Kashmiri Lal Gupta Prop. M/s Gupta Electricals and H.W. Store, Samana V. Pr. C.I.T., Patiala

ITA 366/CHANDI/2022

AI Insights

The case involves two appeals filed by different assessees, Shri Kashmiri Lal Gupta and M/s Gupta Electrico, against the orders of the PCIT, Patiala, which had set aside their assessments for the assessment year 2017-18 under section 263 of the Income Tax Act, 1961. The PCIT had found the original assessments to be erroneous and prejudicial to the interests of the revenue, primarily due to the non-taxation of income surrendered during a survey at a higher tax rate as stipulated under section 115BBE. The Tribunal examined whether the PCIT was justified in exercising his revisionary powers and concluded that the AO had made a conscious and informed decision after due inquiry, and thus, the PCIT's orders were set aside.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133730 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-11-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 17-04-2022
• Other Referred Cases: Kim Pharma Pvt. Ltd. V CIT, Fakir Mohmed Haji Hasan V CIT, S.K. Srigiri & Bros. V CIT, Bhuvan Goyal Vs DCIT, Arora Alloys Vs DCIT, Shri Ramswroop Singla, Sanju Bairathi Gems Ltd., M/s J.B. Resorts, M/s Raghav Woollen Mills, M/s Khurana Rolling Mills (P) Ltd., M/s Sham Jewellers & Others, Harish Sharma, Smt. Rekha Shekhawat Vs. PCIT, Nirav Modi V/s. Pr. Commissioner of income Tax, Des Raj Hi-Tech Machines Ltd. Vs. DCIT, PCIT V/s. N K Proteins Ltd., Shree Balkrishna Commercial Co. Ltd. V/s. Pr. Commissioner of income Tax, PCIT VS Shreeji Prints (P) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure; Business income; Revision of order; Depreciation; Audit objection; Deemed to accrue or arise in india; Question of law; Set aside
• Section: 68; 263; 69C; 143(3); 142(1); 133A; 195; 69B; 143(2); 69A; 264; 43; 13; 153; 119; 22

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण,च瀃डीगढ़ 瀈यायपीठ च瀃डीगढ़ 瀈यायपीठच瀃डीगढ़ 瀈यायपीठ च瀃डीगढ़ 瀈यायपीठ , च瀃डीगढ़ च瀃डीगढ़च瀃डीगढ़ च瀃डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘A’ CHANDIGARH BEFORE: SMT. DIVA SINGH, JUDICIAL MEMBER & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर आयकरआयकर आयकर अपील अपीलअपील अपील सं संसं सं./ ITA No. 366/CHD/2022 Assessment Year. : 2017-18 Shri Kashmiri Lal Gupta, Prop. M/s Gupta Electricals & H.W. Store, Samana. बनाम VS The Pr.CIT, Patiala. 瀡थायी लेखा सं./PAN /TAN No: ACSPG9133A अपीलाथ牸/Appellant 灹瀄यथ牸/Respondent & आयकर आयकरआयकर आयकर अपील अपीलअपील अपील सं संसं सं./ ITA No. 367/CHD/2022 Assessment Year. : 2017-18 M/s Gupta Electrico, Main Road, Samana. बनाम VS The Pr.CIT, Patiala. 瀡थायी लेखा सं./PAN /TAN No: AAKFG7565L अपीलाथ牸/Appellant 灹瀄यथ牸/Respondent िनधा榁琇रती क琉 ओर से/Assessee by : Shri Sudhir Sehgal,Advocate राज瀡व क琉 ओर से/ Revenue by : Shri Sandip Dahiya, CIT-DR. तारीख/Date of Hearing : 22.11.2022 उदघोषणा क琉 तारीख/Date of Pronouncement : 12.01.2023 आदेश आदेशआदेश आदेश/ORDER PER DIVA SINGH Both the appeals have been filed by two different assessees pertaining to 2017-18 assessment year against the separate orders of the ld. PCIT Patiala passed u/s 263 dated 15.03.2022 and 25.03.2022 respectively. A common order is being passed accepting the oral prayer of the parties before the Bench and considering the facts on record which also ITA 366&367/CHD/2022 A.Y. 2017-18 Page 2 of 45 show that the facts on record on the issues agitated for the respective parties remain the same. 2. In the said backdrop, ld. AR requested that the arguments advanced in ITA 367/CHD/2022 would fully apply to the issues agitated in ITA 366/CHD/2022 also. 2.1 The ld. CIT-DR, accordingly, was required to address whether he has any objection to the said submission. Mr. Dahiya appearing on behalf of the Revenue submitted that he has no objection as the facts remain the same in both the appeals. 3. Accordingly, we thus take up ITA 367/CHD/2022. The said appeal is an appeal filed by the assessee wherein the correctness of the order passed u/s 263 by the ld. PCIT, Patiala pertaining to 2017-18 assessment year is assailed. 3.1 When comparing the grounds in the respective appeals, it is seen that infact there is no difference in the grounds raised. The grounds raised in ITA 367/CHD/2022 are reproduced hereunder accordingly: 1. That the Ld. PCIT, Patiala has erred in assuming the jurisdiction to issue notice u/s 263 of the Income Tax Act, 1961 and, thereby, cancelling the assessment already framed by the AO vide order dated 28.06.2019 and holding the order passed by the Ld. Assessing Officer as erroneous and prejudicial to the interest of revenue and setting-aside the assessment already framed to the file of the Assessing Officer, with the direction to pass the assessment order, afresh in accordance with law, after granting sufficient opportunity to the assessee. ITA 366&367/CHD/2022 A.Y. 2017-18 Page 3 of 45 2. That the Ld. PCIT has failed to appreciate the fact that the assessment as framed by the Assessing Officer vide order dated 28.06.2019, was after considering various replies as filed during the course of assessment proceedings and after complete application of mind on the issues, raised by the Ld. PCIT in the notice u/s 263. 3. That the Ld. PCIT has failed to consider that in the letter filed during survey proceedings conducted at the premises of the assessee on 18.05.2016, offer of surrender was made over and above the normal business income, meaning, thereby, that the amount offered during survey was in respect of business income only and the Ld. Assessing Officer has taken a possible view and, thus, the finding of the Ld. PCIT for taxing the income offered during survey, at special rate of tax is not proper. 4. Notwithstanding, with the above said grounds of appeal, the Ld. PCIT having assumed the jurisdiction u/s 263 on the basis of proposal sent by the Ld. Assessing Officer vide letter dated 21.10.2019 to the Ld. PCIT and PCIT by acting on that letter of the Assessing Officer, issued the show-cause notice u/s 263(1) vide letter dated 05.11.2019 and, thus, such assumption of jurisdiction by the Ld. PCIT is void-ab-initio as per the binding judgment of different coordinate benches of the ITAT. 5. The Ld. PCIT have erred in assuming the jurisdiction of the assessee on the basis of the audit objection, which is void-ab-initio, as per the binding judgment of Jurisdictional High Court in the case of Sohana Woollen Mills and followed in the case of Sh. Surinder Pal Singh in ITA No. 57/Chd/2021 and in the case of Ganga Acrowool in ITA No.196/CHD /2021. 6. That the Ld. PCIT has relied upon some judgments while passing the order which all not applicable to the facts & circumstances of the case and the replies as filed during the course of proceedings before PCIT have not been considered properly. 7. That the appellant craves leave to add, amend, alter any of the above grounds during the appellate proceedings have been considered. 4. The relevant facts of the case are that the assessee's returned income was selected for compulsory manual selection in view of the fact that it was a survey case. The AO records that the assessee is dealing in business of trading. After issuance of notice, questionnaire etc., the ITA 366&367/CHD/2022 A.Y. 2017-18 Page 4 of 45 returned income of the assessee was accepted. This order has been subjected to the Revisionary Powers by the ld. PCIT, Patiala exercising the powers u/s 263 of the Act. Aggrieved by this, the assessee is in appeal. 5. The ld. AR inviting attention to the grounds raised in the present appeal submitted that ground No. 5 raised in the present appeal is not being pressed. The grievance posed by the assessee to the order, it was submitted, is addressed in ground No. 1 praying for quashing of the order. The ground numbers 2, 3 and 4, it was clarified are in support of the said prayer in the aforesaid ground. 5.1 Inviting attention to the assessment order, it was highlighted that though the impugned order is a cryptic order, however, the order was passed after hearing the assessee on the issues on various dates as found mentioned in the body of the assessment order itself under the heading ‘DOH' (date of hearing). It was submitted that the AO was conscious of the fact that this case was selected for compulsory manual selection because it was a survey case and hence after making all necessary due enquiries, the order was passed. 