WIMCO LTD, MUMBAI V. PR CIT 2, MUMBAI

ITA 3657/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7257 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 26-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT PATANKAR
• 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); 142(1); 260A; 147; 27; 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 NO.3657/MUM/2016 ASSESSMENT YEAR: 2011-12 WIMCO LTD. INDIAN MERCANTILE CHAMBERS, KAMANI MARG, BALLAR ESTATE, MUMBAI-400028 / VS. PR. CIT-2 AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ( ! /ASSESSEE) ( ' / REVENUE) P.A. NO.AAACW3082B ! / ASSESSEE BY MR. KETAN VED ' / REVENUE BY SHRI ABHIJIT PATANKAR CIT-DR # '$ % !& / DATE OF HEARING : 26/04/2018 % !& / DATE OF PRONOUNCEMENT 26/04/2018 ITA NO.3657MUM/2016 M/S. WIMCO LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 28/03/2016 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. DURING HEARING, SHRI KETAN VED, LD. COUNSEL FOR THE ASSESSEE, CONTENDED THAT THE WELL REASONED ASSE SSMENT ORDER U/S 143(3) OF THE ACT WAS PASSED BY THE ASSES SING OFFICER CONSIDERING THE DETAILS FILED BY THE ASSESS EE, THUS, THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJU DICIAL TO THE INTEREST OF THE REVENUE. IT WAS PLEADED THAT THE LD. PR. COMMISSIONER DID NOT APPLY HIS MIND WHILE DIREC TING THE ASSESSING OFFICER. THE LD. COUNSEL PLACED RELIA NCE UPON THE DECISION FROM HON'BLE BOMBAY HIGH COURT IN CIT VS FINE JEWELLERY (INDIA) LTD. 55 TAXMANN.COM 514 (BOM .) AND ANOTHER DECISION IN CIT VS NIRAV MODI (2016) 390 IT R 292 (BOM.). THE CRUX OF THE ARGUMENT ON BEHALF OF THE A SSESSEE IS THAT THE ASSESSMENT ORDER WAS FRAMED ON CONSIDER ATION OF NECESSARY DETAILS FILED BY THE ASSESSEE AND FURT HER ON DUE APPLICATION OF MIND. ITA NO.3657MUM/2016 M/S. WIMCO LTD. 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 M ANNER. OUR ATTENTION WAS INVITED TO EXPLANATION-2 TO SECTI ON 263, 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 RE FERENCE 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.3657MUM/2016 M/S. WIMCO LTD. 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 PRINCIP AL DIRECTOR GENERAL OR DIRECTOR GENERAL OR PRINCIPAL COMMISSIONER OR COMMISSIONER AUTHORISED BY THE BOAR D 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 COMMISS IONER UNDER THIS SUB-SECTION SHALL EXTEND AND SHALL BE DE EMED ALWAYS TO HAVE EXTENDED TO SUCH MATTERS AS HAD NOT BEEN CONSIDERED AND DECIDED IN SUCH APPEAL. 47 [ EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSI NG OFFICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL 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.3657MUM/2016 M/S. WIMCO LTD. 5 ( D ) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, REND ERED BY THE 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 TR IBUNAL, 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.3657MUM/2016 M/S. WIMCO LTD. 6 01/06/2015. UNDISPUTEDLY, THE LD. PR. COMMISSIONER SERVED UPON THE ASSESSEE A SHOW CAUSE NOTICE DATED 28/12/2015, ISSUED U/S 263 OF THE ACT AND SERVED UP ON THE ASSESSEE. DUE TO CHANGE OF INCUMBENT, ONCE AGAI N NOTICE DATED 22/02/2016 WAS SERVED UPON THE ASSESSE E, TO WHICH THE ASSESSEE ATTENDED THE PROCEEDINGS AND ALS O FILED WRITTEN SUBMISSIONS DATED 10/03/2016. BEFORE THE LD . PR COMMISSIONER, THE ASSESSEE SUBMITTED THAT THE LD. ASSESSING OFFICER DULY EXAMINED THE ISSUE INVOLVED, RAISED APPROPRIATE QUERIES, CALLED FOR RELEVANT DETAILS AN D ON EXAMINATION OF SUCH DETAILS ALLOWED DEDUCTION OF RS.8,69,77,799/-. 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 OF THE REVENUE. IT IS NOTEWORTHY THAT WHILE COMING TO ITA NO.3657MUM/2016 M/S. WIMCO LTD. 7 A PARTICULAR CONCLUSION, HON'BLE CALCUTTA HIGH COUR T CONSIDERED FOLLOWING JUDICIAL PRONOUNCEMENTS:- I. CIT V. CALCUTTA DISCOUNT CO. LTD. [1973] 91 ITR 8 (SC) (PARA 3), 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), ITA NO.3657MUM/2016 M/S. WIMCO LTD. 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), 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), ITA NO.3657MUM/2016 M/S. WIMCO LTD. 9 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), 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. SO FAR AS, THE CASES RELIED UPON BY THE ASSES SEE LIKE CIT VS FINE JEWELLERY (INDIA) LTD. AND CIT VS NIRAV MODI ((SUPRA)) ARE CONCERNED, NO DOUBT THESE CASES THROW LIGHT ITA NO.3657MUM/2016 M/S. WIMCO LTD. 10 ON THE ISSUE BUT WERE DECIDED BY HON'BLE JURISDICTI ONAL HIGH COURT TO THE PECULIAR FACTS OF THE CASE AND ON THE BASIS OF FACTUAL FINDING RECORDED BY THE TRIBUNAL. HOWEVER, IT IS OUR DUTY TO EXAMINE THE FACTS OF THE PRESENT APPEAL, SO THAT WE CAN REACH TO A FAIR CONCLUSION. IN VIEW OF THIS BACKGROUND, WE ARE REPRODUCING HEREUNDER THE ASSESS MENT ORDER PASSED BY LD. ASSESSING OFFICER:_ THE ASSESSEE FILED ITS E-RETURN OF INCOME ON 29.09 .2011 DECLARING TOTAL LOSS OF RS.43,88,80,066/-. THE SAME WAS DULY PROCESSED U/S 143(1) OF THE INCOME TAX ACT. THE CAS E WAS SELECTED FOR SCRUTINY. NOTICE U/S 143(2) WAS ISSUED ON 10.09.2012 AND DULY SERVED ON THE ASSESSEE. SUBSEQU ENTLY, NOTICE U/S 142(1) WITH QUESTIONNAIRE WAS DULY SERVE D ON THE ASSESSEE. IN RESPONSE THERETO AND SUBSEQUENT NOTICE S U/S 142(1), MR. HARI PRASAD MANAGER, FINANCE AND MR. SH RI HARI, ASST. MANAGER, FINANCE, FOR THE ASSESSEE COMPANY AT TENDED FROM TIME TO TIME SUBMITTED THE DETAILS CALLED FOR. 2. THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURE, TRADING AND SALE OF SAFETY MATCHES AND PACKAGING MA CHINE. DURING THE COURSE OF ASSESSMENT, THE ASSESSEE SUBMI TTED THE DETAILS CALLED FOR. AFTER VERIFICATION OF VARIOUS D ETAILS FILED BY THE ASSESSEE, THE RETURN OF INCOME FILED BY THE ASS ESSEE IS ACCEPTED AND CURRENT YEAR LOSS IS ASSESSED AT RS.43,88,80,066/-. 3. ASSESSED U/S 143(3) OF THE INCOME TAX ACT, CHARGE INTEREST AS APPLICABLE. GIVE CREDIT FOR TAXE S PAID AFTER DUE VERIFICATION/ISSUE DN/RO ACCORDINGLY. 2.6. IF THE AFORESAID ORDER IS ANALYZED, ONE FACT IS OOZING OUT THAT DETAILED ORDER HAS NOT BEEN PASSED BY THE LD. ASSESSING OFFICER. HOWEVER, NOW, WE SHALL EXAMI NE, WHETHER THIS ORDER IS ERRONEOUS AS WELL AS PREJUDIC IAL TO THE INTEREST OF REVENUE. WE FIND THAT WHILE MAKING THE ITA NO.3657MUM/2016 M/S. WIMCO LTD. 11 ASSESSMENT, THE ASSESSEE DEBITED AN AMOUNT OF RS.37,46,43,338/- TO PROFIT & LOSS ACCOUNT FOR THE YEAR AS EXCEPTIONAL ITEM-AMOUNT PAID UNDER VOLUNTARY RETI REMENT SCHEME. AS PER THE ASSESSEE, THE AMOUNT OF RS.28,76,65,539/- FALL WITHIN THE PURVIEW OF SECTIO N 35DDA, THE SAME WAS ADDED BACK IN THE TAX COMPUTATI ON AND 1/5 TH THEREOF I.E. RS.5,75,33,108/- WAS CLAIMED AS DEDUCTION U/S 35DDA OF THE ACT. HOWEVER, WE FIND NO SUCH DISCUSSION HAS BEEN MADE IN THE ASSESSMENT ORDER. B EFORE US, IT WAS ALSO PLEADED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE AMOUNT OF RS.8,69,77,799/- IS THE PAYMENT MADE BY THE ASSESSEE TO ITS WORKERS ROUTINELY AND IS AN EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND HENCE THE SAME IS ALLOWABLE U/S 37 OF THE ACT. HOWEVER, WE FIND, EVEN NO DISCUSSION HAS BEEN MADE IN THE ASSESSMENT ORDER. IT IS NOTED THAT THE AMOUNT OF RS.8,69,77,799/- WAS CLAIMED AS EX-GRATIA PAYMENT, VRS AMOUNT TO OTHERS, ETC AND ENTIRE AMOUN T WAS CLAIMED AS DEDUCTION. THE LD. PR. COMMISSIONER , OBSERVED THAT THE ENTIRE AMOUNT OF RS.7,75,43,657/- WAS PART OF THE SCHEME (AN AMOUNT OF RS.94,34,142/- WAS ITA NO.3657MUM/2016 M/S. WIMCO LTD. 12 EXCLUDED IN THE ABSENCE OF ANY DOCUMENT REGARDING PAYMENT MADE TO TRAINEES AND THE CERTIFICATE OF THE C.A. THAT THREE EMPLOYEES WERE NOT ELIGIBLE FOR VRS AND PAID COMPENSATION FOR RETRENCHMENT). THE ASSESSEE WAS EXPECTED TO CLAIM ONLY 1/5 TH OF RS.6,20,34,926/-. IT HAS ALSO BEEN OBSERVED THAT EXTRA PAYMENT FORMED PART & PARCEL OF THE EMPLOYEE SEPARATION SCHEME AND AS THE UNIT HAD BEEN CLOSED WAS PART OF MANAGEMENT NEGOTIATION PACKAGE. AS THE PAYMENT FORMED PART OF THE SCHEME, ALLOWANCE OF SUCH SOME U/S 37 INSTEAD OF ALLOWABLE U/S 35DDA WAS IN VIOLATION OF THE PROVISION OF THE ACT AS THE EXPENDITURE WAS EXPRESSLY COVERED SPECIFIC SECTION TO DISCOURAGE CLAIM OF HUGE EXPENDITURE DURING ONE YEA R. THUS, THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDI CIAL TO THE INTEREST OF REVENUE. IDENTICAL OBSERVATION HAS BEEN MADE IN THE IMPUGNED ORDER AS DUE TO THE ASSESSMENT ORDER UNDER ASSESSMENT HAS BEEN MADE. IN VIEW OF TH IS FACTS, THE LD. PR. COMMISSIONER, ISSUED DIRECTION T O THE LD. ASSESSING OFFICER TO RE-COMPUTE THE SAME AFTER PROV IDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THU S, WE ARE OF THE CLEAR VIEW THAT THE NEITHER THE ASSESSME NT ORDER ITA NO.3657MUM/2016 M/S. WIMCO LTD. 13 IS SPEAKING ONE NOR IN CONFORMITY WITH THE PROVISIO N OF THE ACT AND CLEARLY ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. 2.6. WE HAVE ALSO PERUSED THE ASSESSMENT ORDER, WHICH IS A SUBJECT MATTER OF REVISIONAL JURISDICTIO N U/S 263 AND THE IMPUGNED ORDER PASSED BY THE LD. PR. COMMISSIONER. ADMITTEDLY, AN INCORRECT ASSUMPTION O F FACT OR AN INCORRECT APPLICATION OF LAW WOULD SATISFY TH E REQUIREMENT OF ORDER BEING ERRONEOUS U/S. 263 OF TH E ACT. THE PHRASE PREJUDICIAL TO THE INTEREST OF THE REVE NUE U/S. 263, HAS TO BE READ IN CONJUNCTION WITH THE EXPRESS ION ERRONEOUS ORDER BY THE ASSESSING OFFICER. EVERY L OSS OF REVENUE AS A CONSEQUENCE OF ASSESSMENT ORDER CANNOT BE TERMED AS PREJUDICIAL TO THE INTEREST OF REVENUE, M EANING THEREBY, PREJUDICE MUST BE PREJUDICE TO THE REVEN UE 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 ITA NO.3657MUM/2016 M/S. WIMCO LTD. 14 ACT, THE ASSESSMENT ORDER MUST CONTAIN GRIEVOUS ERR OR WHICH IS SUBVERSIVE OF THE ADMINISTRATION OF REVENU E. FURTHER, EXACT ERROR MUST BE DISCLOSED BY THE COMMISSIONER AS WAS HELD IN CIT VS. G.K. KABRA (211 ITR 336)(AP). SECTION 263 OF THE ACT ENABLES THE COMMI SSIONER TO HAVE A RE-LOOK AT THE ORDERS OR PROCEEDINGS OF T HE LOWER AUTHORITY TO EFFECT CORRECTION, IF SO NEEDED, PARTI CULARLY, IF THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF THE REVENUE. THE OBJECT OF THE PROVISION IS TO RAISE RE VENUE FOR THE STATE AND SECTION 263 IS ENABLING PROVISION CON FERRING JURISDICTION UPON THE COMMISSIONER TO REVISE THE OR DER. THE PROVISION IS INTENDED TO PLUG THE LEAKAGE OF THE RE VENUE BY THE ERRONEOUS AND PREJUDICIAL ORDER. OUR VIEW FIND SUPPORT FROM THE RATIO 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 IT R 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.), ITA NO.3657MUM/2016 M/S. WIMCO LTD. 15 VIII. CIT VS GABREAL INDIA LTD. (1993) 203 ITR 108, 114 (BOM.), IX. MALABAR INDUSTRIAL COMPANY LTD. VS CIT (2000) 243 ITR 83 (SC), 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 AL AND ANALYZED, THE LD. ASSESSING OFFICER WHILE FRAMING T HE ASSESSMENT MADE NO DISCUSSION WITH THE CLAIM OF THE ASSESSEE AND SIMPLY FRAMED THE ASSESSMENT IN A SLIP SHOT MANNER. SUCH AN APPROACH OF THE LD. ASSESSING OFFIC ER CANNOT BE APPRECIATED. THUS, IT IS CLEAR THAT THE ASSESSMENT ORDER WAS PASSED WITHOUT VERIFICATION, APPLICATION OF MIND, CONSEQUENTLY, IT IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE, THUS THE REVISIONAL JURISDICTION WAS RIGHTLY INVOKED. IT IS ALSO NOTED THAT IF THE ASSESSEE IS SO CLEAN IN ITS CLAIM THEN NO PREJUDICE WILL BE CAUSED TO THE ASSESSEE AS THE LD. PR. ITA NO.3657MUM/2016 M/S. WIMCO LTD. 16 COMMISSIONER HAS DIRECTED THE ASSESSING OFFICER, IN THE INTEREST OF JUSTICE, TO PROVIDE OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE. 