SAI ENTERPRISES, THANE V. PR. CIT- 2 , THANE

ITA 3075/MUM/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 4350 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 09-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH LD
• Assessee Lawyers: SUBODH RATNAPARKHI LD
• Keywords: Revision of order; Opportunity of being heard; Principle of natural justice; TDS; Set aside
• Section: 43CA; 143(3); 142(1); 194C; 147; 263

Judgement Text

ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , , BEFORE HONBLE SHRI C.N. PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.3075/MUM/2019 ( / ASSESSMENT YEAR: 2014-15) SAI ENTERPRISES 2 ND FLOOR, ROSA VISTA OPP. SURAJ WATER PARK GHODBUNDER ROAD, THANE(W) MAHARASHTRA. / VS. PR. C IT - 2 ASHAR I.T. PAK, B WING 6 TH FLOOR, WAGLE INDL. ESTATE THANE(E), MAHARASHTRA. ./ ./PAN/GIR NO. AAEFS-0841-H ( ! /APPELLANT ) : ( ' ! / RESPONDENT ) ASSESSEE BY : SHRI SUBODH RATNAPARKHI-LD. AR REVENUE BY : CHAUDHARY ARUN KUMAR SINGH - LD.SR.DR / DATE OF HEARING : 20/08/2019 / DATE OF PRONOUNCEMENT : 15/11/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1.1 AS PER THE PROVISIONS OF SECTION 263 OF INCOME TAX ACT, 1961, THE REVENUE AUTHORITIES NAMELY PR. COMMISSIONER OF INCO ME TAX / COMMISSIONER OF INCOME TAX IS VESTED WITH THE SUPER VISORY POWERS OF SUO-MOTO REVISION OF ANY ORDER PASSED BY THE ASSESS ING OFFICER [AO]. FOR THE SAID PURPOSE, THE APPROPRIATE AUTHORITY MAY CALL FOR AND EXAMINE ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 2 THE RECORD OF ANY PROCEEDINGS UNDER THE ACT AND MAY PROCEED TO REVISE THE SAME PROVIDED TWO CONDITIONS ARE SATISFIED-(I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS ; AND (II) IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IF ONE OF THE CONDITION IS ABSENT I.E. IF THE ORDER OF THE INCOME-TAX OFFICER IS ERRO NEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOU S BUT IT IS PREJUDICIAL TO THE REVENUE - RECOURSE CANNOT BE HAD TO SECTION 263 OF THE ACT AS HELD BY HONBLE SUPREME COURT IN MALABAR INDUSTRIAL CO. LTD. V/S CIT [243 ITR 83 10/02/2000] & NOTED BY HONBLE DELHI HIGH COURT IN CIT V/S VIKAS POLYMERS [194 TAXMAN 57 16/08/2010]. THE HONBLE SUPREME COURT IN MALABAR INDUSTRIAL CO. LTD. V/S CIT (SUPRA) HAS HELD THAT THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE ' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE A SSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE. FOR EXAMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF R EVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS T AKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. THE SAID PRINCIPAL HAS BEEN REITERATED BY HONBLE COURT IN I TS SUBSEQUENT JUDGEMENT TITLED AS CIT V/S MAX INDIA LTD. (295 ITR 282). SIMILAR PRINCIPAL HAS BEEN FOLLOWED BY JURISDICTIONAL HIGH COURT IN GRASIM INDUSTRIES LTD. V/S CIT (321 ITR 92). ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 3 1.2 THE HONBLE DELHI HIGH COURT, CIT V/S VIKAS POLYMERS (SUPRA), FURTHER OBSERVED THAT AS REGARDS THE SCOPE AND AMBI T OF THE EXPRESSION 'ERRONEOUS', HONBLE BOMBAY HIGH COURT IN CIT VS. GABRIEL INDIA LTD. [1993 203 ITR 108 (BOMBAY)] , HELD WITH REFERENCE TO BLACK'S LAW DICTIONARY THAT AN 'ERRONEOUS JUDGMENT' MEANS 'ONE RENDERED ACCORDING TO COURSE AND PRACTICE OF COURT, BUT CONTRARY TO LA W, UPON MISTAKEN VIEW OF LAW; OR UPON ERRONEOUS APPLICATION OF LEGAL PRIN CIPLES' AND THUS IT IS CLEAR THAT AN ORDER CANNOT BE TERMED AS 'ERRONEOUS' UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF AN INCOME-TAX OFFICER ACTIN G IN ACCORDANCE WITH LAW MAKES A CERTAIN ASSESSMENT, THE SAME CANNOT BE BRANDED AS 'ERRONEOUS' BY THE COMMISSIONER SIMPLY BECAUSE, ACC ORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN DIFFERENTLY OR MORE ELABORATELY. THE SECTION DOES NOT VISUALIZE THE SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE INCOME-TAX OFFICER, WH O PASSED THE ORDER UNLESS THE DECISION IS NOT IN ACCORDANCE WITH LAW. 1.3 FURTHER, ANY AND EVERY ERRONEOUS ORDER CANNOT B E THE SUBJECT MATTER OF REVISION BECAUSE THE SECOND REQUIREMENT A LSO MUST BE FULFILLED. THERE MUST BE MATERIAL ON RECORD TO SHOW THAT TAX W HICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED AS HELD IN GABRIEL INDIA LTD. HOWEVER, THE EXPRESSION 'PREJUDICIAL TO THE INTEREST OF THE REVENUE', AS HELD BY THE SUPREME COURT IN THE MALABAR INDUSTRIAL CO. LTD.'S CASE, IS NOT AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT AND , THEREFORE, MUST BE UNDERSTOOD IN ITS ORDINARY MEANING. IT IS OF WIDE I MPORT AND IS NOT CONFINED TO THE LOSS OF TAX AS HELD IN VARIOUS JUDI CIAL PRONOUNCEMENTS. AT THE SAME TIME, THE WORDS 'PREJUDICIAL TO THE INTERE ST OF THE REVENUE', AS OBSERVED IN DAWJEE DADABHOY AND CO. VS. S.P. JAIN, (1957) 311 ITR ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 4 872 (CALCUTTA), CAN ONLY MEAN THAT 'THE ORDERS OF A SSESSMENT CHALLENGED ARE SUCH AS ARE NOT IN ACCORDANCE WITH LAW, IN CONS EQUENCE WHEREOF THE LAWFUL REVENUE DUE TO THE STATE HAS NOT BEEN REALIZ ED OR CANNOT BE REALIZED.' THUS, THE COMMISSIONER'S EXERCISE OF REV ISIONAL JURISDICTION UNDER THE PROVISIONS OF SECTION 263 CANNOT BE BASED ON WHIMS OR CAPRICE. IT IS TRITE LAW THAT IT IS A QUASI-JUDICIA L POWER HEDGED IN WITH LIMITATION AND NOT AN UNBRIDLED AND UNCHARTERED ARB ITRARY POWER. THE EXERCISE OF THE POWER IS LIMITED TO CASES WHERE THE COMMISSIONER ON EXAMINING THE RECORDS COMES TO THE CONCLUSION THAT THE EARLIER FINDING OF THE INCOME-TAX OFFICER WAS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF THE REVENUE AND THAT FRESH DETERMINATION OF THE CAS E IS WARRANTED. THERE MUST BE MATERIAL TO JUSTIFY THE COMMISSIONER'S FIND ING THAT THE ORDER OF THE ASSESSMENT WAS ERRONEOUS INSOFAR AS IT WAS PREJ UDICIAL TO THE INTEREST OF THE REVENUE. 1.4 THE HONBLE DELHI COURT, IN THE CITED DECISION, FURTHER OBSERVED THAT THERE IS A FINE THOUGH SUBTLE DISTINCTION BETWEEN ' LACK OF INQUIRY' AND 'INADEQUATE INQUIRY'. IT IS ONLY IN CASES OF 'LACK OF INQUIRY' THAT THE COMMISSIONER IS EMPOWERED TO EXERCISE HIS REVISIONA L POWERS BY CALLING FOR AND EXAMINING THE RECORDS OF ANY PROCEEDINGS UN DER THE ACT AND PASSING ORDERS THEREON. IN GABRIEL INDIA LTD. (SUPR A), IT WAS EXPRESSLY OBSERVED: - 'THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO STARTING FISHING AND ROVING ENQUIRIES IN MATTERS OR ORDERS WHICH ARE ALR EADY CONCLUDED. SUCH ACTION WILL BE AGAINST THE WELL-ACCEPTED POLICY OF LAW THAT THE RE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI- JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY [PARASHURAM POTTERY WORKS CO. LTD. VS. ITO, (1977) 106 ITR 1 (S C)]. ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 5 IT WAS FURTHER OBSERVED AS UNDER: - 'FROM THE AFORESAID DEFINITIONS AS IT IS CLEAR THAT AN ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF AN INCOME-TAX OFFICER ACTING IN ACCORDANCE WITH LAW MAKES A CERTAIN ASSESSMENT, THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCOR DING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY. THIS SECTION DO ES NOT VISUALIZE A CASE OF SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FO R THAT OF THE INCOME-TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISION IS HELD TO BE ERRONEOUS. CASES MAY BE VISUALIZED WHERE THE INCOME-TAX OFFICER WHILE MAKIN G AN ASSESSMENT EXAMINES THE ACCOUNTS, MAKES ENQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME EITHER BY ACCEPTING THE ACCOUNTS OR BY MAKING SOME ESTIMATE HIMSELF. THE COMMISSIONER, ON PERUSAL OF THE RECORDS, MAY BE OF THE OPINION THAT THE ESTIMATE MADE BY THE OFFICER CONCE RNED WAS ON THE LOWER SIDE AND LEFT TO THE COMMISSIONER HE WOULD HAVE ESTIMATED TH E INCOME AT A FIGURE HIGHER THAN THE ONE DETERMINED BY THE INCOME-TAX OFFICER. THAT WOULD NOT VEST THE COMMISSIONER WITH POWER TO RE-EXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIMSELF AT A HIGHER FIGURE. IT IS BECAUSE THE INCOM E-TAX OFFICER HAS EXERCISED THE QUASI-JUDICIAL POWER VESTED IN HIM IN ACCORDANCE WI TH LAW AND ARRIVED AT CONCLUSION AND SUCH A CONCLUSION CANNOT BE TERMED TO BE ERRONE OUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE CONCL USION. X X X X THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD T O SHOW THAT TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY T HE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATIO N A LESSER TAX THAN WHAT WAS JUST HAS BEEN IMPOSED. 1.5 THE HONBLE SUPREME COURT IN CIT V/S AMITABH BACHCHAN (69 TAXMANN.COM 170 11/05/2016) HELD THAT THE POWER OF APPEAL AND REVISION IS CONTAINED IN CHAPTER XX OF THE ACT WHIC H INCLUDES SECTION 263 THAT CONFERS SUO MOTU POWER OF REVISION IN THE COMMISSIONER. THE DIFFERENT SHADES OF POWER CONFERRED ON DIFFERENT AU THORITIES UNDER THE ACT HAS TO BE EXERCISED WITHIN THE AREAS SPECIFICALLY D ELINEATED BY THE ACT AND THE EXERCISE OF POWER UNDER ONE PROVISION CANNO T TRENCH UPON THE POWERS AVAILABLE UNDER ANOTHER PROVISION OF THE ACT . IN THIS REGARD, IT MUST BE SPECIFICALLY NOTICED THAT AGAINST AN ORDER OF ASSESSMENT, SO FAR AS THE REVENUE IS CONCERNED, THE POWER CONFERRED UN DER THE ACT IS TO REOPEN THE CONCLUDED ASSESSMENT UNDER SECTION 147 A ND/OR TO REVISE THE ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 6 ASSESSMENT ORDER UNDER SECTION 263. THE SCOPE OF TH E POWER/JURISDICTION UNDER THE DIFFERENT PROVISIONS OF THE ACT WOULD NAT URALLY BE DIFFERENT. THE POWER AND JURISDICTION OF THE REVENUE TO DEAL WITH A CONCLUDED ASSESSMENT, THEREFORE, MUST BE UNDERSTOOD IN THE CO NTEXT OF THE PROVISIONS OF THE RELEVANT SECTIONS. WHILE DOING SO , IT MUST ALSO BE BORNE IN MIND THAT THE LEGISLATURE HAD NOT VESTED IN THE REVENUE ANY SPECIFIC POWER TO QUESTION AN ORDER OF ASSESSMENT BY MEANS O F AN APPEAL. REGARDING APPLICABILITY OF SECTION 263, WHAT HAS TO BE SEEN IS THAT A SATISFACTION THAT AN ORDER PASSED BY THE AUTHORITY UNDER THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE IS THE BASIC PRE- CONDITION FOR EXERCISE OF JURISDICTION UNDER SECTIO N 263. BOTH ARE TWIN CONDITIONS THAT HAVE TO BE CONJOINTLY PRESENT. ONCE SUCH SATISFACTION IS REACHED, JURISDICTION TO EXERCISE THE POWER WOULD B E AVAILABLE SUBJECT TO OBSERVANCE OF THE PRINCIPLES OF NATURAL JUSTICE WHI CH IS IMPLICIT IN THE REQUIREMENT CAST BY THE SECTION TO GIVE THE ASSESSE E AN OPPORTUNITY OF BEING HEARD. FURTHER, THERE COULD BE NO DOUBT THAT SO LONG AS THE VIEW TAKEN BY THE ASSESSING OFFICER IS A POSSIBLE VIEW, THE SAME OUGHT NOT TO BE INTERFERED WITH BY THE COMMISSIONER UNDER SECTIO N 263 MERELY ON THE GROUND THAT THERE IS ANOTHER POSSIBLE VIEW OF THE M ATTER. PERMITTING EXERCISE OF REVISIONAL POWER IN A SITUATION WHERE T WO VIEWS ARE POSSIBLE WOULD REALLY AMOUNT TO CONFERRING SOME KIND OF AN A PPELLATE POWER IN THE REVISIONAL AUTHORITY. THIS IS A COURSE OF ACTION TH AT MUST BE DESISTED FROM. 1.6 THE HONBLE BOMBAY HIGH COURT IN MOIL LTD. VS. CIT [81 TAXMANN.COM 420] OBSERVED THAT IF A QUERY IS RAISED DURING THE ASSESSMENT PROCEEDINGS WHICH WAS RESPONDED TO BY TH E ASSESSEE, THE MERE FACT THAT THE QUERY WAS NOT DEALT WITH IN THE ASSESSMENT ORDER THEN ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 7 IT WOULD NOT LEAD TO A CONCLUSION THAT NO MIND HAS BEEN APPLIED TO IT AND THE ASSESSING OFFICER IS NOT EXPECTED TO RAISE MORE QUERIES, IF HE WAS SATISFIED ABOUT THE ADMISSIBILITY OF CLAIM ON THE B ASIS OF THE MATERIAL AND THE DETAILS SUPPLIED. 1.7 AN EXPLANATION-2 HAS BEEN INSERTED BY FINANCE A CT 2015 IN SECTION 263 WITH EFFECT FROM 01/06/2015 TO DECLARE THAT ORDER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICI AL TO THE INTEREST OF THE REVENUE, IF IN THE OPINION OF APPROPRIATE AUTHORITY -(1) THE ORDER WAS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATIONS WH ICH SHOULD HAVE BEEN MADE; (II) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; (III) THE ORDER IS NOT IN ACCORDANCE WITH AN Y DIRECTION OR INSTRUCTIONS ETC. ISSUED BY THE BOARD U/S 119; OR (IV) THE ORDER WAS NOT IN ACCORDANCE WITH BINDING JUDICIAL PRECEDENT. 2.1 KEEPING IN MIND AFORESAID PRINCIPLE, WE FIND TH AT THE ASSESSEE BEFORE US, IS UNDER APPEAL CHALLENGING THE VALIDITY OF REVISIONAL JURISDICTION EXERCISED BY LD. PR. COMMISSIONER OF I NCOME TAX-2, THANE FOR ASSESSMENT YEAR 2014-15 VIDE ORDER DATED 19/03/ 2019. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER: - ON THE FACTS AND IN LAW, 1. THE LEARNED PR.CIT ERRED IN HOLDING THE ORDER FR AMED BY THE ASSESSING OFFICER U/S 143(3) OF THE I.TAX ACT ON 03.12.2016 TO BE ERRONEO US AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AS PER SECTION 263 OF THE IT ACT FOR THE ONLY REASON THAT CERTAIN DOCUMENTS FROM THE APPLICANTS CASE RECORDS WERE NOT AVAILABLE, IGNORING THAT ALL INFORMATION NECESSARY FOR COMPLETION OF ASSESSMENT INCLUDING BOOKS OF ACCOUNTS, BILLS, VOUCHERS WERE PRODUCED BEFORE THE LD. AO IN THE ASST. ORDER AND THEREFORE, THE ASSUMPTION OF JURISDICTION BY THE PR. CIT U/S 263 O F THE I.T. ACT, 1961 WAS NOT VALID AND JUSTIFIED. 2. THE LEARNED PR. CIT ERRED IN SETTING ASIDE THE A SSESSMENT FRAMED U/S 143(3) OF THE I.TAX ACT, 1961 ON 03.12.2016, BY RELYING UPON THE PROVISIONS OF SEC. 263 OF THE I.TAX ACT, 1961, WITHOUT IN ANY MANNER INDICATING A S TO HOW THE ASSESSMENT FRAMED WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF TH E REVENUE AND THEREFORE, THE ORDER U/S 263 DT. 19.03.2019 BE HELD TO BE INVALID AND BA D-IN-LAW. ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 8 2.2 THE ASSESSMENT FOR YEAR UNDER CONSIDERATION WAS FRAMED BY LD. AO ON 03/12/2016 ACCEPTING RETURNED INCOME OF RS.17 .82 CRORES E-FILED BY THE ASSESSEE ON 30/11/2014. THE ASSESSMENT ORDER IS A SHORT ORDER WHICH NOTE THAT NOTICE U/S 142(1) DATED 15/06/2016 WAS ISSUED ALONG WITH QUESTIONNAIRE WHICH WAS RESPONDED TO BY THE AS SESSEE AND DETAILS WERE FURNISHED. ANOTHER OBSERVATION IN THE ORDER IS THAT BOOKS OF ACCOUNT ALONG WITH BILLS AND VOUCHERS WERE PRODUCED WHICH W ERE SUBJECTED TO TEST CHECK. 2.3 SUBSEQUENTLY, LD. PR.CIT, AFTER PERUSAL OF CASE RECORDS, NOTED THAT THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS ON CE RTAIN PARAMETERS (10 IN NUMBER) WHICH HAVE ALREADY BEEN ENUMERATED I N THE OPENING PARAGRAPH OF IMPUGNED ORDER. IT WAS OBSERVED THAT R EPLY WITH RESPECT TO QUESTIONNAIRE COVERING ALL THE POINTS WAS NOT SUBMI TTED BY THE ASSESSEE AND SCRUTINY ASSESSMENT WAS COMPLETED ON THE BASIS OF LIMITED RECORDS ONLY. IT WAS, INTER-ALIA, OBSERVED THAT COMPLETE DETAIL OF PROJECT WISE PROFITABILITY AS PER PROJECT COMPLETION METHOD WAS NOT SUBMITTED AND THE SAME REMAINED TO BE VERIFIED. FURTHER THE COMPLIANC E OF SECTION 43CA REMAINED UNVERIFIED. SINCE THE WIP WAS CONVERTED IN TO STOCK IN TRADE, PAYMENT OF RS.25.30 CRORES U/S 194C WOULD REQUIRE V ERIFICATION. GROSS PROFIT RATE WAS STATED TO BE NOT AS PER INDUSTRY AV ERAGE AND FURTHER, CORRECTNESS OF SALE OF LAND AND DEVELOPMENT RIGHTS REMAINED UNVERIFIED. ACCORDINGLY, THE ASSESSEE WAS SHOW-CAUSED THAT THE ASSESSMENT ORDER WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERES T OF THE REVENUE. 2.4 IN RESPONSE TO SHOW-CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT ALL THE REQUISITE DOCUMENTS, BOOKS OF ACCOUNT, BILLS, V OUCHERS, COPIES OF ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 9 AGREEMENT AS CALLED FOR WERE DULY SUBMITTED AND LD. AO HAD DONE VERIFICATION ON ALL THE POINTS BEFORE PASSING THE A SSESSMENT ORDER U/S 143(3) AND THEREFORE THE PROCEEDINGS U/S 263 WOULD NOT BE WARRANTED. 2.5 HOWEVER, IT WAS NOTED THAT NO REPLY WAS SUBMITT ED BY THE ASSESSEE IN RESPONSE TO QUESTIONNAIRE ISSUED ON 15/06/2016. ANOTHER OBSERVATION WAS THAT THE ORDER SHEET OF ASSESSMENT PROCEEDINGS WAS NOT MAINTAINED PROPERLY WHICH WOULD BE VITAL EVIDENCE CONCERNING T HE PROCEEDINGS TAKEN IN RELATION TO ASSESSMENT, PENALTY, REVISIONS , RECTIFICATION ETC. APPREHENSION WAS ALSO RAISED THAT TWO SUBMISSIONS P URPORTED TO BE SUBMITTED BY THE ASSESSEE DURING ASSESSMENT PROCEED INGS WERE NEITHER INWARD IN THE OFFICE OF DCIT, CIRCLE-3, THANE NOR W ERE THEY PRODUCED AT THE TIME OF ASSESSMENT PROCEEDINGS. ANNEXURE-C WAS FOUND TO BE UNSIGNED. KEEPING IN VIEW THESE FACTORS, IT WAS CON CLUDED THAT THE ASSESSMENT WAS COMPLETED WITHOUT ANY ENQUIRIES OR V ERIFICATIONS WHICH SHOULD HAVE BEEN DONE. THE ASSESSEE FAILED TO SUBMI T DETAILS AT THE TIME OF ASSESSMENT PROCEEDINGS AND LD. AO FAILED TO MAKE INQUIRIES ON THE ISSUES MENTIONED IN THE QUESTIONNAIRE. NOTICING THE DEEMING FICTION OF CLAUSE (A) OF EXPLANATION-2 TO SECTION 263, THE ORD ER WAS DEEMED TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. FINALLY, THE ASSESSMENT ORDER WAS SET ASIDE AND A DIRECTION WAS ISSUED TO REDO THE ASSESSMENT DE-NOVO AFTER AFFORDING ADEQUATE OPP ORTUNITY TO THE ASSESSEE. AGGRIEVED, THE ASSESSEE IS UNDER APPEAL B EFORE US. 3. WE HAVE HEARD AND CONSIDERED THE SUBMISSION MADE BY RESPECTIVE REPRESENTATIVES. WE HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US INCLUDING QUESTIONNAIRE DATED 15/06/2016 ISSUED BY LD. AO DURING ASSESSMENT PROCEEDINGS AND THE ASSESSEES RESPONSE THERETO. ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 10 4. UPON PERUSAL OF NOTICE U/S 142(1) DATED 15/06/20 16 ISSUED TO THE ASSESSEE DURING THE COURSE OF ORIGINAL ASSESSMENT P ROCEEDINGS, IT COULD BE SEEN THAT A DETAILED QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE ASKING HIM TO SUBMIT THE REQUISITE DETAILS / DOCUMENTS UND ER VARIOUS HEADS ETC. THE SAID DETAILS WERE FURNISHED BY THE ASSESSEE IN COUPLE OF REPLIES WHICH ARE PLACED ON PAGE NOS. 23 TO 117 OF THE PAPE R BOOK. IN ONE OF THE REPLIES, THE ASSESSEE HAS, INTER-ALIA, EXPLAINED ITS NATURE OF BUSINESS, DETAILS OF PROJECTS UNDERTAKEN BY THE ASSESSEE, ALO NG WITH DETAILS OF BANK ACCOUNTS. IN ANOTHER REPLY, THE ASSESSEE FILED SEVERAL DETAILS WHICH WERE CALLED FOR BY LD.AO. THESE DETAILS WOULD, INTER-ALIA, INCLUDE COMPLETE DETAILS OF SUNDRY CREDITORS, PARTY WISE DE POSITS AND ADVANCES, DETAILS OF LOANS & INTEREST PAID, PARTY WISE DETAIL S OF UNSECURED LOANS, PARTY WISE DETAILS OF PURCHASES, DETAILS OF SALARY, ADDITION TO FIXED ASSETS, RECONCILIATION OF CONTRACT RECEIPTS, DETAILS OF INV ENTORY HELD BY THE ASSESSEE, DETAILS OF OTHER INCOME CREDITED TO PROFI T & LOSS A/C, DETAILS OF LAND COST ALONG WITH THE COPY OF AGREEMENT, DETAILS OF TDS DEDUCTED, SUB-CONTRACT PAYMENTS, DETAILS OF SALE / BOOKING, S OURCES OF CAPITAL, DETAILS OF EXPENSES CAPITALIZED ETC. THEREAFTER, TH E ASSESSMENT WAS FRAMED BY LD. AO ON 03/12/2016. PRIMA FACIE, NO OTHER DETAILS HAVE BEEN CALLED FROM THE ASSESSEE AT ANY STAGE AFTER SU BMISSION OF TWO REPLIES. THEREFORE, IT IS DIFFICULT TO ACCEPT THE F ACT THAT VARIOUS DETAILS AS FILED BY THE ASSESSEE IN TWO SUBMISSIONS SKIPPED EX AMINATION AS WELL AS VERIFICATION BY LD.AO. AT THE SAME TIME, IT WOULD A LSO RAISE A PRESUMPTION IN ASSESSEES FAVOR THAT THE DETAILS FU RNISHED BY THE ASSESSEE WERE FOUND TO BE ADEQUATE AS WELL AS SATIS FACTORY AND IT WAS THOUGHT FIT TO FRAME THE ASSESSMENT ON THE BASIS OF SUBMISSIONS. ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 11 5. REGARDING ASSESSEES SUBMISSIONS, THE OBSERVATIO NS OF LD. PR.CIT ARE TWO-FOLD VIZ. ANNEXURE-C WAS UNSIGNED AND THE S UBMISSIONS WERE NOT SHOWN TO BE INWARD IN THE OFFICE OF LD. AO. HOW EVER, NOTHING ON RECORD WOULD ESTABLISH THE FACT THAT THESE SUBMISSI ONS WERE NOT AVAILABLE IN THE CASE RECORDS AND IT IS ALSO NOT THE ALLEGATI ONS OF LD. PR.CIT. THEREFORE, THE AFORESAID ACTION U/S 263 COULD NOT B E TRIGGERED ONLY ON THE BASIS OF MERE APPREHENSION / DOUBTS. ANOTHER APPREH ENSION RAISED BY LD. PR.CIT WAS THE FACT THAT ORDER SHEET ENTRIES WE RE NOT PROPERLY MAINTAINED. HOWEVER, WE ARE NOT CONVINCED WITH THE REASONING / LOGIC SINCE THE NO FAULT COULD BE FOUND ON THE PART OF AS SESSEE WITH RESPECT TO MAINTENANCE OF ORDER SHEET ENTRIES. THE SAME WAS TH E RESPONSIBILITY OF LD. AO AND THE ASSESSEE COULD NOT BE MADE TO SUFFER AND GO THROUGH THE ENTIRE EXERCISE OF ASSESSMENT PROCEEDINGS MERELY BE CAUSE THERE WAS CERTAIN LAPSE OF THIS KIND ON THE PART OF LD. AO. T HEREFORE, THE EXERCISE OF JURISDICTION ON THIS BASIS COULD NOT BE HELD TO BE JUSTIFIED. 6. PROCEEDING FURTHER, WE FIND THAT THE ASSESSEE WA S DIRECTED TO FILE VARIOUS DETAILS VIDE NOTICE DATED 15/06/2016, AGAIN ST WHICH TWO REPLIES WERE FILED BY THE ASSESSEE AND THE SAME WERE SUBJEC T MATTER OF CONSIDERATION BY LD. AO. AFTER SATISFYING HIMSELF W ITH THE DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSMENT WAS FRAME D. THE LD. PR.CIT FINDING SHORTCOMINGS IN THE VERIFICATION MADE BY LD . AO, SET-ASIDE THE ORDER AND DIRECTED LD. AO TO FRAMED ASSESSMENT DE-N OVO. HOWEVER, AS ALREADY NOTED BY US, LD. AO HAD APPRECIATED THE DET AILS SUBMITTED BY THE ASSESSEE AND CHOSE NOT TO MAKE ANY ADDITIONS ON THE BASIS OF DETAILS FURNISHED BY THE ASSESSEE. THEREFORE, THE ORDER COU LD NOT BE BRANDED AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE REV ENUE SIMPLY BECAUSE THE ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 12 REVISIONAL AUTHORITY FELT THAT FURTHER VERIFICATION S SHOULD HAVE BEEN DONE IN THE MATTER AND MORE ASPECTS WERE TO BE CONSIDERE D WHILE FRAMING THE ASSESSMENT. IF THAT BE SO, THERE WOULD BE NO END TO ASSESSMENT PROCEEDINGS AND THE MATTER WOULD NEVER ATTAIN FINAL ITY. THE LD. PR.CIT, IN OUR OPINION, COULD NOT BE CLOTHED WITH UNBRIDLED PO WER TO UNDO EACH AND EVERY ASSESSMENT MERELY BECAUSE, IN HIS OPINION, FU RTHER VERIFICATIONS WERE REQUIRED TO BE MADE UNLESS IT WAS SHOWN THAT T HE ORDER UNDER CONSIDERATION WAS NOT PASSED IN ACCORDANCE WITH LAW . 7. THEREFORE, KEEPING IN VIEW THE ENTIRETY OF FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT REVISIONAL JU RISDICTION U/S 263 AS EXERCISED BY LD. PR.CIT VIDE ORDER DATED 19/03/2019 COULD NOT BE HELD TO BE SUSTAINABLE UNDER LAW. BY QUASHING THE SAME, WE RESTORE THE ORIGINAL ORDER FRAMED BY LD. AO U/S 143(3). 8. THE APPEAL STANDS ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH NOVEMBER, 2019. SD/- SD/- (C.N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 15/11/2019 SR.PS, JAISY VARGHESE 9:;<=< / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. ' ! / THE RESPONDENT ITA NO.3075/MUM/2019 SAI ENTERPRISES ASSESSMENT YEAR :2014-15 13 3. B ( ) / THE CIT(A) 4. B / CIT CONCERNED 5. CD < E , E , / DR, ITAT, MUMBAI 6. DFGH / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.