5.2 Inviting attention to the impugned order, it was submitted, that the ld. PCIT has passed the order ignoring ITA 366&367/CHD/2022 A.Y. 2017-18 Page 5 of 45 the detailed reply filed by the assessee to the Show Cause Notice dated 08.11.2019 and another Show Cause Notice dated 10.08.2021. Referring to the record, it was submitted that the assessee has also made available a detailed parawise reply to the notice on 20.09.2021 available at pages 58 to 66. Referring to the Paper Book, attention was also invited to yet another notice u/s 263 issued on 22.02.2022. Copy is available at pages 67 and 68. The detailed reply filed to this dated 28.02.2022, it was submitted, is available at pages 69 to 72. These replies, it was submitted, is based on the basis of the replies and queries by the AO. Copies available in Paper Book No.1 filed in the present proceedings. Referring to the said Paper Book, it was submitted, that pages 1 to 4 of the same would be evidence of filing of the return alongwith copy of computation of income in the year under consideration. Inviting attention to page 18 of the Paper Book it was submitted, that in the P&L account, the assessee has included the surrendered income and considering the surrendered income, net profit has been arrived. It has been transferred to the capital account of the parties. Inviting attention to Paper Book page 23, attention was invited to the list of fixed assets wherein for the building, an addition of Rs.5,02,800/- has been added separately by the assessee in terms of the surrender ITA 366&367/CHD/2022 A.Y. 2017-18 Page 6 of 45 during the survey. Pointing to these facts on record which have been in- encapsuled in the impugned order by ld. PCIT also, it was submitted, the total surrender was Rs.44,39,500/- which comprised of investment in building amounting to Rs.5,02,800/- and this has been reflected in his audited financial statements evidenced in the Tax Audit Report at Paper Book page 23. The Tax Audit Report is accepted. 5.3 Inviting attention to the impugned order, it was submitted that in the facts of the present case the AO has passed an order after making full and proper enquiries even if the order ultimately passed was a cryptic order. In the facts of the present case, it was submitted, the AO was conscious of the amended position of law which the ld. PCIT now wants to relook again. Once the AO has taken a conscious view, the ld. PCIT, it was submitted, was not justified as per settled legal position to upset the order validly passed by the AO after proper enquiries. Accordingly, the impugned order, it was his prayer, may be quashed. Inviting attention to the order it was submitted that the assessee was show caused by the ld. PCIT as to why u/s 155BBE a higher rate of tax should not be imposed on the surrendered income. The following facts noticed in the ITA 366&367/CHD/2022 A.Y. 2017-18 Page 7 of 45 impugned order in para 2 were highlighted for consideration of the Bench : “ the survey u/s 133A of the Income Tax Act, 1961 (hereinafter 'the Act') was conducted on your business premises at M/s Gupta Electrico, Main Road, Samana-147101 on 18/05/2016 and you have surrendered a total amount of Rs.44,39,500/- during the course of survey consequent to the following discrepancies found by the survey team: Unexplained Advances made Rs.30,44,200/- Unexplained cash in hand Rs. 8,92,500/- Unexplained investment in building Rs. 5,02,800/- Total Rs.44,39,500/- Subsequently, you have filed ITR forA.Y. 2017-18 in which you have disclosed the surrendered income of Rs.44,39,500/- in the profit and loss account (PartA-P&L of ITR 2017-18) and paid tax at the rates applicable to normal business income. After that your case was selected under compulsory manual selection guidelines. The Assessing Officer, while framing the assessment order u/s 143(3) dated 28/06/2019 accepted the returned income of the assessee. However, you ought to have disclosed the unexplained income u/s 115BBE of the act which would have resulted in an effective tax rate of 77.25%. In view of the above narrated facts, the assessment seems to be erroneous so far as prejudicial to the interest of revenue. Please state as to why on above issue, your case may not be considered for revision u/s 263 of the Act." 5.4 Relying on the record, it was submitted that the ld. PCIT does take note of the reply dated 20.09.2021 and also captures the assessee's submission in brief, however, fails to address it in the order passed. Inviting attention to the order, it was highlighted that the ld. PCIT records that “the assessee is doing trading of electrical goods for last many years and has no other source of income”. He also noticed that the surrender was stated to be by the assessee as flowing out from business income and transactions of the firm. He argued that it was duly disclosed in the Income Tax Return under the business receipts and the order of the AO was passed after following due diligence and consideration of all relevant facts and documents before the passing of the ITA 366&367/CHD/2022 A.Y. 2017-18 Page 8 of 45 valid order which was being set aside for no stated reasons. Pointing to para 3 of the impugned order, it was further submitted that it had also been noticed by the ld. PCIT that the counsel had argued that at the time of survey i.3e. on 18.05.2016 there was no provision of taxation @ 77.25% u/s 155 BBE as the said Section was amended on 15.12.2016 during the demonetization period. Accordingly, he placed reliance upon decision of Chandigarh Bench and Jodhpur Bench in Bhuvan Goyal Vs DCIT, Arora Alloys and Shri Ramswroop Singla. 5.5 The said reply of the assessee was not accepted holding that the assessee was required to show the general entries passed in its books of account which according to the ld. PCIT was required to be seen by the AO. Referring to para 3.2 it was submitted that again the assessee relied upon the position of law as available on the date of survey and copy of ledger accounts in support of the general entries passed in assessee's books of account. Copies of these had been filed as recorded in para 3.2 of the impugned order itself. Considering this, it was argued the ld. PCIT strangely concluded that the assessee has only filed copy of the ledger account and has made no further submissions, hence, it has been incorrectly held that the assessee has chosen not to comply with the notice. Relying on the record containing the ITA 366&367/CHD/2022 A.Y. 2017-18 Page 9 of 45 supporting evidences, it was argued that all queries stood replied to. Thus, what further submission was still required to be addressed, it was questioned. In view of this fact, the ld. PCIT holds that the order dated 28.06.2019 is not tenable as supporting general entries passed and treatment in the trial balance was not explained. The ld. AR inviting attention to the record submitted that what further explanation was still required. Explanation has been offered, supporting evidences from assessee's books of account have also been filed. In the circumstances, it was questioned what further remained to be explained. The fact that the AO has not examined the same is also not the case. The amended position of the provision was another factor taken into consideration and the ld. PCIT held that Section 68 to 69D were applicable. Reliance was incorrectly placed upon the decision of the jurisdictional High Court in the case of Kim Pharma Pvt. Ltd. V CIT 216 Taxman 153 (P&H) and various other decisions of the Courts which have no direct applicability to the facts of the present case. The order, it was argued is whimsical and arbitrary. 5.6 In para 9 ld. PCIT, it was submitted, it has been held that the provisions of Section 115 BBE are consequential in nature. Accordingly, following discrepancies were pointed out : ITA 366&367/CHD/2022 A.Y. 2017-18 Page 10 of 45 (xi) In the case of the assessee, survey u/s 133A was conducted on 18.05.2016 i.e. relevant assessment year 2017-18. The following discrepancies were found, confronted and accepted by the assessee during the course of survey proceedings. Unexplained Advances made Rs.30,44,200/- Unexplained cash in hand Rs. 8,92,500/- Unexplained investment in building Rs. 5,02,800/- Total Rs.44,39,500/- In this regard, it is noted that the case of the assessee is squarely covered under provisions of Sections 69, 69A, 69B & 69C as under:- a Advances are covered u/s 69 , 69B or 69D b. Excess cash is clearly covered u/s 69A . c. Investment in building is covered u/s 69B or 69C. 5.7 On the basis of these facts, the ld. PCIT came to the conclusion that the order passed is an erroneous order and directed that detailed and deep enquiries were required to be made. For ready reference, para 5 and 5.1 of the ld. PCIT assailed are extracted hereunder : 5. Under the aforesaid circumstances, the order of the A.O. is erroneous as the AO had not called for necessary documentary evidences to examine the nature of the surrendered income and also prejudicial to the interests of the revenue being the discrepancies found during the survey proceedings attracting provisions of Section 115BBE of the Income Tax Act, 1961 entailing tax rate of 77.25%. 5.1 Detailed and deep enquiries were required to be made on the issues discussed above before accepting claim of the assessee. In this regard, it is worthwhile to refer to provisions of Explanation 2 to Section 263(1) of the Income Tax Act, 1961 according to which an order passed by the A.O. shall be deemed to be erroneous in so far as it is prejudicial to the interest of revenue for various reasons including the fact that if in the opinion of Principal Commissioner or Commissioner the order is passed without making any enquiry or verification which should have been done and also includes the order which is passed allowing any relief without enquired into the claim. 5.8 Accordingly, considering the facts of various cases which have no applicability to the issue at hand, invoking Explanation-II of Section 263 the order was set aside holding as under : ITA 366&367/CHD/2022 A.Y. 2017-18 Page 11 of 45 “ 5 . 5 ... ... . Moreover, the facts of the case are squarely covered by Explanation 2 of Sec.263, which is inserted w.e.f. 01.06.2015. It is as under :- a. The order is passed without making inquiries or verification which should have been made. b. The order is passed allowing any relief without inquiring into the claim. c. The order has not been made in accordance with any order, direction or instruction issued by the board u/s 119 or d. The order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional high court or Supreme Court in the case of the assessee or any other person. 6. Hence, keeping in view the above discussed facts, figures of the case and lapses on the part of the A.O., I hold the assessment order dated 28.06.2019 for the A.Y. 2017-18 in the case of the assessee is erroneous as well as prejudicial to-the interests of the revenue and therefore set aside the order to the file of the A.O. for passing a fresh order in accordance with law in respect of the issue discussed above and also raised in show cause notice u/s 263(1) of the Act, after giving sufficient opportunity of hearing to the assessee.” 5.9 . It was his submission that the order passed may be quashed as the ld. PCIT is proceeding as though Section 115 BBE is automatic in nature which is not so. Enquiries have to be made in the nature of surrendered income and after enquiry, a view has been formed. Notwithstanding these primary arguments, it was further submitted that the order passed by the ld. PCIT further suffers from various shortcomings and thus even otherwise the order which de- hors the earlier arguments still cannot be sustained. As per law the ld. PCIT is to pass a clear order setting out the errors and the prejudice caused to the Revenue and not start fishing and roving enquiries. In the facts of the present case the ld. PCIT incorrectly and arbitrarily holding the assessment order as unsustainable is himself unsure ITA 366&367/CHD/2022 A.Y. 2017-18 Page 12 of 45 whether the surrender is to be covered under Section. Which specific Section would apply has been left unaddressed. Surrender as per the assessee on account of business advances which is held to be unexplained advances by the ld. PCIT for no stated reasons. Hence, rashly all Sections namely Section 69m 69B or 69D are all roped in. Similarly, investment in building explained from business sources by the assessee is arbitrarily held to be possibly covered u/s 69B or 69C. In the facts of the present case, it was his submission that a conscious view on facts has been taken by the AO after making full and proper enquiries. Infact it is the impugned order which has been passed ignoring the detailed replies of the assessee before the ld. PCIT. Referring to pages 54 to 57 which are the Show Cause Notices issued to the assessee. Parawise reply, it was submitted is available at pages 58 to 66. It was submitted that thereafter there was another Show Cause Notice which is available at pages 67 and 68 of the Paper Book filed. Herein also, the detailed reply of the assessee is available at pages 69 to 72. 5.10 In the said backdrop, relying upon the submissions as advanced in detail before ld. PCIT and captured in the synopsis filed, it was his submission that the impugned order is an arbitrary order which is trying to re-look at the ITA 366&367/CHD/2022 A.Y. 2017-18 Page 13 of 45 very same facts in order to bring to tax a higher rate. In view of the peculiar circumstances wherein the survey was conducted on 18.05.2016 and the relevant provision was not available on the Statute, the applicability of the higher rate of tax had been questioned by the AO as by then, the Statute stood amended. This specific query had been replied to by the assessee. A considered view had been taken since the provision had been brought on the Statute on 15.12.2016 i.e. much after the date of the survey. The AO, it was submitted, had considered the record which consisted of the surrender accepted the view of the Survey Team. Thus, where on facts the Survey Team has accepted the post dated cheques calculating the prevalent tax rate available on the Statute and the AO after enquiring and looking into the facts has also accepted that the tax was to be levied at the rate which was available on the Statute as on the date of the survey. Thus, in these undisputed facts on record, the action of the ld. PCIT in seeking to impose a higher tax rate as opposed to the tax rate correctly imposed even otherwise in the facts of the present case which was debatable. It was submitted that this issue not only on the facts of the surrender made when the amendment was not on the Statute but even otherwise by a play of facts as two separate Revenue authorities had already accepted the tax rate applicable as the prevalent tax ITA 366&367/CHD/2022 A.Y. 2017-18 Page 14 of 45 rate on the date of the surrender the assessment order is a valid order, hence the impugned order may be quashed. The Revisionary Powers exercised by the ld. PCIT in the peculiar facts and circumstances of the case went beyond the scope of the power vested. Ld. PCIT, it was argued, cannot be permitted to revise the order merely because he disagrees with the view of the AO. A validly passed assessment order cannot be set aside on mere whims. The view taken by the AO, it was argued has to be shown to be either a view on which the AO was not conscious and made no enquiries or that even if after making the enquiries, the view taken was erroneous and prejudicial to the interests of the revenue. On the basis of facts on record and precedent available in various orders of different Benches of the Tribunal as well as Courts, available in the public domain, it was his submission that there can be no doubt that a conscious view has been taken and at best the issue is debatable issue. Thus, even in such a situation, the ld. PCIT was precluded from exercising the Revisionary powers. The proposition of law that when considered view has been taken by the AO after due enquiries, the order cannot be set aside on mere whims, was heavily relied upon. In the backdrop of the said legal submission, attention was invited to Paper Book which consists of the following documents : ITA 366&367/CHD/2022 A.Y. 2017-18 Page 15 of 45 SI. No. PARTICULARS PAGES 1. Evidence of filing of Return of Income along with the Computation of Income for the Assessment Year 2017-18. 1-4 2. Copy of the Tax Audit Report along with the Audited Financial Statements for the AY 2017-18. 5-19 3. Copy of the letter dated 19/05/2016 as filed during the course of survey wherein, a total surrender for an amount of Rs. 51,60,500/- has been made,along with the photocopies of the post-dated cheques issued during survey at normal rate of tax. 20-21 4. Copy of the notice dated 10.09.2018 issued u/s 143(2) of The Income Tax Act, 1961. ('the Act') 22-23 5. Copy of the notice dated 31.12.2018 issued u/s 142(1) of the Act. The first questionnaire issued asking for the details. 24-28 6. Copy of the reply dated 07.02.2019 filed in response to the notice issued u/s 142(1) dated 31.12.2018. 29-31 7. Copy of the anothernotice dated 20.05.2019 issued u/s 142(1) of the Act. 32-33 8. Copy of the reply dated 10.06.2019 filed in response to the notice issued dated 20.05.2019. 34-35 9. Copy of another notice dated 26.06.2019 issued u/s 142(1) of the Act. 36-38 10. Copy of the reply dated 27.06.2019 to the letter dated 26.06.2019 issued u/s 142(1) of the Act by the Ld. Assessing Officer. 39-40 11. Copy of the letter dated 21.10.2019 of the Worthy DCIT, Circle Sangrur with respect to the proposal sent to the Worthy CIT for taking action u/s 263 of the Act. 41-42 12. Copy of the letter dated 01.02.2021 as sent by the Income Tax Officer, Sangrur to the Audit Officer regarding the issue of 115 BBE of the Act is highly debatable, and as such AO had taken possible view. 43-44 13. Copy of letter dated 17.08.2021 by the ITO, Ward- Sangrur sharing the details of the audit objections, the serial no. of the assessee in such details being S.No. 7. 45-47 14. Copy of the Annotated Reports of the Income Tax Officer, Sangrur, mentioning the debatable issue with regard to section 115BBE. 48-49 15. Copy of the Show Cause Notice dated 08.11,2019 issued u/s 263 of the Act by the Worthy PCIT, Patiala. 50-52 16. Copy of another Show Cause Notice dated 10.08.2021 issued u/s 263 of the Act by the Worthy PCIT, Patiala. 53 17. Para wise reply dated 20.09.2021 to the notice issued u/s 263 of the Act dated 10.08.2021. 54-62 18. Copy of another Show Cause Notice issued u/s 263 dated 22.02.2022. 63-64 19. Reply dated 28.02.2022 filed to the Show Cause Notice dated 22.02.2022. 65-68 ITA 366&367/CHD/2022 A.Y. 2017-18 Page 16 of 45 5.11 Attention was invited to Paper Book page 1 to 4 which consists of the return filed alongwith computation of income. Attention was also invited to the copy of Tax Audit Report filed and the financial statements accompanying it. Specific page 18 was highlighted to show that the surrendered income stood duly reflected in the assessee's trading and P&L Account and had been included therein for arriving at the net profit of the assessee. Thus, the treatment in assessee's books of account stood examined by the AO and made available also to the PCIT and not faulted with is evident from the record itself. The net profit, it was submitted, was duly reflected in the partner’s capital account also stood seen by the tax authorities and is not faulted with. Similarly, inviting attention to Paper Book page 23, it was submitted that the expenses for building stood reflected in the list of assets. The surrender letter taken into consideration by the AO and also referred to before ld. PCIT is available at page 24. The treatment to the surrender in the assessee's books of account was available and examined what further explanation could assessee make to the ld. PCIT was vehemently questioned. The exercise of powers, it was submitted, was arbitrary. ITA 366&367/CHD/2022 A.Y. 2017-18 Page 17 of 45 5.12 Referring to the documents and the surrender letter, it was submitted that the assessee has clearly stated therein that the surrender is made to cover the discrepancies and differences found during the survey which is over and above the normal business income and is out of business transactions of the firm. For ready reference, relevant extract is reproduced hereunder : 5.13 It was his submission that the assessee has been subjected to a survey and no other source of income was found. In the circumstances, it is for the Revenue to show that the surrendered income was not from the known business sources but was from some other sources. Attention was invited to Paper Book page 25 which are post- dated cheques dated 15.06.2016, 15.09.2016, 15.12.2016 ITA 366&367/CHD/2022 A.Y. 2017-18 Page 18 of 45 and 15.03.2017 calculating the tax due on the surrendered income at the prevalent rate of tax. Attention was invited to Paper Book page 26 and 27 which is questionnaire issued to the assessee on 10.09.2018 on the ITBA Portal. Specific attention was invited to page 28 which is another questionnaire dated 31.12.2018 issued by the AO to the assessee accompanied by an Annexure at pages 29 to 32 wherein the nature of queries raised would show that all questions raised were on the normal business of the assessee. No other source has been referred to by the Survey Team, the AO or the PCIT. The questions raised shows that the assessee has been required to substantiate its returned income wherein the surrender stood honoured and included. Attention was also invited to Paper Book page 33 to 35 which is copy of the reply dated 07.02.2019 filed by the assessee. Referring to the same, attention was invited to reply to question No.3. Attention was also invited to Paper Book page 35 which is the reply containing detail of fixed assets provided by the assessee on the query raised by the AO informing that no additional depreciation was claimed. Attention was invited to page 36 which is another notice issued u/s 142(1) dated 20.05.2019 wherein the AO put the following specific queries to the assessee : ITA 366&367/CHD/2022 A.Y. 2017-18 Page 19 of 45 5.14 Reply of the assessee, it was submitted, is at pages 38 and 39. Said queries and replies, it was submitted, were through ITBA Portal and thus necessarily would be available ITA 366&367/CHD/2022 A.Y. 2017-18 Page 20 of 45 to the ld. PCIT also and have been relied upon before the said authority : ITA 366&367/CHD/2022 A.Y. 2017-18 Page 21 of 45 5.15 Attention was invited to another notice u/s 142(1) dated 26.06.2019 through ITBA Portal wherein the issues were still continued to be enquired into by the AO. The replies of the assessee at pages 43-44 which contains the following explanation of the assessee dated 27.06.2019 on facts was relied upon with the submission that these issues have been considered by the AO before the passing of the assessment order : ITA 366&367/CHD/2022 A.Y. 2017-18 Page 22 of 45 5.16 It was submitted that he is supposed to see that this very same Assessing Officer states that ‘inadvertently it was accepted’ and should have been subjected to a higher rate of tax. Attention was invited to page 45 and 46 wherein the very same AO on 21.10.2019 referred to for consideration before the PCIT. Naming the AO from the records available, it was submitted that the assumption of power u/s 263 on the basis of such actions is questionable. If the AO is conscious of a lapse he h as the power to rectify. The following extract assailed is reproduced hereunder for completeness: 5.17 It was his submission that when the assessment order under consideration is taken into consideration and the aforesaid reference made to the ld. PCIT is seen, it is evident that both the order and the proposal has been sent by the very same AO. The said action was strongly objected to. It was pointed out by the Bench to the ld. AR that the flow of information to the Revisionary Authority can be from any source and thus if the flow of information is coming from the ITA 366&367/CHD/2022 A.Y. 2017-18 Page 23 of 45 AO, the objections of the assessee have no relevance. The ld. AR in response submitted that he is not objecting to the flow of information to the ld. PCIT, he is objecting to the conduct of the AO who has passed an order after due enquiries and after passing the order herself, the officer states that there is an error in the order. In the said situation, it was his submission that the invoking of Revisionary Authority causes prejudice to the assessee. As if on a debatable issue, the AO was of the view that 154 proceedings could not have been done, the Revisionary provisions consequentially also become inapplicable on this ground. Thus, it is upsetting the vested right of the assessee which is under challenge in such a manner, where first the AO passed an order after full and due enquiries and then attempt to unsettle a settled position by resiling from the view taken. From the body of the assessment order, it was highlighted the number of hearings recorded by the AO herself before the passing of the order itself would show that due enquiries have been made. The action of the very same AO to move a proposal knowing that it was a debatable issue, it was submitted, shows the high handedness to which the assessee is subjected to. 5.18 Referring to page 47 of the Paper Book, it was submitted that some Audit Memo has been referred to and ITA 366&367/CHD/2022 A.Y. 2017-18 Page 24 of 45 the assessee's name is also referred to therein. The Show Cause Notices issued to the assessee by the ld. PCIT are placed in the Paper Book. In the said backdrop again, attention was invited to Paper Book page 58 onwards which are replies to the ld. PCIT again highlighting that the surrender was from the business income/transactions and these facts, it was submitted, were mentioned in the surrender letter itself which have been referred to in the submissions and the officers of the Survey Team had also accepted the cheques for advance tax against surrendered income as business income. For the specific reason, case was selected for compulsory manual selection under CASS.. Referring to Section 115 BBE and Explanation 2 to Section 263(1), it was submitted that none of the clauses A, B, C or D were attracted. Again the assessee has highlighted that the survey was conducted on 18.05.2016. Relevant provision was introduced much later and only for addressing the de- monetization which is evident from the statement of objects and reasons which have been captured at page 63 and 64. The same are reproduced hereunder : "Evasion of taxes deprives the nation of critical resources which could enable the Government to undertake anti-poverty and development programs. It also puts a disproportionate burden on the honest taxpayers who have to bear the brunt of higher taxes to make up for the revenue leakage. As a step forward to curb black money, bank notes o f existing series of denomination of the value of five hundred rupees and one thousand rupees (hereinafter referred to as ITA 366&367/CHD/2022 A.Y. 2017-18 Page 25 of 45 specified bank notes) issued- by the Reserve Bank of. India have been ceased to be legal tender with effect from the 9th November, 2016. Concerns have been raised that some of the existing provisions of the Income- tax Act, 1961 could possibly be used for concealing black money. It is, therefore, important that the Government amends the Act to plug these loopholes as early as possible so as to prevent in issue of the provisions. The Taxation Laws (Second Amendment) Bill, 2016, proposes to make some changes in the Act to ensure that defaulting- assessees are subjected to tax at a higher rate and stringent penalty provision. In the wake of declaring specified bank notes as not legal tender, there have been representations and suggestions from experts that instead of allowing people to find illegal ways of converting their black money into black again, the Government should give them an opportunity to pay taxes with heavy penalty and allow them to come clean so that not only the Government gets additional revenue for undertaking activities for the welfare of the poor but also the remaining part of the declared income legitimately comes into the formal economy. Thus, money coming from additional revenue as a result of the decision to ban Rs.1000 and Rs. 500 notes can be utilized for welfare schemes for the poor. " 5.19 It was submitted that it had been highlighted that the amendment received the Presidential assent on 25.12.2016 and in view of the fact that survey stood conducted on 18.05.2016 on which date the assessee had surrendered, the relevant provision was not in existence. The documentary evidences which are on the basis of the seized records, it was submitted, cannot be brushed aside. Reliance upon aforesaid decisions of the ITAT in the said background have been placed. In response to another notice issued by the ld. PCIT, replies available at page 69 to72 was relied upon where it was highlighted that surrender was as per tax rate applicable at that point of time. The amendment having been carried out on 15.12.2016 through Taxation Laws (2 n d Amendment) Act 2016 in terms of the statements and objects ITA 366&367/CHD/2022 A.Y. 2017-18 Page 26 of 45 of the Act itself would not have any application. It was further submitted that 115 BBE refers to Section 68 and 69 and in the face of the record, these provisions were not attracted. No bullion etc. or unexplained investment etc. was found. In the facts of the present case, the assessee is in this line of business for the last so many years and there is only one source. It was re-iterated, no new source has been pointed out. The assessee cannot be required to perform the impossible. Accordingly, it was his submission that the order may be quashed. 5.20 Inviting our attention yet again to the reply of the assessee available at pages 58 to 66 of the order, it was submitted that the assessee had again for the benefit of Ld. PCIT (copy at page 60) highlighted the fact that the assessee was in the business for the last so many years and the surrender made during the survey was from this very business income. The business income referring to page 60, it was submitted was from trading in electric goods. Referring to Page 61, it was highlighted that all the relevant cash books and receipts noted in the respective “Jindal Exercise Books” were impounded by the Department and the basis of the surrendered income was from this known source of business. It was re-iterated that there is no other source of income. The fact that this issue was fully addressed by ITA 366&367/CHD/2022 A.Y. 2017-18 Page 27 of 45 the AO, it was submitted, stands fully examined. Accordingly, relying upon the decisions mentioned in the paper book from S.No. 1to 9, it was submitted that the following decisions were relied upon for the specific proposition of law that once on facts it can be demonstrated that the AO after fully enquiring and considering the reply received has passed the order, the due application of mind is evident. This presumption that the AO has duly applied his mind cannot be easily discarded. The Revisionary powers cannot be exercised without setting out the error in the order and prejudiced caused to the Revenue following decisions were relied upon : SI. No. PARTICULARS 1. Copy of judgment of ITAT, Chandigarh Bench, Chandigarh in the case of Surinder Pal Singh reported in 94 ITR (Trib.) 458 vide order dated 31.01.2022 on the issue of u/s.263. 2. Judgment of ITAT, Chandigarh Bench in the case of Ganga Acrowools Limited Vs PCIT in ITA No.196/Chd/2021 for application of mind and on audit objection. 3. Commissioner of Income Tax vs. Anil Kumar Sharma 335 ITR 83 Delhi-HC. 4. CIT vs. Hindustan Marketing 8t Advertising Co. Ltd. 341 ITR 180 Delhi-HC. 5. Loil Continental Foods Ltd. vs. Pr. Commissioner of income Tax ITA No. 577/Chd/2019 Chd-Trib. 6. Commissioner of income Tax vs. Late Shri Vijay Kumar Koganti 195 DTR 428 (Mad High Court). 7. Copy of judgment of ITAT, Surat Bench in the case of Pramod Kasharich and Shah ITA No. 43/SRT/2018. 8. Shailesh Kumar Gandhi V/s. Pr. Commissioner of income Tax 195 DTR 259 CUTTACK- TRIB. 9. Pr. CIT V/s. N K Proteins Ltd.429 ITR 493 Guj-HC. 10. Shree Balkrishna Commercial Co. Ltd. V/s. Pr. Commissioner of income Tax 11. Copy of the judgment in the case of PCIT VS Shreeji Prints (P) Ltd. [2021] 130 taxmann.com 294 (SC). 12. Copy of the judgement of ITAT, Chandigarh in the case of Sanjay Jain & Others in ITA No.140/CHD/2021 vide order dated 23.03.2022 on the issue of u/s 263. 13. Copy of judgment of ITAT, Chandigarh Bench, Chandigarh in the case of M/s. Venus Texspin Ltd. in ITA No.793/CHD/2017 vide order dated 12.12.2017 on the issue of u/s 263. 14. Copy of the judgment in the case of M/s. Arora Alloys vs. DCIT in ITA No. 1481/CHD/2017. ITA 366&367/CHD/2022 A.Y. 2017-18 Page 28 of 45 15. Copy of the judgment in the case of PCIT vs. DECCAN JEWELLERS P LTD. as reported in 132 Taxmann.com 73(AP). 5.21 The decision cited from S.No. 11, 12, 13 are relied again for the same proposition that once the AO having applied his mind and has taken a plausible view than merely because the decision taken is not to the liking of the PCIT, it cannot be revised. Reliance was also placed on the decision of the Hon’ble Mumbai High Court in the case of Nirav Modi 71 Taxmann.com 272 Bombay-High, which decision has been approved by the Hon'ble Apex Court. Attention was also invited to the latest decision of the Chandigarh Bench of the Tribunal in the case of M/s Arora Alloys Vs. DCIT in ITA No. 1481/Chd/201, decision of the Hon'ble Andhra Pradesh High Court in the case of PCIT Vs. Deccan Jewellers P. Ltd reported in 132 Taxmann.com 73(AP) was also relied upon. 5.22 Apart from these decisions, attention was invited to a consolidated Paper Book of decisions in ITA 366 & 367/CHD/2022 filed on 18.11.2022 wherein the decision of the Chandigarh Bench of the Tribunal in the case of Gandhi Ram Vs. PCIT in ITA No. 121/Chd/2021 order dated 4.8.2022 at Sl.No. 1has been placed. Inviting our attention to the aforesaid decision it was reiterated that at page 21 in para 9, it has been noticed that the amendment was not ITA 366&367/CHD/2022 A.Y. 2017-18 Page 29 of 45 available on the Statute on the date of the survey. Hence, section 115BBE could not be invoked. In the facts of the said case also, the Ld. PCIT sought to impose higher rate of tax at 60% instead of 30% which had been imposed by the AO as it was the tax rate available on the statute on the relevant point of time i.e. on the date of survey. Considering the position of law, as laid down by the Hon'ble Apex Court in the case of Malabar Industrial Co. Ltd 243 ITR 83 (SC); Hon'ble Bombay High Court in Gabrial India Ltd. 203 ITR 108(Bom.); Hon'ble Gujarat High Court in the case of CIT Vs. Nirmal Chemical Work Ltd 309 ITR 67 (Guj.); Hon'ble Delhi High Court in the case of CIT Vs. Sunbeam Auto 332 ITR 167 (Del.); the order passed by the Ld. PCIT u/s 263 was set aside and was quashed. Accordingly, it was his submission that this decision was fully applicable to the facts of the