GAUTAM TUBE CORPORATION, MUMBAI V. PR CIT 19, MUMBAI

ITA 3608/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7464 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT PATANKAR
• Assessee Lawyers: RAJESH CHAMARIA
• Keywords: Unexplained expenditure; Revision of order; Opportunity of being heard; Principle of natural justice; Period of limitation; Prejudicial to interest; Revised return
• Section: 69C; 143(3); 260A; 133(6); 147; 263; 154

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NOS.3608 & 3609/MUM/2017 ASSESSMENT YEAR: 2008-09 & 2009-10 GAUTAM TUBE CORPORATION, 1 ST FLOOR, 7, DOSHI BHAVAN, 02 ND CARPENTER STREET, MUMBAI-400004 / VS. PR. CIT-19, ROOM NO.228, 02 ND FLOOR, MATRU MANDIR, TARDEO RAOD, MUMBAI-400007 ( ! /ASSESSEE) ( ' / REVENUE) P.A. NO.AADFG0524A ! / ASSESSEE BY MR. RAJESH CHAMARIA ' / REVENUE BY SHRI ABHIJIT PATANKAR CIT-DR # '$ % !& / DATE OF HEARING : 26/04/2018 % !& / DATE OF PRONOUNCEMENT 26/04/2018 ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER BOT H DATED 29/03/2017 OF THE LD. PRINCIPAL COMMISSIONER OF INCOME TAX, MUMBAI, INVOKING REVISIONAL JURISDICTIO N U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE AC T). 2. FIRST, WE SHALL TAKE UP THE APPEAL FOR ASSESSME NT YEAR 2008-09 (ITA NO.3608/MUM/2017). DURING HEARING , SHRI RAJESH CHAMARIA, LD. COUNSEL FOR THE ASSESSEE, CONTENDED THAT A WELL REASONED ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS PASSED BY THE ASSESSING OFFICER CONS IDERING THE DETAILS FILED BY THE ASSESSEE, THUS, THE ASSESS MENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERES T OF THE REVENUE. IT WAS PLEADED THAT THE LD. PR. COMMISSION ER DID NOT APPLY HIS MIND WHILE DIRECTING THE ASSESSING OF FICER. THE CRUX OF THE ARGUMENT ON BEHALF OF THE ASSESSEE IS T HAT THE ASSESSMENT ORDER WAS FRAMED ON CONSIDERATION OF NEC ESSARY DETAILS FILED BY THE ASSESSEE AND FURTHER ON DUE AP PLICATION OF MIND. ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 3 2.1. ON THE OTHER HAND, SHRI ABHIJIT PATANKAR, LD. CIT-DR STRONGLY CONTESTED, THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE BY INVITING OUR ATTENTION TO THE A SSESSMENT ORDER. IT WAS CONTENDED THAT THE LD. ASSESSING OFFI CER EVEN HAS NOT MADE A WHISPER ABOUT THE ISSUE INVOLVED AND SIMPLY PASSED THE ASSESSMENT ORDER IN A SLIP SHOT MANNER. OUR ATTENTION WAS INVITED TO EXPLANATION-2 TO SECTION 2 63, INSERTED BY THE FINANCE ACT, 2015 W.E.F. 01/06/2015 . PLEA WAS ALSO RAISED THAT THE ASSESSMENT ORDER IS ERRONE OUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE AD VERTING FURTHER, IT IS OUR BOUNDED DUTY TO EXAMINE SECTION 263 OF THE ACT, WHICH IS REPRODUCED HEREUNDER FOR READY REFERE NCE AND ANALYSIS:- 263. (1) THE PRINCIPAL COMMISSIONER OR COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING U NDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THER EIN BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS P REJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR C AUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SU CH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, I NCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CAN CELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 4 46 [ EXPLANATION 1 .]FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT, FOR THE PURPOSES OF THIS SUB-SECTION , ( A ) AN ORDER PASSED ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988 BY THE ASSESSING OFFICER SHALL INCLUDE ( I ) AN ORDER OF ASSESSMENT MADE BY THE ASSISTANT COMM ISSIONER OR DEPUTY COMMISSIONER OR THE INCOME-TAX OFFICER ON THE BASIS OF THE DIRECTIONS ISSUED BY THE JOINT COMMISS IONER UNDERSECTION 144A ; ( II ) AN ORDER MADE BY THE JOINT COMMISSIONER IN EXERCI SE OF THE POWERS OR IN THE PERFORMANCE OF THE FUNCTIONS OF AN ASSESSING OFFICER CONFERRED ON, OR ASSIGNED TO, HIM UNDER THE ORDERS OR DIRECTIONS ISSUED BY THE BOARD OR BY THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL DIR ECTOR GENERAL OR DIRECTOR GENERAL OR PRINCIPAL COMMISSION ER OR COMMISSIONER AUTHORISED BY THE BOARD IN THIS BEHALF UNDER SECTION 120 ; ( B ) 'RECORD' SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDING UND ER THIS ACT AVAILABLE AT THE TIME OF EXAMINATION BY THE PRINCIP AL COMMISSIONER OR COMMISSIONER; ( C ) WHERE ANY ORDER REFERRED TO IN THIS SUB-SECTION A ND PASSED BY THE ASSESSING OFFICER HAD BEEN THE SUBJECT MATTER O F ANY APPEAL FILED ON OR BEFORE OR AFTER THE 1ST DAY OF J UNE, 1988, THE POWERS OF THE PRINCIPAL COMMISSIONER OR COMMISSIONE R UNDER THIS SUB-SECTION SHALL EXTEND AND SHALL BE DEEMED A LWAYS TO HAVE EXTENDED TO SUCH MATTERS AS HAD NOT BEEN CONSI DERED AND DECIDED IN SUCH APPEAL. 47 [ EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFI CER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICI AL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, ( A ) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR V ERIFICATION WHICH SHOULD HAVE BEEN MADE; ( B ) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT I NQUIRING INTO THE CLAIM; ( C ) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH AN Y ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119 ; OR ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 5 ( D ) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY T HE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE C ASE OF THE ASSESSEE OR ANY OTHER PERSON.] (2) NO ORDER SHALL BE MADE UNDER SUB-SECTION (1) AF TER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL Y EAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED. (3) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTI ON (2), AN ORDER IN REVISION UNDER THIS SECTION MAY BE PASSED AT ANY TIME IN THE CASE OF AN ORDER WHICH HAS BEEN PASSED IN CO NSEQUENCE OF, OR TO GIVE EFFECT TO, ANY FINDING OR DIRECTION CONTAINED IN AN ORDER OF THE APPELLATE TRIBUNAL, NATIONAL TAX TRIBU NAL, THE HIGH COURT OR THE SUPREME COURT. EXPLANATION .IN COMPUTING THE PERIOD OF LIMITATION FOR THE PURPOSES OF SUB-SECTION (2), THE TIME TAKEN IN GIVI NG AN OPPORTUNITY TO THE ASSESSEE TO BE REHEARD UNDER THE PROVISO TO SECTION 129 AND ANY PERIOD DURING WHICH ANY PROCEEDING UNDER THIS SECTION IS STAYED BY AN ORDER OR INJUNCT ION OF ANY COURT SHALL BE EXCLUDED. 2.3. IF THE AFORESAID SECTION IS ANALYZED, IT SPEA KS ABOUT THE POWERS OF THE LD. PR. COMMISSIONER OR THE COMMISSIONER TO CONSIDER WHETHER THE ASSESSMENT ORD ER IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE AND AFTER GIVING OPPORTUNITY OF BEING HEARD AND HE MAKE SUCH ENQUIRY AS HE DEEMS NECESSARY AND PASS SUCH OR DER THEREON AS THE CIRCUMSTANCES OF THE CASE SO JUSTIFY INCLUDING, ENHANCE AND MODIFYING THE ASSESSMENT OR CANCELING THE ASSESSMENT AND DIRECTING A FRESH ASSE SSMENT. IT HAS BEEN FURTHER EXPLAINED WITH THE INSERTION OF EXPLANATION-2 INSERTED BY THE FINANCE ACT, 2015 W.E .F. ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 6 01/06/2015. UNDISPUTEDLY, THE LD. PR. COMMISSIONER PROVIDED OPPORTUNITY TO THE ASSESSEE AND A NOTICE O F HEARING WAS ISSUED U/S 263(1) AND FURTHER ON 24/03/2017. BE FORE THE LD. PR COMMISSIONER, THE ASSESSEE SUBMITTED THA T THE LD. ASSESSING OFFICER DULY EXAMINED THE ISSUE INVOL VED, RAISED APPROPRIATE QUERIES, CALLED FOR RELEVANT DET AILS AND ON EXAMINATION OF SUCH DETAILS GRANTED RELIEF TO THE A SSESSEE. IDENTICAL PLEA WAS RAISED BEFORE THIS TRIBUNAL. 2.4. NOW, WE SHALL DEAL WITH THE CASES CITED FROM BOTH SIDES ALONG WITH THE RATIO LAID DOWN THEREIN AND AL SO SOME OTHER CASES WHICH ARE AVAILABLE ON THE ISSUE IN HAN D, SO THAT WE CAN REACH TO A JUSTIFIABLE CONCLUSION. THE HON' BLE CALCUTTA HIGH COURT IN RAJMANDIR ESTATE PVT. LTD. V S PR. CIT (2016) 70 TAXMAN.COM 124 (CALC.) ORDER DATED 13/05/ 2016 AND THE RATIO LAID DOWN THEREIN SUPPORTS THE CASE O F THE REVENUE. IT IS NOTEWORTHY THAT WHILE COMING TO A PARTICULAR CONCLUSION, HON'BLE CALCUTTA HIGH COURT CONSIDERED FOLLOWING JUDICIAL PRONOUNCEMENTS:- I. CIT V. CALCUTTA DISCOUNT CO. LTD. [1973] 91 ITR 8 (SC) (PARA 3), ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 7 II. SUMATI DAYAL V. CIT [1995] 214 ITR 801/80 TAXMAN 89 (SC) (PARA 4), III. CIT V. NOVA PROMOTERS & FINLEASE (P.) LTD. [2012] 342 ITR 169/206 TAXMAN 207/18 TAXMANN.COM 217 (DELHI) (PARA 4), IV. CIT V. DURGA PRASAD MORE [19711] 82 ITR 540 (SC) (PARA 6), V. CIT V. PRECISION FINANCE (P.) LTD. [1994] 208 ITR 465/[1995] 82 TAXMAN 31 (CAL.) (PARA 6), VI. ITO V. DG HOUSING PROJECTS LTD. [2012] 343 ITR 329/212 TAXMAN 132 (MAG.)/[2012] 20 TAXMANN.COM 587 (DELHI) (PARA 7), VII. DIT V. JYOTI FOUNDATION [2013] 35 ITR 388/219 TAXMAN 105/38 TAXMANN.COM 180 (DELHI) (PARA 7), VIII. CIT V. STELLER INVESTMENT LTD. [1991] 192 ITR 287/59 TAXMAN 568 (DELHI) (PARA 8), IX. CIT V. SOPHIA FINANCE LTD. [1994] 205 ITR 98/70 TAXMAN 69 (DELHI) (FB) (PARA 8), X. CIT V. DIVINE LEASING & FINANCE LTD. [2008] 299 ITR 268/[2007] 158 TAXMAN 440 (DELHI)(PARA 8), XI. LOTUS CAPITAL FINANCIAL SERVICES LTD. V. ITO [IT APPEAL NO. 479 (KOL.) OF 2011] (PARA 8), XII. CIT V. LOTUS CAPITAL FINANCIAL SERVICES (P.) LTD. [ITAT NO. 125 OF 2012] (PARA 8), XIII. CIT V. DATAWARE (P.) LTD. [ITAT NO. 263 OF 2011] (PARA 8), XIV. CIT V. ROSEBERRY MERCANTILE (P.) LTD. [G.A. NO. 3296 OF 2010, DATED 10-1-2011] (PARA 8), XV. CIT V. SANCHATI PROJECTS (P.) LTD. [ITAT NO. 140 OF 2011] (PARA 8), XVI. CIT V. SAMIR BIO-TECH. (P.) LTD. [2010] 325 ITR 294 (DELHI) (PARA 8), XVII. CIT V. KAMDHENU STEEL & ALLOYS LTD. [2014] 361 ITR 220/[2012] 206 TAXMAN 254/19 TAXMANN.COM 26 (DELHI) (PARA 8), ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 8 XVIII. CIT V. DWARKADHISH CAPITAL (P.) LTD. [2011] 330 ITR 298/[2010] 194 TAXMAN 43 (DELHI) (PARAS 9, 10), XIX. CIT V. KINETIC CAPITAL FINANCE LTD. [2013] 354 ITR 296/[2011] 202 TAXMAN 548/14 TAXMANN.COM 150 (DELHI) (PARAS 9, 10), XX. ZAFA AHMAD & CO. V. CIT [2013] 214 TAXMAN 440/30 TAXMANN.COM 267 (ALL.) (PARAS 9, 10), XXI. ANIL RICE MILLS V. CIT [2006] 282 ITR 236/[2005] 149 TAXMAN 313 (ALL.) (PARAS 9, 10), XXII. CIT V. FIVE VISION PROMOTERS (P.) LTD. [2016] 380 ITR 289/236 TAXMAN 502/65 TAXMANN.COM 71 (DELHI) (PARA 11), XXIII. CIT V. GABRIEL INDIA LTD. [1993] 203 ITR 108/71 TAXMAN 585 (BOM.) (PARA 12), XXIV. HARI IRON TRADING CO. V. CIT [2003] 263 ITR 437/131 TAXMAN 535 (PUNJ. & HAR.) (PARA 12), XXV. CIT V. LEISURE WEAR EXPORTS (P.) LTD. [2012] 341 ITR 166/[2011] 202 TAXMAN 130/11 TAXMANN.COM 54 (DELHI) (PARA 13), XXVI. OMAR SALAY MOHAMED SAIT V. CIT [1959] 37 ITR 151 (SC) (PARA 14), XXVII. LALCHAND BHAGAT AMBICA RAM V. CIT [1959] 37 ITR 288 (SC) (PARA 14), XXVIII. RELIANCE JUTE & INDUSTRIES LTD. V. CIT [1979] 120 ITR 921/2 TAXMAN 417 (SC) (PARA 15), XXIX. KARIMTHARUVI TEA ESTATE LTD. V. STATE OF KERALA [1966] 60 ITR 262 (SC) (PARA 15), XXX. CIT V. SUNBEAM AUTO LTD. [2011] 332 ITR 167/[2010] 189 TAXMAN 436 (DELHI) (PARA 16), XXXI. GRINDLAYS BANK LTD. V. ITO [1978] 115 ITR 799 (CAL.) (PARA 17), XXXII. VIJAY MALLYA V. ASSTT. CIT [2003] 131 TAXMAN 477 (CAL.) (PARA 17), ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 9 XXXIII. CIT V. J.L. MORRISON (INDIA) LTD. [2014] 366 ITR 593/225 TAXMAN 17 (MAG.)/46 TAXMANN.COM 215 (CAL.) (PARA 17 ), XXXIV. MALABAR INDUSTRIAL CO. LTD. V. CIT [2000] 243 ITR 83/109 TAXMAN 66 (SC) (PARA 18), XXXV. CIT V. MAX INDIA LTD. [2007] 295 ITR 282/166 TAXMAN 188 (SC) (PARA 18), XXXVI. CIT V. MAITHAN INTERNATIONAL [2015] 375 ITR 123/231 TAXMAN 381/56 TAXMANN.COM 283 (CAL.) (PARA 20), XXXVII. CIT V. NAVODAYA CASTLES (P.) LTD. [2014] 367 ITR 306/226 TAXMAN 190/50 TAXMANN.COM 110 (DELHI) (PARA 20), XXXVIII. CIT V. N.R. PORTFOLIO (P.) LTD. [2013] 214 TAXMAN 408/29 TAXMANN.COM 291 (DELHI) (PARA 20), XXXIX. CIT V. ACTIVE TRADERS (P.) LTD. [1995] 214 ITR 583/[1993] 69 TAXMAN 281 (CAL.) (PARA 20), XL. CIT V. JAWAHAR BHATTACHARJEE [2012] 341 ITR 434/209 TAXMAN 174/24 TAXMANN.COM 215 (GAU.) (FB) (PARA 20) AND XLI. SMT. TARA DEVI AGGARWAL V. CIT [1973] 88 ITR 323 (SC) (PARA 27). 2.5. WE HAVE PERUSED THE ASSESSMENT ORDER AND FOUN D THAT THE ASSESSEE MADE PURCHASES FROM M/S NAVRATANA IMPEX, WHO WAS DECLARED AS A HAWALA DEALER BY THE S ALES TAX AUTHORITY. THIS ASPECT WAS NOT DISPUTED BY THE ASSESSEE THAT PURCHASES WERE MADE FROM THIS PARTY. IT IS NOT ED THAT THE LD. ASSESSING OFFICER SIMPLY ACCEPTED THE CLAIM OF THE ASSESSEE IS GENUINE AND DID NOT MAKE ANY ENQUIRY. T HE LD. ASSESSING OFFICER MERELY MADE DISCUSSION WITH RESPE CT TO ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 10 OBTAINING BOGUS BILLS FROM SHRI SUNDHA STEELS PVT. LTD.. THE ASSESSEE WAS ASKED TO LINK THE PURCHASES WITH THE S ALES BILLS AND VOUCHERS REFLECTED BY THE ASSESSEE. NOTICE U/S 133 (6) WAS ISSUED TO SHRI SUNDHA STEEL ONLY AND NOT IN THE CASE OF M/S NAVARATNA IMPEX FROM WHERE THE ASSESSEE ALSO MA DE PURCHASES AND WHO WAS DECLARED AS HAWALA DEALER. IT IS A CLEAR CUT CASE OF LACK OF ENQUIRY. THUS, THE ASSESS MENT ORDER IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. 2.6. SO FAR AS, ASSESSMENT YEAR 2009-10 (ITA NO.3609/MUM/2017), IS CONCERNED, ASSESSEE MADE PURCHASES FROM M/S NEW STEEL INDIA, WHO WAS ALSO DE CLARED AS HAWALA DEALER BY THE SALES TAX AUTHORITY AND THE LD. ASSESSING OFFICER IDENTICALLY ACCEPTED THE SAME AS GENUINE WITHOUT MAKING ENQUIRY. IT IS ALSO NOTED THAT FOR A SSESSMENT YEAR 2010-11, THE ASSESSMENT WAS COMPLETED ON 26/03/2013, WHEREIN, THE PURCHASES MADE BY THE ASSE SSEE WERE TREATED AS BOGUS AND THE ENTIRE PURCHASES WERE DISALLOWED. INFORMATION WAS AVAILABLE ON RECORD IN ASSESSMENT YEAR 2010-11 THAT MS. MANJULA DEVI VORA, WAS A PROPRIETOR OF M/S NAVRATAN IMPEX AND SHE TENDERED THE STATEMENT ON OATH BEFORE THE SALES TAX AUTHORITIES, ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 11 ADMITTING THAT SHE DOES NOT HAVE ANY KNOWLEDGE ABOU T THE BUSINESS ACTIVITY OF M/S NAVARATAN IMPEX. THE LD. ASSESSING OFFICER SIMPLY ACCEPTED THE CLAIM OF THE ASSESSEE. IN THE ASSESSMENT ORDER, IT HAS BEEN ADMITTED THAT ACCOMMODATION BILLS WERE ISSUED TO THE ASSESSEE BY THE PARTIES (5 PARTIES). THE DETAILS CALLED FOR AND THE ASSESSEE WAS ASKED TO LINK THE PURCHASES WITH THE SALES REFL ECTED IN THE RECORD. THE ASSESSEE WAS ALSO ASKED TO PRODUCE THE NECESSARY DETAILS. THERE IS CATEGORICAL FINDING IN THE ASSESSMENT ORDER ITSELF THAT THE BILLS PRODUCE BY T HE ASSESSEE DO NOT MENTION ANY SUCH DETAILS. THE NOTIC ES ISSUED U/S 133(6) WERE RETURNED UNSERVED EXCEPT SHR I SUNDHA STEELS PVT. LTD.. THE LD. ASSESSING OFFICER SIMPLY ADOPTED THE RATE OF 12.5% AS PROFIT ELEMENT ON ACCO UNT OF NON-GENUINE PURCHASES OF RS.1,32,74,601/-. WITHOUT GOING INTO MUCH DELIBERATION, ONE UNDISPUTED FACT IS OOZI NG OUT THAT NO JUSTIFIABLE DISCUSSION HAS BEEN MADE BY THE LD. ASSESSING OFFICER AND SIMPLY ACCEPTED THE CLAIM OF THE ASSESSEE. CERTAINLY, THE ASSESSMENT ORDER IS ERRONE OUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 12 2.6. WE ALSO NOTE THAT BOTH THE ASSESSMENT ORDERS, WHICH ARE A SUBJECT MATTER OF REVISIONAL JURISDICTI ON U/S 263 OF THE ACT ARE ERRONEOUS AND ALSO PREJUDICIAL TO TH E INTEREST OF REVENUE. ADMITTEDLY, AN INCORRECT ASSUMPTION OF FACT OR AN INCORRECT APPLICATION OF LAW WOULD SATISFY THE R EQUIREMENT OF ORDER BEING ERRONEOUS U/S. 263 OF THE ACT. THE P HRASE PREJUDICIAL TO THE INTEREST OF THE REVENUE U/S. 2 63, HAS TO BE READ IN CONJUNCTION WITH THE EXPRESSION ERRONEO US ORDER BY THE ASSESSING OFFICER. EVERY LOSS OF REVEN UE AS A CONSEQUENCE OF ASSESSMENT ORDER CANNOT BE TERMED AS PREJUDICIAL TO THE INTEREST OF REVENUE, MEANING THE REBY, PREJUDICE MUST BE PREJUDICE TO THE REVENUE ADMINISTRATION. AT THE SAME TIME, IF ANOTHER VIEW I S POSSIBLE, REVISION IS NOT PERMISSIBLE. OUR VIEW IS FORTIFIED BY THE DECISION FROM HIMACHAL PRADESH FINANCIAL CORP. (186 TAXMANN 105)(HP), BISMILLAH TRADING CO. (248 ITR 292)(KER.) AND CIT VS. GREEN WORLD CORPN. (314 ITR 81)(SC) . FOR INVOKING REVISIONAL JURISDICTION U/S. 263 OF THE AC T, THE ASSESSMENT ORDER MUST CONTAIN GRIEVOUS ERROR WHICH IS SUBVERSIVE OF THE ADMINISTRATION OF REVENUE. FURTHE R, EXACT ERROR MUST BE DISCLOSED BY THE COMMISSIONER AS WAS HELD IN ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 13 CIT VS. G.K. KABRA (211 ITR 336)(AP). SECTION 263 OF THE ACT ENABLES THE COMMISSIONER TO HAVE A RE-LOOK AT THE O RDERS OR PROCEEDINGS OF THE LOWER AUTHORITY TO EFFECT CORREC TION, IF SO NEEDED, PARTICULARLY, IF THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE OBJ ECT OF THE PROVISION IS TO RAISE REVENUE FOR THE STATE AND SEC TION 263 IS ENABLING PROVISION CONFERRING JURISDICTION UPON THE COMMISSIONER TO REVISE THE ORDER. THE PROVISION IS INTENDED TO PLUG THE LEAKAGE OF THE REVENUE BY THE ERRONEOUS AND PREJUDICIAL ORDER. OUR VIEW FIND SUPPORT FROM THE R ATIO LAID DOWN IN FOLLOWING DECISIONS:- I. CIT VS INFOSYS TECHNOLOGIES LTD. (2012) 341 ITR 293 (KARN.), II. CIT VS JAWAHAR BHATTACHARYAJI (2012) 341 ITR 434 (GUWAHATI) (FB), III. CIT VS LEISURE WEAR EXPORTS LTD. (2012) 341 ITR 166 (DEL.), IV. CIT VS TRIVENI ENGINEERING WORKS LTD. (2011) 336 ITR 366 (DEL.), V. R.A. HIMMATSINGHKA & COMPANY VS CIT (2012) 340 ITR 253 (PAT.) VI. CIT VS RAJEEV AGNIHOTRI (2011) 332 ITR 608 (P & H), VII. CIT VS DLF LTD. (2013) 350 ITR 555 (DEL.), VIII. CIT VS GABREAL INDIA LTD. (1993) 203 ITR 108, 114 (BOM.), IX. MALABAR INDUSTRIAL COMPANY LTD. VS CIT (2000) 243 ITR 83 (SC), ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 14 X. NABHA INVESTMENTS PVT. LTD. VS UOI (2000) 246 ITR 41 (DEL.), XI. BISMILLAH TRADING COMPANY LTD. VS IO (2001) 248 ITR 292, 308 (KERALA), XII. PAUL MATHEWS & SONS VS CIT (2003) 263 ITR 101, 113 (KERALA), XIII. CIT VS SESHASAYEE PAPER & BOARDS LTD. (2000) 242 ITR 490, 500 (MAD.), XIV. RAYON SILK MILLS VS CIT 221 ITR 155 (GUJ.) 2.7. IF THE AFORESAID JUDICIAL PRONOUNCEMENTS ARE KEPT IN JUXTAPOSITION WITH THE FACTS OF THE PRESENT APPE ALS AND ANALYZED, THE LD. ASSESSING OFFICER WHILE FRAMING T HE ASSESSMENT MADE NO DISCUSSION WITH THE CLAIM OF THE ASSESSEE WITH RESPECT TO ALL THE PARTIES, WHEREIN, EVEN THE NOTICES U/S 133(6) WERE RETURNED UNSERVED BY THE PO STAL DEPARTMENT AND SIMPLY FRAMED THE ASSESSMENT IN A SL IP SHOT MANNER. THUS, IT IS CLEAR THAT THE ASSESSMENT ORDER WAS PASSED WITHOUT VERIFICATION, APPLICATION OF MIN D, CONSEQUENTLY, IT IS ERRONEOUS AS WELL AS PREJUDICIA L TO THE INTEREST OF THE REVENUE, THUS THE REVISIONAL JURISD ICTION WAS RIGHTLY INVOKED. IT IS ALSO NOTED THE LD. PR. COMM ISSIONER SIMPLY DIRECTED THE ASSESSING OFFICER TO MAKE PROPE R ENQUIRY THAT TO AFTER PROVIDING DUE OPPORTUNITY TO THE ASSESSEE, THUS, NO GRIEVANCE IS CAUSED TO THE ASSES SEE AND ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 15 AT THE SAME TIME, THE INTEREST OF THE REVENUE HAS A LSO BEEN SAFEGUARDED. 2.8. OUR VIEW IS FORTIFIED BY THE DECISION IN INDI AN TEXTILE VS CIT (157 ITR 112) (MAD.), GEE VEE ENTERP RISES VS ADDL. CIT (99 ITR 375)(DEL.), THALIBAI F JAIN VS IT O 101 ITR 1 (KARN.) AND CIT VS HPFC 186 TAXMAN 105 (HP), CIT VS PUSHPA DEVI 164 ITR 639 (PATNA). WE ARE AWARE THAT BEFORE THE LD. COMMISSIONER INVOKES THE REVISIONAL JURISDICTION U/S 263 OF THE ACT, HE SHOULD GET SATI SFIED THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONE OUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. HONBL E GUJARAT HIGH COURT IN CIT VS M. M.KHAMBATBALA 198 ITR 144 ( GUJ.) EVEN WENT TO THE EXTENT THAT REVISIONAL POWERS CAN BE EXERCISED EVEN IF THE ISSUE IS DEBATABLE. THE HONB LE JURISDICTIONAL HIGH COURT IN CIT VS GABRIEL INDIA L TD. (1993) 203 ITR 108 (BOM.) CONCLUDED THAT POWERS U/S 263 CA NNOT BE EXERCISED FOR STARTING FISHING AND ROVING ENQUIR IES. FOR MAKING A VALID ORDER U/S 263(1), IT IS ESSENTIAL TH AT THE COMMISSIONER HAS TO RECORD AN EXPRESS FINDING THAT PREJUDICE HAS BEEN CAUSED TO THE INTEREST OF THE RE VENUE. OUR VIEW FIND SUPPORT FROM THE RATIO LAID DOWN IN B HARGWA ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 16 ENGINEERING CORPORATION VS CIT (1996) 134 TAXATION 493, 494 (ALL.), CIT VS DIGVIJAY TRADERS (1997) 137 CTR (MP) 224, CIT VS REGIONAL AGRO INDUSTRIAL DEVELOPMENT COOPERATIVE SOCIETY LTD. (1998) 143 TAXATION 293 (K ERALA), CIT VS AGARWAL ENTERPRISES (1998) 100 TAXMAN 360 ( ALL.) AND CIT VS KAILASH APARTMENT PVT. LTD. (200) 243 IT R 795 (DEL.). TOTALITY OF FACTS, CLEARLY INDICATES THAT T HE ASSESSMENT ORDER HAS BEEN FRAMED WITHOUT FULL ENQUI RIES, THEREFORE, THE LD. COMMISSIONER JUSTIFIABLY INVOKED REVISIONAL JURISDICTION. 2.9. THE HON'BLE APEX COURT IN RAJMANDIR ESTATES P VT. LTD. (2017) 77 TAXMAN.COM 285 (SC), WHEREIN, THERE WAS LACK OF REQUISITE ENQUIRY INTO INCREASE OF SHARE CA PITAL AND NON-APPLICATION OF MIND, THE COMMISSIONER WAS HELD TO BE JUSTIFIED IN INVOKING THE REVISIONAL JURISDICTION, WHICH IS REPRODUCED HEREUNDER:- SECTION 68, READ WITH SECTION 263 OF THE INCOME-TA X ACT, 1961 - CASH CREDIT (SHARE APPLICATION MONEY) - ASSESSMENT YEAR 2009-10 - DURING RELEVANT YEAR, ASSESSEE-COMPANY HAD INCREASED ITS SHARE CAPITAL BY ISSUING 7.93 LAKHS SHARES OF RS.10 EACH AT A PREMIU M OF RS.390 - ASSESSING OFFICER COMPLETED ASSESSMENT WITHOUT HOLDING REQUISITE INVESTIGATION EXCEPT FOR CALLING FOR RECORDS - COMMISSIONER PASSED ORDER UNDER SECTI ON 263 AND OPINED THAT THIS COULD BE A CASE OF MONEY LAUNDERING WHICH WENT UNDETECTED DUE TO LACK OF ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 17 REQUISITE ENQUIRY INTO INCREASE OF SHARE CAPITAL IN CLUDING PREMIUM RECEIVED BY ASSESSEE AND NON-APPLICATION OF MIND - HIGH COURT BY IMPUGNED ORDER HELD THAT SINCE ASSESSEE WITH AN AUTHORISED SHARE CAPITAL OF RS.1.3 6 CRORES RAISED NEARLY A SUM OF RS.32 CRORES ON ACCOU NT OF PREMIUM AND CHOSE NOT TO GO IN FOR INCREASE OF AUTHORISED SHARE CAPITAL MERELY TO AVOID PAYMENT OF STATUTORY FEES WAS AN IMPORTANT POINTER NECESSITATI NG INVESTIGATION AND THUS, COMMISSIONER WAS JUSTIFIED IN TREATING ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO INTEREST OF REVENUE - WHETHER SPECIAL LEAVE PETITIO N FILED AGAINST IMPUGNED ORDER WAS TO BE DISMISSED - HELD, YES [PARA 2] [IN FAVOUR OF REVENUE] 2.10. THE HON'BLE APEX COURT IN CIT VS AMITABH BACCHAN (2016) 69 TAXMAN.COM 170 (SC) (ORDER DATED 11/05/2016) IS HELD AS UNDER:- 2. THE APPELLANT - REVENUE SEEKS TO CHALLENGE THE ORDE R OF THE HIGH COURT DATED 7TH AUGUST, 2008 DISMISSING THE APPEAL FILED BY IT UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 (HEREINAFT ER REFERRED TO AS ''THE ACT') AND AFFIRMING THE ORDER OF THE INCOME T AX APPELLATE TRIBUNAL, MUMBAI BENCH ('TRIBUNAL' FOR SHORT) DATED 28TH AUGUST, 2007 WHEREBY THE ORDER DATED 20TH MARCH, 2006 PASSE D BY THE COMMISSIONER OF INCOME TAX-1, MUMBAI ('C.I.T.' FOR SHORT) UNDER SECTION 263 OF THE ACT WAS REVERSED. THE ASSESSMENT YEAR IN QUESTION IS 2001-2002 AND THE ASSESSMENT ORDER IS D ATED 30TH MARCH, 2004. 3. AFTER THE ASSESSMENT AS ABOVE WAS FINALIZED, A SHOW CAUSE NOTICE DATED 7TH NOVEMBER, 2005 UNDER SECTION 263 OF THE A CT WAS ISSUED BY THE LEARNED C.I.T. DETAILING AS MANY AS ELEVEN ( 11) ISSUES/GROUNDS ON WHICH THE ASSESSMENT ORDER WAS PROPOSED TO BE RE VISED UNDER SECTION 263 OF THE ACT. THE RESPONDENT - ASSESSEE F ILED HIS REPLY TO THE SAID SHOW CAUSE NOTICE ON CONSIDERATION OF WHIC H BY ORDER DATED 20TH MARCH, 2006 THE LEARNED C.I.T. SET ASIDE THE O RDER OF ASSESSMENT DATED 30TH MARCH, 2004 AND DIRECTED A FRESH ASSESSM ENT TO BE MADE. AGGRIEVED, THE RESPONDENT ASSESSEE CHALLENGED THE SAID ORDER BEFORE THE LEARNED TRIBUNAL WHICH WAS ALLOWED BY TH E ORDER DATED 28TH AUGUST, 2007. 4. AGGRIEVED BY THE ORDER DATED 28TH AUGUST, 2007 OF T HE LEARNED TRIBUNAL, THE REVENUE FILED AN APPEAL UNDER SECTION 260A OF THE ACT ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 18 BEFORE THE HIGH COURT OF BOMBAY. THE AFORESAID APPE AL I.E. ITA NO. 293 OF 2008 WAS SUMMARILY DISMISSED BY THE HIGH COU RT BY THE IMPUGNED ORDER DATED 7TH AUGUST, 2008 HOLDING THAT AS THE C.I.T. HAD GONE BEYOND THE SCOPE OF THE SHOW CAUSE NOTICE DATED 7TH NOVEMBER, 2005 AND HAD DEALT WITH THE ISSUES NOT COVERED/MENTIONED IN THE SAID NOTICE THE REVISIONAL ORDER DATED 20TH MARCH, 2006 WAS IN VIOLATION OF THE PRINCIPLES OF N ATURAL JUSTICE. SO FAR AS THE QUESTION AS TO WHETHER THE ASSESSING OFF ICER HAD MADE SUFFICIENT ENQUIRIES ABOUT THE ASSESSEE'S CLAIM OF EXPENSES MADE IN THE RE-REVISED RETURN OF INCOME IS CONCERNED, WHICH QUESTION WAS FORMULATED AS QUESTION NO. 2 FOR THE HIGH COURT'S C ONSIDERATION, THE HIGH COURT TOOK THE VIEW THAT THE SAID QUESTION RAI SED PURE QUESTIONS OF FACT AND, THEREFORE, OUGHT NOT TO BE EXAMINED UN DER SECTION 260A OF THE ACT. THE APPEAL OF THE REVENUE WAS CONSEQUEN TLY DISMISSED. AGGRIEVED, THIS APPEAL HAS BEEN FILED UPON GRANT OF LEAVE UNDER ARTICLE 136 OF THE CONSTITUTION OF INDIA. 5. WE HAVE HEARD SHRI RANJIT KUMAR, LEARNED SOLICITOR GENERAL APPEARING FOR THE APPELLANT REVENUE AND SHRI SHYAM DIVAN, LEARNED SENIOR COUNSEL APPEARING FOR THE RESPONDENT ASSES SEE. 6. THE ASSESSMENT IN QUESTION WAS SET ASIDE BY THE LEA RNED C.I.T. BY THE ORDER DATED 20TH MARCH, 2006 ON THE PRINCIPAL G ROUND THAT REQUISITE AND DUE ENQUIRIES WERE NOT MADE BY THE AS SESSING OFFICER PRIOR TO FINALIZATION OF THE ASSESSMENT BY ORDER DA TED 30TH MARCH, 2004. IN THIS CONNECTION, THE LEARNED C.I.T. ON CON SIDERATION OF THE FACTS OF THE CASE AND THE RECORD OF THE PROCEEDINGS CAME TO THE CONCLUSION THAT IN THE COURSE OF THE ASSESSMENT PRO CEEDINGS DESPITE SEVERAL OPPORTUNITIES THE ASSESSEE DID NOT SUBMIT T HE REQUISITE BOOKS OF ACCOUNT AND DOCUMENTS AND DELIBERATELY DRAGGED T HE MATTER LEADING TO ONE ADJOURNMENT AFTER THE OTHER. EVENTUA LLY, THE ASSESSING OFFICER, TO AVOID THE BAR OF LIMITATION, HAD NO OPT ION BUT TO 'HURRIEDLY' FINALIZE THE ASSESSMENT PROCEEDINGS WHI CH ON DUE AND PROPER SCRUTINY DISCLOSED THAT THE NECESSARY ENQUIR IES WERE NOT MADE. ON THE SAID BASIS THE LEARNED C.I.T. CAME TO THE CO NCLUSION THAT THE ASSESSMENT ORDER IN QUESTION WAS ERRONEOUS AND PREJ UDICIAL TO THE INTERESTS OF THE REVENUE WARRANTING EXERCISE OF POW ER UNDER SECTION 263 OF THE ACT. CONSEQUENTLY, THE ASSESSMENT FOR TH E YEAR 2001-2002 WAS SET ASIDE AND A FRESH ASSESSMENT WAS ORDERED. A T THIS STAGE, IT MUST BE NOTICED THAT IN THE ORDER DATED 20TH MARCH, 2006 THE LEARNED C.I.T. ARRIVED AT FINDINGS AND CONCLUSIONS IN RESPE CT OF ISSUES WHICH WERE NOT SPECIFICALLY MENTIONED IN THE SHOW CAUSE N OTICE DATED 7TH NOVEMBER, 2005. IN FACT, ON AS MANY AS SEVEN/EIGHT (07/08) ISSUES MENTIONED IN THE SAID SHOW CAUSE NOTICE THE LEARNED C.I.T. DID NOT RECORD ANY FINDING WHEREAS CONCLUSIONS ADVERSE TO T HE ASSESSEE WERE RECORDED ON ISSUES NOT SPECIFICALLY MENTIONED IN TH E SAID NOTICE BEFORE PROCEEDING TO HOLD THAT THE ASSESSMENT NEEDS TO BE SET ASIDE. ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 19 HOWEVER, THREE (03) OF THE ISSUES, DETAILS OF WHICH ARE NOTICED HEREIN BELOW, ARE COMMON TO THE SHOW CAUSE NOTICE AS WELL AS THE REVISIONAL ORDER OF THE LEARNED C.I.T. 7. ON APPEAL, THE LEARNED TRIBUNAL TOOK THE VIEW THAT THE LEARNED C.I.T. EXERCISING POWERS UNDER SECTION 263 OF THE A CT COULD NOT HAVE GONE BEYOND THE ISSUES MENTIONED IN THE SHOW CAUSE NOTICE DATED 7TH NOVEMBER, 2005. THE LEARNED TRIBUNAL, THEREFORE, TH OUGHT IT PROPER TO TAKE THE VIEW THAT IN RESPECT OF THE ISSUES NOT MENTIONED IN THE SHOW CAUSE NOTICE THE FINDINGS AS RECORDED IN THE R EVISIONAL ORDER DATED 20TH MARCH, 2006 HAVE TO BE UNDERSTOOD TO BE IN BREACH OF THE PRINCIPLES OF NATURAL JUSTICE. THE LEARNED TRIBUNAL ALSO SPECIFICALLY CONSIDERED THE THREE (03) COMMON ISSUES MENTIONED A BOVE AND ON SUCH CONSIDERATION ARRIVED AT THE CONCLUSION THAT T HE REASONS DISCLOSED BY THE LEARNED C.I.T. IN THE ORDER DATED 20TH MARCH, 2006 FOR HOLDING THE ASSESSMENT TO BE LIABLE FOR CANCELL ATION ON THAT BASIS ARE NOT TENABLE. ACCORDINGLY, THE LEARNED TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE AND REVERSED THE ORDER OF THE SUO MOTU REVISION DATED 20TH MARCH, 2006. 8. AT THIS STAGE, IT MAY BE APPROPRIATE TO REPRODUCE H EREUNDER THE PROVISIONS OF SECTION 263 OF THE ACT TO APPRECIATE THE ARGUMENTS ADVANCED AND TO UNDERSTAND THE CONTOURS OF THE SUO MOTU REVISIONAL POWER VESTED IN THE LEARNED C.I.T. BY THE AFORESAID PROVISION OF THE ACT. '263 - REVISION OF ORDERS PREJUDICIAL TO REVENUE.( 1) THE PRINCIPAL COMMISSIONER OR COMMISSIONER MAY CALL FOR AND EXAMI NE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDE RS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER IS ERRONEOU S INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS 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 JUSTIFY, I NCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLIN G THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. EXPLANATION ...' 9. UNDER THE ACT DIFFERENT SHADES OF POWER HAVE BEEN C ONFERRED ON DIFFERENT AUTHORITIES TO DEAL WITH ORDERS OF ASSESS MENT PASSED BY THE PRIMARY AUTHORITY. WHILE SECTION 147 CONFERS POWER ON THE ASSESSING AUTHORITY ITSELF TO PROCEED AGAINST INCOM E ESCAPING ASSESSMENT, SECTION 154 OF THE ACT EMPOWERS SUCH AU THORITY TO CORRECT A MISTAKE APPARENT ON THE FACE OF THE RECOR D. THE POWER OF APPEAL AND REVISION IS CONTAINED IN CHAPTER XX OF T HE ACT WHICH INCLUDES SECTION 263 THAT CONFER SUO MOTU POWER OF REVISION IN THE LEARNED C.I.T. THE DIFFERENT SHADES OF POWER CONFER RED ON DIFFERENT AUTHORITIES UNDER THE ACT HAS TO BE EXERCISED WITHI N THE AREAS ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 20 SPECIFICALLY DELINEATED BY THE ACT AND THE EXERCISE OF POWER UNDER ONE PROVISION CANNOT TRENCH UPON THE POWERS AVAILAB LE UNDER ANOTHER PROVISION OF THE ACT. IN THIS REGARD, IT MUST BE SP ECIFICALLY NOTICED THAT AGAINST AN ORDER OF ASSESSMENT, SO FAR AS THE REVENUE IS CONCERNED, THE POWER CONFERRED UNDER THE ACT IS TO REOPEN THE CONCLUDED ASSESSMENT UNDER SECTION 147 AND/OR TO RE VISE THE ASSESSMENT ORDER UNDER SECTION 263 OF THE ACT. THE SCOPE OF THE POWER/JURISDICTION UNDER THE DIFFERENT PROVISIONS O F THE ACT WOULD NATURALLY BE DIFFERENT. THE POWER AND JURISDICTION OF THE REVENUE TO DEAL WITH A CONCLUDED ASSESSMENT, THEREFORE, MUST B E UNDERSTOOD IN THE CONTEXT OF THE PROVISIONS OF THE RELEVANT SECTI ONS NOTICED ABOVE. WHILE DOING SO IT MUST ALSO BE BORNE IN MIND THAT T HE LEGISLATURE HAD NOT VESTED IN THE REVENUE ANY SPECIFIC POWER TO QUE STION AN ORDER OF ASSESSMENT BY MEANS OF AN APPEAL. 10. REVERTING TO THE SPECIFIC PROVISIONS OF SECTION 26 3 OF THE ACT WHAT HAS TO BE SEEN IS THAT A SATISFACTION THAT AN ORDER PASSED BY THE AUTHORITY UNDER THE ACT IS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF THE REVENUE IS THE BASIC PRE-CONDITION FOR EXERCISE OF JURISDICTION UNDER SECTION 263 OF THE ACT. BOTH ARE TWIN CONDITI ONS THAT HAVE TO BE CONJOINTLY PRESENT. ONCE SUCH SATISFACTION IS RE ACHED, JURISDICTION TO EXERCISE THE POWER WOULD BE AVAILABLE SUBJECT TO OBSERVANCE OF THE PRINCIPLES OF NATURAL JUSTICE WHICH IS IMPLICIT IN THE REQUIREMENT CAST BY THE SECTION TO GIVE THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. IT IS IN THE CONTEXT OF THE ABOVE POSITION THAT THIS C OURT HAS REPEATEDLY HELD THAT UNLIKE THE POWER OF REOPENING AN ASSESSME NT UNDER SECTION 147 OF THE ACT, THE POWER OF REVISION UNDER SECTION 263 IS NOT CONTINGENT ON THE GIVING OF A NOTICE TO SHOW CAUSE. IN FACT, SECTION 263 HAS BEEN UNDERSTOOD NOT TO REQUIRE ANY SPECIFIC SHOW CAUSE NOTICE TO BE SERVED ON THE ASSESSEE. RATHER, WHAT I S REQUIRED UNDER THE SAID PROVISION IS AN OPPORTUNITY OF HEARING TO THE ASSESSEE. THE TWO REQUIREMENTS ARE DIFFERENT; THE FIRST WOULD COM PREHEND A PRIOR NOTICE DETAILING THE SPECIFIC GROUNDS ON WHICH REVI SION OF THE ASSESSMENT ORDER IS TENTATIVELY BEING PROPOSED. SUC H A NOTICE IS NOT REQUIRED. WHAT IS CONTEMPLATED BY SECTION 263, IS A N OPPORTUNITY OF HEARING TO BE AFFORDED TO THE ASSESSEE. FAILURE TO GIVE SUCH AN OPPORTUNITY WOULD RENDER THE REVISIONAL ORDER LEGAL LY FRAGILE NOT ON THE GROUND OF LACK OF JURISDICTION BUT ON THE GROUN D OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. REFERENCE IN THIS RE GARD MAY BE ILLUSTRATIVELY MADE TO THE DECISIONS OF THIS COURT IN GITA DEVI AGGARWAL V. CIT [1970] 76 ITR 496 AND IN CIT V. ELECTRO HOUSE [1971] 82 ITR 824 (SC) . PARAGRAPH 4 OF THE DECISION IN ELECTRO HOUSE ( SUPRA ) BEING ILLUMINATION OF THE ISSUE INDICATED ABOVE M AY BE USEFULLY REPRODUCED HEREUNDER: 'THIS SECTION UNLIKE SECTION 34 DOES NOT PRESCRIBE ANY NOTICE TO BE GIVEN. IT ONLY REQUIRES THE COMMISSIONER TO GIVE AN OPPORTUNITY TO ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 21 THE ASSESSEE OF BEING HEARD. THE SECTION DOES NOT S PEAK OF ANY NOTICE. IT IS UNFORTUNATE THAT THE HIGH COURT FAILE D TO NOTICE THE DIFFERENCE IN LANGUAGE BETWEEN SECTIONS 33-B AND 34 . FOR THE ASSUMPTION OF JURISDICTION TO PROCEED UNDER SECTION 34, THE NOTICE AS PRESCRIBED IN THAT SECTION IS A CONDITION PRECEDENT . BUT NO SUCH NOTICE IS CONTEMPLATED BY SECTION 33-B. THE JURISDICTION O F THE COMMISSIONER TO PROCEED UNDER SECTION 33-B IS NOT D EPENDENT ON THE FULFILMENT OF ANY CONDITION PRECEDENT. ALL THAT HE IS REQUIRED TO DO BEFORE REACHING HIS DECISION AND NOT BEFORE COMM ENCING THE ENQUIRY, HE MUST GIVE THE ASSESSEE AN OPPORTUNITY O F BEING HEARD AND MAKE OR CAUSE TO MAKE SUCH ENQUIRY AS HE DEEMS NECE SSARY. THOSE REQUIREMENTS HAVE NOTHING TO DO WITH THE JURISDICTI ON OF THE COMMISSIONER. THEY PERTAIN TO THE REGION OF NATURAL JUSTICE. BREACH OF THE PRINCIPLES OF NATURAL JUSTICE MAY AFFECT THE LEGALITY OF THE ORDER MADE BUT THAT DOES NOT AFFECT THE JURISDICTION OF T HE COMMISSIONER. AT PRESENT WE ARE NOT CALLED UPON TO CONSIDER WHETH ER THE ORDER MADE BY THE COMMISSIONER IS VITIATED BECAUSE OF THE CONTRAVENTION OF ANY OF THE PRINCIPLES OF NATURAL JUSTICE. THE SC OPE OF THESE APPEALS IS VERY NARROW. ALL THAT WE HAVE TO SEE IS WHETHER BEFORE ASSUMING JURISDICTION THE COMMISSIONER WAS REQUIRED TO ISSUE A NOTICE AND IF HE WAS SO REQUIRED WHAT THAT NOTICE SHOULD HAVE CON TAINED? OUR ANSWER TO THAT QUESTION HAS ALREADY BEEN MADE CLEAR . IN OUR JUDGMENT NO NOTICE WAS REQUIRED TO BE ISSUED BY THE COMMISSI ONER BEFORE ASSUMING JURISDICTION TO PROCEED UNDER SECTION 33-B . THEREFORE THE QUESTION WHAT THAT NOTICE SHOULD CONTAIN DOES NOT A RISE FOR CONSIDERATION. IT IS NOT NECESSARY NOR PROPER FOR U S IN THIS CASE TO CONSIDER AS TO THE NATURE OF THE ENQUIRY TO BE HELD UNDER SECTION 33- B. THEREFORE, WE REFRAIN FROM SPELLING OUT WHAT PRI NCIPLES OF NATURAL JUSTICE SHOULD BE OBSERVED IN AN ENQUIRY UNDER SECT ION 33-B. THIS COURT IN GITA DEVI AGGARWAL V. CIT, WEST BENGAL RULED THAT SECTION 33-B DOES NOT IN EXPRESS TERMS REQUIRE A NOTICE TO BE SERVED ON THE ASSESSEE AS IN THE CASE OF SECTION 34. SECTION 33-B MERELY REQUIRES THAT AN OPPORTUNITY OF BEING HEARD SHOULD BE GIVEN TO THE ASSESSEE AND THE STRINGENT REQUIREMENT OF SERVICE OF NOTICE UNDER SECTION 34 CANNOT, THEREFORE, BE APPLIED TO A PROCEEDING UNDER SECTION 33-B.' (PAGE 827-828). [NOTE: SECTION 33-B AND SECTION 34 OF THE INCOME TA X ACT, 1922 CORRESPONDS TO SECTION 263 AND SECTION 147 OF THE I NCOME TAX ACT, 1961] 11. IT MAY BE THAT IN A GIVEN CASE AND IN MOST CASES I T IS SO DONE A NOTICE PROPOSING THE REVISIONAL EXERCISE IS GIVEN T O THE ASSESSEE INDICATING THEREIN BROADLY OR EVEN SPECIFICALLY THE GROUNDS ON WHICH THE EXERCISE IS FELT NECESSARY. BUT THERE IS NOTHIN G IN THE SECTION (SECTION 263) TO RAISE THE SAID NOTICE TO THE STATU S OF A MANDATORY SHOW CAUSE NOTICE AFFECTING THE INITIATION OF THE E XERCISE IN THE ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 22 ABSENCE THEREOF OR TO REQUIRE THE C.I.T. TO CONFINE HIMSELF TO THE TERMS OF THE NOTICE AND FORECLOSING CONSIDERATION O F ANY OTHER ISSUE OR QUESTION OF FACT. THIS IS NOT THE PURPORT OF SEC TION 263. OF COURSE, THERE CAN BE NO DISPUTE THAT WHILE THE C.I.T. IS FR EE TO EXERCISE HIS JURISDICTION ON CONSIDERATION OF ALL RELEVANT FACTS , A FULL OPPORTUNITY TO CONTROVERT THE SAME AND TO EXPLAIN THE CIRCUMSTA NCES SURROUNDING SUCH FACTS, AS MAY BE CONSIDERED RELEVANT BY THE AS SESSEE, MUST BE AFFORDED TO HIM BY THE C.I.T. PRIOR TO THE FINALIZA TION OF THE DECISION. 12. IN THE PRESENT CASE, THERE IS NO DISPUTE THAT IN T HE ORDER DATED 20TH MARCH, 2006 PASSED BY THE LEARNED C.I.T. UNDER SECT ION 263 OF THE ACT FINDINGS HAVE BEEN RECORDED ON ISSUES THAT ARE NOT SPECIFICALLY MENTIONED IN THE SHOW CAUSE NOTICE DATED 7TH NOVEMB ER, 2005 THOUGH THERE ARE THREE (03) ISSUES MENTIONED IN THE SHOW CAUSE NOTICE DATED 7TH NOVEMBER, 2005 WHICH HAD SPECIFICALLY BEE N DEALT WITH IN THE ORDER DATED 20TH MARCH, 2006. THE LEARNED TRIBU NAL IN ITS ORDER DATED 28TH AUGUST, 2007 PUT THE AFORESAID TWO FEATU RES OF THE CASE INTO TWO DIFFERENT COMPARTMENTS. INSOFAR AS THE FIR ST QUESTION I.E. FINDINGS CONTAINED IN THE ORDER OF THE LEARNED C.I. T. DATED 20TH MARCH, 2006 BEYOND THE ISSUES MENTIONED IN THE SHOW CAUSE NOTICE IS CONCERNED THE LEARNED TRIBUNAL TAKING NOTE OF TH E AFORESAID ADMITTED POSITION HELD AS FOLLOWS: 'IN THE CASE ON HAND, THE CIT HAS ASSUMED JURISDICT ION BY ISSUING SHOW CAUSE NOTICE U/S 263 BUT WHILE PASSING THE FIN AL ORDER HE RELIED ON VARIOUS OTHER GROUNDS FOR COMING TO THE FINAL CO NCLUSION. THIS ITSELF MAKES THE REVISION ORDER BAD IN LAW AND ALSO VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE AND THUS NOT MAINTAIN ABLE. IF, DURING THE COURSE OF REVISION PROCEEDINGS THE CIT WAS OF THE O PINION THAT THE ORDER OF THE AO WAS ERRONEOUS ON SOME OTHER GROUNDS ALSO OR ON ANY ADDITIONAL GROUNDS NOT MENTIONED IN THE SHOW CAUSE NOTICE, HE OUGHT TO HAVE GIVEN ANOTHER SHOW CAUSE NOTICE TO THE ASSE SSEE ON THOSE GROUNDS AND GIVEN HIM A REASONABLE OPPORTUNITY OF H EARING BEFORE COMING TO THE CONCLUSION AND PASSING THE FINAL REVI SION ORDER. IN THE CASE ON HAND, THE CIT HAS NOT DONE SO. THUS, THE OR DER U/S 263 IS VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE AS FAR A S THE REASONS, WHICH FORMED THE BASIS FOR THE REVISION BUT WERE NOT PART OF THE SHOW CAUSE NOTICE ISSUED U/S 263 ARE CONCERNED. THE ORDER OF T HE CIT PASSED U/S 263 IS THEREFORE LIABLE TO BE QUASHED INSOFAR AS TH OSE GROUNDS ARE CONCERNED.' 13. THE ABOVE GROUND WHICH HAD LED THE LEARNED TRIBUNA L TO INTERFERE WITH THE ORDER OF THE LEARNED C.I.T. SEEMS TO BE CO NTRARY TO THE SETTLED POSITION IN LAW, AS INDICATED ABOVE AND THE TWO DECISIONS OF THIS COURT IN GITA DEVI AGGARWAL ( SUPRA ) AND ELECTRO HOUSE ( SUPRA ). THE LEARNED TRIBUNAL IN ITS ORDER DATED 28TH AUGUST , 2007 HAD NOT RECORDED ANY FINDING THAT IN COURSE OF THE SUO MOTU REVISIONAL PROCEEDINGS, HEARING OF WHICH WAS SPREAD OVER MANY DAYS AND ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 23 ATTENDED TO BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, OPPORTUNITY OF HEARING WAS NOT AFFORDED TO THE ASSE SSEE AND THAT THE ASSESSEE WAS DENIED AN OPPORTUNITY TO CONTEST THE F ACTS ON THE BASIS OF WHICH THE LEARNED C.I.T. HAD COME TO HIS CONCLUS IONS AS RECORDED IN THE ORDER DATED 20TH MARCH, 2006. DESPITE THE AB SENCE OF ANY SUCH FINDING IN THE ORDER OF THE LEARNED TRIBUNAL, BEFOR E HOLDING THE SAME TO BE LEGALLY UNSUSTAINABLE THE COURT WILL HAVE TO BE SATISFIED THAT IN THE COURSE OF THE REVISIONAL PROCEEDING THE ASSESSE E, ACTUALLY AND REALLY, DID NOT HAVE THE OPPORTUNITY TO CONTEST THE FACTS ON THE BASIS OF WHICH THE LEARNED C.I.T. HAD CONCLUDED THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO T HE INTERESTS OF THE REVENUE. THE ABOVE IS THE QUESTION TO WHICH THE COU RT, THEREFORE, WILL HAVE TO TURN TO. 14. TO DETERMINE THE ABOVE QUESTION WE HAVE READ AND C ONSIDERED THE ORDER OF THE ASSESSING OFFICER DATED 30TH MARCH , 2004; AS WELL AS THE ORDER OF THE LEARNED C.I.T. DATED 20TH MARCH, 2 006. FROM THE ABOVE CONSIDERATION, IT APPEARS THAT THE LEARNED C. I.T. IN THE COURSE OF THE REVISIONAL PROCEEDINGS HAD SCRUTINIZED THE R ECORD OF THE PROCEEDINGS BEFORE THE ASSESSING OFFICER AND NOTED THE VARIOUS DATES ON WHICH OPPORTUNITIES TO PRODUCE THE BOOKS OF ACCO UNT AND OTHER RELEVANT DOCUMENTS WERE AFFORDED TO THE ASSESSEE WH ICH REQUIREMENT WAS NOT COMPLIED WITH BY THE ASSESSEE. IN THESE CIR CUMSTANCES, THE REVISIONAL AUTHORITY TOOK THE VIEW THAT THE ASSESSI NG OFFICER, AFTER BEING COMPELLED TO ADJOURN THE MATTER FROM TIME TO TIME, HAD TO HURRIEDLY COMPLETE THE ASSESSMENT PROCEEDINGS TO AV OID THE SAME FROM BECOMING TIME BARRED. IN THE COURSE OF THE REV ISIONAL EXERCISE RELEVANT FACTS, DOCUMENTS, AND BOOKS OF ACCOUNT WHI CH WERE OVERLOOKED IN THE ASSESSMENT PROCEEDINGS WERE CONSI DERED. ON SUCH RE-SCRUTINY IT WAS REVEALED THAT THE ORIGINAL ASSES SMENT ORDER ON SEVERAL HEADS WAS ERRONEOUS AND HAD THE POTENTIAL O F CAUSING LOSS OF REVENUE TO THE STATE. IT IS ON THE AFORESAID BASIS THAT THE NECESSARY SATISFACTION THAT THE ASSESSMENT ORDER DATED 30TH M ARCH, 2004 WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE WAS RECORDED BY THE LEARNED C.I.T. AT EACH STAGE OF THE REVISION AL PROCEEDING THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAD APPEA RED AND HAD FULL OPPORTUNITY TO CONTEST THE BASIS ON WHICH THE REVIS IONAL AUTHORITY WAS PROCEEDING/HAD PROCEEDED IN THE MATTER. IF THE REVI SIONAL AUTHORITY HAD COME TO ITS CONCLUSIONS IN THE MATTER ON THE BA SIS OF THE RECORD OF THE ASSESSMENT PROCEEDINGS WHICH WAS OPEN FOR SCRUT INY BY THE ASSESSEE AND AVAILABLE TO HIS AUTHORIZED REPRESENTA TIVE AT ALL TIMES IT IS DIFFICULT TO SEE AS TO HOW THE REQUIREMENT OF GI VING OF A REASONABLE OPPORTUNITY OF BEING HEARD AS CONTEMPLATED BY SECTI ON 263 OF THE ACT HAD BEEN BREACHED IN THE PRESENT CASE. THE ORDE R OF THE LEARNED TRIBUNAL INSOFAR AS THE FIRST ISSUE I.E. THE REVISI ONAL ORDER GOING BEYOND THE SHOW CAUSE NOTICE IS CONCERNED, THEREFOR E, CANNOT HAVE OUR ACCEPTANCE. THE HIGH COURT HAVING FAILED TO FUL LY DEAL WITH THE ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 24 MATTER IN ITS CRYPTIC ORDER DATED 7TH AUGUST, 2008 WE ARE OF THE VIEW THAT THE SAID ORDERS ARE NOT TENABLE AND ARE LIABLE TO BE INTERFERED WITH. 15. THIS WILL BRING US TO A CONSIDERATION OF THE SECON D LIMB OF THE CASE AS DEALT WITH BY THE LEARNED TRIBUNAL, NAMELY, THAT TENABILITY OF THE ORDER OF THE LEARNED C.I.T. ON THE THREE (03) I SSUES MENTIONED IN THE SHOW CAUSE NOTICE AND ALSO DEALT WITH IN THE RE VISIONAL ORDER DATED 20TH MARCH, 2006. THE AFORESAID THREE (03) IS SUES ARE: '( I ) ASSESSEE MAINTAINING 5 BANK ACCOUNTS AND AO NOT EXA MINING THE 5TH BANK ACCOUNT, BOOKS OF ACCOUNT AND ANY OTHER BA NK ACCOUNT WHERE RECEIPTS RELATED TO KBC WERE BANKED. ( II ) REGARDING CLAIM OF DEPOSITS OF RS. 52.06 LAKHS IN S PECIAL BENCH A/C NO.11155 UNDER THE HEAD RECEIPTS ON BEHALF OF MRS. JAYA BACHCHAN AND ( III ) REGARDING THE CLAIM OF ADDITIONAL EXPENSES IN THE R E-REVISED RETURN.' 16. ON THE ABOVE ISSUES THE LEARNED TRIBUNAL HAD GIVEN DETAILED REASONS FOR NOT ACCEPTING THE GROUNDS CITE D IN THE REVISIONAL ORDER FOR SETTING ASIDE THE ASSESSMENT U NDER SECTION 263 OF THE ACT. THE REASONS CITED BY THE LE ARNED TRIBUNAL INSOFAR AS THE FIRST TWO ISSUES ARE CONCER NED MAY NOT JUSTIFY A SERIOUS RELOOK AND HENCE NEED NOT BE GONE INTO. THE THIRD QUESTION WOULD, HOWEVER, REQUIRE SOME DETAILE D ATTENTION. THE SAID QUESTION IS WITH REGARD TO THE CLAIM OF ADDITIONAL EXPENSES MADE BY THE ASSESSEE IN ITS RE- REVISED RETURN WHICH WAS SUBSEQUENTLY WITHDRAWN. 17. THE ASSESSEE IN THE RE-REVISED RETURN DATED 31ST M ARCH, 2003 HAD MADE A CLAIM OF ADDITIONAL EXPENSES OF 30% OF THE GROSS PROFESSIONAL RECEIPTS (RS. 3.17 CRORES). IT A PPEARS THAT THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FILE REQUISITE DETAILS IN THIS REGARD. THE ASSESSEE RESPONDED BY L ETTER DATED 13TH FEBRUARY, 2004 STATING AS FOLLOWS: 'WITH REGARD TO THE 30% ESTIMATED EXPENSES CLAIMED, WE HAVE TO SUBMIT THAT THESE ARE THE EXPENSES WHICH ARE SPE NT FOR SECURITY PURPOSES BY EMPLOYING CERTAIN AGENCIES, GU ARDS ETC. FOR THE PERSONAL SAFETY OF SHRI BACHCHAN AS HE HAS TO PROTECT HIMSELF FROM VARIOUS THREATS TO HIS LIFE RECEIVED B Y HIM AND TO AVOID EXTORTION OF MONEY FROM GANGSTERS. THE NAMES OF SUCH AGENCIES CANNOT BE DISCLOSED/DIVULGED AS THERE IS A POSSIBILITY OF LEAKAGE OF INFORMATION OF AGENCIES' NAMES FROM T HE OFFICE STAFF, WHICH WILL OBVIOUSLY BE DETRIMENTAL TO THE I NTERESTS OF SHRI BACHCHAN. THE PAYMENTS HAVE BEEN MADE OUT OF C ASH BALANCES AVAILABLE AND LOT OF OUTSTANDING EXPENSES ARE TO BE PAID WHICH COULD NOT BE PAID FOR WANT OF INCOME.' ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 25 18. THEREAFTER BY LETTER DATED 13TH MARCH, 2004 THE AS SESSEE INFORMED THE LEARNED C.I.T. THAT THE CLAIM WAS MADE ON A BELIEF THAT THE SAME IS ALLOWABLE BUT AS IT WILL NOT BE FE ASIBLE FOR THE ASSESSEE TO SUBSTANTIATE THE SAME, THE RE-REVISED R ETURN OF INCOME MAY BE TAKEN TO THE WITHDRAWN. IT APPEARS TH AT THEREAFTER THE ASSESSING OFFICER ISSUED A NOTICE TO SHOW CAUSE AS TO WHY THE PROVISIONS OF SECTION 69C SHOULD NOT BE INVOKED AND THE EXPENSES CLAIMED SHOULD NOT BE TREATED AS UNEXPLAINED EXPENDITURE. IN REPLY, THE ASSESSEE BY LETTER DATED 24TH MARCH, 2004 SUBMITTED THAT THE CLAIM WAS MADE AS A STANDARD DEDUCTION AND THAT THE ASSESSEE HAD BEEN W RONGLY ADVISED TO MAKE THE SAID CLAIM AND AS THE SAME HAS BEEN WITHDRAWN, SECTION 69-C WILL HAVE NO APPLICATION. T HE RECORD OF THE ASSESSMENT PROCEEDINGS DISCLOSE THAT THE SAI D STAND WAS ACCEPTED BY THE ASSESSING OFFICER AND THE MATTER WA S NOT PURSUED ANY FURTHER. 19. THE LEARNED C.I.T. TOOK THE VIEW THAT NOTWITHSTAND ING THE WITHDRAWAL OF THE CLAIM BY THE ASSESSEE, IN VIEW OF THE EARLIER STAND TAKEN THAT THE SAID EXPENSES WERE INCURRED FO R SECURITY PURPOSES OF THE ASSESSEE, THE ASSESSING OFFICER OUG HT TO HAVE PROCEEDED WITH THE MATTER AS THE ASSESSEE WAS FOLLO WING THE CASH SYSTEM OF ACCOUNTING AND THE FILING OF THE RE- REVISED RETURN, PRIMA FACIE, INDICATED THAT THE ADDITIONAL EXPENSES CLAIMED HAD BEEN INCURRED. IN THIS REGARD, THE FOLL OWING FINDINGS/REASONS RECORDED BY THE LEARNED C.I.T. IN THE ORDER DATED 20TH MARCH, 2006 WOULD BE OF PARTICULAR RELEV ANCE: 'WITHDRAWAL OF CLAIM BY ASSESSEE CAN BE FOR VARIETY OF REASONS AND THIS DOES NOT MEAN THAT ASSESSING OFFIC ER SHOULD ABANDON ENQUIRIES REGARDING SOURCES FOR INCURRING E XPENSES. ASSESSEE FOLLOWS CASH SYSTEM OF ACCOUNTING AND THE CLAIM REGARDING ADDITIONAL EXPENSES WAS MADE THROUGH DULY VERIFIED REVISED RETURN. THE CLAIM WAS PRESSED DURI NG ASSESSMENT PROCEEDINGS CARRIED ON BY A.O. AFTER FIL ING REVISED RETURN AND IT WAS SPECIALLY STATED IN LETTE R DATED 13.02.2004 THAT EXPENSES WERE FOR SECURITY PURPOSES AND THAT PAYMENTS HAVE BEEN MADE OUT OF CASH BALANCES A VAILABLE ETC. UNDER THE CIRCUMSTANCES, THE ASSESSING OFFICER WAS EXPECTED TO EXAMINE THE MATTER FURTHER TO ARRIVE AT A DEFINITE FINDING WHETHER ASSESSEE INCURRED EXPENSES OR NOT A ND IN CASE, ACTUALLY INCURRED, THEN WHAT WERE SOURCES FOR INCURRING THESE EXPENSES. ASSESSING OFFICER WAS SATISFIED ON WITHDRAWAL OF THE CLAIM AND IN MY VIEW, HIS FAILURE TO DECIDE THE MATTER REGARDING ACTUAL INCURRING OF ADDITIONAL EXPENSES ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 26 AND SOURCES THEREOF RESULTED INTO ERRONEOUS ORDER W HICH IS PREJUDICIAL TO THE INTEREST OF REVENUE.' 20. AN ARGUMENT HAS BEEN MADE ON BEHALF OF THE ASSESSE E THAT NOTICE UNDER SECTION 69-C WAS ISSUED BY THE AS SESSING OFFICER AND THEREAFTER ON WITHDRAWAL OF THE CLAIM B Y THE ASSESSEE THE ASSESSING OFFICER THOUGHT THAT THE MAT TER OUGHT NOT TO BE INVESTIGATED ANY FURTHER. THIS, ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, IS A POSSIBLE VIE W AND WHEN TWO VIEWS ARE POSSIBLE ON AN ISSUE, EXERCISE OF REV ISIONAL POWER UNDER SECTION 263 WOULD NOT BE JUSTIFIED. REL IANCE IN THIS REGARD HAS BEEN PLACED ON A JUDGMENT OF THIS C OURT IN MALABAR INDUSTRIAL CO. LTD. V . CIT [2000] 243 ITR 83/109 TAXMAN 66 WHICH HAS BEEN APPROVED IN CIT V. MAX INDIA LTD. [2007] 295 ITR 282/[2008] 166 TAXMAN 188 (SC) 21. THERE CAN BE NO DOUBT THAT SO LONG AS THE VIEW TAK EN BY THE ASSESSING OFFICER IS A POSSIBLE VIEW THE SAME O UGHT NOT TO BE INTERFERED WITH BY THE COMMISSIONER UNDER SECTIO N 263 OF THE ACT MERELY ON THE GROUND THAT THERE IS ANOTHER POSSIBLE VIEW OF THE MATTER. PERMITTING EXERCISE OF REVISION AL POWER IN A SITUATION WHERE TWO VIEWS ARE POSSIBLE WOULD REAL LY AMOUNT TO CONFERRING SOME KIND OF AN APPELLATE POWE R IN THE REVISIONAL AUTHORITY. THIS IS A COURSE OF ACTION TH AT MUST BE DESISTED FROM. HOWEVER, THE ABOVE IS NOT THE SITUAT ION IN THE PRESENT CASE IN VIEW OF THE REASONS STATED BY THE L EARNED C.I.T. ON THE BASIS OF WHICH THE SAID AUTHORITY FEL T THAT THE MATTER NEEDED FURTHER INVESTIGATION, A VIEW WITH WH ICH WE WHOLLY AGREE. MAKING A CLAIM WHICH WOULD PRIMA FACIE DISCLOSE THAT THE EXPENSES IN RESPECT OF WHICH DEDU CTION HAS BEEN CLAIMED HAS BEEN INCURRED AND THEREAFTER ABANDONING/WITHDRAWING THE SAME GIVES RISE TO THE NECESSITY OF FURTHER ENQUIRY IN THE INTEREST OF THE REVENUE. THE NOTICE ISSUED UNDER SECTION 69-C OF THE ACT COU LD NOT HAVE BEEN SIMPLY DROPPED ON THE GROUND THAT THE CLA IM HAS BEEN WITHDRAWN. WE, THEREFORE, ARE OF THE OPINION T HAT THE LEARNED C.I.T. WAS PERFECTLY JUSTIFIED IN COMING TO HIS CONCLUSIONS INSOFAR AS THE ISSUE NO. (III) IS CONCE RNED AND IN PASSING THE IMPUGNED ORDER ON THAT BASIS. THE LEARN ED TRIBUNAL AS WELL AS THE HIGH COURT, THEREFORE, OUGH T NOT TO HAVE INTERFERED WITH THE SAID CONCLUSION. 22. IN THE LIGHT OF THE DISCUSSIONS THAT HAVE PRECEDED AND FOR THE REASONS ALLUDED WE ARE OF THE OPINION THAT THE PRESENT IS A FIT CASE FOR EXERCISE OF THE SUO MOTU REVISIONAL POWERS OF THE LEARNED C.I.T. UNDER SECTION 263 OF THE ACT. THE OR DER OF THE LEARNED C.I.T., THEREFORE, IS RESTORED AND THOSE OF THE LEARNED ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 27 TRIBUNAL DATED 28TH AUGUST, 2007 AND THE HIGH COURT DATED 7TH AUGUST, 2008 ARE SET ASIDE. THE APPEAL OF THE R EVENUE IS ALLOWED. SLP(C) NO.861 OF 2013 23. LEAVE GRANTED. 24. PURSUANT TO THE REVISIONAL ORDER DATED 20TH MARCH, 2006 UNDER SECTION 263 OF THE INCOME TAX ACT SETTING ASI DE THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2001-2002 AND DIRECTING FRESH ASSESSMENT, A FRESH ASSESSMENT HAD BEEN MADE BY THE ASSESSING OFFICER BY ORDER DATED 29TH DECEMBER, 2006. AGAINST THE SAID ORDER THE RESPONDE NT ASSESSEE FILED AN APPEAL BEFORE THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS). BY ORDER DATED 18TH OCTOBER, 2007 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA D SET ASIDE THE ASSESSMENT ORDER DATED 29TH DECEMBER, 200 6 AS IN THE MEANTIME, BY ORDER DATED 28TH AUGUST, 2007 OF T HE LEARNED INCOME TAX APPELLATE TRIBUNAL THE REVISIONA L ORDER DATED 20TH MARCH, 2006 UNDER SECTION 263 OF THE ACT WAS SET ASIDE. THE REVENUE'S APPEAL BEFORE THE LEARNED TRIB UNAL AGAINST THE ORDER DATED 18TH OCTOBER, 2007 WAS DISM ISSED ON 11TH JANUARY, 2000 AND BY THE HIGH COURT ON 29TH FE BRUARY, 2012. AGAINST THE AFORESAID ORDER OF THE HIGH COURT THIS APPEAL HAS BEEN FILED BY THE REVENUE. AS BY THE ORD ER PASSED TODAY IN THE CIVIL APPEAL ARISING OUT OF SPECIAL LE AVE PETITION (CIVIL) NO.11621 OF 2009 WE HAVE RESTORED THE SUO MOTU REVISIONAL ORDER DATED 20TH MARCH, 2006 PASSED BY T HE LEARNED C.I.T., WE ALLOW THIS APPEAL FILED BY THE R EVENUE AND SET ASIDE THE ORDER DATED 11TH JANUARY, 2010 PASSED BY THE LEARNED TRIBUNAL AND THE ORDER DATED 29TH FEBRUARY, 2012 PASSED BY THE HIGH COURT REFERRED TO ABOVE. HOWEVER , WE HAVE TO ADD THAT AS THE RE-ASSESSMENT ORDER DATED 2 9TH DECEMBER, 2006 HAD NOT BEEN TESTED ON MERITS THE AS SESSEE WOULD BE FREE TO DO SO, IF HE IS SO INCLINED AND SO ADVISED. 25. THE APPEALS ARE DISPOSED OF IN THE ABOVE TERMS. IF THE RATIO LAID DOWN IN THE AFORESAID ORDER IS AP PLIED TO THE FACTS OF THE PRESENT APPEALS, WE FIND NO INF IRMITY INTEREST HE SAME AS EVEN AS PER MANDATE OF ARTICLE- 265 OF CONSTITUTION OF INDIA, ONLY DUE TAXES HAS TO BE ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 28 LEVIED/COLLECTED. HOWEVER, WE DIRECT THAT THE LD. ASSESSING OFFICER TO ADJUDICATE THE ISSUES AFRESH IN A DETAIL ED MANNER WITH REASONING. THE ASSESSEE IS DIRECTED TO FURNISH THE NECESSARY EVIDENCE IN SUPPORT OF ITS CLAIM. IN VIE W OF THIS FACTUAL MATRIX, IN PRINCIPLE, WE AFFIRM THE STAND O F THE LD. PR. COMMISSIONER, RESULTANTLY THE APPEALS OF THE ASSESS EE ARE THEREFORE HAVING NO MERIT, CONSEQUENTLY, DISMISSED. FINALLY, THE APPEALS OF THE ASSESSEE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING ON 26/04/2018. SD/- (G. MANJUNATHA) SD/- (JOGINDER SINGH) ' # / ACCOUNTANT MEMBER $ # / JUDICIAL MEMBER MUMBAI; + DATED : 26/04/2018 F{X~{T? P.S/. .. , !%$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 22 3! , ( ,- ) / THE CIT, MUMBAI. 4. 22 3! / CIT(A)- , MUMBAI 5. 5'60! , 2,-&,) , / DR, ITAT, MUMBAI ITA NO.3608 & 3609MUM/2017 GAUTAM TUBE CORPORATION 29 6. 78 / GUARD FILE. ! / BY ORDER, 15-!0! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI