MR. G. Veerabhadra Rao, Vijayawada V. THE DCIT, CENTRAL CIRCLE, VIJAYAWADA., Vijayawada

ITA 291/VIZ/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0228 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 06-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T S N MURTHY
• Keywords: Search and seizure; Revised return
• Section: 143(3); 153A; 263; 132

Judgement Text

ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 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.291/VIZAG/2012 ( / ASSESSMENT YEAR : 2006-07 ) G. VEERABHADRA RAO VIJAYAWADA VS. DCIT CENTRAL CIRCLE VIJAYAWADA [ PAN: AEIPG 7314L ] (, , , , / APPELLANT) (-., -., -., -., / RESPONDENT ) , / / APPELLANT BY : SHRI G.V.N. HARI, AR -., / / RESPONDENT BY : SHRI T.S.N. MURTHY, DR / 3 / DATE OF HEARING : 19.10.2015 / 3 / DATE OF PRONOUNCEMENT : 29.10.2015 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT (CENTRAL), HYDERABAD DATED 6.3.2012 U/S 263 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED ACT) AND PERTAINS T O ASSESSMENT YEAR 2006-07. ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNER IN M/S. SAILAJA HOUSING ESTATES AND ALSO MANAGING DIRE CTOR IN M/S. SAITEJA BUILDERS PVT. LTD. THE ASSESSEE HAS FILED HIS RETU RN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 31.10.2006 DECLARING TOT AL INCOME OF RS.4,53,480/-. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT, WAS CONDUCTED IN THE GROUP CASES OF SAITEJA BUILDERS, V IJAYAWADA ON 23.4.2008. CONSEQUENT TO SEARCH PROCEEDINGS, THE C ASE WAS NOTIFIED TO THE CENTRAL CIRCLE VIDE NOTIFICATION NO.F.NO.CCIT/2 -TECH/12(7)-08-09 DATED 15.7.2008. CONSEQUENT TO SEARCH PROCEEDINGS, THE ASSESSMENT WAS REOPENED AND NOTICE U/S 153A OF THE ACT DATED 2 5.2.2009 WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO NOTICE U/S 153A OF THE ACT, THE ASSESSEE HAS FILED REVISED RETURN ON 28.8.2009 ADMI TTING A TOTAL INCOME OF RS.54,53,480/-. THE CASE WAS SELECTED FOR SCRUT INY AND STATUTORY NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 14.9.200 9. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FILED A REVISED COMPUTATION ON 7.10.2010 AND AS PER THE REVISED COM PUTATION, HE HAS ADMITTED TOTAL INCOME OF RS.39,23,585/-. THE ASSES SING OFFICER AFTER CONSIDERING THE RELEVANT MATERIALS FILED BY THE ASS ESSEE HAS COMPLETED ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT ON 31. 12.2010 AND DETERMINED TOTAL INCOME OF RS.72,34,320/-. ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 3 3. THE CIT(CENTRAL), HYDERABAD ISSUED A SHOW CAUSE NOTICE U/S 263 OF THE ACT AND PROPOSED TO REVISE THE ASSESSMENT OR DER PASSED U/S 143(3) R.W.S. 153A OF THE ACT DATED 31.12.2010. TH E CIT PROPOSED TO REVISE THE ASSESSMENT ORDER ON THE GROUNDS THAT THE ASSESSING OFFICER HAS CONSIDERED SUPPRESSED TURNOVER OF RS.28,30,220/ - AS AGAINST THE SUPPRESSED TURNOVER OF RS.34,77,525/- AS PER THE SE IZED BOOKS OF ACCOUNTS. THUS, THERE IS A DIFFERENCE OF RS.6,47,3 05/-. THE CIT FURTHER WAS OF THE VIEW THAT THE ASSESSING OFFICER HAS WRON GLY TAKEN THE TOTAL INCOME AS PER REVISED COMPUTATION AT RS.38,88,525/- AS AGAINST THE TOTAL INCOME ADMITTED OF RS.39,23,585/-. THUS, THERE IS A DIFFERENCE OF RS.35,000/-. WITH THESE OBSERVATIONS, THE CIT WAS O F THE OPINION THAT THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 153A OF THE ACT DATED 31.12.2010 IS ERRONEOUS IN SO FAR AS IT IS PREJUDIC IAL TO THE INTEREST OF THE REVENUE IN TERMS OF THE PROVISIONS OF SECTION 263 O F THE ACT. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE HAS FIL ED DETAILED WRITTEN SUBMISSIONS AND CONTENDED THAT THE CIT(A) IS WRONG IN OBSERVING THAT THERE IS A DIFFERENCE OF SUPPRESSED TURNOVER OF RS. 6,47,305/- AS THE FIGURE DETERMINED BY THE ASSESSING OFFICER AT RS.28 ,30,220/- IS NOT SHORTAGE OF SUPPRESSED TURNOVER, BUT IN FACT IT IS EXCESS AMOUNT WHEN COMPARED TO THE REVISED RETURN FILED BY THE ASSESSE E. THE ASSESSEE FURTHER CONTENDED THAT THE DIFFERENCE IN THE TABLE MENTIONED BY THE ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 4 ASSESSING OFFICER PERTAINS TO THE EXCESS AMOUNT OFF ERED BY THE ASSESSEE. THIS IS BECAUSE THE RECEIPTS ACCOUNTED AS PER THE R EVISED STATEMENT OF TOTAL INCOME ARE EVEN MORE THAN THE AMOUNT OBTAINED AS PER THE SEIZED MATERIALS. THE ASSESSEE FURTHER CONTENDED THAT AS PER THE SEIZED MATERIALS, THE TOTAL TURNOVER PERTAINS TO SIX PARTI ES IS AT RS.1,39,61,975/- AS AGAINST THIS, THE ASSESSEE ADMITTED TURNOVER OF RS.1,44,86,270/-. THEREFORE, THE ASSESSEE HAS ADMITTED TURNOVER IN EX CESS OF THE TURNOVER DETERMINED AS PER THE SEIZED MATERIALS. THE ASSESS EE FURTHER SUBMITTED THAT THESE DETAILS WERE SUBMITTED TO THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT AND THE ASSESSING OFFICER HAS CONSIDERED IN DETAIL THE ISSUE AND DISCUSSED IN ASSESSMENT ORDER AT PAGE NOS.2 TO 5 AT PARA NO.3.5 OF THE ASSESSMENT ORDER. AS FAR AS THE SECOND GROUND IS CONCERNED, THE ASSESSEE SUBMITTED THAT HE HAS NO OBJECTION TO PROP OSED RECTIFICATION TO BRING THE DIFFERENCE OF RS.35,000/- TO TAX. THE CI T AFTER CONSIDERING THE RELEVANT SUBMISSIONS SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE THE TOTAL INCOME AF TER GIVING THE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. AGGRIEVED BY THE CIT(A)S ORDER, THE ASSESSEE IS IN APPEAL BEFORE US AND RAISED THE FOLLOWING GROUNDS OF APPEAL: 1 THE ORDER OF THE COMMISSIONER OF INCOMETAX, (CEN TRAL), HYDERABAD IN HOLDING THAT THE INCOME TAX ASSESSMENT ORDER PAS SED ON 3112 2010 BY DYCWT, CENTRAL CIRCLE 6, HYDERABAD (DCWT) IS ERR ONEOUS AND ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 5 PREJUDICIAL TO THE INTERESTS OF REVENUE IS TOTALLY CONTRARY TO THE FACTS AND EVIDENCE ON RECORD AND IS THEREFORE WHOLLY UNSU STAINABLE BOTH ON FACTS IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME TAX (CENTRAL), H YDERABAD, ON A WRONG FOUNDATION OF REASONING ARISING OUT OF A FUNDAMENTAL MISCONCEPTION OF FACTS CAME TO A TOTALLY WRONG AND ERRONEOUS CONCLUSION THAT THE ORDER PASSED BY THE DEPUTY COMM ISSIONER OF INCOME TAX, CENTRAL CIRCLE, HYDERABAD, ON 31 12.2010U/S 14 3 (3) RW. 153A OF THE INCOME TAX ACT 1957 WAS ERRONEOUS AND PREJUD ICIAL TO THE INTEREST OF REVENUE AND THEREFORE MUST BE QUASHED 3. THE LEARNED COMMISSIONER OF INCOME TAX (CENTRAL), H YDERABAD, FAILED TO NOTE THAT THE D C L I CENTRAL CIRCLE, VIJ AYAWADA, EXAMINED THE ISSUES IN CONSIDERATION AND CAME TO A CONCLUSION TH AT THE INCOME DISCLOSED WAS IN ORDER AND THEREFORE THE COMMISSION ER OF INCOME TAX. CENTRAL CIRCLE, HYDERABAD, ERRED IN HOLDING THAT TH E ORDER PASSED U/S 143 (3) RW. 153A ON 3112 2010 WAS ERRONEOUS AND PRE JUDICIAL TO THE INTERESTS OF REVENUE. 4. THE LEARNED COMMISSIONER OF INCOME TAX (CENTRAL) CI RCLE, HYDERABAD ERRED IN SETTING ASIDE THE ORDER PASSED U NDER 143 (3) RW. 153A WITH A DIRECTION TO RECOMPUTE THE INCOME OF TH E APPELLANT T WHEN THERE WAS A LULL DISCLOSURE OF THE GROSS RECEI PTS BY THE PARTNERSHIP FIRM OF THE M/S SAI TEJA HOUSING ESTATE S IN WHICH THE APPELLANT WAS A PARTNER 5.THE ORDER OF THE CIT (CENTRAL), HYDERABAD IN SETT ING ASIDE THE ORDER PASSED ON 3112.2010 BY THE DEPUTY COMMISSIONER OF I NCOME TAX, (CENTRAL), VIJAYAWADA FOR THE ASSESSMENT YEAR 2006 07 WITH A DIRECTION TO THE ASSESSING OFFICER TO RECOMPUTED THE INCOME O F THE APPELLANT ON THE GROUND THAT THE ORDER PASSED UNDER 143(3) R.W. 153A ON 31.12.2010 IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE, IS WHOLLY UNSUSTAINABLE. 4. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE, S UBMITTED THAT THE ASSESSMENT ORDER IS NOT ERRONEOUS AND ALSO NOT PREJ UDICIAL TO THE INTEREST OF THE REVENUE AS THE ISSUE RAISED BY THE CIT IS ALREADY DISCUSSED BY THE ASSESSING OFFICER AT THE TIME OF A SSESSMENT ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 6 PROCEEDINGS. THE A.R. FURTHER SUBMITS THAT AS FAR AS THE ISSUE OF DIFFERENCE IN SUPPRESSED TURNOVER IS CONCERNED, THE CIT MISUNDERSTOOD THE FIGURES MENTIONED BY THE ASSESSING OFFICER IN T HE ASSESSMENT ORDER. THE ASSESSEE FURTHER SUBMITS THAT THE DIFFERENCE IN THE TABLE MENTIONED BY THE ASSESSING OFFICER IS TO BE UNDERSTOOD AS EXC ESS AMOUNTS OFFERED BY THE ASSESSEE SINCE, THE AMOUNT AS PER THE REVISE D RETURN IS MORE THAN THE AMOUNT AS PER THE SEIZED MATERIAL MENTIONE D BY THE ASSESSING OFFICER. THE ASSESSEE FURTHER STATED THAT THE ASSE SSEE HAS SOLD UNDIVIDED SHARE OF LAND COMPONENT TO SIX PEOPLE MEN TIONED IN THE TABLE AND THE CONSTRUCTION RECEIPTS WERE RECORDED IN THE BOOKS OF THE FIRM M/S. SAI TEJA HOUSING AND ESTATES. THE DETAILS OF THE GROSS RECEIPTS RECORDED AS PER THE SEIZED MATERIAL AND AS PER THE REVISED FINANCIAL STATEMENT ARE AS FOLLOWS: SL.NO. NAME OF THE PARTY TURNOVER AS PER SEIZED LEDGER T/O PERTAINING TO UNDIVIDED SHARE OF LAND OFFERED BY THE ASSESSEE IN THE REVISED RETURN T/O PERTAINING TO CONSTRUCTION RECEIPTS OFFERED BY M/S. SAI TEJA HOUSING & ESTATES IN THE REVISED RETURN TOTAL RECEIPTS OFFERED IN THE REVISED RETURNS 1. P.V. HEMALATHA 4427375 4360900 0 4360900 2. P. POORNACHANDRA JOSHI 1467000 1437350 0 1437350 3. U. RAJENDRA NAIDU 1450000 1002800 937014 1939814 ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 7 4. V. SHYAM 2041000 1008000 934600 1942600 5. G. CHALAPATHI RAO 1770000 950400 431200 1381600 6. G. SRIDHAR 2806000 1725000 1699006 3224006 13961975 10484450 4001820 14486270 5. THE A.R. FURTHER, SUBMITTED THAT THE CIT(A) IS N OT CORRECT IN STATING THAT THE AO DID NOT VERIFIED THE ISSUE, BECAUSE THE ASSESSING OFFICER HAS VERIFIED THE ISSUE IN DETAIL AND INDICATED IN HIS A SSESSMENT ORDER WHICH IS EVIDENT FROM THE ASSESSMENT ORDER. IT IS ONLY, THE CIT MISUNDERSTOOD THE FIGURES QUOTED BY THE ASSESSING OFFICER AND ASS UMED THE JURISDICTION TO REVISE THE ASSESSMENT ORDER. THE A.R. FURTHER S UBMITTED THAT AS FAR AS THE SECOND GROUND IS CONCERNED, HE ADMITTED THAT THERE IS A DIFFERENCE OF RS.35,000/- IN TOTAL INCOME CONSIDERE D BY THE ASSESSING OFFICER TO THE TOTAL INCOME ADMITTED BY THE ASSESSE E IN THE REVISED COMPUTATION STATEMENT FILED ON 7.10.2010. THEREFOR E, THE ASSESSEE DID NOT HAVE ANY OBJECTION TO REVISE THE ASSESSMENT ORD ER AS FAR AS THIS ISSUE IS CONCERNED. THE A.R. FURTHER SUBMITTED THA T THE ASSESSING OFFICER HAS EXAMINED THE RELEVANT ASPECTS OF THE ISSUES IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE ELEMENT OF JUDGEMENT A ND DISCRETIONS ARE INVOLVED IN THIS MATTER AND ASSESSING OFFICER BEING QUASI JUDICIAL AUTHORITY SHALL HAVE THE AUTHORITY TO EXERCISE THE RIGHT DISCRETION ON THE ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 8 BASIS OF AVAILABLE INFORMATION COMING TO HIS KNOWLE DGE DURING THE COURSE OF ASSESSMENT, MOST OF WHICH MAY NOT FIND PLACE IN THE ASSESSMENT ORDER. THEREFORE, THE ASSESSMENT ORDER PASSED BY T HE ASSESSING OFFICER IS NOT ERRONEOUS AND ALSO NOT PREJUDICIAL TO THE IN TEREST OF THE REVENUE SHOULD BE UPHELD AND THAT THE ORDER OF THE CIT SHOU LD BE QUASHED. 6. ON THE OTHER HAND, THE LD. D.R. RELIED UPON THE ORDER OF THE CIT(A) AND URGED TO UPHOLD THE CIT(A)S ORDER. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIALS AVAILABLE ON RECORD. THE CIT ASSUMED THE REVISIONA L POWERS ON THE GROUNDS THAT THE ASSESSING OFFICER HAS NOT CONDUCTE D PROPER ENQUIRY BEFORE PASSING THE ASSESSMENT ORDER ON THE ISSUES O F SUPPRESSED TURNOVER AS WELL AS DIFFERENCE IN TOTAL INCOME ADMI TTED BY THE ASSESSEE IN THE REVISED STATEMENT OF TOTAL INCOME, THEREBY H IS ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE. THE CIT FURTHER OBSERVED THAT THERE IS A DIFFERENCE OF RS.6 ,47,305/- WITH REFERENCE TO SUPPRESSED TURNOVER BASED ON THE SEIZE D MATERIALS. THEREFORE, THE ASSESSING OFFICER HAS NOT PROPERLY V ERIFIED THE ISSUE BEFORE PASSING THE ASSESSMENT ORDER, WHICH IS A CLE AR CASE OF LACK OF ENQUIRY AND NON APPLICATION OF MIND BY THE ASSESSIN G OFFICER. THE CIT FURTHER, WAS OF THE OPINION THAT THE ASSESSING OFFI CER HAS MADE A ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 9 MISTAKE IN ADOPTING THE CORRECT RETURNED INCOME AS PER THE REVISED COMPUTATION. THUS, THERE IS A DIFFERENCE OF RS.35, 000/- IN THE RETURNED INCOME ADMITTED BY THE ASSESSEE TO THE INCOME ADOPT ED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 8. WE HAVE GONE THROUGH THE ASSESSMENT ORDERS AS WEL L AS THE CITS ORDER. TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT, 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 CANNOT ASSUME JURISDICTION TO REVISE THE ASSESSMENT ORDER U/S 263 OF THE ACT. IT IS NOT NECESSARY THAT EVERY ORDER WHICH IS ERRONEOUS IS AL SO PREJUDICIAL TO THE INTEREST OF THE REVENUE. UNLESS THE ASSESSING OFFI CERS ORDER IS NOT ERRONEOUS, NO ACTION CAN BE TAKEN BY THE CIT U/S 26 3 OF THE ACT. THIS IS BECAUSE THE TWIN CONDITIONS I.E. (I) THE ORDER IS E RRONEOUS AND (II) THE SAME IS ALSO PREJUDICIAL TO THE INTEREST OF THE REV ENUE ARE NOT CO-EXIST. IN THE PRESENT CASE ON HAND, THE AO HAS CONDUCTED E NQUIRY ON THE ISSUE OF SUPPRESSED TURNOVER BEFORE PASSING THE ASSESSMEN T ORDER. AS PER THE ASSESSEE, THE TOTAL TURNOVER ADMITTED FROM THESE TR ANSACTIONS IS AT RS.1,44,86,270/- AS AGAINST THE TOTAL TURNOVER AS P ER SEIZED BOOKS OF ACCOUNTS OF RS.1,39,61,975/-. BUT, THE CIT HAS ARR IVED AT A DIFFERENCE ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 10 OF RS.6,47,305/- AFTER TAKING INTO ACCOUNT THE TOTA L TURNOVER AS PER SEIZED LEDGER OF RS.1,39,61,975/- AND THE TURNOVER AS PER THE REVISED RETURN OF RS.1,04,84,450/-. AFTER GOING THROUGH TH E ASSESSMENT ORDER AND CIT(A)S ORDER, WE ARE OF THE OPINION THAT THE AO HAS RIGHTLY CONSIDERED THE SUPPRESSED TURNOVER IN HIS ORDER. I T IS ONLY, THE CIT MISUNDERSTOOD THE FIGURE OF RS.28,30,220/- WHICH IS ACTUALLY THE EXCESS TURNOVER DETERMINED BY THE ASSESSING OFFICER AS PER REVISED RETURN AND TO THE TURNOVER AS PER ORIGINAL RETURN. THE ASSESSI NG OFFICER HAS CAREFULLY EXAMINED THE BOOKS OF ACCOUNTS AND OTHER DETAILS FU RNISHED BY THE ASSESSEE AND PASSED ASSESSMENT ORDER WHICH IS EVIDE NT FROM THE ASSESSMENT ORDER. THE CITS CONTENTION IS THAT FRO M THE ASSESSMENT ORDER IT IS NOT CLEAR AS TO HOW THE DIFFERENCE POIN TED OUT IN THE ASSESSMENT ORDER IS INCLUDED IN THE GROSS RECEIPTS OFFERED BY THE ASSESSEE. THE ASSESSING OFFICER HAS EXAMINED THE I SSUE IN DETAIL BEFORE PASSING THE ASSESSMENT ORDER AND FOR THE SAME REASO N THE CIT CANNOT ASSUME JURISDICTION WITHOUT ANY BASIS. IF THERE IS AN INADEQUATE ENQUIRY TAKEN BY THE ASSESSING OFFICER THAT WOULD NOT BY IT SELF GIVE OCCASION TO THE CIT TO ASSUME JURISDICTION U/S 263 OF THE ACT M ERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER. IN OUR OPINION, THE ISSUE RAISED BY THE CIT IS ALREADY EXAMINED BY THE ASSESSING OFFICER, T HEREFORE, THE CIT HAS ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 11 NO JURISDICTION TO INTERFERE TO REVISE THE ASSESSME NT ORDER WHEN THERE IS NO SUCH REASON EXISTED FOR HIM TO ASSUME JURISDICTI ON. 9. IN THE CASE OF SPECTRA SHARES AND SCRIPS PVT. LT D., (2013) 354 ITR 35, THE HONBLE A.P. HIGH COURT HAS CULLED OUT PRIN CIPLES LAID DOWN BY THE HONBLE SUPREME COURT AND ALSO VARIOUS HIGH COU RTS ON THE ISSUE OF EXERCISE OF JURISDICTION BY THE CIT U/S 263 OF THE ACT. IT READS AS FOLLOWS: '(A) THE COMMISSIONER HAS TO BE SATISFIED OF TWIN C ONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. IF ONE OF THEM IS ABSENTIF THE ORDER OF THE INCOME-TAX OFFICER IS ERR ONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IT IS PREJUDICIAL TO THE REVENUERECOURSE CANNOT BE HAD TO SECT/ON 263(1) OF THE ACT. (B) EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS O F THE REVENUE. FOR EXAMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURS ES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIO NER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTA INABLE IN LAW. (C) TO INVOKE THE SUO MOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER SECTION 263, THE COMMISSIONER MUST GIVE REASO NS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME-TAX OFFICER IS ERR ONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WILL N OT SUFFICE; THAT THE REASONS MUST BE SUCH AS TO SHOW THAT THE ENHANCEMENT OR MODIFICA TION OF THE ASSESSMENT OR CANCELLATION OF THE ASSESSMENT OR DIRECTIONS ISSUED FOR A FRESH ASSESSMENT WERE CALLED FOR, AND MUST IRRESISTIBLY LEAD TO THE CONCL USION THAT THE ORDER OF THE INCOME- TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDIC IAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE INCOME-TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVING DETAILED REASONS IN RESPE CT OF EACH AND EVERY DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE ASSESSING OFFICER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSES SING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSME NT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED FOR INTERFERENCE AND REVISION. (E) THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WI TH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALR EADY CONCLUDED , THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIG ATION BECAUSE OF NEW VIEWS THEY ENTERTAIN ON FACTS OR NEW VERSIONS WHICH THEY PRESE NT AS TO WHAT SHOULD BE THE ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 12 INFERENCE OR PROPER INFERENCE EITHER OF THE FACTS D ISCLOSED OR THE WEIGHT OF THE CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED. (F) WHETHER THERE WAS APPLICATION OF MIND BEFORE AL LOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN IN QUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMI SSIONER TO PASS ORDERS UNDER SECTION 263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT IT IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME-TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTE N MORE ELABORATELY, THERE MUST BE SOME PRIMA FADE MATERIAL ON RECORD TO SHOW THAT THE TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATION, A LESSER TAX THAN WHAT WAS JUST, HAS BEEN IMPOSED. (G) THE POWER OF THE COMMISSIONER UNDER SECTION 263 (1) IS NOT LIMITED ONLY TO THE MATER/AL WHICH WAS AVAILABLE BEFORE THE AO AND, IN ORDER TO PROTECT THE INTERESTS OF THE REVENUE, THE COMMISSIONER IS ENTITLED TO EXA MINE ANY OTHER RECORD WHICH ARE AVAILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE SUBSEQUENT TO THE ORD ER OF ASSESSMENT.' -. 10. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE CIT HAS WRONGLY ASSUMED THE JURISD ICTION U/S 263 OF THE ACT. THE CIT ASSUMED THE JURISDICTION AND REVISED THE ASSESSMENT ORDER U/S 263 OF THE ACT WITHOUT POINTING OUT ANY MISTAKE IN THE ASSESSING OFFICERS ORDER MERELY MISUNDERSTANDING THE FIGURES FROM THE ASSESSMENT ORDER, WHICH ITSELF IS NOT A GROUND FOR ASSUMING JU RISDICTION U/S 263 OF THE ACT. THEREFORE, AS FAR AS THE ISSUE OF SUPPRES SED TURNOVER IS CONCERNED, THE CIT INVOKED THE JURISDICTION WITHOUT PROPERLY APPRECIATING THE FACTS FROM THE ASSESSMENT ORDER, H ENCE, WE SET ASIDE THE CITS ORDER AND RESTORE THE ASSESSING OFFICERS ORDER. ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 13 11. NOW COMING TO THE SECOND ISSUE, I.E. THE DIFFER ENCE OF RS.35,000/- IN CONSIDERING THE TOTAL INCOME ADMITTED BY THE ASS ESSEE IN THE REVISED STATEMENT OF TOTAL INCOME AND TO THE FIGURE ADOPTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. AFTER EXAMINING T HE ASSESSMENT ORDER, WE FIND THAT THE ASSESSING OFFICER HAS TAKEN TOTAL TURNOVER OF RS.39,23,585/- INCLUDING AGRICULTURAL INCOME OF RS. 35,000/-. WHEREAS, THE ASSESSEE HAS FILED A REVISED STATEMENT OF TOTAL INCOME DATED 7.10.2010 AND AS PER THAT STATEMENT, THE TOTAL INCO ME IS AT RS.39,23,585/- INCLUDING AGRICULTURAL INCOME OF RS. 35,000/-. IN FACT, THERE IS NO DIFFERENCE BETWEEN THE TURNOVER ADMITTE D BY THE ASSESSEE AND THE TURNOVER CONSIDERED BY THE ASSESSING OFFICE R IN THE ASSESSMENT ORDER. IT IS ONLY THE CIT WHO HAS CONSIDERED THE W RONG FIGURES WITHOUT PROPERLY APPRECIATING THE FIGURES IN THE ASSESSMENT ORDER WHICH LEADS TO DIFFERENCE OF RS.35,000/-. HOWEVER, THE ASSESSEE B EFORE THE CIT HAS NOT OBJECTED TO THE REVISION OF ASSESSMENT ORDER AS FAR AS THIS ISSUE IS CONCERNED. THEREFORE, WE ARE OF THE OPINION THAT T HE CIT HAS RIGHTLY ASSUMED JURISDICTION TO REVISE THE ASSESSMENT ORDER AS FAR AS THIS ISSUE IS CONCERNED. HENCE, WE UPHOLD THE CITS ORDER ON THIS ISSUE. ITA NO.291/VIZAG/2012 G. VEERABHADRA RAO, VIJAYAWADA 14 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 29 TH OCT15. SD/- SD/- ( (( ( . .. . ) ) ) ) ( (( ( . . . . ) ) ) ) ( (( ( V. DURGA RAO ) )) ) ( (( ( G. MANJUNATHA) / // / JUDICIAL MEMBER / // / ACCOUNTANT MEMBER /VISAKHAPATNAM: 6 / DATED : 29.10.2015 VG/SPS / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT M/S. VENKAT SRINIVAS & CO., CHARTERED ACCOUNTANT S, D.NO.9-29-19/A, FLAT NO.101, WALTAIR HIGHTS, BALAJI NAGAR, VISAKHAPATNAM-530 003. 2. -., / THE RESPONDENT THE DCIT CENTRAL CIRCLE, VIJAYAWADA 3. ; / THE CIT (CENTRAL), HYDERABAD 4. ; () / THE CIT(A), VISAKHAPATNAM 5. -, , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // AB ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM