PRIYANK SHARMA, Jaipur V. CIT, Kota

ITA 347/JPR/2013

• Counselvise Citation: 34723114 RSA 2013
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHASH CHANDRA
• Keywords: Gift; Income from undisclosed sources; Salary income; Opportunity of being heard
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JAIPUR BENCH : JAIPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.347/JP/2013 (A.Y. 2009-10) SHRI PRIYANK SHARMA, VS. CIT, C.R. BUILDING, 377, SHASTRI NAGAR, RAWATBHATA ROAD, DADABARI, KOTA. KOTA (RAJ.) PAN NO. AQEPS 0960 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.C. PARWAL. DEPARTMENT BY : SHRI SUBHASH CHANDRA - D.R. DATE OF HEARING : 23/01/2014. DATE OF PRONOUNCEMENT : 28/02/2014. O R D E R PER N.K. SAINI, A.M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 06/03/2013 OF LD. CIT, KOTA. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, ORDER PASSED U/S 263 BY LD. COMMISSIONER OF INCOME TAX IS ILLEGAL AN D BAD IN LAW & BE QUASHED SINCE:- 2 (I) THE LD. CIT HAS NOT CALLED FOR AND EXAMINED TH E RECORD HIMSELF BEFORE INITIATION OF PROCEEDINGS U/S 263 BUT HAS IN ITIATED SUCH PROCEEDINGS ON THE BASIS OF PROPOSAL RECEIVED FROM ITO, WARD-2(2), KOTA HOLDING THE ORDER OF HIS PREDECESSOR ITO AS ERRONEO US & PREJUDICIAL TO THE INTEREST OF THE REVENUE. (II) THE ISSUE ON WHICH ORDER U/S 263 IS PASSED IS SUBJECT MATTER OF APPEAL U/S 246A BEFORE CIT(A), KOTA. 2. THE LD. COMMISSIONER OF INCOME TAX HAS ERRED ON FAC TS & IN LAW IN DIRECTING THE AO FOR DOING VERIFICATION/INVESTIGATI ONS ON CASH GIFTS OF RS. 10 LACS RECEIVED BY ASSESSEE IGNORING THAT AFT ER MAKING SUCH VERIFICATION/INVESTIGATION, THE AO IN F RAMING THE ASSESSMENT ORDER U/S 143(3), MADE ADDITION OF RS. 3 .50 LACS. 3. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY ANY OF THE GROUNDS OF APPEAL. 4. NECESSARY COST BE ALLOWED TO THE ASSESSEE. 2 THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE INITIATION OF PROCEEDINGS UNDER SECTION 263 OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) AND IN DIRECTING THE ASSESSING OFFICER TO MAKE VERIFICATION/INVESTIGATIO N ON CASH GIFTS OF RS. 10 LAC. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE F ILED RETURN OF INCOME ON 22/07/2009 DECLARING AN INCOME OF RS. 1,7 3,140/-. THE ASSESSMENT, HOWEVER, WAS FRAMED UNDER SECTION 143(3 ) OF THE ACT AT AN INCOME OF RS. 5,23,140/- AFTER MAKING ADDITION OF R S. 3,50,000/- ON ACCOUNT OF GIFTS RECEIVED BY THE ASSESSEE. THEREAF TER, THE ITO WARD-2(2), 3 KOTA VIDE LETTER NO. 81 DATED 11/04/2011 PROPOSED T HE ACTION UNDER SECTION 263 OF THE ACT ON THE FOLLOWING POINTS DECI DED BY THE ASSESSING OFFICER CONSIDERING THE SAME AS ERRONEOUS AND PREJU DICIAL TO THE INTEREST OF THE REVENUE:- (I) DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS TAKEN GIFTS IN CASH OFRS.10.00 LAKHS, DETAILS OF WHICH ARE AS UNDE R: (I) SHRI V.D. SHARMA, FATHER RS. 2.00 LAKHS (II) SMT. SANDHYA SHARMA MOTHER RS. 2.00 LAKHS (III) SMT. KANCHAN BAI GR. MOTHER RS. 6.00 LAKH S IN ASSESSMENT ORDER, THE AO HAS STATED THAT A SUM O F RS. 182000/- HAS BEEN WITHDRAWN BY SHRI V.D.SHARMA FROM HIS BANK ACCOUNT FOR MAKING CASH GIFT OF RS.2.00 LAKHS. THE AO ADDED BAL ANCE AMOUNT OFRS.18000/- TO THE TOTAL INCOME BY TREATING IT AS UNDISCLOSED INCOME. LIKEWISE, FOR GIFT AMOUNT OF RS.2.00 LAKHS BY SMT. SANDHYA SHARMA, A SUM OFRS.168000/-HAS BEEN TREATED BY AO AS GENUINE GIFT BEING WITHDRAWN FROM HER BANK ACCOUNT AND BALANCE AMOUNT OF RS.32000/- HAS BEEN ADDED AS INCOME FROM UNDISCLOSED SOURCES. ON PERUSAL OF THE COPIES OF BANK ACCOUNTS AVAILABLE ON RECORD OF BOTH THE DONORS, NO CASH WITHDRAWAL IS FOUND TO BE THERE SO AS TO PROVE THE GENUINE CASH GIFT TO THE EXTENT OF AMOUNT AS MENTIO NED BY THE AO IN THE ASSESSMENT ORDER. IN BOTH THE BANK ACCOUNT, DONORS HAVE ISSUED CHEQUES IN THE NAME OF SHRI PRIYANK SHARMA W HICH MAY BE FOR SOME OTHER REASON BUT NO CASH WITHDRAWAL IN THEIR B ANK ACCOUNT IS REFLECTED. THEREFORE, THE ENTIRE ALLEGED GIFTED AMO UNT OFRS.4.00 LAKHS SHOULD HAVE BEEN TREATED AS INCOME FROM UNDISCLOSED SOURCES. (II) AS PER RECORD, A COPY OF ACCOUNT OF SMT. KANCH AN BAI IN CENTRAL BANK OF INDIA, KUNHARI IS AVAILABLE ON FILE WHICH REFLECTS THAT SMT. KANCHAN BAI IS RESIDING AT KUNHARI IN HER HUSBAND'S HOUSE. ON PERU SAL OF THE SAID BANK ACCOUNT, IT IS NOTICED THAT DURING THE YEAR HE R SOURCE OF INCOME WAS ONLY FAMILY PENSION BECAUSE FROM TIME TO TIME S HE HAS WITHDRAWN THE AMOUNT FOR HER LIVELY HOOD APPARENTLY . THE STATEMENT OF THE ASSESSEE WAS ACCEPTED BY THE AO TH AT SHE HAS CASH IN HAND OFRS.6.00 LAKHS AT HER HOME, THEN DEFI NITELY THERE WAS NO NEED FOR WITHDRAWAL OF THE MEAGER AMOUNT FROM HE R BANK ACCOUNT. ANY PRUDENT PERSON WOULD HAVE DEPOSITED RS. 6.00 LA KHS IN THE BANK ACCOUNT FOR SAFETY AS WELL AS FOR EARNING THE INTER EST. 4 (III) AS PER COPY OF JAMABANDI, IT IS NOTICED THAT THE AGRICULTURE LAND MEASURING 0.55 HECTARE EQUAL TO 3.5 BIGHA APPROXIMA TELY BELONGS TO 7 PERSONS WHICH INCLUDES SMT. KANCHAN BAI. IT MEANS O NLY BIGHA OF LAND IS BELONGING TO SMT. KANCHAN BAI WHICH IS TRANSFERR ED IN THE NAME OF 7 PERSONS ON 20-08-2009 I.E. DURING THE F.Y. 2009-10 WHEREAS THE ASSESSMENT RELATES TO THE F.Y. 2008-09 AND SHRI KAL YAN MAL, HUSBAND OF SMT. KANCHAN BAI DIED DURING THE F.Y. 2007-08. AS P ER DECLARATION OF GIFT MADE BY SMT. KANCHAN BAI, THE DATE OF GIFT IS MENTIONED AS 02/05/2008. THUS, IT IS CLEAR THAT THE RENT OF AGRI CULTURE LAND WOULD HAVE BEEN RECEIVED BY SMT. KANCHAN BAI ONLY FOR ONE YEAR THAT TOO FOR BIGHA OF LAND WHICH MAY BE TO THE EXTENT OF RS.2 TO 3 THOUSAND ONLY AND THAT TOO COULD HAVE BEEN USED BY HER FOR HER OW N REQUIREMENT. FROM THE FACTS DISCUSSED ABOVE, IT CRYSTAL CLEAR TH AT SMT. KANCHAN_BAI APPEARS TO HAVE NO CASH BALANCE WITH HE R EXCEPT BALANCE AVAILABLE IN HER BANK ACCOUNT. IT IS ENTI RELY A COOKED STORY MADE BY THE ASSESSEE TO SAVE HIMSELF FROM THE NET O F INCOME TAX AND SAVE FROM TAX LIABILITY BY ADOPTING ROUTE OF GIFTS BEING UNDISCLOSED INCOME EARNED BY THE ASSESSEE. IT IS PERTINENT TO MENTION HERE THAT CENTRAL PUBLIC SCHOOL, VIGYAN NAGAR, KOTA BELONGS TO THE ASSESSEE AND HIS FAMILY AND FUNDS GENERATED THERE FROM MUST HAVE BEEN CHANNELIZED THR OUGH THESE GIFTS. OTHERWISE ALSO, SMT. KANCHAN BAI HAS 5 SONS AND AFT ER THE DEATH OF HER HUSBAND, IT IS NATURAL THAT THE ASSETS BELONGIN G TO SHRI KALYAN MAL WERE TO BE PASSED ON TO HIS INHERITENTS AS HAS BEEN DONE IN RESPECT OF THE AGRICULTURE LAND BEING DISTRIBUTED A MONGST ALL THE CLAIMANTS.' 4. THE LD. CIT ON RECEIPT OF PROPOSAL UNDER SECTION 263 OF THE ACT FROM THE ITO, WARD-2(2), KOTA, ISSUED A SHOW-CAUSE NOTICE DATED 17/01/2013 UNDER SECTION 263 OF THE ACT. IN RESPON SE TO THE SAID NOTICE, THE ASSESSEE FURNISHED THE WRITTEN SUBMISSION ON 15 /02/2013 STATING THEREIN AS UNDER:- A) AS REGARDS GIFTS OF RS. 200000/- EACH RECEIVED B Y ASSESSEE FROM SHRI V.D. SHARMA & SMT SANDHYA SHARMA INCLUDES RS. 182000/- & RS. 168000/- RESPECTIVELY GIVEN OUT OF CASH WITHDRAWN B Y THEM FROM THEIR BANK A/CS, NO CASH WITHDRAWAL IS FOUND TO BE THERE SO AS TO PROVE THE 5 GENUINENESS OF CASH GIFT TO THE EXTENT OF AMOUNT ME NTIONED BY THE LD A.O. IN ASSESSMENT ORDER. THE LD A.O. HAS MADE ADDI TION OF RS. 18000/- & RS. 32000/- BEING BALANCE GIFT RECEIVED FROM V.D. SHARMA & SMT. SANDHYA SHARMA IN ASSESSEE'S INCOME TREATING IT AS UNDISCLOSED INCOME. YOU HAVE ALSO MENTIONED THAT ON PERUSAL OF BANK A/C IN BOTH THE BANK A/C DONORS HAVE ISSUED CHEQUES IN THE NAME OF SHRI PRIYANK SHARMA WHICH MAY BE FOR SOME OTHER REASON BUT NO CASH WITH DRAWAL IN THEIR BANK A/C IS REFLECTED. THEREFORE, THE ENTIRE ALLEGE D GIFTED AMOUNT OF RS 4.00 LAKH SHOULD HAVE BEEN TREATED AS INCOME FRO M UNDISCLOSED SOURCES. B) AS REGARDS CASH GIFT OFRS.6 LACS RECEIVED BY THE ASSESSEE FROM SMT KANCHAN BAI YOUR GOODSELF HAVE OBSERVED THAT SMT KA NCHAN BAI WAS NOT HAVING CASH BALANCE WITH HER SO AS TO PROVE THE GEN UINENESS OF GIFT MADE BY HER ON A/C OF FOLLOWING REASONS- I) ON PERUSAL OF HER BANK A/C IT IS NOTICED THAT HE R SOURCE OF INCOME WAS ONLY FROM FAMILY PENSION & SHE HAS WITHDRAWN THE AM OUNT FROM TIME TO TIME FOR HER LIVELY HOOD . IF AS STATED BY YOU A ND ACCEPTED BY THE A.O THAT SHE HAS CASH IN HAND OF RS. 6 LACS AT HER HOUS E, THEN THERE WAS NO NEED FOR WITHDRAWAL OF THE MEAGER AMOUNT FROM HER B ANK & ANY PRUDENT PERSON WOULD HAVE DEPOSITED RS. 6 LACS IN BANK ACCO UNT FOR SAFETY AS WELL AS FOR EARNING INTEREST. II) WITH REGARD TO AGRICULTURE INCOME OF THE SMT KA NCHAN BAI AS PER JAMABANDI OF LAND, THE LAND BELONGED TO SEVEN PERSO NS & SHE HAS RECEIVED INCOME FOR ONE YEAR AFTER DEATH OF HER HUS BAND WHICH MAY BE TO THE EXTENT OF RS. 2-3 THOUSAND ONLY & THAT TOO HAS BEEN USED BY FOR HER OWN REQUIREMENT. III) THE CENTRAL PUBLIC SCHOOL, VIGYAN NAGAR, KOTA BELONG TO ASSESSEE & HIS FAMILY & FUNDS GENERATED THERE FROM MUST HAVE C HANNELIZED THROUGH THESE GIFTS. WITH REFERENCES TO ABOVE WE BEG TO SUBMIT AS UNDER FOR YOUR KIND CONSIDERATION :- (I) THAT WE HAVE SUBMITTED EXPLANATION ALONG WITH NECESSARY DOCUMENTS IN SUPPORT OF GENUINESS OF GIFTS OF RS. 1 0 LACS RECEIVED BY THE ASSESSEE FROM FOLLOWING PERSONS BEFORE THE LD A .O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. WHICH HAVE BEEN CONSIDERED BY THE LD A.O. WHILE FINALIZING ASSESSMENT FOR THE ABO VE YEARS. 6 SHRI V.D. SHARMA (FATHER) 200000 SMT. SANDHYA SHARMA (MOTHER) 200000 SMT. KANCHAN BAI (GRAND MOTHER) 600000 TOTAL RS. 1000000 (II) THE DONARS SHRI V.D. SHARMA & SMT SANDHYA SHAR MA HAVE ISSUED BEARER CHEQUES IN THE NAME OF SHRI PRIYANK SHARMA F OR RS. 182000/- & RS. 168000/- RESPECTIVELY FOR CASH WITHDRAWAL. IT I S EVIDENT FROM THE COPY OF BANK STATEMENT OF ASSESSEE (PRIYANK SHARMA) SUBMITTED BEFORE THE LD A.O. THAT THERE IS NO CREDIT FOR SUCH AMOUNTS IN HIS BANK A/C TOWARDS CHEQUES ISSUED BY THE DONORS. WE ENCLOS E A COPY OF CERTIFICATE FROM PUNJAB NATIONAL BANK VIDE WHICH IT HAS BEEN CONFIRMED THAT RS. 182000/- & RS. 168000/- SHOWN IN THE NAME OF PRIYANK SHARMA IN THE A/C OF SH V.D. SHARMA & SMT. SANDHYA SHARMA IS CASH WITHDRAWAL. (III) YOUR OBSERVATION ABOUT NON-AVAILABILITY OF CA SH OF RS 6 LACS FOR GIFT WITH SMT KANCHAN BAI TO THE ASSESSEE IS NOT CORRECT ON ACCOUNT OF FOLLOWING REASONS- A) THAT SMT. KANCHAN BAI BEING AN OLD LADY WAS IN H ABIT OF KEEPING HER MONEY IN CASH WITH HER ONLY WHICH SHE H AS RECEIVED AFTER THE DEATH OF HER HUSBAND & THEREAFTER RECEIVED FR OM RENTAL & AGRICULTURE INCOME & FROM HER FIVE SONS WHO WERE WE LL TO DO & ENJOYING GOOD SALARY INCOME. SHE HAS OPENED BANK A /C FOR THE PURPOSE OF GETTING PAYMENT TOWARDS FAMILY PENSION O NLY. SHE HAS NEVER DEPOSITED ANY AMOUNT IN CASH IN HER B ANK A/C. THE WITHDRAWAL OF CASH FROM BANK WAS FOR THE PURPOSE OF GIVING PETTY GIFTS TO HER GRANDSON MR ROHIT & GRANDDAUGHTER MISS YASHI SON/DAUGHTER OF HIS SON MAHESH SHARMA & HER DAUGHTE R SMT. BHAGWATI. SHE WAS RESIDING WITH HER SON SHRI V.D. S HARMA WHO WAS BEARING HER HOUSEHOLD & LIVELY HOOD EXPENSES, THERE FORE, SHE DID NOT MADE ANY CASH WITHDRAWL FROM BANK FOR HER OWN REQUI REMENT. B) YOUR ALLEGATION THAT CENTRAL PUBLIC SCHOOL, VIGY AN NAGAR, KOTA BELONGS TO ASSESSEE & HIS FAMILY & FUNDS GENERATED THERE FROM MUST HAVE BEEN CHANNELIZED THROUGH THESE GIFTS IS WITHOU T ANY BASIS. (IV) THAT THE LD A.O. HAS AFTER CONSIDERING THE ASS ESSEE'S EXPLANATION & THE DOCUMENTS FILED BEFORE HIM AND AFTER DETAILED DISCUSSION ABOUT THE SAME IN HIS ASSESSMENT ORDER HAS MADE ADDITIONS OF RS. 7 350000/- U/S 69A OF THE I.T. ACT, 1961 TREATING THE GIFTS TO THE EXTENT AS INCOME FROM UNDISCLOSED SOURCES AS UNDER- SHRI V.D. SHARMA 18000 SMT. SANDHYA SHARMA 32000 SMT. KANCHAN BAI 300000 TOTAL RS. 350000 (V) AS THE LD A.O. HAS NOT PROPERLY CONSIDERED THE EXPLANATIONS/DOCUMENTS SUBMITTED BEFORE HIM WITH RE GARD TO GENUINENESS OF GIFTS OF RS. 10 LACS RECEIVED BY THE ASSESSEE, AN APPEAL HAS BEEN FILED AGAINST HIS ORDER BEFORE THE LD C.I.T.(A) KOTA ON 6 TH JAN 2011 (COPY OF FORM NO.35 ENCLOSED). IN VIEW OF ABOVE THE ORDER U/S 143(3) OF L.T. ACT, 1961 DT. 27/12/10 PASSED BY THE LD A.O. CANNOT BE TERMED AS ERRONEOUS & PREJUDICIAL ORDER AS THE SAME HAS BEEN PASSED AFTER CONSIDERING ALL T HE FACTS & INFORMATION & APPLICATION OF MIND AFTER PROPER ENQU IRY ON THE ISSUES INVOLVED IN ASSESSEE'S CASE. WE RELY ON FOLLOWING D ECISIONS OF VARIOUS APPELLATE AUTHORITIES (COPIES ENCLOSED) IN SUPPORT OF OUR CONTENTION: - A) CIT V/S. RATILAM COAL ASH CO (1988)171 ITR 141 (MP) B) CIT V/S. MEHROTRTA BROTHERS (2004) 270 ITR 157 (MP) C) CIT V/S. PARAMESHWAR BOHRA (2004) 267 ITR 698 (RAJ) D) PAUL MATHEWS & SONS VS. CIT (2003) 263 ITR 101 (KER ) E) CIT VS. ARVIND JEWELLERS (2003) 259 ITR 502 (GUJ) F) CIT VS. HASTINGS PROPERTIES (2002) 253 ITR 124 (CAL ) G) CIT VS. J.P. GOEL (HUF) (2001) 247ITR 555 (CAL) H) CIT VS. AMALGAMATIONS LTD (1999) 238 ITR 963 (M AD) I) CIT VS. MACNEILL MAGORE LTD (1998) 232 ITR 945 (CAL) J) CIT VS. GANPAT RAM BISHNOI (2008) 296 ITR 292 ( RAJ) K) GYAN CHAND GUPTA VS CIT ITAT, JAIPUR 'B' BENCH (2011) 135 TTJ (JP) (U0) 1 FURTHER AS THE ISSUES INVOLVED IN ASSESSMENT ORDER U/S 143 (3) DT 27/12/10 HAS BEEN THE SUBJECT OF APPEAL FILED BEFOR E THE LD CIT (A), KOTA THE SAME IS OUT OF PURVIEW OF PROVISION CONTAI NED IN SEC 263 OF THE I.T. ACT, 1961. WE, THEREFORE, REQUEST YOUR GOODSEL F TO KINDLY ARRANGE TO DROP THE PROCEEDINGS INITIATED U/S 263 OF THE I.T. ACT, 1961 VIDE YOUR NOTICE DT 17/1/13 & OBLIGE. 8 THEREFORE, PLEASE CONSIDER ABOVE FACTS IN REVISION OF ASSESSMENT ORDER U/S 263 OF L.T. ACT AND PLEASE THE PROCEEDING S OF NOTICE AND OBLIGED.' 5. THE LD. CIT AFTER CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE OBSERVED THAT THE ASSESSING OFFICER COMPLETED THE A SSESSMENT IN A ROUTINE MANNER AND THERE WAS NOT ONLY LACK OF VERIF ICATION BUT ALSO MISTAKEN VIEW OF LAW WHICH HAD MADE THE ORDER ERRON EOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE, ACCORDINGLY SET SIDE THE ASSESSMENT ORDER BY CONSIDERING THE SAME AS ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF THE REVENUE AND CANCELLED THE SAME. T HE LD. CIT DIRECTED THE ASSESSING OFFICER TO FRAME THE ASSESSMENT DENOVO AFTER MAKING PROPER VERIFICATION & ENQUIRY OF THE BOOKS OF ACCOUNTS AND OTHER RECORDS. NOW THE ASSESSEE IS IN APPEAL. 6 . LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT I N THE PRESENT CASE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE A CT. THEREAFTER, ASSESSING OFFICER MOVED A PROPOSAL UNDER SECTION 26 3 OF THE ACT DATED 11/04/2011 TO THE LD. CIT FOR REVISION OF THE ASSES SMENT ORDER AND A SHOW CAUSE NOTICE DATED 17/01/2013 WAS THEN ISSUED BY THE ITO (TECH.) TO THE ASSESSEE REFERENCE WAS MADE TO 2 ND & 3 RD PARAS OF THE IMPUGNED 9 ORDER. IT WAS FURTHER STATED THAT CONSEQUENTLY, TH E LD. CIT PASSED THE ORDER UNDER SECTION 263 OF THE ACT HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) OF THE ACT WAS WITHOUT DUE AND PROPER ENQUIRY AND WAS MISTAKEN VIE W OF LAW WHICH HAD MADE THE ORDER ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF THE REVENUE. IT WAS EMPHASIZED THAT THE CONDITION PRECEDENT FOR ISSUANCE OF NOTICE UNDER SECTION 263 OF THE ACT IS THAT THE COMMISSION ER OF INCOME TAX IS TO CALL RECORD FOR EXAMINATION OF ANY PROCEEDINGS UNDE R THIS ACT BEFORE FRAMING HIS OPINION THAT THE ORDER PASSED BY THE AS SESSING OFFICER WAS ERRONEOUS SO FAR AS IT WAS PREJUDICIAL TO THE INTER EST OF THE REVENUE. HOWEVER, IN THE PRESENT CASE, AS EVIDENT FROM PARA 2 & 3 OF THE IMPUGNED ORDER THAT THE LD. CIT INITIATED THE PROCE EDINGS UNDER SECTION 263 OF THE ACT BY NOT CALLING AND EXAMINING THE REC ORDS BUT ONLY ON THE PROPOSAL MOVED BY THE ASSESSING OFFICER TO REVISE T HE ORDER DATED 27/12/2010 PASSED UNDER SECTION 143(3) OF THE ACT, WHICH WAS AGAINST THE PLAIN LANGUAGE OF SECTION 263 OF THE ACT BECAUSE TH E SUGGESTION OF THE ASSESSING OFFICER CANNOT BE A BASIS FOR REVISION OF THE ASSESSMENT ORDER. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- 1) RAJIV ARORA VS. CIT (2011) 131 ITD 58 (JP.) (TRI B.) 2) JHEENDU RAM VS. CIT (2011) 7 ITR 463 (LUCKNOW) ( TRIB.) 10 3) MS. BINA INDRA KUMAR VS. ITO (2012) 137 ITD 238/ 80 DTR 180 (MUM.) (TRIB.) 4) CIT VS NEW DELHI TELEVISION LTD. (2013) 94 DTR 2 1 (DEL.) (HC) 5) CIT VS. AMIT CORPN. (2013) 213 TAXMAN 19 (GUJ.) (HC) (MAG.) 6) CIT VS. LEISURE WEAR EXPORTS LTD. (2011) 341 ITR 166 (DEL.) (HC) 7) PRADEEP BANDHU VS. CIT (2013) 81 DTR 289 (JD.) ( TRIB.) 8) MANISH KUMAR VS. CIT 134 ITD 27/17 ITR 324 (INDO RE) (TRIB.) 7 . IN HIS RIVAL SUBMISSIONS, LEARNED D.R. STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT AND FURTHER SUBMITTED THAT TH E ASSESSING OFFICER DID NOT MAKE PROPER ENQUIRIES WHILE PASSING THE ASSESSM ENT ORDER. THEREFORE, THE ASSESSMENT ORDER WAS NOT ONLY ERRONE OUS BUT ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE. 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS ABUNDANTLY CLEAR FROM PARA 2 OF THE IMP UGNED ORDER THAT THE ITO, WARD-2(2), KOTA VIDE LETTER NO. 81 DATED 11/04 /2011 PROPOSED ACTION UNDER SECTION 263 OF THE ACT AND IT WAS NOT THE LD. CIT, WHO HIMSELF CALLED RECORD AND EXAMINED THE SAME FOR ANY PROCEEDING UNDER SECTION 263 OF THE ACT. THEREFORE, IT CAN BE SAID T HAT THE LD. CIT HAD NOT APPLIED HIS MIND BUT THE MATTER WAS REFERRED BY THE ASSESSING OFFICER FOR 11 INITIATING THE PROCEEDING UNDER SECTION 263 OF THE ACT. IN THE PRESENT CASE, FROM PARA 3 OF THE IMPUGNED ORDER, IT IS NOTI CED THAT THE NOTICE DATED 17/01/2013 UNDER SECTION 263 OF THE ACT WAS I SSUED ONLY ON RECEIPT OF THE PROPOSAL UNDER SECTION 263 OF THE ACT FROM T HE ITO, WARD-2(2), KOTA AND THE ASSESSEE EXPLAINED, VIDE WRITTEN SUBMI SSION WHICH HAS BEEN REPRODUCED IN PARA 4 OF THE IMPUGNED ORDER, EACH AN D EVERY OBJECTION RAISED BY THE ITO, WARD-2(2), KOTA. IT IS WELL SET TLED THAT THE LD. CIT WHILE EXERCISING THE REVISIONARY POWERS UNDER SECTI ON 263 OF THE ACT MAY CALL FOR AND EXAMINE THE RECORDS OF ANY PROCEEDINGS AND THEREAFTER IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN IS ERRONEOU S INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MA KING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFIED. THEREFORE, BE FORE TAKING ANY ACTION, LD. CIT HIMSELF SHALL APPLY HIS MIND AFTER EXAMININ G THE RECORD OF ANY PROCEEDINGS AND HIS SATISFACTION IS MUST. HOWEVER, IN THE PRESENT CASE, THE SATISFACTION WAS OF THE ITO (TECH.) WHO PROPOSE D ACTION UNDER SECTION 263 OF THE ACT, BUT NOT OF THE LD. CIT. THEREFORE, ISSUANCE OF NOTICE UNDER SECTION 263 OF THE ACT ON THE BASIS OF THE PR OPOSAL MADE BY THE ITO WAS VOID AB INITIO . WE, THEREFORE, SET ASIDE THE SAME. FOR THE AFORE SAID 12 VIEW, WE ARE VERIFIED BY THE FOLLOWING DECISIONS OF VARIOUS BENCHES OF THE TRIBUNALS:- 1) RAJIV ARORA VS. CIT (2011) 131 ITD 58 (JP.) 2) JHEENDU RAM VS. CIT (2011) 7 ITR (TRIB.) 463 (LU CKNOW) 3) MS. BINA INDRA KUMAR VS. ITO (2012) 137 ITD 238 (MUM.) 4) PRADEEP BANDHU VS. CIT (2013) 81 DTR 289 (JD.) ( TRIB.) 5) MANISH KUMAR VS. CIT 134 ITD 27/17 ITR 324 (INDO RE) (TRIB.) 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE COURT ON 28 TH FEBRUARY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH FEBRUARY, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JAIPUR.