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 ITO 101 ITR 1 (KARN.) AND CIT VS HPFC 186 TAXMAN 105 (HP), CIT VS PUSHPA DEVI 164 ITR 639 (PATNA). WE ARE AWARE T HAT 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 ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. HONBLE GUJARAT HIGH COURT IN CIT VS M. M.KHAMBATBA LA 198 ITR 144 (GUJ.) EVEN WENT TO THE EXTENT THAT REV ISIONAL POWERS CAN BE EXERCISED EVEN IF THE ISSUE IS DEBATA BLE. THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS GABRIEL INDIA LTD. (1993) 203 ITR 108 (BOM.) CONCLUDED THAT POWER S U/S 263 CANNOT BE EXERCISED FOR STARTING FISHING AND RO VING ENQUIRIES. FOR MAKING A VALID ORDER U/S 263(1), IT IS ESSENTIAL THAT THE COMMISSIONER HAS TO RECORD AN EX PRESS FINDING THAT PREJUDICE HAS BEEN CAUSED TO THE INTER EST OF ITA NO.3657MUM/2016 M/S. WIMCO LTD. 17 THE REVENUE. OUR VIEW FIND SUPPORT FROM THE RATIO L AID DOWN IN BHARGWA ENGINEERING CORPORATION VS CIT (199 6) 134 TAXATION 493, 494 (ALL.), CIT VS DIGVIJAY TRADE RS (1997) 137 CTR (MP) 224, CIT VS REGIONAL AGRO INDUSTRIAL DEVELOPMENT COOPERATIVE SOCIETY LTD. (1998) 143 TAX ATION 293 (KERALA), CIT VS AGARWAL ENTERPRISES (1998) 10 0 TAXMAN 360 (ALL.) AND CIT VS KAILASH APARTMENT PVT. LTD. (200) 243 ITR 795 (DEL.). TOTALITY OF FACTS, CLEARL Y INDICATES THAT THE ASSESSMENT ORDER HAS BEEN FRAMED WITHOUT F ULL ENQUIRIES, THEREFORE, THE LD. COMMISSIONER JUSTIFIA BLY INVOKED REVISIONAL JURISDICTION. 2.9. THE HON'BLE APEX COURT IN RAJMANDIR ESTATES PVT. LTD. (2017) 77 TAXMAN.COM 285 (SC), WHEREIN, T HERE WAS LACK OF REQUISITE ENQUIRY INTO INCREASE OF SHAR E CAPITAL AND NON-APPLICATION OF MIND, THE COMMISSIONER WAS H ELD TO BE JUSTIFIED IN INVOKING THE REVISIONAL JURISDIC TION, 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 HA D INCREASED ITS SHARE CAPITAL BY ISSUING 7.93 LAKHS S HARES OF RS.10 EACH AT A PREMIUM OF RS.390 - ASSESSING OFFIC ER COMPLETED ASSESSMENT WITHOUT HOLDING REQUISITE INVE STIGATION EXCEPT FOR CALLING FOR RECORDS - COMMISSIONER PASSE D ORDER ITA NO.3657MUM/2016 M/S. WIMCO LTD. 18 UNDER SECTION 263 AND OPINED THAT THIS COULD BE A C ASE OF MONEY LAUNDERING WHICH WENT UNDETECTED DUE TO LACK OF 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 ASSESS EE WITH AN AUTHORISED SHARE CAPITAL OF RS.1.36 CRORES RAISE D NEARLY A SUM OF RS.32 CRORES ON ACCOUNT OF PREMIUM AND CHOSE NOT TO GO IN FOR INCREASE OF AUTHORISED SHARE CAPITAL MERE LY TO AVOID PAYMENT OF STATUTORY FEES WAS AN IMPORTANT POINTER NECESSITATING INVESTIGATION AND THUS, COMMISSIONER WAS JUSTIFIED IN TREATING ASSESSMENT ORDER ERRONEOUS AN D PREJUDICIAL TO INTEREST OF REVENUE - WHETHER SPECIA L LEAVE PETITION FILED AGAINST IMPUGNED ORDER WAS TO BE DIS MISSED - 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 DATED 30TH MA RCH, 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 REVIS ED UNDER SECTION 263 OF THE ACT. THE RESPONDENT - ASSESSEE FILED HIS REPLY TO THE SAID SHOW CAUSE NOTICE ON CONSIDERATION OF WHICH BY ORDE R DATED 20TH MARCH, 2006 THE LEARNED C.I.T. SET ASIDE THE ORDER OF ASSESSMENT DATED 30TH MARCH, 2004 AND DIRECTED A FRESH ASSESSMENT TO BE MADE. AGGRIEVED, THE RESPONDENT ASSESSEE CHALLENGED THE SAID ORDER BEFORE THE LEARNED TRIBUNAL WHICH WAS ALLOWED BY THE 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.3657MUM/2016 M/S. WIMCO LTD. 19 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 DATE D 7TH NOVEMBER, 2005 AND HAD DEALT WITH THE ISSUES NOT COVERED/MENT IONED IN THE SAID NOTICE THE REVISIONAL ORDER DATED 20TH MARCH, 2006 WAS IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. SO FAR AS THE QU ESTION AS TO WHETHER THE ASSESSING OFFICER HAD MADE SUFFICIENT ENQUIRIES ABO UT 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 CONSIDERATION, THE HIGH COURT TOOK THE VIEW THAT TH E SAID QUESTION RAISED PURE QUESTIONS OF FACT AND, THEREFORE, OUGHT NOT TO BE EXAMINED UNDER SECTION 260A OF THE ACT. THE APPEAL OF THE RE VENUE WAS CONSEQUENTLY DISMISSED. AGGRIEVED, THIS APPEAL HAS BEEN FILED UPON GRANT OF LEAVE UNDER ARTICLE 136 OF THE CONSTITUTIO N 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 GROUN D THAT REQUISITE AND DUE ENQUIRIES WERE NOT MADE BY THE ASSESSING OFFICE R PRIOR TO FINALIZATION OF THE ASSESSMENT BY ORDER DATED 30TH MARCH, 2004. IN THIS CONNECTION, THE LEARNED C.I.T. ON CONSIDERATION OF THE FACTS OF THE CASE AND THE RECORD OF THE PROCEEDINGS CAME TO THE CONCL USION THAT IN THE COURSE OF THE ASSESSMENT PROCEEDINGS DESPITE SEVERA L OPPORTUNITIES THE ASSESSEE DID NOT SUBMIT THE REQUISITE BOOKS OF ACCO UNT AND DOCUMENTS AND DELIBERATELY DRAGGED THE MATTER LEADING TO ONE ADJOURNMENT AFTER THE OTHER. EVENTUALLY, THE ASSESSING OFFICER, TO AV OID THE BAR OF LIMITATION, HAD NO OPTION BUT TO 'HURRIEDLY' FINALI ZE THE ASSESSMENT PROCEEDINGS WHICH ON DUE AND PROPER SCRUTINY DISCLO SED THAT THE NECESSARY ENQUIRIES WERE NOT MADE. ON THE SAID BASI S THE LEARNED C.I.T. CAME TO THE CONCLUSION THAT THE ASSESSMENT ORDER IN QUESTION WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE WARRANTING EXERCISE OF POWER UNDER SECTION 263 OF THE ACT. CON SEQUENTLY, THE ASSESSMENT FOR THE YEAR 2001-2002 WAS SET ASIDE AND A FRESH ASSESSMENT WAS ORDERED. AT THIS STAGE, IT MUST BE NOTICED THAT IN THE ORDER DATED 20TH MARCH, 2006 THE LEARNED C.I.T. ARRIVED AT FIND INGS AND CONCLUSIONS IN RESPECT OF ISSUES WHICH WERE NOT SPECIFICALLY ME NTIONED IN THE SHOW CAUSE NOTICE DATED 7TH NOVEMBER, 2005. IN FACT, ON AS MANY AS SEVEN/EIGHT (07/08) ISSUES MENTIONED IN THE SAID SH OW CAUSE NOTICE THE LEARNED C.I.T. DID NOT RECORD ANY FINDING WHEREAS C ONCLUSIONS ADVERSE TO THE ASSESSEE WERE RECORDED ON ISSUES NOT SPECIFI CALLY MENTIONED IN THE SAID NOTICE BEFORE PROCEEDING TO HOLD THAT THE ASSESSMENT NEEDS TO BE SET ASIDE. HOWEVER, THREE (03) OF THE ISSUES, DE TAILS OF WHICH ARE ITA NO.3657MUM/2016 M/S. WIMCO LTD. 20 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 ACT COUL D NOT HAVE GONE BEYOND THE ISSUES MENTIONED IN THE SHOW CAUSE NOTIC E DATED 7TH NOVEMBER, 2005. THE LEARNED TRIBUNAL, THEREFORE, TH OUGHT IT PROPER TO TAKE THE VIEW THAT IN RESPECT OF THE ISSUES NOT MEN TIONED IN THE SHOW CAUSE NOTICE THE FINDINGS AS RECORDED IN THE REVISI ONAL ORDER DATED 20TH MARCH, 2006 HAVE TO BE UNDERSTOOD TO BE IN BREACH O F THE PRINCIPLES OF NATURAL JUSTICE. THE LEARNED TRIBUNAL ALSO SPECIFIC ALLY CONSIDERED THE THREE (03) COMMON ISSUES MENTIONED ABOVE AND ON SUC H CONSIDERATION ARRIVED AT THE CONCLUSION THAT THE REASONS DISCLOSE D BY THE LEARNED C.I.T. IN THE ORDER DATED 20TH MARCH, 2006 FOR HOLDING THE ASSESSMENT TO BE LIABLE FOR CANCELLATION ON THAT BASIS ARE NOT TENAB LE. 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 CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER IS ERRONEOUS INSOF AR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVI NG THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUS ING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THER EON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORD ER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSM ENT 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 INCOME ESCAPING ASSESSMENT, SECTION 154 OF THE ACT EMPOWERS SUCH AUTHORITY TO CORRECT A MISTAKE APPARENT ON THE FACE OF THE RECORD. THE POWER OF APPEAL AND REVISION IS CONTAINED IN CHAPTER XX OF THE ACT WHICH INCLUDES SECTION 263 THAT CONFER SUO MOTU POWER OF REVISION IN THE LEARNED C.I.T. THE DIFFERE NT SHADES OF POWER CONFERRED ON DIFFERENT AUTHORITIES UNDER THE ACT HAS TO BE EXERCISED WITHIN THE AREAS SPECIFICALLY DELINEATED BY THE ACT AND THE EXERCISE OF POWER UNDER ONE PROVISION CANNOT TRENCH UPON THE POWERS AVAILABLE UNDER ANOTHER PROVISION OF THE ACT. IN TH IS REGARD, IT MUST BE SPECIFICALLY NOTICED THAT AGAINST AN ORDER OF ASSES SMENT, SO FAR AS THE ITA NO.3657MUM/2016 M/S. WIMCO LTD. 21 REVENUE IS CONCERNED, THE POWER CONFERRED UNDER THE ACT IS TO REOPEN THE CONCLUDED ASSESSMENT UNDER SECTION 147 AND/OR T O REVISE 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 SECTIONS NOTICED ABOVE. WHILE DOING SO IT MUST ALSO BE BORNE IN MIND THAT THE LEG ISLATURE HAD NOT VESTED IN THE REVENUE ANY SPECIFIC POWER TO QUESTIO N 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 PREJUDICIAL TO THE I NTEREST OF THE REVENUE IS THE BASIC PRE-CONDITION FOR EXERCISE OF JURISDIC TION UNDER SECTION 263 OF THE ACT. BOTH ARE TWIN CONDITIONS THAT HAVE TO B E CONJOINTLY PRESENT. ONCE SUCH SATISFACTION IS REACHED, JURISDICTION TO EXERCISE THE POWER WOULD BE AVAILABLE SUBJECT TO OBSERVANCE OF THE PRI NCIPLES OF NATURAL JUSTICE WHICH IS IMPLICIT IN THE REQUIREMENT CAST B Y THE SECTION TO GIVE THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. IT IS I N THE CONTEXT OF THE ABOVE POSITION THAT THIS COURT HAS REPEATEDLY HELD THAT UNLIKE THE POWER OF REOPENING AN ASSESSMENT 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 UNDERSTOO D NOT TO REQUIRE ANY SPECIFIC SHOW CAUSE NOTICE TO BE SERVED ON THE ASSE SSEE. RATHER, WHAT IS REQUIRED UNDER THE SAID PROVISION IS AN OPPORTUNITY OF HEARING TO THE ASSESSEE. THE TWO REQUIREMENTS ARE DIFFERENT; THE F IRST WOULD COMPREHEND A PRIOR NOTICE DETAILING THE SPECIFIC GR OUNDS ON WHICH REVISION OF THE ASSESSMENT ORDER IS TENTATIVELY BEI NG PROPOSED. SUCH A NOTICE IS NOT REQUIRED. WHAT IS CONTEMPLATED BY SEC TION 263, IS AN OPPORTUNITY OF HEARING TO BE AFFORDED TO THE ASSESS EE. FAILURE TO GIVE SUCH AN OPPORTUNITY WOULD RENDER THE REVISIONAL ORD ER LEGALLY FRAGILE NOT ON THE GROUND OF LACK OF JURISDICTION BUT ON THE GR OUND 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 MAY BE US EFULLY 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 THE ASSESSEE OF BEING HEARD. THE SECTION DOES NOT SPEAK OF ANY NOTICE. IT IS UNFORTUNATE THAT THE HIGH COURT FAILED TO NOTICE TH E DIFFERENCE IN LANGUAGE BETWEEN SECTIONS 33-B AND 34. FOR THE ASSU MPTION OF JURISDICTION TO PROCEED UNDER SECTION 34, THE NOTIC E AS PRESCRIBED IN THAT SECTION IS A CONDITION PRECEDENT. BUT NO SUCH NOTIC E IS CONTEMPLATED BY ITA NO.3657MUM/2016 M/S. WIMCO LTD. 22 SECTION 33-B. THE JURISDICTION OF THE COMMISSIONER TO PROCEED UNDER SECTION 33-B IS NOT DEPENDENT ON THE FULFILMENT OF ANY CONDITION PRECEDENT. ALL THAT HE IS REQUIRED TO DO BEFORE REA CHING HIS DECISION AND NOT BEFORE COMMENCING THE ENQUIRY, HE MUST GIVE THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND MAKE OR CAUSE TO MAK E SUCH ENQUIRY AS HE DEEMS NECESSARY. THOSE REQUIREMENTS HAVE NOTHING TO DO WITH THE JURISDICTION OF THE COMMISSIONER. THEY PERTAIN TO T HE REGION OF NATURAL JUSTICE. BREACH OF THE PRINCIPLES OF NATURAL JUSTIC E MAY AFFECT THE LEGALITY OF THE ORDER MADE BUT THAT DOES NOT AFFECT THE JURI SDICTION OF THE COMMISSIONER. AT PRESENT WE ARE NOT CALLED UPON TO CONSIDER WHETHER THE ORDER MADE BY THE COMMISSIONER IS VITIATED BECA USE OF THE CONTRAVENTION OF ANY OF THE PRINCIPLES OF NATURAL J USTICE. THE SCOPE OF THESE APPEALS IS VERY NARROW. ALL THAT WE HAVE TO S EE IS WHETHER BEFORE ASSUMING JURISDICTION THE COMMISSIONER WAS REQUIRED TO ISSUE A NOTICE AND IF HE WAS SO REQUIRED WHAT THAT NOTICE SHOULD H AVE CONTAINED? 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 PRINCI PLES 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 R EQUIRES THAT AN OPPORTUNITY OF BEING HEARD SHOULD BE GIVEN TO THE A SSESSEE AND THE STRINGENT REQUIREMENT OF SERVICE OF NOTICE UNDER SE CTION 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 NOTHING IN THE SECTION (SECTION 263) TO RAISE THE SAID NOTICE TO THE STATUS OF A MA NDATORY SHOW CAUSE NOTICE AFFECTING THE INITIATION OF THE EXERCISE IN THE ABSENCE THEREOF OR TO REQUIRE THE C.I.T. TO CONFINE HIMSELF TO THE TERMS OF THE NOTICE AND FORECLOSING CONSIDERATION OF ANY OTHER ISSUE OR QUE STION OF FACT. THIS IS NOT THE PURPORT OF SECTION 263. OF COURSE, THERE CA N BE NO DISPUTE THAT WHILE THE C.I.T. IS FREE TO EXERCISE HIS JURISDICTI ON ON CONSIDERATION OF ALL RELEVANT FACTS, A FULL OPPORTUNITY TO CONTROVER T THE SAME AND TO EXPLAIN THE CIRCUMSTANCES SURROUNDING SUCH FACTS, A S MAY BE CONSIDERED ITA NO.3657MUM/2016 M/S. WIMCO LTD. 23 RELEVANT BY THE ASSESSEE, MUST BE AFFORDED TO HIM B Y THE C.I.T. PRIOR TO THE FINALIZATION 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 C AUSE NOTICE DATED 7TH NOVEMBER, 2005 WHICH HAD SPECIFICALLY BEEN DEALT WI TH IN THE ORDER DATED 20TH MARCH, 2006. THE LEARNED TRIBUNAL IN ITS ORDER DATED 28TH AUGUST, 2007 PUT THE AFORESAID TWO FEATURES OF THE CASE INTO TWO DIFFERENT COMPARTMENTS. INSOFAR AS THE FIRST QUESTI ON 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 NOTIC E IS CONCERNED THE LEARNED TRIBUNAL TAKING NOTE OF THE AFORESAID ADMIT TED 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 FINAL OR DER HE RELIED ON VARIOUS OTHER GROUNDS FOR COMING TO THE FINAL CONCL USION. THIS ITSELF MAKES THE REVISION ORDER BAD IN LAW AND ALSO VIOLAT IVE OF PRINCIPLES OF NATURAL JUSTICE AND THUS NOT MAINTAINABLE. IF, DURI NG THE COURSE OF REVISION PROCEEDINGS THE CIT WAS OF THE OPINION THA T THE ORDER OF THE AO WAS ERRONEOUS ON SOME OTHER GROUNDS ALSO OR ON A NY ADDITIONAL GROUNDS NOT MENTIONED IN THE SHOW CAUSE NOTICE, HE OUGHT TO HAVE GIVEN ANOTHER SHOW CAUSE NOTICE TO THE ASSESSEE ON THOSE GROUNDS AND GIVEN HIM A REASONABLE OPPORTUNITY OF HEARING BEFORE COMI NG TO THE CONCLUSION AND PASSING THE FINAL REVISION ORDER. IN THE CASE ON HAND, THE CIT HAS NOT DONE SO. THUS, THE ORDER U/S 263 IS VIO LATIVE OF PRINCIPLES OF NATURAL JUSTICE AS FAR AS 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 THE CIT PASSED U/S 263 IS T HEREFORE LIABLE TO BE QUASHED INSOFAR AS THOSE 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 DEC ISIONS OF THIS COURT IN GITA DEVI AGGARWAL ( SUPRA ) AND ELECTRO HOUSE ( SUPRA ). THE LEARNED TRIBUNAL IN ITS ORDER DATED 28TH AUGUST, 2007 HAD N OT RECORDED ANY FINDING THAT IN COURSE OF THE SUO MOTU REVISIONAL PROCEEDINGS, HEARING OF WHICH WAS SPREAD OVER MANY DAYS AND ATTENDED TO BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, OPPORTUNITY OF HEAR ING WAS NOT AFFORDED TO THE ASSESSEE AND THAT THE ASSESSEE WAS DENIED AN OPPORTUNITY TO CONTEST THE FACTS ON THE BASIS OF WHICH THE LEARNED C.I.T. HAD COME TO HIS CONCLUSIONS AS RECORDED IN THE ORDER DATED 20TH MARCH, 2006. DESPITE THE ABSENCE OF ANY SUCH FINDING IN THE ORDE R OF THE LEARNED TRIBUNAL, BEFORE HOLDING THE SAME TO BE LEGALLY UNS USTAINABLE THE COURT WILL HAVE TO BE SATISFIED THAT IN THE COURSE OF THE REVISIONAL PROCEEDING ITA NO.3657MUM/2016 M/S. WIMCO LTD. 24 THE ASSESSEE, 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 PRE JUDICIAL TO THE INTERESTS OF THE REVENUE. THE ABOVE IS THE QUESTION TO WHICH THE COURT, 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, 20 04; AS WELL AS THE ORDER OF THE LEARNED C.I.T. DATED 20TH MARCH, 2006. FROM THE ABOVE CONSIDERATION, IT APPEARS THAT THE LEARNED C.I.T. I N THE COURSE OF THE REVISIONAL PROCEEDINGS HAD SCRUTINIZED THE RECORD O F THE PROCEEDINGS BEFORE THE ASSESSING OFFICER AND NOTED THE VARIOUS DATES ON WHICH OPPORTUNITIES TO PRODUCE THE BOOKS OF ACCOUNT AND O THER RELEVANT DOCUMENTS WERE AFFORDED TO THE ASSESSEE WHICH REQUI REMENT WAS NOT COMPLIED WITH BY THE ASSESSEE. IN THESE CIRCUMSTANC ES, THE REVISIONAL AUTHORITY TOOK THE VIEW THAT THE ASSESSING OFFICER, AFTER BEING COMPELLED TO ADJOURN THE MATTER FROM TIME TO TIME, HAD TO HURRIEDLY COMPLETE THE ASSESSMENT PROCEEDINGS TO AVOID THE SA ME FROM BECOMING TIME BARRED. IN THE COURSE OF THE REVISIONAL EXERCI SE RELEVANT FACTS, DOCUMENTS, AND BOOKS OF ACCOUNT WHICH WERE OVERLOOK ED IN THE ASSESSMENT PROCEEDINGS WERE CONSIDERED. ON SUCH RE- SCRUTINY IT WAS REVEALED THAT THE ORIGINAL ASSESSMENT ORDER ON SEVE RAL HEADS WAS ERRONEOUS AND HAD THE POTENTIAL OF CAUSING LOSS OF REVENUE TO THE STATE. IT IS ON THE AFORESAID BASIS THAT THE NECESSARY SAT ISFACTION THAT THE ASSESSMENT ORDER DATED 30TH MARCH, 2004 WAS ERRONEO US AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE WAS RECORDED BY THE LEARNED C.I.T. AT EACH STAGE OF THE REVISIONAL PROCEEDING THE AUTHORI ZED REPRESENTATIVE OF THE ASSESSEE HAD APPEARED AND HAD FULL OPPORTUNITY TO CONTEST THE BASIS ON WHICH THE REVISIONAL AUTHORITY WAS PROCEEDING/HA D PROCEEDED IN THE MATTER. IF THE REVISIONAL AUTHORITY HAD COME TO ITS CONCLUSIONS IN THE MATTER ON THE BASIS OF THE RECORD OF THE ASSESSMENT PROCEEDINGS WHICH WAS OPEN FOR SCRUTINY BY THE ASSESSEE AND AVAILABLE TO HIS AUTHORIZED REPRESENTATIVE AT ALL TIMES IT IS DIFFICULT TO SEE AS TO HOW THE REQUIREMENT OF GIVING OF A REASONABLE OPPORTUNITY OF BEING HEAR D AS CONTEMPLATED BY SECTION 263 OF THE ACT HAD BEEN BREACHED IN THE PRE SENT CASE. THE ORDER OF THE LEARNED TRIBUNAL INSOFAR AS THE FIRST ISSUE I.E. THE REVISIONAL ORDER GOING BEYOND THE SHOW CAUSE NOTICE IS CONCERNED, TH EREFORE, CANNOT HAVE OUR ACCEPTANCE. THE HIGH COURT HAVING FAILED T O FULLY DEAL WITH THE MATTER IN ITS CRYPTIC ORDER DATED 7TH AUGUST, 2 008 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) ISSUE S MENTIONED IN THE SHOW CAUSE NOTICE AND ALSO DEALT WITH IN THE REVISI ONAL ORDER DATED 20TH MARCH, 2006. THE AFORESAID THREE (03) ISSUES ARE: ITA NO.3657MUM/2016 M/S. WIMCO LTD. 25 '( 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 DET AILED 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 AR E SPENT FOR SECURITY PURPOSES BY EMPLOYING CERTAIN AGENCIES , GUARDS ETC. FOR THE PERSONAL SAFETY OF SHRI BACHCHAN AS HE HAS TO PROTECT HIMSELF FROM VARIOUS THREATS TO HIS LIFE RE CEIVED BY 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 THE OFFICE STAFF, WHICH WILL OBVIOUSLY B E DETRIMENTAL TO THE INTERESTS OF SHRI BACHCHAN. THE PAYMENTS HAVE BEEN MADE OUT OF CASH BALANCES AVAILABLE AND L OT OF OUTSTANDING EXPENSES ARE TO BE PAID WHICH COULD NOT BE PAID FOR WANT OF INCOME.' 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 NO T BE FEASIBLE FOR THE ASSESSEE TO SUBSTANTIATE THE SAME, THE RE-R EVISED RETURN OF INCOME MAY BE TAKEN TO THE WITHDRAWN. IT APPEARS THAT THEREAFTER THE ASSESSING OFFICER ISSUED A NOTI CE TO SHOW CAUSE AS TO WHY THE PROVISIONS OF SECTION 69C SHOUL D NOT BE INVOKED AND THE EXPENSES CLAIMED SHOULD NOT BE TREA TED AS ITA NO.3657MUM/2016 M/S. WIMCO LTD. 26 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 B EEN WRONGLY ADVISED TO MAKE THE SAID CLAIM AND AS THE S AME HAS BEEN WITHDRAWN, SECTION 69-C WILL HAVE NO APPLICATI ON. THE RECORD OF THE ASSESSMENT PROCEEDINGS DISCLOSE THAT THE SAID STAND WAS ACCEPTED BY THE ASSESSING OFFICER AND THE MATTER WAS 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 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 ITA NO.3657MUM/2016 M/S. WIMCO LTD. 27 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 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 ITA NO.3657MUM/2016 M/S. WIMCO LTD. 28 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 APPEAL, WE FIND THAT TH E LD. PR. COMMISSIONER ISSUED SHOW CAUSE NOTICE TO THE ASSESS EE AND PROVIDED DUE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM AND AFTER BEING SATISFIED TH AT THE ORDER IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE IN TEREST OF REVENUE AND AFTER RECORDING THE DUE REASONS, DIRECT ED THE ASSESSING OFFICER TO FRAME THE ASSESSMENT AFRESH AN D THAT TOO AFTER PROVIDING SUFFICIENT OPPORTUNITY TO THE A SSESSEE, ITA NO.3657MUM/2016 M/S. WIMCO LTD. 29 THUS, NO GRIEVANCE IS CAUSED TO THE ASSESSEE. EVEN OTHERWISE, THE MANDATE OF ARTICLE 265 OF CONSTITUTI ON OF INDIA IS TO LEVY AND COLLECT DUE TAXES. HOWEVER, WE DIRECT THAT THE LD. ASSESSING OFFICER TO ADJUDICATE THE IS SUES AFRESH IN A DETAILED MANNER WITH REASONING. THE ASS ESSEE IS DIRECTED TO FURNISH THE NECESSARY EVIDENCE IN SUPPO RT OF ITS CLAIM. IN VIEW OF THIS FACTUAL MATRIX, IN PRINCIPL E, WE AFFIRM THE STAND OF THE LD. PR. COMMISSIONER, RESULTANTLY THE APPEAL OF THE ASSESSEE IS THEREFORE HAVING NO MERIT , CONSEQUENTLY, DISMISSED. FINALLY, THE APPEAL OF THE ASSESSEE IS 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. ITA NO.3657MUM/2016 M/S. WIMCO LTD. 30 3. 22 3! , ( ,- ) / THE CIT, MUMBAI. 4. 22 3! / CIT(A)- , MUMBAI 5. 5'60! , 2,-&,) , / DR, ITAT, MUMBAI 6. 78 / GUARD FILE. ! / BY ORDER, 15-!0! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI