED THAT THE ORDER PASSED BY THE CIT U/S. 263 OF THE ACT WAS AB INITIO VOID, THAT HE HAD NOT APPLIED HIS OWN MIND, THAT THE PROCEEDINGS HAD STARTED ON THE BASIS OF THE RECOMMENDATION OF T HE ADDITIONAL CIT, THAT IN THE SHOW CAUSE NOTICE THE CIT HAS SPECIFICALLY MENTIONED THAT BOTH THE ISSUES, DISCUSSED IN THE SHOW CAUSE NOTICE, HAD BEEN RAISED AS PER THE REPORT OF ADDITI ONAL CIT, THAT AS PER THE PROVISIONS OF THE ACT THE CIT HIMSELF HAS TO CALL FOR THE RECORDS AND HAS TO FORM AN INDEPENDENT OPINION ABOUT THE ORDER PASSED BY THE AO, THAT THE ORDER OF THE A O WAS NEITHER ERRONEOUS NOT PREJUDICIAL TO THE INTEREST OF REVENUE.HE RELIED UPON THE CASES OF SPAN OVERSEAS LTD (ITA/1223/PN/2013- AY.2008-09,DATED 21/12/2015),YES BANK LTD. (ITA 23/ MUMBAI/2012-AY. 2007-08,DATED 05/12/ 2014),VINAY PRATAP THACKER(ITA/2939/MUMBAI/2 011-AY.2006-07,DATED 27/02/2013), SUNBEAM AUTO LTD (322 ITR 167). HE FURTHER STATED T HAT THE AO HAD MADE DETAILED ENQUIRY ABOUT BOTH THE ITEMS, THAT THE ASSESSEE WAS NOT A P RODUCER. HE REFERRED TO PAGES 34, 40, 41-43 OF THE PAPER BOOK AND STATED THAT DETAILS OF PURCHA SE AND SALES OF BOTH THE FILMS WERE FURNISH - ED AND WERE DELIBERATED UPON BY THE AO. WITH REGARD TO INTEREST EXPENDITURE, HE STATED THAT DETAILED ENQUIRY WAS MADE BY THE AO. IN THAT REGARD REFERRED TO PAGES 56-59 AND 61 TO 86 OF THE PAPER BOOK. HE FURTHER STATED THAT THE CIT HAD NOT CALLED FOR THE RECORDS BEFORE INITIATING REVISIONARY PROCEEDINGS.HE RELIED UPON THE CASE OF METACAPS ENGINEERING AND MAHINDRA CONSTRUCTION CO JV(ITA/2895/MUMBAI/2014-AY. 2009-10 , DATED 11/09/2017) IN THAT REGARD. THE DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE CIT AND STATED THAT THE ORDER PASSED BY THE AO ONCE NOT ONLY ERRONEOUS WHAT WAS PREJUDICIAL TO INTEREST OF REVENUE, THAT IT WAS NOT A CASE OF IN ADEQUATE ENQUIRY BUT I T WAS A MATTER OF LACK OF ENQUIRY,THAT THE AO HAD NOT APPLIED HIS MIND WITH REGARD TO THE AVAILAB LE MATERIAL,THAT THE AO HAD NOT DISCUSSED EITHER OF THE TWO ISSUES WHILE FRAMING THE ASSESSME NT U/S.143 (3) OF THE ACT 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.THE UNCONTROVERT - ED FACTS OF THE CASE UNDER CONSIDERATION ARE THAT T HE TRIGGER POINT OF REVISIONARY PROCEEDINGS WAS THE LETTER OF THE ADDITIONAL CIT,THAT HE HAD SU GGESTED THE CIT TO TAKE SOME REMEDIAL ACTION ABOUT THE TWO ITEMS,THAT THE CIT HAS NOWHERE MENTIONED THAT HE HAD CALLED FOR THE RECORDS OF THE AO BEFORE ISSUING THE SHOW CAUSE NOT ICE TO THE ASSESSEE. IN OUR OPINION,THIS IS THE BASIC CONDITION FOR INVOKING THE PROVISIONS OF SECTION 263.IN THE CASE OF YES BANK LTD.(SUPRA)THE TRIBUNAL FOUND THAT THE REVISIONARY PROCEEDINGS WERE INITIATED ON A REPORT OF THE AO.HOLDING IT BAD IN LAW,THE TRIBUNAL OBSERVED AS UNDER: 25. WE ALSO FIND THAT THE CIT DID NOT INITIATE THE PROCEEDINGS HIMSELF BUT INITIATED THE PROCEEDINGS ON THE PROPOSAL RECEIVED FROM THE AO. M/S. NEPTUNE ENTERPRISES-ITA NO.2852/11; 5387/15 4 26. THIS IN OUR OPINION, TOO IS AGAINST THE LEGISLA TIVE SPIRIT, BECAUSE, THE PROVISION CONTEMPLATES INDEPENDENT APPLICATION OF MIND BY THE CIT, BECAUSE THE SECTION SAYS COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORDS OF ANY PROCEEDINGS UNDER THE ACT AND IF HE CONSIDERS , WHICH MEANS THAT THE PROPOSAL FOR INITIATION OF REVISION PROCEEDINGS MUST BE INITIATED BY THE CIT, BECAUSE, IT IS THE CIT WHO HAS TO CALL FOR EXAMINE THE RECORD, AS HELD BY THE COORDINATE BENCH IN THE CASE OF ASHOK KUMAR SHIVPURI IN ITA NO. 631/MUM/2014 (WHERE ONE OF US WAS THE PARTY). 27. LOOKING AT THE ISSUE FROM THIS ANGLE ALSO, THE INITIATION OF REVISION PROCEEDING BECOME INFIRM AND ILLEGAL. NOW WE WOULD LIKE TO REPRODUCE THE RELEVANT PART OF THE ORDER OF THE SPAN OVERSEAS(SUPRA).IN THAT MATTER ALSO THE ORDER PASSED U/S.263 WAS PASSE D ON THE BASIS OF THE LETTER OF DCIT.THE TRIBUNAL SET ASIDE THE ORDER: A PERUSAL OF THE SHOW CAUSE NOTICE SHOWS THAT THE C OMMISSIONER OF INCOME TAX HAS INVOKED THE PROVISIONS OF SECTION 263 ON THE PROPOSAL SUBMI TTED BY THE DY. COMMISSIONER OF INCOME TAX AND DEFICIENCIES IN THE ASSESSMENT ORDER POINTE D OUT BY THE DY. COMMISSIONER OF INCOME TAX. 6. AS PER THE PROVISIONS OF SECTION 263 IT IS THE COMMISSIONER OF INCOME TAX WHO HAS TO EXAMINE THE RECORDS AND THEREAFTER FORM AN INDEPEND ENT OPINION THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT PREJ UDICIAL TO THE INTEREST OF REVENUE. IN THE PRESENT CASE WE FIND THAT THE COMMISSIONER OF INCOM E TAX HAS NOT EXERCISED HIS INDEPENDENT JUDGMENT FOR INVOKING REVISIONAL POWERS. FOR ASSUMI NG THE REVISIONAL JURISDICTION, THE COMMISSIONER OF INCOME TAX FIRST HAS TO CALL FOR TH E RECORDS OF ANY PROCEEDINGS UNDER THE ACT AND EXAMINE THE SAME. AFTER EXAMINING THE RECORDS, IF THE COMMISSIONER OF INCOME TAX CONSIDERS THAT THE ORDER PASSED BY ASSESSING OFFICE R IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE MAY ISSUE SHOW C AUSE NOTICE TO THE ASSESSEE. AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE AND CONDUCTI NG ENQUIRY AS MAY BE NECESSARY, THE COMMISSIONER OF INCOME TAX SHALL PASS ORDER AS THE CASE MAY BE INCLUDING ENHANCING OR MODIFYING THE ASSESSMENT OR CANCELLING THE ASSESSME NT. THE COMMISSIONER OF INCOME TAX HAS TO PASS A SPEAKING ORDER HIGHLIGHTING DEFICIENCIES IN THE ASSESSMENT ORDER WITH REASONS. 7. A PERUSAL OF THE IMPUGNED ORDER SHOWS, THAT THE COMMISSIONER OF INCOME TAX IN THE INSTANT CASE HAS MERELY REPRODUCED THE DEFICIENCIES POINTED OUT BY THE DY. COMMISSIONER OF INCOME TAX IN THE ASSESSMENT ORDER. THE COMMISSION ER OF INCOME TAX HAS NOT GIVEN THE REASONS AS TO HOW THE FINDINGS OF THE ASSESSING OFF ICER ARE ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. THE CONTENTION OF THE A SSESSEE IS THAT ALL THE RELEVANT DOCUMENTS WERE PLACED ON RECORD BY THE ASSESSEE DURING THE CO URSE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAS PASSED THE ORDER AFTER CONSID ERING THE SAME. THE DUTY OF THE ASSESSEE IS BRING ALL THE RELEVANT DOCUMENTS BEFORE THE ASSESSI NG OFFICER. THE MANNER IN WHICH THE ORDER IS TO BE PASSED IS THE PREROGATIVE OF THE ASSESSING OFFICER. 8. THE ORDER OF THE ASSESSING OFFICER MAY BE BRIEF AND CRYPTIC BUT THAT BY ITSELF IS NOT SUFFICIENT REASON TO HOLD THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IT IS FOR THE COMMISSIONER TO POINT OUT AS TO WHAT ERROR WAS COMMITTED BY THE ASSESSING OFFICER IN TAKING A PARTICULAR VIEW. IN T HE CASE IN HAND, THE COMMISSIONER OF INCOME TAX HAS FAILED TO POINT OUT ERROR IN THE ASS ESSMENT ORDER. FOR INVOKING REVISIONARY POWERS THE COMMISSIONER OF INCOME TAX HAS TO EXERCI SE HIS OWN DISCRETION AND JUDGMENT. HERE THE COMMISSIONER OF INCOME TAX HAS INVOKED THE PROVISIONS OF SECTION 263 AT THE MERE SUGGESTION OF THE DY. COMMISSIONER OF INCOME TAX, W ITHOUT EXERCISING HIS OWN DISCRETION AND JUDGMENT. 9. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF VINAY PRATAP THACKER VS. COMMISSIONER OF INCOME TAX (SUPRA) HAS SET ASIDE THE ORDER OF CO MMISSIONER OF INCOME TAX PASSED U/S. 263 ON THE GROUND THAT THE COMMISSIONER OF INCOME TAX H AD NOT USED HIS OWN DISCRETION AND JUDGMENT IN ASSUMING THE REVISIONAL JURISDICTION. T HE RELEVANT EXTRACT OF THE ORDER OF THE TRIBUNAL IS REPRODUCED HERE-IN-UNDER: 22. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PAR TIES AND HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US, INCLUDING THE CASE LAWS CITED BY EITHER SIDE. ON GOING THROUGH THE M/S. NEPTUNE ENTERPRISES-ITA NO.2852/11; 5387/15 5 SUBMISSIONS OF THE ASSESSEE, SCN AND AUDIT OBJECTIO N, WE FIND THAT THE ISSUE HAD BEEN DEALT WITH BY THE AO IN REGULAR ASSESSMENT PROCEEDI NGS AND THEREAFTER AN AUDIT OBJECTION WAS RAISED, WHICH WAS USED BY THE AO TO CONVINCE TH E CIT TO INVOKE HIS JURISDICTION UNDER SECTION 263. WHEN WE READ THE SECTION, WHICH READS, AS, (1) THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDI NG UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFI CER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY , AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MA DE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTA NCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CAN CELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. THIS CLEARLY SHOWS, THAT THE C IT MUST HIMSELF COME TO A CONCLUSION, AFTER APPLYING HIS OWN MIND, BECAUSE, THE WORDS USE D IN THE SECTION ARE,.. AND IF HE CONSIDERS .., HERE, APPLICATION OF HIS OWN MIND B ECOMES IMPORTANT. IT IS IMPORTANT TO EXAMINE THE SIMILARITY OF THE EXPRESSION USED UNDER SECTION 147(1) AND 263(1). UNDER SECTION 147(1), THE EXPRESSION USED IS HAS REASON TO BELIEVE AND UNDER SECTION 263(1), THE EXPRESSION USED IS IF HE CONSIDERS. THOUGH TH E EXPRESSIONS USED ARE NOT VERBATIM PARI MATERIA, BUT THE MEANING WHICH IS TO BE DRAWN IN BOTH THE EXPRESSIONS ARE PARI MATERIA, I.E., AN INDEPENDENT, UNPOLLUTED AND UNADO PTED APPLICATION OF MIND BY THE OFFICER, INVOKING THE PROVISION. 23. WE HAVE SEEN F ROM THE IMPUGNED ORDER OF THE CIT, DATED 11.02.2011, THE CIT ADMITS, A PROPOSAL WAS R ECEIVED ON 10.06.2010 FROM THE AO UNDER SECTION 263 OF THE INCOME TAX ACT, 1961, POIN TING OUT SOME DISCREPANCIES/SHORT COMINGS IN THE ASSESSMENT ORDER. THIS CLEARLY SHOW S THAT IN SO FAR AS THE CIT WAS CONCERNED, HE DID NOT APPLY HIS OWN MIND, WHICH THE HONBLE SUPREME COURT OF INDIA HAS SAID IN ICICI BANK (SUPRA) THAT THERE SHOULD BE AN INDEPENDENT APPLICATION OF MIND. 10. IN VIEW OF THE FACT THAT THE COMMISSIONER OF IN COME TAX HAS INVOKED THE PROVISIONS OF SECTION 263 WITHOUT APPLYING HIS OWN INDEPENDENT JU DGMENT AND MERELY AT THE BEHEST OF PROPOSAL FORWARDED BY THE DY. COMMISSIONER OF INCOM E TAX IS AGAINST THE SPIRIT OF ACT. THUS, THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE. 4.1. WE WOULD ALSO LIKE TO REFER TO THE CASE OF RAJAN N . ASWANI(ITA/3988/MUM./2010 AY. 2005 -06, DTD.10/7/2017). 2.BRIEF FACTS ARE, THE ASSESSEE AN INDIVIDUAL IS E NGAGED IN MANUFACTURE AND EXPORT OF READYMADE GARMENTS THROUGH HIS PROPRIETORSHIP CONCE RN DIAMEX INC. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE FILED ITS RE TURN OF INCOME ON 31 ST OCTOBER 2005, DECLARING TOTAL INCOME OF RS.7,94,527, AFTER CLAIMI NG DEDUCTION UNDER SECTION 80IB(4) OF THE ACT. ASSESSMENT IN CASE OF THE ASSESSEE WAS COMPLET ED UNDER SECTION 143(3) OF THE ACT DETERMINING TOTAL INCOME AT RS.7,96,700. SUBSEQUENT LY, ON THE BASIS OF PROPOSAL RECEIVED FROM THE ASSESSING OFFICER, THE LEARNED COMMISSIONER ISS UED A SHOW CAUSE NOTICE UNDER SECTION 263 OF THE ACT PROPOSING TO REVISE THE ASSESSMENT O RDER ON THE BASIS THAT ASSESSMENT ORDER PASSED IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST S OF REVENUE AS THE ASSESSING OFFICER HAS ALLOWED ASSESSEES CLAIM OF DEDUCTION 80IB(4) WITHO UT PROPER VERIFICATION OF EVIDENCE / DOCUMENTS PRODUCED BY THE ASSESSEE. OFCOURSE, THE LEARNED COMMISSIONER ALSO POINTED OUT COUPLE OF OTHER DEFICIENCIES IN THE ASSESSMENT ORDE R PERTAINING TO WITHDRAWAL FROM PARTNERS CAPITAL ACCOUNT AND INTEREST INCOME. 7.WE HAVE PATIENTLY AND CAREFULLY HEARD THE RIVAL C ONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO APPLIED OUR MIND TO THE DECISIONS CITED BEFORE US. AT THE OUTSET, WE HAVE TO EXAMINE WHETHER THE ASSESSMENT O RDER PASSED BY THE ASSESSING OFFICER CAN BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTE RESTS OF REVENUE SO AS TO CLOTHE THE REVISIONAL AUTHORITY WITH THE POWER TO EXERCISE JUR ISDICTION UNDER SECTION 263. XXXXX IN THIS CONTEXT, IT IS RELEVANT TO REFER TO THE ORD ER SHEET ENTRIES IN THE PROCEEDINGS UNDER SECTION 263 OF THE ACT WHICH ARE REPRODUCED HEREUND ER FOR BETTER APPRECIATION: M/S. NEPTUNE ENTERPRISES-ITA NO.2852/11; 5387/15 6 SHRI RAJAN N. ASWANI A.Y. 200506 5.10.07-RECEIVED PROPOSAL U/S. 263 FROM ITO 12(2)(2 ) THROUGH ADDL. CIT IN THE CASE OF SHRI. RAJAN N. ASWANI FOR A.Y. 2005-06. PUT UP IN YEAR KIND PERUSAL AND FURTHER DIRECTION P LEASE. 24.10.2017-IN THIS CASE REVIEW WAS CONDUCTED & SOME OF THE DISCREPANCY WERE OBSERVED. ACCORDINGLY, THE A.O HAS REQUESTED FOR AN ACTION U/S. 263, AS DEEMED FIT SO AS TO PROTECT THE INTEREST OF REVENUE. WHILE GOING THROUGH THE RECORD, IT IS SEEN THAT SOM E OF THE VITAL INFORMATION ALSO NEED TO BE GATHERED FOR EXAMINING THE ALLOW AB ILITY OF DED U/S. 80IB(4), AS XXXXX PUT UP FOR KIND PERUSAL PLEASE. FROM THE AFORESAID ORDER SHEET ENTERIES, IT IS VE RY MUCH CLEAR THAT INITIATION OF PROCEEDINGS UNDER SECTION 263 OF THE ACT WAS PROPOSED BY THE AS SESSING OFFICER HIMSELF AND THE LEARNED COMMISSIONER AT THE BEHEST OF THE ASSESSING OFFICER INITIATED PROCEEDINGS UNDER SECTION 263 BY ISSUING SHOW CAUSE NOTICE TO THE ASSESSEE. THE ORDE R SHEET ENTRY DATED 24 TH OCTOBER 2007 FURTHER REVEALS THAT IT IS THE ASSESSING OFFICER WH O ON REVIEW OF THE ASSESSMENT ORDER PASSED FOR THE IMPUGNED ASSESSMENT YEAR HAD PROPOSED ACTION TO BE TAKEN UNDER SECTION 263 OF THE ACT. FROM THE AFORESAID FACT, IT IS CLEAR THAT THE ASSES SING OFFICER HIMSELF HAS USURPED THE POWER OF THE REVISIONAL AUTHORITY AND HAS PROPOSED REVISION OF THE ASSESSMENT ORDER. AS PER THE MANDATE OF SECTION 263, POWER IS VESTED WITH THE REVISIONAL AUTHORITY TO CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING AND IN COURSE OF SUCH EXAMINATION IF HE CONSIDERS THAT THE ORDER PASSED IN SUCH PROCEEDING IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE, HE MAY INVOKE HIS POWER UNDER SECTION 263 BY ISSUING SHOW CAUSE NOTIC E. IN THE PRESENT CASE, ADMITTEDLY, THE LEARNED COMMISSIONER HAS NOT CALLED FOR AND EXAMINE D THE RECORD ON HIS OWN BUT HAS MERELY ACTED UPON THE PROPOSAL OF THE ASSESSING OFFICER TO INITIATE PROCEEDINGS UNDER SECTION 263 OF THE ACT WHICH, IN OUR VIEW, IS NOT IN TRUE SPIRIT O F PROVISIONS CONTAINED IN SECTION 263, HENCE, IMPERMISSIBLE. . IT IS NECESSARY TO OBSERVE, THE LAW IS NOW FAIRLY W ELL SETTLED THAT FOR EXERCISING THE POWER UNDER SECTION 263, THE REVISIONAL AUTHORITY HAS TO CALL F OR AND EXAMINE THE ASSESSMENT RECORD AND ONLY AFTER APPLYING HIS MIND INDEPENDENTLY TO THE FACTS AND MATERIAL ON RECORD AND FORMING A PRIMA FACIE OPINION THAT THE ASSESSMENT ORDER IS ERRONEOU S AND PREJUDICIAL TO THE INTERESTS OF REVENUE CAN EXERCISE HIS POWER UNDER SECTION 263. IN THIS C ONTEXT, WE MAY REFER TO THE FOLLOWING DECISIONS: I) YES BANK LTD. V/S ACIT, ITA NO.23/MUM./2012 II) PRATAP THAKKAR V/S CIT, ITA NO.2939/MUM./2011, ORDE R DATED 27.02.2013 III) SHRI INDERCHAND AMARCHAND CHOPDA V/S CIT, ITA NO.79 2/PN./2010 DATED 05.10.2011. THEREFORE, CONSIDERED IN THE AFORESAID PERSPECTIVE, EXERCISE OF POWER UNDER SECTION 263 IN THE INSTANT CASE IS INVALID. CONSIDERING THE ABOVE,WE ARE OF THE OPINION THAT TH E ORDER PASSED BY THE CIT,ON RECOMMENDATION OF THE ADDL.CIT AND WITHOUT CALLING FOR THE RECORD,IS INVALID. 5. HERE,WE WOULD ALSO LIKE TO MENTION THAT LIKE THE RE ASSESSMENT PROCEEDINGS,THE REVISIONARY PROCEEDINGS ARE NOT THE NORMAL COURSE OF ASSESSMENT PROCEEDINGS.THESE SECTIONS CAN BE INVOKED IN PECULIAR CIRCUMSTANCES ONLY.FOR INVOKING THE REVISIONARY POWERS,THE ORDER OF THE AO SHOULD SUFFER FROM TWIN DEFICIENCIES I.E. IT SHO ULD BE ERRONEOUS AND IT SHOULD BE PREJUDICIAL TO INTEREST OF REVENUE.THE PROVISIONS C ANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE AO.IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE M/S. NEPTUNE ENTERPRISES-ITA NO.2852/11; 5387/15 7 SECTION WILL BE ATTRACTED.AN INCORRECT ASSUMPTION O F FACT OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERR ONEOUS.IN THE CASE UNDER CONSIDERATION,THE CIT HAS NOT PROVED THAT AS TO HOW THE TREATMENT GIV EN TO BOTH THE ITEMS,BY THE ASSESSEE,WAS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE . IN THE MATTER OF RELIANCE COMMUNICATION LTD.(396 IT R 217)THE HONBLE BOMBAY HIGH COURT HAS DEALT WITH THE ISSUE OF NOT MENTIONING OF CERTA IN FACTS IN THE ORDER BY THE AO AFTER MAKING INQURIES AND JUSTIFICATION OF INITIATION OF REVISIO NARY PROCEEDINGS BY THE CIT.DECIDING THE MATTER,THE HONBLE COURT HELD AS UNDER: ..IT WAS EVIDENT FROM THE ASSESSMENT ORDER THAT T HE ASSESSING OFFICER HAD NOT ONLY MADE ENQUIRIES ABOUT THE ASPECTS WHICH WERE NOTED BY THE COMMISSIONER, BUT WAS ALSO SATISFIED WITH THE ASSESSEES REPLIES FURNISHED FROM TIME TO TIME IN SUPPORT OF ITS STAND. THE MERE FACT THAT THE ASSESSING OFFICER DID NOT MAKE ANY REFEREN CE TO THE ISSUES IN THE ASSESSMENT ORDER DID NOT MAKE IT ERRONEOUS SINCE THE ISSUES HAD BEEN LOO KED INTO. THE COMMISSIONER WAS NOT, THEREFORE, JUSTIFIED IN INVOKING POWERS U/S. 263 . THE ORDER OF THE APPELLATE TRIBUNAL SETTING ASIDE THE REVISION ORDER PASSED BY THE COMMISSIONER WAS NOT PERVERSE. NO QUESTION OF LAW AROSE. IN THE CASE OF MOIL LTD.(396 ITR 244)NAGPUR BENCH O F THE HONBLE BOMBAY HIGH COURT HAS DEALT WITH THE REVISIONARY ORDER PASSED BY THE CIT. IN THAT MATTER ON A PERUSAL OF THE ORDERS PASSED BY THE AUTHORITIES,IT APPEARED THAT BEFORE T HE ASSESSMENT ORDER WAS PASSED, A NOTICE WAS SERVED ON THE ASSESSEE U/S. 142(1) OF THE ACT A ND 20 QUERIES PERTAINING TO DIFFERENT HEADS WERE MADE THEREIN.THE HONBLE COURT FURTHER OBSERVE D AS UNDER: THE NINTH QUERY IN THE NOTICE U/S. 142(1) OF THE A CT PERTAINS TO THE EXPENDITURE FOR THE CORPORATE SOCIAL RESPONSIBILITY. BY THE SAID QUERY, THE ASSESSEE WAS DIRECTED TO GIVE A DETAILED NOTE OF EXPENDITURE FOR THE CORPORATE SOCIAL RESPON SIBILITY ALONG WITH BIFURCATION OF THE EXPENSES UNDER DIFFERENT HEADS. AN EXHAUSTIVE REPLY WAS SUBMITTED BY THE ASSESSEE TO THE NOTICE U/S. 142(1) OF THE ACT. IN PARAGRAPH 8 OF TH E REPLY, THE ASSESSEE GAVE THE DETAILED NOTE PERTAINING TO THE EXPENDITURE FOR THE CORPORATE SOC IAL RESPONSIBILITY UNDER DIFFERENT HEADS THAT RUNS INTO SEVERAL PAGES. THE HEADS UNDER WHICH THE EXPENSES WERE MADE TOWARDS THE CORPORATE SOCIAL RESPONSIBILITY WERE SPECIFICALLY M ENTIONED AS HEALTH, ENVIRONMENT, SPORTS, EDUCATION ETC. AND FOR EACH OF THE DIFFERENT HEADS, PARTICULARS WERE GIVEN IN RESPECT OF EVERY MINOR OR MAJOR EXPENSES. A DETAILED NOTE ON THE EXP ENDITURE ON THE CORPORATE SOCIAL RESPONSIBILITY CLAIM WAS GIVEN IN PARAGRAPH 8 WHICH RUNS INTO MORE THAN FIVE PAGES. IT IS NOT DISPUTED THAT THE APPELLANT-ASSESSEE IS A GOVERNMEN T OF INDIA UNDERTAKING AND THE GOVERNMENT HAS A CONTROL OVER THE EXPENSES OF THE U NDERTAKING. IT IS PERTINENT TO NOTE THAT DURING THE PREVIOUS ASSESSMENT YEARS, SIMILAR CLAIM S WERE MADE BY THE ASSESSEE-COMPANY AND THE ASSESSMENT ORDERS ALLOWING THE CLAIMS HAVE ATTA INED FINALITY. WE HAVE MINUTELY PERUSED THE ASSESSMENT ORDER. THE CLAIMS FOR DEDUCTIONS WERE MADE BY THE ASSESSEE AT LEAST UNDER 20 HEADS AND QUERIES WERE M ADE IN THE NOTICE U/S. 142(1) OF THE ACT TO THE ASSESSEE IN RESPECT OF NEARLY ALL OF THEM. WE, HOWEVER, FIND FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS DEALT WITH NEARLY NINE CL AIMS OF DEDUCTIONS. THESE CLAIMS HAVE BEEN SPECIFICALLY MENTIONED IN THE ASSESSMENT ORDER AND THEY HAVE BEEN DISCUSSED THEREIN BECAUSE THE ASSESSING OFFICER APPEARS TO HAVE DISALLOWED TH OSE CLAIMS EITHER PARTIALLY OR TOTALLY. IN RESPECT OF THE CLAIM FOR THE CORPORATE SOCIAL RESPO NSIBILITY AND SOME OTHER CLAIMS THAT WERE ALLOWED BY THE ASSESSING OFFICER, THE ASSESSING OFF ICER HAS NOT MADE A SPECIFIC REFERENCE IN THE ASSESSMENT ORDER. IT IS APPARENT FROM THE ASSES SMENT ORDER THAT THE ASSESSING OFFICER HAS M/S. NEPTUNE ENTERPRISES-ITA NO.2852/11; 5387/15 8 EXPRESSED IN DETAIL ABOUT THE CLAIMS THAT WERE DISA LLOWABLE. WHERE THE CLAIMS WERE ALLOWABLE, AS WE FIND FROM THE READING OF THE ASSES SMENT ORDER, THE ASSESSING OFFICER HAS NOT REFERRED TO THOSE CLAIMS. THE CORPORATE SOCIAL RESP ONSIBILITY CLAIM IS ONE OF THEM. IT IS APPARENT FROM THE NOTICE U/S. 142(1) OF THE ACT THA T A SPECIFIC QUERY IN REGARD TO THE CLAIM PERTAINING TO THE CORPORATE SOCIAL RESPONSIBILITY W AS MADE AND A DETAILED NOTE AFTER GIVING BIFURCATION OF THE EXPENSES UNDER DIFFERENT HEADS W AS SOUGHT. WE HAVE PERUSED THE RESPONSE IN RESPECT OF THIS QUERY WHICH IS EXHAUSTIVE. WE FI ND THAT THE ASSESSEE HAS GIVEN THE DETAILS, AS ARE SOUGHT UNDER QUERY NO. 9 IN THE NOTICE U/S. 142 (1) OF THE ACT.. THAT IF A QUERY IS RAISED DURING THE ASSESSMENT PRO CEEDINGS AND THE QUERY IS RESPONDED TO BY THE ASSESSEE, THE MERE FACT THAT THE QUERY IS NOT D EALT WITH IN THE ASSESSMENT ORDER WOULD NOT LEAD TO A CONCLUSION THAT NO MIND HAS BEEN APPLIED TO IT. .IN THE INSTANT CASE, WE FIND THAT THE ASSESSING OFFICER HAS APPLIED HIS MIND TO THE CLAIMS MADE BY THE ASSESSEE AND WHEREVER THE CLAIMS WERE DISALLOWABLE THEY HAVE BEE N DISCUSSED IN THAT ASSESSMENT ORDER AND THERE IS NO DISCUSSION OR REFERENCE IN RESPECT OF T HE CLAIMS THAT WERE ALLOWED. .IT CANNOT BE SAID THAT MERELY BECAUSE THE ASSESS ING OFFICER HAD NOT SPECIFICALLY MENTIONED ABOUT THE CLAIM IN RESPECT OF THE CORPORA TE SOCIAL RESPONSIBILITY, THE ASSESSING OFFICER HAD PASSED THE ASSESSMENT ORDER WITHOUT MAK ING ANY ENQUIRY IN RESPECT OF THE ALLOWABILITY OF THE CLAIM OF CORPORATE SOCIAL RESPO NSIBILITY. IN OUR VIEW, THE PROVISIONS OF SECTION 263 OF THE ACT COULD NOT HAVE BEEN INVOKED BY THE COMMISSIONER OF INCOME-TAX IN THE CIRCUMSTANCES OF THIS CASE. THE TRIBUNAL WAS NOT JU STIFIED IN HOLDING THAT THE QUERY U/S. 142(1) OF THE ACT WAS VERY GENERAL IN NATURE AND THE REPLY OF THE ASSESSEE WAS ALSO VERY GENERAL IN NATURE. IN OUR CONSIDERED VIEW, THE QUERY PERTAININ G TO CORPORATE SOCIAL RESPONSIBILITY WAS EXHAUSTIVELY ANSWERED AND THE APPELLANT-ASSESSEE HA D PROVIDED THE DATA PERTAINING TO THE EXPENDITURE UNDER EACH HEAD OF THE CLAIM IN RESPECT OF CORPORATE SOCIAL RESPONSIBILITY, IN DETAIL. THE TRIBUNAL WAS NOT JUSTIFIED IN HOLDING T HAT THE REPLY/EXPLANATION OF THE ASSESSEE WAS NOT ELABORATE ENOUGH TO DECIDE WHETHER THE EXPENDIT URE CLAIM WAS ADMISSIBLE UNDER THE PROVISIONS OF THE INCOME-TAX ACT. THE ASSESSING OFF ICER IS NOT EXPECTED TO RAISE MORE QUERIES, IF THE ASSESSING OFFICER IS SATISFIED ABOUT THE ADM ISSIBILITY OF CLAIM ON THE BASIS OF THE MATERIAL AND THE DETAILS SUPPLIED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ANSWER THE QUESTION OF LAW IN THE NEGATIVE AND AGAINST THE REV ENUE. FROM PERUSAL OF ABOVE JUDGMENTS,IT IS CLEAR THAT IF AN AO MAKES INQUIRIES DURING ASSESSMENT PROCEEDINGS AND THE ASSESSEE FILES REPLY IN THAT RE GARD,THEN THE DUTY OF THE ASSESSEE IS OVER.HE CANNOT COMPEL THE AO TO PASS THE ASSESSMENT ORDER I N A PARTICULAR MANNER THAT WOULD SATISFY THE CIT. 6 .IN THE CASE UNDER CONSIDERATION ,THE ASSESSEE FILE D DETAILED SUBMISSIONS ON 22/11/2008 (PG- 41 OF THE PB)ABOUT THE QUERIES RAISED BY THE AO. IT FILED THE DETAILS OF PURCHASE AND SALE OF FILMS AS WELL AS THE AGREEMENTS FOR PURCHASE AND SA LE. IN THE ANNEXURE IT HAD SHOWN PROFIT OR LOSS ARISING OUT OF SUCH TRANSACTION. VIDE ITS LETT ER DTD 8/12/2008 (PG-43 OF THE PB) FURTHER DETAILS ABOUT PRODUCTION OF FILMS AND INTEREST PAID ON UNSECURED LOANS AND THEIR APPORTION - MENT TOWARDS COST OF PRODUCTION OF MOVIE WERE ALSO FILED.IT WAS SPECIFICALLY MENTIONED THAT THE ASSESSEE WAS NOT A PRODUCER OF THE FILM AND THA T IT WAS ONLY A DISTRIBUTOR. FROM THE ABOVE,IT IS CLEAR THAT THE AO HAD MADE ENQUIRIES AB OUT BOTH THE ISSUES THUS,IT IS NOT A CASE OF NO INQUIRY. WE HAVE ALREADY HELD THAT THE ASSESSEE HAD RESPONDED TO THE QUESTIONS RAISED BY M/S. NEPTUNE ENTERPRISES-ITA NO.2852/11; 5387/15 9 THE AO DURING THE ASSESSMENT PROCEEDINGS.SO,MERELY BECAUSE THE ASSESSMENT ORDER DOES NOT MENTION THE SAME, IT WOULD NOT LEAD TO A CONCLUSION THAT THE AO HAD NOT APPLIED HIS MIND TO THE CASE. IN OTHER WORDS,WE FIND THAT NEITHER DID T HE AO OVERLOOK THE RELEVANT FACTS NOR DID HE NOT MAKE INQUIRIES,THAT THE QUERIES WERE SPECIFICAL LY WITH RESPECT TO PURCHASE EXPENSES OF SOME OF THE FILMS RIGHTS TRADED BY THE ASSESSEE, NO N-DISALLOWANCE OF INTEREST EXPENDITURE IN RESPECT OF MONEY RECEIVED FROM THE SISTER CONCERN,T HAT HE HAD ALSO CONSIDERED THE EXPLANATION OF THE ASSESSEE ON THE SUBJECT.THEREFORE, THE CITS VIEW THAT THE ASSESSMENT ORDERS WERE ERRONEOUS AND REQUIRED REVISION IS UNSUSTAINABLE. ITA/5387/MUM/2015,AY: 2006-07 7. THIS APPEAL IS ARISING OUT OF ORDER OF FIRST APPEL LATE AUTHORITY(FAA) WHO HAD CONFIRMED THE ORDER PASSED BY AO IN PURSUANCE OF THE DIRECTIO NS ISSUED BY CIT IN HIS REVISIONARY ORDER. WE HAVE HELD THAT ORDER PASSED BY CIT U/S. 263 IS N OT A VALID ORDER EITHER FROM JURISDICTIONAL ASPECT OR ON MERITS.THEREFORE, ORDERS PASSED BY AO AND FAA IN PURSUANCE OF THE 263 ORDER IS HELD TO BE INVALID ORDER.WE ALLOW THE APPEAL THE SECOND APPEAL FILED BY THE ASSESSEE. AS A RESULT, APPEA LS FILED BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH FEBRUARY ,2018. 8 , 2018 SD/- S D/- ( . . / C.N.PRASAD ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 08.02.2018. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR I BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.