present case also. 5.23 Even on merits, it was his submission that the provisions of section 115BBE are not attracted. For the said purpose, attention was invited to the decision at Sl.No. 3 (pages 33 to 90) of the Chandigarh Bench of the Tribunal in M/s Sham Jewellers & Others in ITA NO. 375/Chd/2022 order dated 22.08.2022, copy at pages 33 to 90. Specific attention was invited to page 82 of the same for the ITA 366&367/CHD/2022 A.Y. 2017-18 Page 30 of 45 proposition that no evidence has been brought on record by the Revenue to show that there was any other source of income despite the fact that a survey stood conducted on the assessee, documents stood impounded. Thus, it was his submission that in the facts of the present case, none of the deeming provisions of section 68 or 69 were attracted. Attention was also invited to the fact that in para 10.19 in the aforesaid decision in the case of M/s Sham Jewellers (supra). Reliance have been placed in the case of Famina Knit Fabs Vs. ACIT reported in 176 ITD 246 (Chd-Trib) as in the facts of the present case also the proceeds were from the known business sources of the assessee, these have been accepted as such, thus, relying upon the proposition as considered in the case of M/s Sham Jewellers where the sources of expenditure / investment stood identified, the deeming provisions as considered in para 10.20 to 10.22 are not attracted. Referring to para 10.22, it was submitted that the decision in the case of Kim Pharma Ltd Vs. CIT in ITA No. 106 of 2011 (O&M) has been considered therein as reported by the Hon'ble Punjab & Haryana High Court, the decision was distinguished holding as under:- “10.22 It is also seen that the Ld. CIT(A) has relied on the judgement of the Hon'ble Punjab & Haryana High Court in the case of Kim Pharma Ltd. Vs. CIT in ITA No. 106 of 2011 (O&M) and the Ld. CIT DR has also quoted the same in his arguments before us. However, after going through the aforesaid judgement of the Hon'ble Punjab & Haryana High Court, it is seen that in that particular case, the only issue was with regard to the cash ITA 366&367/CHD/2022 A.Y. 2017-18 Page 31 of 45 surrendered at the time of survey and no other income. The cash found could not be related to the already disclosed and accepted source of income of the assessee and, therefore, the Hon'ble Punjab & Haryana High Court held that such surrendered cash was to be treated as deemed income u/s 69 of the Act. However, in the present case before us, the assessee has only one source of income i.e. business income and nowhere has it been brought on record that the assessee had any other source of income except business income and, therefore, we respectfully state that judgement of the Hon’ble Punjab and Haryana High Court in the case of Kim Pharma Pvt. Ltd (supra) would not apply on the facts of the present case. 5.24 Heavy reliance was paced at Des Raj Hi-Tech Machines Ltd Vs. DCIT, 174 TTJ 0009 Asr-Trib. Copy available at pages 95 to 106 at Sl.No. 4. Head Note of the said decision was read out. On the basis of the same it was argued that merely because the PCIT has a different view than that of the AO, it is not a good ground for setting aside the order. 5.25 The decision mentioned at S.No. 5 in CIT Vs. NiravModi 71 Taxmann.com 272 Bombay-High Court, it was submitted, has already been referred. Attention was invited to the decision at Sr.No.6 Harish Sharma dated 11.05.2021 in ITA 327/CHD/2020 at pages 116 to 124, attention was invited to page 119 of the same, it was highlighted that considering the issue in para 7 to 10, again the fact that in the peculiar facts, deeming provisions were not attracted from the proposition relied upon. 5.26 Reliance was placed on the decision mentioned at Sr. No. 7 i.e. Smt. Rekha Shekhawat Vs. PCIT (2022) 218 DTR ITA 366&367/CHD/2022 A.Y. 2017-18 Page 32 of 45 171 (Jaipur-Trib.) Reading from the Head Note therein it was submitted that the issue herein was also the revisionary powers of the PCIT and the deeming provisions invoked by the said authority which on facts was found to be emanating from the Real Estate Business and, hence, applicability of the section 115BBE was ousted. 5.27 Relying on the brief synopsis filed, it was submitted that the assessee has relied on several judgements to argue that proposal has been sent by the AO, accordingly the objection of the assessee may be noted even if the Bench is not inclined to give any findings on the source of information. It was highlighted that the assessee’s objection is on the ground that the very same AO having passed the order instead of carrying out rectification u/s 154 if she so believed instead sends a proposal for 263 proceedings again on a debatable issue. The manner in which assumption of jurisdiction is sought to be justified, is strongly objected to. Accordingly, resting his case, it was his prayer that the impugned order may be quashed. 6. The Ld. CIT DR relied heavily upon the impugned order. It was his submission that the income having been surrendered during the survey, hence, necessarily the income is sustainable to tax u/s 68 & 69 or any of its ITA 366&367/CHD/2022 A.Y. 2017-18 Page 33 of 45 deeming provisions. It was argued that once a deeming provision is invoked, applicability of section 115BBE is automatic. Thus, it was his submission that the source of the assets etc. cannot be considered to be from business sources. It was also his argument that it is not for the department to demonstrate the source as these are facts best known to the assessee itself. Once on facts the assessee knowingly fails to explain the source, the deeming provisions directly and automatically apply in full force. Accordingly, the decisions relied upon by the Ld. AR in support of his case, it was argued, were not relevant as the Revenue is supported by the decision of the Hon'ble Jurisdictional High court in the case of Kim Pharma (P) Ltd. Vs CIT, Panchkula & Ors. (ITA 106/2011 dated 27.04.2011), (2013) 35 taxmann.com 456 (P&H). 6.1 It was also his submission that in the decisions relied upon by the Ld. AR of the Chandigarh Bench the decision of the jurisdictional High Court in the case of Kim Pharma had not been discussed. It was argued that just because it may have been referred to therein, in passing the discussion on the merits of the decision was absent. Hence, these decisions, it was argued cannot be considered to be a valid precedent. ITA 366&367/CHD/2022 A.Y. 2017-18 Page 34 of 45 6.2 It was his submission that in the facts of the present case, the AO had applied her mind and sent a proposal to the Ld. PCIT for invoking the powers u/s 263 of the Act and ld. PCIT has also applied his mind and noticed that the source remains unexplained. The arguments of the assessee that the disclosure is voluntary and cheque payments have been received in the advance tax, it was submitted are meaningless. It was argued that the advance tax is also filed as per assessee’s estimate and possibly section 154 of the Act was not resorted to by the AO as the issue was considered to be debatable. He conceded that there may be a situation where on a debatable issue a fact may operate as a bar to the PCIT to invoke Section 263. However, the present case does not fall in that category. In a case like this, it cannot be a bar. Accordingly, it was his prayer that the amended provision would fully apply in terms of the decision of the Ld. PCIT. It was further submitted that anyway the ld. PCIT has left the issue open and assessee's case has not been outrightly discarded. The assessee, accordingly, is still free to argue before the AO. Accordingly, it was his prayer that the order may be upheld. 7. The Ld. AR in reply submitted that section115BBE is not automatically attracted. This issue, it was submitted, has been considered at length in the decision of the Gandhi ITA 366&367/CHD/2022 A.Y. 2017-18 Page 35 of 45 Ram v PCIT (supra) (available at pages 1 -16 of the paper book ). It was submitted that it is attracted only when the source is not satisfactorily explained, only then that the deeming provisions are attracted. Reading from the surrender letter, the conduct of the survey team in accepting those cheques and the AO passing the original assessment order, it was submitted that the Assessing Officer’s interpretation was a plausible view, hence, the decision relied upon which laid down the proposition that once the AO takes a possible view after full and due enquiries. Revisionary powers are ousted was fully applicable and were being relied upon. Addressing the source of income which is sought to be questioned, reliance was placed on the decision of the Chandigarh Bench in the case of Sham Jewellers & others where the decision of the jurisdictional High Court in the case of Kim Pharma has been considered fully. Apart from that, it was argued there were various other decisions of the Chandigarh Bench namely Harish Sharma order dated 11.05.2021 in ITA 327/CHD/2020 (Paper Book page 116-124), M/s Sab Industries Ltd, Chandigarh Bench in ITA No. 848/CHD/2017; Sanjay Bairathi Gems Ltd., Jaipur Bench in ITA No. 157/JP/2017; M/s Marshal Machines Pvt Ltd., Chandigarh Bench in ITA No. 57/CHD/2017; M/s J.B. Resorts, Amritsar Bench, in ITA ITA 366&367/CHD/2022 A.Y. 2017-18 Page 36 of 45 No.488/ASR/2015; M/s Raghav Woollen Mills, Chandigarh Bench, in ITA No. 892/CHD/2015; M/s Khurana Rolling Mills (p) Ltd., Chandigarh Bench in ITA No.745/CHD/2016; Shri Bhuwan Goyal, Chandigarh Bench in ITA No.1385/CHD/2019. Copies being submitted in the course of the day fully address the issue that the decision of Kim Pharma of the jurisdictional High Court stands addressed and discussed. 7.1 Referring to the ld. CIT-DR’s arguments on cheques accepted by the survey team, as being estimates of assessee for advance tax purposes. The said argument was strongly repelled. It was submitted that these were cheques on the basis of the impounded documents with the department where the Survey Team has carefully examined and accepted the same. The impounded documents form the basis of the surrender and they were not based on any estimation of the assessee. These were amounts and the sources duly stood addressed by the impounded documents. The tax calculated on actual, it was argued, was not estimate and it was calculated at the normal tax rates as per the prevalent rates then on the Statute. It was his submission that if the issue is debatable for 154 proceedings, then it is debatable even for 263 proceedings. The view taken by the AO was as a complex legal issue and if at best the Revenue can argue it ITA 366&367/CHD/2022 A.Y. 2017-18 Page 37 of 45 to be a debatable issue which the AO could not address in 154 proceedings then 263 action was also not maintainable. It was submitted that however complicated the issue may be, due enquiries were made by the AO, a view was formed after examining the facts, consistent orders of the ITAT also support this view, thus in terms of the decisions of the various Courts relied upon therein which have held the case to be allowable, the AO forming his view after due enquiry has passed a valid order and may not be permissible to be upset by the order passed. Accordingly, it was his prayer that the impugned order may be quashed. 8. We have heard the rival submissions and perused the material available on record. In the facts of the present case, on a perusal of the decisions cited by the ld. CIT-DR and on the facts as available on record, we find that the decision in the case of Kim Pharma (P) Ltd. (cited supra) rendered by the jurisdictional High Court does not afford the Revenue any specific help in seeking to support the impugned order. The reasons for coming to the said conclusion, we propose to address hereinafter. 8.1 However, before addressing the legal position as canvassed by the Revenue, it is necessary to set out the admitted facts on record. In the facts of the present case, the Survey Team has impounded the books and on the basis ITA 366&367/CHD/2022 A.Y. 2017-18 Page 38 of 45 of that survey, the assessee has surrendered specific income under specific heads. On the basis of the surrender and the heads, specific cheques for specific dates have been collected by the Survey Team. The surrender made has been honoured by the assessee. The applicability of the prevalent rate and the higher rate post the amendment is a factor which was considered by the AO. The assessee relying upon the surrender letter has argued that the impounded documents relatable to the business income of the assessee considering which the amounts have been surrendered under specific heads. Relying on the facts, it has been pleaded the AO has examined this claim. Appropriate ledger entries in the books of account of the assessee have been shown and the treatment in assessee's books of account to the business income surrender has also been demonstrated by the assessee before the AO. These very facts have been pleaded before the ld. PCIT. In the facts of the present case, information from the assessee on the queries raised by the AO have both moved to and fro through the ITBA portal and thus, what enquiries were raised by the AO and what responses were made by the assessee is a fact not open to manipulation and is available. On going through the submissions and the facts on record, we find that these queries raised and replies made were always available to the ITA 366&367/CHD/2022 A.Y. 2017-18 Page 39 of 45 ld. PCIT also. No case has been built referring to any material how the order can be said to be erroneous on facts. The Revisionary powers in the facts of the present case is clearly an attempt to re-look at the very same information. This action as per settled legal position is barred under the Revisionary powers. The view taken by the AO after carrying out due and relevant enquiries and considering the responses of the assessee is not shown to be an erroneous view. We find that there are many orders of the Co-ordinate Benches supporting the view taken by the AO. At this stage, to argue that this was not the business income of the assessee and was amenable to tax under the deeming head and thus, Section 115BBE de-hors facts cannot be accepted. On facts, a conscious and reasonable possible view has been taken by the AO. Thus, merely because the view is not to the liking of the ld. PCIT by itself cannot make the order passed by the AO as an erroneous order. We find that the reliance placed upon by the ld. CIT-DR on the decision of the jurisdictional High Court in the case of Kim Pharma (P) Ltd. (cited supra) is misplaced. This fact is evident from the findings of the Hon'ble Court. For ready reference, we reproduce the relevant finding from the aforesaid decision : 3. We have heard learned counsel for the assessee. 4. Learned counsel for the assessee submitted that the amount surrendered by the assessee was business income and assessable as such. He relied upon a ITA 366&367/CHD/2022 A.Y. 2017-18 Page 40 of 45 decision of the Karnataka High Court in CIT v. S.K. Srigiri & Bros. [20081 298 ITR 13/171 Taxman 264. 5. The point for determination in this appeal is, whether Rs. 5,00,000 which was surrendered by the assessee during the course of survey under s. 133A of the Act would form part of business income or was assessable under s. 69A of the Act. The AO, the CIT(A) and the Tribunal after considering the factual aspect noticed that the amount surrendered during the survey was not reflected in the books of account and no source from where it was derived was declared by the assessee and, therefore, it was, deemed income of the assessee under s. 69A of the Act. The findings recorded by the Tribunal in this regard are as under: "In the facts of the present case, we find that assessee during the course of survey had surrendered the income as income from other sources though a plea has been raised by the assessee that the income was surrendered as income from job work but no evidence to prove the stand of the assessee has been brought on record. The assessee had also surrendered additional income of Rs. 10 lakhs in asst. yr. 2005-06 on account of sundry credits, repairs to building and advances to staff, which being relatable to business carried on by assessee was included as income from business. However, in respect of cash found during survey, which was not reflected in the books of account, no source was declared by the assessee and in the absence of nature of source of cash being proved, the same is not assessable as income from business. In the circumstances, we uphold the order of the CIT(A)' in including the additional income as deemed income under s. 69A of the Act and not allowing the benefit of the business losses determined against the said deemed income. The grounds of appeal raised by the assessee are dismissed." 6. The Tribunal had relied upon a decision of the Gujarat High Court in Fakir Mohmed Haji Hasan v. CIT( 2001) 247 ITR 290 [2002] 120 Taxman 11. In that case, interpreting the scope and describing the scheme of ss. 69, 69A, 69B and 69C of the Act, it was observed : "The scheme of ss. 69, 69A, 69B and 69C of the IT Act, 1961, would show that in cases where the nature and source of investments made by the assessee or the nature and source of acquisition of money, bullion etc., owned by the assessee or the source of expenditure incurred by the assessee are not explained at all, or not satisfactorily explained, then, the value of such investments and money or the value of articles not recorded in the books of account or the unexplained expenditure may be deemed to be the income of such assessee.lt follows that the moment a satisfactory explanation is given about such nature and source by the assessee, then the source would stand disclosed and will, therefore, be known and the income would be treated under the appropriate head of income for assessment as per the provisions of the Act. However, when these provisions apply because no source is disclosed at all on the basis of which the income can be classified under one of the heads of income under s. 14 of the Act, it would not be possible to classify such deemed income under any of these heads including income from 'other sources' which have to be sources known or explained. When the income cannot be ITA 366&367/CHD/2022 A.Y. 2017-18 Page 41 of 45 so classified under any one of the heads of income under s. 14, it follows that the question of giving any deductions under the provisions which correspond to such heads of income will not arise. If it is possible to peg the income under any one of those heads by virtue of a satisfactory explanation being given, then these provisions of ss. 69, 69A, 69B and 69C will not apply, in which event, the provisions regarding deductions etc. applicable to the relevant head of income under which such income falls will automatically be attracted. The opening words of s. 14 'save as otherwise provided by this Act' clearly leave scope for 'deemed income' of the nature covered under the scheme of ss. 69, 69A, 69B and 69C being treated separately, because such deemed income is not income from salary, house property, profits and gains of business or profession, or capital gains, nor is it income from 'other sources' because the provisions of ss. 69, 69A, 69B and 69C treat unexplained investments, unexplained money, bullion etc. and unexplained expenditure as deemed income where the nature and source of investment, acquisition or expenditure, as the case may be, have not been explained or satisfactorily explained. Therefore, in these cases, the source not being known, such deemed income will not fall even under the head 'Income from other sources'. Therefore, the corresponding deductions which are applicable to the incomes under any of these various heads, will not be attracted in the case of deemed incomes which are covered under the provisions of ss. 69, 69A, 69B and 69C of the Act in view of the scheme of those provisions." 7. The said decision fully applies to the facts of the present case. 8. In S.K. Srigiri & Bros, case (supra) before the Karnataka High Court, a finding of fact was recorded that the assessee received additional income from business only and, therefore, it was entitled to deduction on account of remuneration paid to the partners. Such is not the situation here. 9. In view of the above, no substantial question of law arises in this appeal. The appeal is accordingly dismissed. (emphasis supplied) 8.2 On a reading from the above, it is seen that their Lordships did not hold that income surrendered during the survey necessarily has to be added under the deeming provisions. In fact, in the case of Kim Pharma (P) Ltd. itself the assessee has raised the plea before the ITAT that the income surrendered was from job work. This pleading on ITA 366&367/CHD/2022 A.Y. 2017-18 Page 42 of 45 facts was discarded by the ITAT holding that evidence to prove the stand taken was lacking. The jurisdictional High Court had also taken note of the decision of the Hon'ble Gujrat High Court in the case of Fakir Mohmed Haji Hasan Vs CIT (2001) 247 ITR 290 which had also possibly been relied upon by the ITAT. A reading of the said decision also clearly illustrates the fact that a plea that surrender was from business income or some other specific source could always be taken by the assessee. Thus, we find that the legal precedent relied upon by the ld. CIT-DR does not help the Revenue in any manner. The issues to be considered necessarily are very fact specific and in case supporting facts are available, assessees are permitted to argue that surrendered income be considered under specific heads. Thus, the issue is to be decided on a case to case basis and it is only the facts of a case which will enable the adjudicating authority to decide whether the plea qua the surrendered income is to be accepted or not. From the aforesaid decision of the Hon'ble Court, their Lordships have extracted in para 6, “.....lt follows that the moment a satisfactory explanation is given about such nature and source by the assessee, then the source would stand disclosed and will, therefore, be known and the income would be treated under the appropriate head of income for ITA 366&367/CHD/2022 A.Y. 2017-18 Page 43 of 45 assessment as per the provisions of the Act. However, when these provisions apply because no source is disclosed at all..........” Accordingly, on a reading of the aforesaid decision of the Hon'ble jurisdictional High Court as well as the decision of the Hon'ble Gujrat High Court, we find that the Courts have not held that every income surrendered during the survey necessarily is brought to tax under the deeming provisions. The Courts considering the scheme of the Act have left the door open for the assessees wherever they can, to argue on facts if available that a specific income surrendered was under a specific head. It is the explanation of the assessee supported by documents which would bring the deeming provisions into play. Their Lordships have also referred to the decision of the Hon'ble Karnataka High Court in the case of CIT v. S.K. Srigiri & Bros. [2008] 298 ITR 13/171 Taxman 264 and distinguished the same from the facts of Kim Pharma (P) Ltd. as in the facts of the said case before the Hon'ble Karnataka High Court, the income was explained as additional income from business. Accordingly, we find that in the facts of the present case, the decision of the jurisdictional High Court in the case of Kim Pharma (P) Ltd. is of no help. The arguments advanced on behalf of the Revenue that since the assessee best knows the source of income surrendered and deeming provisions are ITA 366&367/CHD/2022 A.Y. 2017-18 Page 44 of 45 automatically attracted and hence, it is not for the Revenue to demonstrate that it was not from the stated heads, we find is misplaced. In the facts of the present case, the assessee has been subjected to survey and documents have been impounded, surrender from stated source has been made which has been accepted by the Survey Team and has also been accepted by the AO after carrying out due enquiries, thus, requiring the assessee to further prove that it was from some other source is asking the assessee to perform the impossible. The assessee cannot prove the negative. If at all it is for the Revenue to demonstrate that the heads as disclosed and accepted as per record is incorrect. No such case is made out by the Revenue. Accordingly, on a consideration of the peculiar facts, circumstances and position of law, we find that the impugned order at best can be said to attempting to make out a case of a debatable view, however, even then the order cannot be upheld. Revenue has failed to point out the error in the order accepting the surrendered income under the stated heads and hence, no prejudice can be said to be caused in the absence of any error in the order pointed out. We may refer here to the decision of the Apex Court in the case of Parshuram Pottery 1977 AIR 429 (S.C). The Revisionary Authority cannot seek to re-look at the very same information in order to arrive at ITA 366&367/CHD/2022 A.Y. 2017-18 Page 45 of 45 a different view. The error and the prejudice caused has to be set out in the order. A valid order after due enquiries has been passed. The power cannot be exercised arbitrarily. The argument that the assessee is still free to argue before the AO in case the impugned order is upheld, we find cannot be accepted. Accordingly, we direct that the impugned order be quashed. Appeal of the assessee is allowed. 9. Since facts and submissions in ITA 366/CHD/2022 remain identical, accordingly, both to the appeals of the assessees stand allowed. Order pronounced in the Open Court on 12 th January, 2023. Sd/- Sd/- (VIKRAM SINGH YADAV) (DIVA SINGH) लेखा लेखालेखा लेखा सद瀡य सद瀡यसद瀡य सद瀡य/ Accountant Member 瀈याियक 瀈याियक瀈याियक 瀈याियक सद瀡य सद瀡यसद瀡य सद瀡य/ Judicial Member “Poonam” आदेश क琉 灹ितिलिप अ灡ेिषत/ Copy of the order forwarded to : 1. अपीलाथ牸/ The Appellant 2. 灹瀄यथ牸/ The Respondent 3. आयकर आयु猴/ CIT 4. आयकर आयु猴 (अपील)/ The CIT(A) 5. िवभागीय 灹ितिनिध, आयकर अपीलीय आिधकरण, च瀃डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड榁 फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar