STARTECH ENGINEERS, MUMBAI V. PR CIT 22, MUMBAI

ITA 3898/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0522 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 29-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMYDR
• Assessee Lawyers: D C SABOO
• Keywords: Unexplained expenditure; Revision of order; Opportunity of being heard; Principle of natural justice; Period of limitation; Difference of opinion; Revised return; Change of opinion
• Section: 69C; 143(3); 142(1); 260A; 147; 263; 154

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO.3898/MUM/2017 ASSESSMENT YEAR: 2012-13 STARTECH ENGINEERS, G-12, SINHGARJANE SOC. MARATHA COLONY, SANTRACRUZ (E), MUMBAI-400055 / VS. PR. COMMISSIONER OF INCOME TAX-22, ROOM NO.409, 4 TH FLOOR, PIRAMAL CHAMBERS, PAREL MUMBAI-400012 ( '# $ /ASSESSEE) ( % / REVENUE) P.A. NO. AAXFS3063J '# $ / ASSESSEE BY SHRI D.C.SABOO & SHRI SHYAM SABOO % / REVENUE BY SHRI MANJUNATHA SWAMY-DR & % ' $ ( / DATE OF HEARI NG : 08/01/2018 ' $ ( / DATE OF ORDER: 01/02/2018 STARTECH ENGINEERS ITA NO.3898/MUM/2017 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 20/03/2017 OF THE LD. PR. COMMISSIONER OF INCOME TA X, MUMBAI, INVOKING REVISIONAL JURISDICTION U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. DURING HEARING, SHRI D.C. SABOO ALONG WITH SHRI SHYAM SABOO, LD. COUNSEL FOR THE ASSESSEE, CONTENDE D THAT THE WELL REASONED ASSESSMENT ORDER U/S 143(3) OF THE AC T WAS PASSED BY THE ASSESSING OFFICER CONSIDERING THE DET AILS FILED BY THE ASSESSEE, THUS, THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT WAS PLEADED THAT THE LD. PR. COMMISSIONER DID NOT APPLY HIS MIN D AND EVEN NOTICE U/S 142(1) WAS ISSUED TO THE ASSESSEE. RELIANCE WAS PLACED UPON THE DECISION IN THE CASE OF SHRI NA RAYAN TATU RANE VS INCOME TAX OFFICER (ITA NO.2690/MUM/2016), SMALL WONDER INDUSTRIES VS CIT (ITA NO.2464/MUM/2013), JEEVANLAL (1929) LTD. VS ADDL. CIT (1997) 108 ITR 4 07 (CAL.). ON THE OTHER HAND, THE LD. DR, SHRI MANJUNATHA SWAM Y, LD. CIT-DR, DEFENDED THE IMPUGNED ORDER BY CONTENDING T HAT THE STARTECH ENGINEERS ITA NO.3898/MUM/2017 3 ASSESSMENT ORDER IS ERRONEOUS AS WELL AS PREJUDICIA L TO THE INTEREST OF REVENUE, THEREFORE, THE REVISIONAL JURI SDICTION WAS JUSTIFIABLY INVOKED. OUR ATTENTION WAS INVITED TO T HE FINDING IN THE IMPUGNED ORDER AND IT WAS ARGUED THAT WHILE FRA MING THE ASSESSEE, THE LD. ASSESSING OFFICER DID NOT MAKE FU LL MEANING ENQUIRY WITH RESPECT TO UNSECURED LOANS AND EVEN TH ERE WAS NOT APPLICATION OF MIND BY THE ASSESSING OFFICER. P LEA WAS ALSO RAISED THAT THERE IS NO CHANGE OF OPINION BY THE AS SESSING OFFICER AS THE ASSESSMENT WAS FRAMED WITHOUT MAKING DUE ENQUIRIES, THEREFORE, THERE IS NO APPLICATION OF MI ND. IT WAS ALSO PLEADED THAT THE PR. CIT HAS NOT THRUST UPON H IS VIEW AND MERELY DIRECTED THE ASSESSING OFFICER TO PROVIDED D UE OPPORTUNITY TO THE ASSESSEE AND FRAMED THE ASSESSME NT THEREAFTER AFRESH, THUS, NO GRIEVANCE IS CAUSED TO THE ASSESSEE. RELIANCE WAS PLACED UPON THE DECISION FROM HON'BLE APEX COURT IN THE CASE OF CIT VS AMITABH BACHCHAN (2016) 69 TAXMANN.COM 170 (SC), M/S LARSO & TOUBRO LTD. VS ST ATE OF JHARKHAND & ORS. (CIVIL APPEAL NO.5390 OF 2007), CI T VS BALLARPUR INDUSTRIES LTD. (ITA NO.27 OF 2007)(BOM.) JAI STEEL INDIA LTD. VS ACIT (2013) 259 CTR (RAJ.) 281, RAJMA NDIR STARTECH ENGINEERS ITA NO.3898/MUM/2017 4 ESTATES VS PR. CIT 77 TAXMANN.COM 285 (SC) AND ARVE E INTERNATIONAL VS ADDL. CIT (ITA NO.3543/MUM/2003). 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE FIRM WORKS ON DESIGNING, SUPP LYING, ERECTING, MAINTENANCE AND CONSULTANCY ON FIRE SAFET Y, SECURITY, BUILDING MANAGEMENT AND OTHER EMERGENCY SYSTEM DECL ARED TOTAL INCOME OF RS.71,25,900/-, WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THE CASE OF THE ASSESSEE WAS SEL ECTED FOR SCRUTINY FOR CASS, THEREFORE, NOTICE U/S 143(2) AND 142(1) WERE ISSUED TO THE ASSESSEE. THE ASSESSEE ATTENDED THE PROCEEDINGS AND FILED THE DETAILS. WHILE FRAMING TH E ASSESSMENT, THE LD. ASSESSING OFFICER HAS DISCUSSED THE ISSUE OF UNDERSTATEMENT OF RECEIPT OF RS.25,000/- AND DID NOT MAKE DISCUSSION/ENQUIRY/INVESTIGATION WITH RESPECT TO OU TSTANDING UNSECURED LOANS OF RS.1,27,28,994/- AS ON 31/03/201 2. HOWEVER, THE ASSESSMENT WAS FRAMED U/S 143(3) OF TH E ACT. THE LD. PR. COMMISSIONER ISSUED SHOW CAUSE NOTICE T O THE ASSESSEE AS TO WHY THE ASSESSMENT SHOULD NOT BE SET -ASIDE INVOKING REVISIONAL JURISDICTION U/S 263 OF THE ACT FIXING THE STARTECH ENGINEERS ITA NO.3898/MUM/2017 5 HEARING FOR 18/12/2016. THE ASSESSEE ON 08/12/2016 REQUESTED FOR ADJOURNMENT FOR A MONTH AND THE MATTE R WAS FIXED FOR 25/01/2017. THE ASSESSEE FILED ITS SUBMIS SIONS. THE SUBMISSIONS OF THE ASSESSEE WERE CONSIDERED AND THE ASSESSEE PLACED RELIANCE UPON CERTAIN PRONOUNCEMENTS AS MENT IONED IN PARA-5 OF THE IMPUGNED ORDER. CONSIDERING THE TOTAL ITY OF FACTS, THE LD. PR. COMMISSIONER DIRECTED THE ASSESSING OFF ICER TO FINALIZE THE ASSESSMENT AFRESH AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE HAS CH ALLENGED THIS ORDER BEFORE THIS TRIBUNAL. 2.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, BEFORE ADVERTING FURTHE R, WE ARE REPRODUCING HEREUNDER THE PROVISIONS OF SECTION 263 OF THE ACT FOR READY REFERENCE AND ANALYSIS:- 263. (1) THE PRINCIPAL COMMISSIONER OR COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY TH E ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN O PPORTUNITY OF STARTECH ENGINEERS ITA NO.3898/MUM/2017 6 BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS T HE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORD ER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSM ENT AND DIRECTING A FRESH ASSESSMENT. 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 TH E BASIS OF THE DIRECTIONS ISSUED BY THE JOINT COMMISSIONER UND ERSECTION 144A ; ( II ) AN ORDER MADE BY THE JOINT COMMISSIONER IN EXERCI SE OF THE POWERS OR IN THE PERFORMANCE OF THE FUNCTIONS OF AN ASSESSING OFFICER CONFERRED ON, OR ASSIGNED TO, HIM UNDER THE ORDERS OR DIRECTIONS ISSUED BY THE BOARD OR BY THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL DIR ECTOR GENERAL OR DIRECTOR GENERAL OR PRINCIPAL COMMISSION ER OR COMMISSIONER AUTHORISED BY THE BOARD IN THIS BEHALF UNDER SECTION 120 ; ( B ) 'RECORD' SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDING UND ER THIS ACT AVAILABLE AT THE TIME OF EXAMINATION BY THE PRINCIP AL COMMISSIONER OR COMMISSIONER; ( C ) WHERE ANY ORDER REFERRED TO IN THIS SUB-SECTION A ND PASSED BY THE ASSESSING OFFICER HAD BEEN THE SUBJECT MATTER OF AN Y APPEAL FILED ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988, TH E POWERS OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER UNDER THIS S UB-SECTION SHALL EXTEND AND SHALL BE DEEMED ALWAYS TO HAVE EXT ENDED 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 ASSESSING OFFI CER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICI AL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, ( A ) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR V ERIFICATION WHICH SHOULD HAVE BEEN MADE; STARTECH ENGINEERS ITA NO.3898/MUM/2017 7 ( 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 ( D ) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY T HE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASSE SSEE 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 YEAR 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 CONSE QUENCE OF, OR TO GIVE EFFECT TO, ANY FINDING OR DIRECTION CONTAIN ED IN AN ORDER OF THE APPELLATE TRIBUNAL, NATIONAL TAX TRIBUNAL, 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 INJUNCTION 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 COMMI SSIONER TO CONSIDER WHETHER THE ASSESSMENT ORDER IS ERRONEO US IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE AND A FTER GIVING OPPORTUNITY OF BEING HEARD AND HE MAKE SUCH ENQUIRY AS HE DEEMS NECESSARY AND PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE SO JUSTIFY INCLUDING, ENH ANCE AND MODIFYING THE ASSESSMENT OR CANCELING THE ASSESSMEN T AND DIRECTING A FRESH ASSESSMENT. IT HAS BEEN FURTHER E XPLAINED STARTECH ENGINEERS ITA NO.3898/MUM/2017 8 WITH THE INSERTION OF EXPLANATION-2 INSERTED BY THE FINANCE ACT, 2015 W.E.F. 01/06/2015. UNDISPUTEDLY, THE LD. PR. COMMISSIONER SERVED UPON THE ASSESSEE A SHOW CAUSE NOTICE ASKING THE ASSESSEE AS TO WHY THE REVISIONAL JURISD ICTION MAY NOT BE INVOKED. IT IS ALSO NOTED THAT IT IS NOT THE CASE THAT THE LD. PR. COMMISSIONER CAUSED ANY PREJUDICE TO THE AS SESSEE RATHER DIRECTED THE LD. ASSESSING OFFICER TO FRAME THE ASSESSMENT AFRESH THAT TOO AFTER PROVIDING DUE OPPO RTUNITY OF BEING HEARD. THEREFORE, FROM SO FAR AS INVOCATION O F REVISIONAL JURISDICTION U/S 263 IS CONCERNED, WE FIND NO INFIR MITY IN SUCH INVOCATION. 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 WITH US, SO THAT WE CAN REACH TO A JUSTIFIABLE CONCLUSION. THE HON'BLE CALCUTTA HIGH COURT IN RAJMANDIR ESTATE PVT. LTD. VS PR. CIT (2016) 70 TAXMAN.COM 124 (CALC.) ORDER DATED 13/05/2016 AND THE RATIO LA ID DOWN THEREIN SUPPORTS THE CASE OF THE REVENUE. IT IS NOTEWORTHY THAT WHILE COMING TO A PARTICULAR CONCLUSION, HON'B LE CALCUTTA HIGH COURT CONSIDERED FOLLOWING JUDICIAL PRONOUNCEM ENTS:- STARTECH ENGINEERS ITA NO.3898/MUM/2017 9 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), 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), STARTECH ENGINEERS ITA NO.3898/MUM/2017 10 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), 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), STARTECH ENGINEERS ITA NO.3898/MUM/2017 11 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 SHRI NARAYAN TATU RANE VS INCOME TAX OFFICER (ITA NO.2690/MUM/2016), SMALL WONDER INDUSTRIES VS CIT ( ITA NO.2464/MUM/2013), JEEVANLAL (1929) LTD. VS ADDL. C IT (1997) 108 ITR 407 (CAL.) IS CONCERNED, THE FACTUAL FINDING IS THAT THE ASSESSING OFFICER AFTER MAKING PROPER AND DETAILED STARTECH ENGINEERS ITA NO.3898/MUM/2017 12 ENQUIRIES TOOK A PARTICULAR VIEW, WHEREAS, IN THE P RESENT APPEAL PROPER ENQUIRY WAS NOT MADE BY THE ASSESSING OFFICER, THEREFORE, THESE JUDICIAL PRONOUNCEMENTS MAY NOT HE LP THE ASSESSEE. SIMILAR IS THE POSITION IN OTHER CASES, W HICH ARE DIFFERENT ON FACTS. 2.6. WE HAVE ALSO PERUSED THE ASSESSMENT ORDER, WH ICH IS A SUBJECT MATTER OF REVISIONAL JURISDICTION U/S 263 AND THE IMPUGNED ORDER PASSED BY THE LD. PR. COMMISSIONER. ADMITTEDLY, AN INCORRECT ASSUMPTION OF FACT OR AN I NCORRECT APPLICATION OF LAW WOULD SATISFY THE REQUIREMENT OF ORDER BEING ERRONEOUS U/S. 263 OF THE ACT. THE PHRASE PREJUDIC IAL TO THE INTEREST OF THE REVENUE U/S. 263, HAS TO BE READ I N CONJUNCTION WITH THE EXPRESSION ERRONEOUS ORDER B Y THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSE QUENCE OF ASSESSMENT ORDER CANNOT BE TERMED AS PREJUDICIAL TO THE INTEREST OF REVENUE, MEANING THEREBY, PREJUDICE M UST BE PREJUDICE TO THE REVENUE ADMINISTRATION. AT THE SAM E TIME, IF ANOTHER VIEW IS POSSIBLE, REVISION IS NOT PERMISSIB LE. OUR VIEW IS FORTIFIED BY THE DECISION FROM HIMACHAL PRADESH FINANCIAL CORP. (186 TAXMANN 105)(HP), BISMILLAH TRADING CO. (248 ITR STARTECH ENGINEERS ITA NO.3898/MUM/2017 13 292)(KER.) AND CIT VS. GREEN WORLD CORPN. (314 ITR 81)(SC) . FOR INVOKING REVISIONAL JURISDICTION U/S. 263 OF THE AC T, THE ASSESSMENT ORDER MUST CONTAIN GRIEVOUS ERROR WHICH IS SUBVERSIVE OF THE ADMINISTRATION OF REVENUE. FURTHE R, EXACT ERROR MUST BE DISCLOSED BY THE COMMISSIONER AS WAS HELD IN CIT VS. G.K. KABRA (211 ITR 336)(AP). SECTION 263 OF THE ACT ENABLES THE COMMISSIONER TO HAVE A RE-LOOK AT THE O RDERS OR PROCEEDINGS OF THE LOWER AUTHORITY TO EFFECT CORREC TION, IF SO NEEDED, PARTICULARLY, IF THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE OBJECT OF THE P ROVISION IS TO RAISE REVENUE FOR THE STATE AND SECTION 263 IS ENAB LING PROVISION CONFERRING JURISDICTION UPON THE COMMISSI ONER TO REVISE THE ORDER. THE PROVISION IS INTENDED TO PLUG THE LEAKAGE OF THE REVENUE BY THE ERRONEOUS AND PREJUDICIAL ORD ER. OUR VIEW FIND SUPPORT FROM THE RATIO LAID DOWN IN FOLLO WING 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.), STARTECH ENGINEERS ITA NO.3898/MUM/2017 14 IV. CIT VS TRIVENI ENGINEERING WORKS LTD. (2011) 336 ITR 366 (DEL.), V. R.A. HIMMATSINGHKA & COMPANY VS CIT (2012) 340 ITR 253 (PAT.) VI. CIT VS RAJEEV AGNIHOTRI (2011) 332 ITR 608 (P & H), VII. CIT VS DLF LTD. (2013) 350 ITR 555 (DEL.), VIII. CIT VS GABREAL INDIA LTD. (1993) 203 ITR 108, 114 (B OM.), 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 APPEAL AND ANALYZED, THE LD. ASSESSING OFFICER WHILE FRAMING T HE ASSESSMENT MADE NO DISCUSSION WITH RESPECT TO OUTST ANDING UNSECURED LOANS OF RS.1,27,28,994/- AS ON 31/03/201 2, CLAIM TO BE TAKEN FROM GYANCHAND MANHOT AND PURSHPA DEVI MANHOT AND AS ON 31/03/2005, THE LOANS OUTSTANDING WERE RS.34,52,427 AND RS.32,36,092/- RESPECTIVELY. ON VERIFICATION OF THE LOAN CONFIRMATIOIN, IT WAS OBSE RVED THAT THERE ARE NO PAN NUMBER ARE MENTIONED ON IT AND EVE N NO STARTECH ENGINEERS ITA NO.3898/MUM/2017 15 COPY OF RETURN OF INCOME, BANK STATEMENT WERE AVAIL ABLE ONO RECORD. THIS OBSERVATION OF THE LD. PR. COMMISSIONE R WAS NEVER CONTRADICTED BY THE ASSESSEE. IT IS ALSO NOTE D WHILE FRAMING THE ASSESSEE, THE LD. ASSESSING OFFICER DID NOT VERIFY, EXAMINED, THE NATURE AND THE GENUINENESS OF THE LOA NS AND NO DETAILS WERE FOUND ON RECORD. IT IS ALSO NOTED THAT IN THE ASSESSMENT ORDER, THERE IS NO MENTION WITH RESPECT TO VERIFICATION OF SUCH LOANS IN THE ASSESSMENT ORDER. 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 REVEN UE, THUS THE REVISIONAL JURISDICTION WAS RIGHTLY INVOKED. IT IS ALSO NOTED THAT IF THE ASSESSEE IS SO CLEAN IN ITS CLAIM THEN NO PREJUDICE IS CAUSED TO THE ASSESSEE AS THE LD. PR. COMMISSION ER MERELY DIRECTED THE ASSESSING OFFICER, IN THE INTEREST OF JUSTICE, TO FINALIZE THE ASSESSMENT AFRESH AFTER PROVIDING SUF FICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS N OT THE CASE THAT THE LD. PR. COMMISSIONER HAS THRUST UPON HIS V IEW AND TO FRAME THE ASSESSMENT IN A PARTICULAR MANNER. STARTECH ENGINEERS ITA NO.3898/MUM/2017 16 2.8. TOTALITY OF FACTS, CLEARLY INDICATES THAT EVE N IN THE IMPUGNED ORDER, THE LD. ASSESSING OFFICER WAS DIREC TED TO DECIDE AFRESH AFTER CONDUCTING APPROPRIATE ENQUIRIE S AND ON EXAMINING THE DETAILS AFTER PROVIDING DUE OPPORTUNI TY OF BEING HEARD BEFORE FINALIZING THE ASSESSMENT, THUS, NO GRIEVANCE IS CAUSED TO THE ASSESSEE, BECAUSE THE AS SESSEE IS AT LIBERTY TO CONTEST THE OBSERVATION MADE BY THE L D. PR. COMMISSIONER. OUR VIEW IS FORTIFIED BY THE DECISIO N IN INDIAN TEXTILE VS CIT (157 ITR 112) (MAD.), GEE VEE ENTERP RISES VS ADDL. CIT (99 ITR 375)(DEL.), THALIBAI F JAIN VS IT O 101 ITR 1 (KARN.) AND CIT VS HPFC 186 TAXMAN 105 (HP), CIT VS PUSHPA DEVI 164 ITR 639 (PATNA). WE ARE AWARE THAT BEFORE THE LD. COMMISSIONER INVOKES THE REVISIONAL JURISDI CTION U/S 263 OF THE ACT, HE SHOULD GET SATISFIED THAT THE OR DER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICI AL TO THE INTEREST OF THE REVENUE. HONBLE GUJARAT HIGH COUR T IN CIT VS M. M.KHAMBATBALA 198 ITR 144 (GUJ.) EVEN WENT TO THE EXTENT THAT REVISIONAL POWERS CAN BE EXERCISED EVEN IF THE ISSUE IS DEBATABLE. THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS GABRIEL INDIA LTD. (1993) 203 ITR 108 (BOM.) CONCLUDED THAT POWERS U/S 263 CANNOT BE EXERCISED F OR STARTECH ENGINEERS ITA NO.3898/MUM/2017 17 STARTING FISHING AND ROVING ENQUIRIES. FOR MAKING A VALID ORDER U/S 263(1), IT IS ESSENTIAL THAT THE COMMISSI ONER HAS TO RECORD AN EXPRESS FINDING THAT PREJUDICE HAS BEEN C AUSED TO THE INTEREST OF THE REVENUE. OUR VIEW FIND SUPPORT FROM THE RATIO LAID DOWN IN BHARGWA ENGINEERING CORPORATION VS CIT (1996) 134 TAXATION 493, 494 (ALL.), CIT VS DIGVIJA Y TRADERS (1997) 137 CTR (MP) 224, CIT VS REGIONAL AGRO INDUS TRIAL 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, CLEARLY INDICATE S THAT THE ASSESSMENT ORDER HAS BEEN FRAMED WITHOUT FULL ENQUI RIES, THEREFORE, THE LD. COMMISSIONER JUSTIFIABLY INVOKED REVISIONAL JURISDICTION. 2.9. THE HON'BLE APEX COURT IN RAJMANDIR ESTATES P VT. LTD. (2017) 77 TAXMAN.COM 285 (SC), WHEREIN, THERE WAS LACK OF REQUISITE ENQUIRY INTO INCREASE OF SHARE CAPITAL AND NON- APPLICATION OF MIND, THE COMMISSIONER WAS HELD TO B E JUSTIFIED IN INVOKING THE REVISIONAL JURISDICTION, WHICH IS R EPRODUCED HEREUNDER:- STARTECH ENGINEERS ITA NO.3898/MUM/2017 18 SECTION 68, READ WITH SECTION 263 OF THE INCOME-TA X ACT, 1961 - CASH CREDIT (SHARE APPLICATION MONEY) - ASSESSMENT YEAR 2009-10 - DURING RELEVANT YEAR, ASSESSEE-COMPANY HAD INCREA SED ITS SHARE CAPITAL BY ISSUING 7.93 LAKHS SHARES OF RS.10 EACH AT A PREMIUM OF RS.390 - ASSESSING OFFICER COMPLETED ASSESSMENT WIT HOUT HOLDING REQUISITE INVESTIGATION EXCEPT FOR CALLING FOR RECO RDS - COMMISSIONER PASSED ORDER UNDER SECTION 263 AND OPI NED THAT THIS COULD BE A CASE OF MONEY LAUNDERING WHICH WENT UNDETECTED DUE TO LACK OF REQUISITE ENQUIRY INTO INCREASE OF S HARE CAPITAL INCLUDING PREMIUM RECEIVED BY ASSESSEE AND NON-APPL ICATION OF MIND - HIGH COURT BY IMPUGNED ORDER HELD THAT SINCE ASSESSEE WITH AN AUTHORISED SHARE CAPITAL OF RS.1.36 CRORES RAISED NEARLY A SUM OF RS.32 CRORES ON ACCOUNT OF PREMIUM AND CHOSE NOT TO GO IN FOR INCREASE OF AUTHORISED SHARE CAPITAL MERELY TO AVOID PAYMENT OF STATUTORY FEES WAS AN IMPORTANT POINTER NECESSIT ATING INVESTIGATION AND THUS, COMMISSIONER WAS JUSTIFIED IN TREATING ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO INTER EST OF REVENUE - WHETHER SPECIAL LEAVE PETITION FILED AGAINST IMPU GNED ORDER WAS TO BE DISMISSED - HELD, YES [PARA 2] [IN FAVOUR OF REVENUE] 2.10. THE HON'BLE APEX COURT IN CIT VS AMITABH BACCHAN (2016) 69 TAXMAN.COM 170 (SC) (ORDER DATED 11/05/2016) IS HELD AS UNDER:- 2. THE APPELLANT - REVENUE SEEKS TO CHALLENGE THE ORDE R OF THE HIGH COURT DATED 7TH AUGUST, 2008 DISMISSING THE APPEAL FILED BY IT UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 (HEREINAFT ER REFERRED TO AS ''THE ACT') AND AFFIRMING THE ORDER OF THE INCOME TAX APP ELLATE TRIBUNAL, MUMBAI BENCH ('TRIBUNAL' FOR SHORT) DATED 28TH AUGU ST, 2007 WHEREBY THE ORDER DATED 20TH MARCH, 2006 PASSED BY THE COMM ISSIONER OF INCOME TAX-1, MUMBAI ('C.I.T.' FOR SHORT) UNDER SECTION 26 3 OF THE ACT WAS REVERSED. THE ASSESSMENT YEAR IN QUESTION IS 2001-2 002 AND THE ASSESSMENT ORDER IS DATED 30TH MARCH, 2004. 3. AFTER THE ASSESSMENT AS ABOVE WAS FINALIZED, A SHOW CAUSE NOTICE DATED 7TH NOVEMBER, 2005 UNDER SECTION 263 OF THE ACT WAS ISSUED BY THE LEARNED C.I.T. DETAILING AS MANY AS ELEVEN (11) ISS UES/GROUNDS ON WHICH THE ASSESSMENT ORDER WAS PROPOSED TO BE REVISED UND ER SECTION 263 OF THE ACT. THE RESPONDENT - ASSESSEE FILED HIS REPLY TO T HE SAID SHOW CAUSE NOTICE ON CONSIDERATION OF WHICH BY ORDER DATED 20T H MARCH, 2006 THE LEARNED C.I.T. SET ASIDE THE ORDER OF ASSESSMENT DA TED 30TH MARCH, 2004 AND DIRECTED A FRESH ASSESSMENT TO BE MADE. AGGRIEV ED, THE RESPONDENT STARTECH ENGINEERS ITA NO.3898/MUM/2017 19 ASSESSEE CHALLENGED THE SAID ORDER BEFORE THE LEARN ED 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 BEFORE THE HIGH COURT OF BOMBAY. THE AFORESAID APPE AL I.E. ITA NO. 293 OF 2008 WAS SUMMARILY DISMISSED BY THE HIGH COURT B Y THE IMPUGNED ORDER DATED 7TH AUGUST, 2008 HOLDING THAT AS THE C. I.T. HAD GONE BEYOND THE SCOPE OF THE SHOW CAUSE NOTICE DATED 7TH NOVEMB ER, 2005 AND HAD DEALT WITH THE ISSUES NOT COVERED/MENTIONED IN THE SAID NOTICE THE REVISIONAL ORDER DATED 20TH MARCH, 2006 WAS IN VIOL ATION OF THE PRINCIPLES OF NATURAL JUSTICE. SO FAR AS THE QUESTION AS TO WH ETHER THE ASSESSING OFFICER HAD MADE SUFFICIENT ENQUIRIES ABOUT THE ASS ESSEE'S CLAIM OF EXPENSES MADE IN THE RE-REVISED RETURN OF INCOME IS CONCERNED, WHICH QUESTION WAS FORMULATED AS QUESTION NO. 2 FOR THE H IGH 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 REVENUE WAS CONSEQUENTLY DISMISSED. AGGRIEVED, THIS APPEAL HAS BEEN FILED UP ON GRANT OF LEAVE UNDER ARTICLE 136 OF THE CONSTITUTION OF INDIA. 5. WE HAVE HEARD SHRI RANJIT KUMAR, LEARNED SOLICITOR GENERAL APPEARING FOR THE APPELLANT REVENUE AND SHRI SHYAM DIVAN, LEA RNED SENIOR COUNSEL APPEARING FOR THE RESPONDENT ASSESSEE. 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 CONCLUSION THAT IN THE COURSE OF THE ASSESSMENT PROCEEDINGS DESPITE SEVERAL OPPORTUNITIE S THE ASSESSEE DID NOT SUBMIT THE REQUISITE BOOKS OF ACCOUNT AND DOCUMENTS AND DELIBERATELY DRAGGED THE MATTER LEADING TO ONE ADJOURNMENT AFTER THE OTHER. EVENTUALLY, THE ASSESSING OFFICER, TO AVOID THE BAR OF LIMITATI ON, HAD NO OPTION BUT TO 'HURRIEDLY' FINALIZE THE ASSESSMENT PROCEEDINGS WHI CH ON DUE AND PROPER SCRUTINY DISCLOSED THAT THE NECESSARY ENQUIRIES WER E NOT MADE. ON THE SAID BASIS THE LEARNED C.I.T. CAME TO THE CONCLUSION THA T THE ASSESSMENT ORDER IN QUESTION WAS ERRONEOUS AND PREJUDICIAL TO THE IN TERESTS OF THE REVENUE WARRANTING EXERCISE OF POWER UNDER SECTION 263 OF T HE ACT. CONSEQUENTLY, THE ASSESSMENT FOR THE YEAR 2001-2002 WAS SET ASIDE AND A FRESH ASSESSMENT WAS ORDERED. AT THIS STAGE, IT MUST BE N OTICED THAT IN THE ORDER DATED 20TH MARCH, 2006 THE LEARNED C.I.T. ARRIVED A T FINDINGS AND CONCLUSIONS IN RESPECT OF ISSUES WHICH WERE NOT SPE CIFICALLY MENTIONED 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 STARTECH ENGINEERS ITA NO.3898/MUM/2017 20 LEARNED C.I.T. DID NOT RECORD ANY FINDING WHEREAS C ONCLUSIONS ADVERSE TO THE ASSESSEE WERE RECORDED ON ISSUES NOT SPECIFICAL LY MENTIONED IN THE SAID NOTICE BEFORE PROCEEDING TO HOLD THAT THE ASSESSMEN T NEEDS TO BE SET ASIDE. HOWEVER, THREE (03) OF THE ISSUES, DETAILS OF WHICH ARE NOTICED HEREIN BELOW, ARE COMMON TO THE SHOW CAUSE NOTICE AS WELL AS THE REVISIONAL ORDER OF THE LEARNED C.I.T. 7. ON APPEAL, THE LEARNED TRIBUNAL TOOK THE VIEW THAT THE LEARNED C.I.T. EXERCISING POWERS UNDER SECTION 263 OF THE 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 MENTIONE D IN THE SHOW CAUSE NOTICE THE FINDINGS AS RECORDED IN THE REVISIONAL O RDER DATED 20TH MARCH, 2006 HAVE TO BE UNDERSTOOD TO BE IN BREACH OF THE P RINCIPLES OF NATURAL JUSTICE. THE LEARNED TRIBUNAL ALSO SPECIFICALLY CON SIDERED THE THREE (03) COMMON ISSUES MENTIONED ABOVE AND ON SUCH CONSIDERA TION ARRIVED AT THE CONCLUSION THAT THE REASONS DISCLOSED BY THE LEARNE D C.I.T. IN THE ORDER DATED 20TH MARCH, 2006 FOR HOLDING THE ASSESSMENT T O BE LIABLE FOR CANCELLATION ON THAT BASIS ARE NOT TENABLE. ACCORDI NGLY, THE LEARNED TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE AND REV ERSED 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 TH E 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 GIVING 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 REV ISION IS CONTAINED IN CHAPTER XX OF THE ACT WHICH INCLUDES SECTION 263 TH AT CONFER SUO MOTU STARTECH ENGINEERS ITA NO.3898/MUM/2017 21 POWER OF REVISION IN THE LEARNED C.I.T. THE DIFFERE NT SHADES OF POWER CONFERRED ON DIFFERENT AUTHORITIES UNDER THE ACT HA S TO BE EXERCISED WITHIN THE AREAS SPECIFICALLY DELINEATED BY THE ACT AND TH E EXERCISE OF POWER UNDER ONE PROVISION CANNOT TRENCH UPON THE POWERS A VAILABLE UNDER ANOTHER PROVISION OF THE ACT. IN THIS REGARD, IT MU ST BE SPECIFICALLY NOTICED THAT AGAINST AN ORDER OF ASSESSMENT, SO FAR AS THE REVENUE IS CONCERNED, THE POWER CONFERRED UNDER THE ACT IS TO REOPEN THE CONC LUDED ASSESSMENT UNDER SECTION 147 AND/OR TO REVISE THE ASSESSMENT O RDER UNDER SECTION 263 OF THE ACT. THE SCOPE OF THE POWER/JURISDICTION UND ER THE DIFFERENT PROVISIONS OF THE ACT WOULD NATURALLY BE DIFFERENT. THE POWER AND JURISDICTION OF THE REVENUE TO DEAL WITH A CONCLUDE D ASSESSMENT, THEREFORE, MUST BE 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 LEGISLATURE HAD NOT VESTED IN THE REVENUE ANY S PECIFIC POWER TO QUESTION AN ORDER OF ASSESSMENT BY MEANS OF AN APPE AL. 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 PAS SED BY THE AUTHORITY UNDER THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTERES T OF THE REVENUE IS THE BASIC PRE-CONDITION FOR EXERCISE OF JURISDICTION UN DER SECTION 263 OF THE ACT. BOTH ARE TWIN CONDITIONS THAT HAVE TO BE CONJO INTLY PRESENT. ONCE SUCH SATISFACTION IS REACHED, JURISDICTION TO EXERC ISE THE POWER WOULD BE AVAILABLE SUBJECT TO OBSERVANCE OF THE PRINCIPLES O F NATURAL JUSTICE WHICH IS IMPLICIT IN THE REQUIREMENT CAST BY THE SECTION TO GIVE THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. IT IS IN THE CONTEXT OF THE ABOVE POSITION THAT THIS COURT HAS REPEATEDLY HELD THAT UNLIKE THE POWE R 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 NO TICE TO SHOW CAUSE. IN FACT, SECTION 263 HAS BEEN UNDERSTOOD NOT TO REQUIR E ANY SPECIFIC SHOW CAUSE NOTICE TO BE SERVED ON THE ASSESSEE. RATHER, WHAT IS REQUIRED UNDER THE SAID PROVISION IS AN OPPORTUNITY OF HEARING TO THE ASSESSEE. THE TWO REQUIREMENTS ARE DIFFERENT; THE FIRST WOULD COMPREH END A PRIOR NOTICE DETAILING THE SPECIFIC GROUNDS ON WHICH REVISION OF THE ASSESSMENT ORDER IS TENTATIVELY BEING PROPOSED. SUCH A NOTICE IS NOT RE QUIRED. WHAT IS CONTEMPLATED BY SECTION 263, IS AN OPPORTUNITY OF H EARING TO BE AFFORDED TO THE ASSESSEE. FAILURE TO GIVE SUCH AN OPPORTUNIT Y WOULD RENDER THE REVISIONAL ORDER LEGALLY FRAGILE NOT ON THE GROUND OF LACK OF JURISDICTION BUT ON THE GROUND OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. REFERENCE IN THIS REGARD MAY BE ILLUSTRATIVELY MADE TO THE DECISIONS OF THIS COURT IN GITA DEVI AGGARWAL V. CIT [1970] 76 ITR 496 AND IN CIT V. ELECTRO HOUSE [1971] 82 ITR 824 (SC) . PARAGRAPH 4 OF THE DECISION IN ELECTRO HOUSE ( SUPRA ) BEING ILLUMINATION OF THE ISSUE INDICATED ABOVE M AY BE USEFULLY REPRODUCED HEREUNDER: 'THIS SECTION UNLIKE SECTION 34 DOES NOT PRESCRIBE ANY NOTICE TO BE GIVEN. IT ONLY REQUIRES THE COMMISSIONER TO GIVE AN OPPORT UNITY TO THE ASSESSEE OF STARTECH ENGINEERS ITA NO.3898/MUM/2017 22 BEING HEARD. THE SECTION DOES NOT SPEAK OF ANY NOTI CE. IT IS UNFORTUNATE THAT THE HIGH COURT FAILED TO NOTICE THE DIFFERENCE IN LANGUAGE BETWEEN SECTIONS 33-B AND 34. FOR THE ASSUMPTION OF JURISDI CTION TO PROCEED UNDER SECTION 34, THE NOTICE AS PRESCRIBED IN THAT SECTIO N IS A CONDITION PRECEDENT. BUT NO SUCH NOTICE IS CONTEMPLATED BY SE CTION 33-B. THE JURISDICTION OF THE COMMISSIONER TO PROCEED UNDER S ECTION 33-B IS NOT DEPENDENT ON THE FULFILMENT OF ANY CONDITION PRECED ENT. ALL THAT HE IS REQUIRED TO DO BEFORE REACHING HIS DECISION AND NOT BEFORE COMMENCING THE ENQUIRY, HE MUST GIVE THE ASSESSEE AN OPPORTUNI TY OF BEING HEARD AND MAKE OR CAUSE TO MAKE SUCH ENQUIRY AS HE DEEMS NECE SSARY. THOSE REQUIREMENTS HAVE NOTHING TO DO WITH THE JURISDICTI ON OF THE COMMISSIONER. THEY PERTAIN TO THE REGION OF NATURAL JUSTICE. BREACH OF THE PRINCIPLES OF NATURAL JUSTICE MAY AFFECT THE LEGALI TY OF THE ORDER MADE BUT THAT DOES NOT AFFECT THE JURISDICTION OF THE COMMIS SIONER. AT PRESENT WE ARE NOT CALLED UPON TO CONSIDER WHETHER THE ORDER M ADE BY THE COMMISSIONER IS VITIATED BECAUSE OF THE CONTRAVENTI ON OF ANY OF THE PRINCIPLES OF NATURAL JUSTICE. THE SCOPE OF THESE A PPEALS IS VERY NARROW. ALL THAT WE HAVE TO SEE IS WHETHER BEFORE ASSUMING JURI SDICTION THE COMMISSIONER WAS REQUIRED TO ISSUE A NOTICE AND IF HE WAS SO REQUIRED WHAT THAT NOTICE SHOULD HAVE CONTAINED? OUR ANSWER TO THAT QUESTION HAS ALREADY BEEN MADE CLEAR. IN OUR JUDGMENT NO NOTICE WAS REQUIRED TO BE ISSUED BY THE COMMISSIONER BEFORE ASSUMING JURISDIC TION TO PROCEED UNDER SECTION 33-B. THEREFORE THE QUESTION WHAT THAT NOTI CE SHOULD CONTAIN DOES NOT ARISE FOR CONSIDERATION. IT IS NOT NECESSARY NO R PROPER FOR US IN THIS CASE TO CONSIDER AS TO THE NATURE OF THE ENQUIRY TO BE H ELD UNDER SECTION 33-B. THEREFORE, WE REFRAIN FROM SPELLING OUT WHAT PRINCI PLES OF NATURAL JUSTICE SHOULD BE OBSERVED IN AN ENQUIRY UNDER SECTION 33-B . THIS COURT IN GITA DEVI AGGARWAL V. CIT, WEST BENGAL RULED THAT SECTION 33-B DOES NOT IN EXPRESS TERMS REQUIRE A NOTICE TO BE SERVED ON THE ASSESSEE AS IN THE CASE OF SECTION 34. SECTION 33-B MERELY REQUIRES THAT AN OP PORTUNITY OF BEING HEARD SHOULD BE GIVEN TO THE ASSESSEE AND THE STRIN GENT REQUIREMENT OF SERVICE OF NOTICE UNDER SECTION 34 CANNOT, THEREFOR E, 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 TO THE A SSESSEE INDICATING THEREIN BROADLY OR EVEN SPECIFICALLY THE GROUNDS ON WHICH T HE EXERCISE IS FELT NECESSARY. BUT THERE IS NOTHING IN THE SECTION (SEC TION 263) TO RAISE THE SAID NOTICE TO THE STATUS OF A MANDATORY SHOW CAUSE NOTICE AFFECTING THE INITIATION OF THE EXERCISE IN THE ABSENCE THEREOF O R TO REQUIRE THE C.I.T. TO CONFINE HIMSELF TO THE TERMS OF THE NOTICE AND FORE CLOSING CONSIDERATION OF ANY OTHER ISSUE OR QUESTION OF FACT. THIS IS NOT TH E PURPORT OF SECTION 263. OF COURSE, THERE CAN BE NO DISPUTE THAT WHILE THE C .I.T. IS FREE TO EXERCISE STARTECH ENGINEERS ITA NO.3898/MUM/2017 23 HIS JURISDICTION ON CONSIDERATION OF ALL RELEVANT F ACTS, A FULL OPPORTUNITY TO CONTROVERT THE SAME AND TO EXPLAIN THE CIRCUMSTANCE S SURROUNDING SUCH FACTS, AS MAY BE CONSIDERED RELEVANT BY THE ASSESSE E, MUST BE AFFORDED TO HIM BY 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 NOVEMBER, 2005 T HOUGH THERE ARE THREE (03) ISSUES MENTIONED IN THE SHOW CAUSE NOTICE DATE D 7TH NOVEMBER, 2005 WHICH HAD SPECIFICALLY BEEN DEALT WITH 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 DIFFERE NT COMPARTMENTS. INSOFAR AS THE FIRST QUESTION I.E. FINDINGS CONTAINED IN TH E ORDER OF THE LEARNED C.I.T. DATED 20TH MARCH, 2006 BEYOND THE ISSUES MEN TIONED IN THE SHOW CAUSE NOTICE IS CONCERNED THE LEARNED TRIBUNAL TAKI NG NOTE OF THE AFORESAID ADMITTED POSITION HELD AS FOLLOWS: 'IN THE CASE ON HAND, THE CIT HAS ASSUMED JURISDICT ION BY ISSUING SHOW CAUSE NOTICE U/S 263 BUT WHILE PASSING THE FINAL OR DER HE RELIED ON VARIOUS OTHER GROUNDS FOR COMING TO THE FINAL CONCLUSION. T HIS ITSELF MAKES THE REVISION ORDER BAD IN LAW AND ALSO VIOLATIVE OF PRI NCIPLES OF NATURAL JUSTICE AND THUS NOT MAINTAINABLE. IF, DURING THE COURSE OF REVISION PROCEEDINGS THE CIT WAS OF THE OPINION THAT THE ORDER OF THE AO WAS ERRONEOUS ON SOME OTHER GROUNDS ALSO OR ON ANY ADDITIONAL GROUND S NOT MENTIONED IN THE SHOW CAUSE NOTICE, HE OUGHT TO HAVE GIVEN ANOTH ER SHOW CAUSE NOTICE TO THE ASSESSEE ON THOSE GROUNDS AND GIVEN HIM A RE ASONABLE OPPORTUNITY OF HEARING BEFORE COMING TO THE CONCLUSION AND PASS ING THE FINAL REVISION ORDER. IN THE CASE ON HAND, THE CIT HAS NOT DONE SO . THUS, THE ORDER U/S 263 IS VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE A S 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 T HE CIT PASSED U/S 263 IS THEREFORE 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 CONTRAR Y TO THE SETTLED POSITION IN LAW, AS INDICATED ABOVE AND THE TWO DECISIONS OF THIS COURT IN GITA DEVI AGGARWAL ( SUPRA ) AND ELECTRO HOUSE ( SUPRA ). THE LEARNED TRIBUNAL IN ITS ORDER DATED 28TH AUGUST, 2007 HAD NOT RECORDED ANY FINDING THAT IN COURSE OF THE SUO MOTU REVISIONAL PROCEEDINGS, HEARING OF WHICH WAS SPREAD OVER MANY DAYS AND ATTENDED TO BY THE AUTHORIZED REPRESE NTATIVE OF THE ASSESSEE, OPPORTUNITY OF HEARING WAS NOT AFFORDED T O THE ASSESSEE AND THAT THE ASSESSEE WAS DENIED AN OPPORTUNITY TO CONTEST T HE FACTS ON THE BASIS OF WHICH THE LEARNED C.I.T. HAD COME TO HIS CONCLUSION S AS RECORDED IN THE ORDER DATED 20TH MARCH, 2006. DESPITE THE ABSENCE O F ANY SUCH FINDING IN THE ORDER OF THE LEARNED TRIBUNAL, BEFORE HOLDING T HE SAME TO BE LEGALLY STARTECH ENGINEERS ITA NO.3898/MUM/2017 24 UNSUSTAINABLE THE COURT WILL HAVE TO BE SATISFIED T HAT IN THE COURSE OF THE REVISIONAL PROCEEDING THE ASSESSEE, ACTUALLY AND RE ALLY, DID NOT HAVE THE OPPORTUNITY TO CONTEST THE FACTS ON THE BASIS OF WH ICH THE LEARNED C.I.T. HAD CONCLUDED THAT THE ORDER OF THE ASSESSING OFFIC ER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE AB OVE 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 HUR RIEDLY COMPLETE THE ASSESSMENT PROCEEDINGS TO AVOID THE SAME FROM BECOM ING TIME BARRED. IN THE COURSE OF THE REVISIONAL EXERCISE RELEVANT FACT S, DOCUMENTS, AND BOOKS OF ACCOUNT WHICH WERE OVERLOOKED IN THE ASSESSMENT PROCEEDINGS WERE CONSIDERED. ON SUCH RE-SCRUTINY IT WAS REVEALED THA T THE ORIGINAL ASSESSMENT ORDER ON SEVERAL HEADS WAS ERRONEOUS AND HAD THE POTENTIAL OF CAUSING LOSS OF REVENUE TO THE STATE. IT IS ON THE AFORESAID BASIS THAT THE NECESSARY SATISFACTION THAT THE ASSESSMENT ORDER DA TED 30TH MARCH, 2004 WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF T HE REVENUE WAS RECORDED BY THE LEARNED C.I.T. AT EACH STAGE OF THE REVISION AL PROCEEDING THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAD APPEA RED AND HAD FULL OPPORTUNITY TO CONTEST THE BASIS ON WHICH THE REVIS IONAL AUTHORITY WAS PROCEEDING/HAD PROCEEDED IN THE MATTER. IF THE REVI SIONAL AUTHORITY HAD COME TO ITS CONCLUSIONS IN THE MATTER ON THE BASIS OF THE RECORD OF THE ASSESSMENT PROCEEDINGS WHICH WAS OPEN FOR SCRUTINY BY THE ASSESSEE AND AVAILABLE TO HIS AUTHORIZED REPRESENTATIVE AT ALL T IMES IT IS DIFFICULT TO SEE AS TO HOW THE REQUIREMENT OF GIVING OF A REASONABLE OP PORTUNITY OF BEING HEARD AS CONTEMPLATED BY SECTION 263 OF THE ACT HAD BEEN BREACHED IN THE PRESENT CASE. THE ORDER OF THE LEARNED TRIBUNAL INS OFAR AS THE FIRST ISSUE I.E. THE REVISIONAL ORDER GOING BEYOND THE SHOW CAUSE NO TICE IS CONCERNED, THEREFORE, CANNOT HAVE OUR ACCEPTANCE. THE HIGH COU RT HAVING FAILED TO FULLY DEAL WITH THE MATTER IN ITS CRYPTIC ORDER DAT ED 7TH AUGUST, 2008 WE ARE OF THE VIEW THAT THE SAID ORDERS ARE NOT TENABL E 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 TE NABILITY OF THE ORDER OF THE LEARNED C.I.T. ON THE THREE (03) ISSUES MENTION ED IN THE SHOW CAUSE STARTECH ENGINEERS ITA NO.3898/MUM/2017 25 NOTICE AND ALSO DEALT WITH IN THE REVISIONAL ORDER DATED 20TH MARCH, 2006. THE AFORESAID THREE (03) ISSUES ARE: '( I ) ASSESSEE MAINTAINING 5 BANK ACCOUNTS AND AO NOT EXA MINING THE 5TH BANK ACCOUNT, BOOKS OF ACCOUNT AND ANY OTHER BA NK ACCOUNT WHERE RECEIPTS RELATED TO KBC WERE BANKED. ( II ) REGARDING CLAIM OF DEPOSITS OF RS. 52.06 LAKHS IN SPECIAL BENCH A/C NO.11155 UNDER THE HEAD RECEIPTS ON BEHALF OF MRS. JAYA BACHCHAN AND ( III ) REGARDING THE CLAIM OF ADDITIONAL EXPENSES IN THE R E-REVISED RETURN.' 16. ON THE ABOVE ISSUES THE LEARNED TRIBUNAL HAD GIVEN DETAILED REASONS FOR NOT ACCEPTING THE GROUNDS CITE D IN THE REVISIONAL ORDER FOR SETTING ASIDE THE ASSESSMENT U NDER SECTION 263 OF THE ACT. THE REASONS CITED BY THE LE ARNED TRIBUNAL INSOFAR AS THE FIRST TWO ISSUES ARE CONCER NED MAY NOT JUSTIFY A SERIOUS RELOOK AND HENCE NEED NOT BE GONE INTO. THE THIRD QUESTION WOULD, HOWEVER, REQUIRE SOME DETAILE D ATTENTION. THE SAID QUESTION IS WITH REGARD TO THE CLAIM OF ADDITIONAL EXPENSES MADE BY THE ASSESSEE IN ITS RE- REVISED RETURN WHICH WAS SUBSEQUENTLY WITHDRAWN. 17. THE ASSESSEE IN THE RE-REVISED RETURN DATED 31ST M ARCH, 2003 HAD MADE A CLAIM OF ADDITIONAL EXPENSES OF 30% OF THE GROSS PROFESSIONAL RECEIPTS (RS. 3.17 CRORES). IT A PPEARS THAT THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FILE REQUISITE DETAILS IN THIS REGARD. THE ASSESSEE RESPONDED BY L ETTER DATED 13TH FEBRUARY, 2004 STATING AS FOLLOWS: 'WITH REGARD TO THE 30% ESTIMATED EXPENSES CLAIMED, WE HAVE TO SUBMIT THAT THESE ARE THE EXPENSES WHICH ARE SPE NT FOR SECURITY PURPOSES BY EMPLOYING CERTAIN AGENCIES, GU ARDS ETC. FOR THE PERSONAL SAFETY OF SHRI BACHCHAN AS HE HAS TO PROTECT HIMSELF FROM VARIOUS THREATS TO HIS LIFE RECEIVED B Y HIM AND TO AVOID EXTORTION OF MONEY FROM GANGSTERS. THE NAMES OF SUCH AGENCIES CANNOT BE DISCLOSED/DIVULGED AS THERE IS A POSSIBILITY OF LEAKAGE OF INFORMATION OF AGENCIES' NAMES FROM T HE OFFICE STAFF, WHICH WILL OBVIOUSLY BE DETRIMENTAL TO THE I NTERESTS OF SHRI BACHCHAN. THE PAYMENTS HAVE BEEN MADE OUT OF C ASH BALANCES AVAILABLE AND LOT OF OUTSTANDING EXPENSES ARE TO BE PAID WHICH COULD NOT BE PAID FOR WANT OF INCOME.' 18. THEREAFTER BY LETTER DATED 13TH MARCH, 2004 THE AS SESSEE INFORMED THE LEARNED C.I.T. THAT THE CLAIM WAS MADE ON A BELIEF THAT THE SAME IS ALLOWABLE BUT AS IT WILL NOT BE FE ASIBLE FOR THE ASSESSEE TO SUBSTANTIATE THE SAME, THE RE-REVISED R ETURN OF INCOME MAY BE TAKEN TO THE WITHDRAWN. IT APPEARS TH AT STARTECH ENGINEERS ITA NO.3898/MUM/2017 26 THEREAFTER THE ASSESSING OFFICER ISSUED A NOTICE TO SHOW CAUSE AS TO WHY THE PROVISIONS OF SECTION 69C SHOULD NOT BE INVOKED AND THE EXPENSES CLAIMED SHOULD NOT BE TREATED AS UNEXPLAINED EXPENDITURE. IN REPLY, THE ASSESSEE BY LETTER DATED 24TH MARCH, 2004 SUBMITTED THAT THE CLAIM WAS MADE AS A STANDARD DEDUCTION AND THAT THE ASSESSEE HAD BEEN W RONGLY ADVISED TO MAKE THE SAID CLAIM AND AS THE SAME HAS BEEN WITHDRAWN, SECTION 69-C WILL HAVE NO APPLICATION. T HE RECORD OF THE ASSESSMENT PROCEEDINGS DISCLOSE THAT THE SAI D STAND WAS ACCEPTED BY THE ASSESSING OFFICER AND THE MATTER WA S NOT PURSUED ANY FURTHER. 19. THE LEARNED C.I.T. TOOK THE VIEW THAT NOTWITHSTAND ING THE WITHDRAWAL OF THE CLAIM BY THE ASSESSEE, IN VIEW OF THE EARLIER STAND TAKEN THAT THE SAID EXPENSES WERE INCURRED FO R SECURITY PURPOSES OF THE ASSESSEE, THE ASSESSING OFFICER OUG HT TO HAVE PROCEEDED WITH THE MATTER AS THE ASSESSEE WAS FOLLO WING THE CASH SYSTEM OF ACCOUNTING AND THE FILING OF THE RE- REVISED RETURN, PRIMA FACIE, INDICATED THAT THE ADDITIONAL EXPENSES CLAIMED HAD BEEN INCURRED. IN THIS REGARD, THE FOLL OWING FINDINGS/REASONS RECORDED BY THE LEARNED C.I.T. IN THE ORDER DATED 20TH MARCH, 2006 WOULD BE OF PARTICULAR RELEV ANCE: 'WITHDRAWAL OF CLAIM BY ASSESSEE CAN BE FOR VARIETY OF REASONS AND THIS DOES NOT MEAN THAT ASSESSING OFFICER SHOUL D ABANDON ENQUIRIES REGARDING SOURCES FOR INCURRING EXPENSES. ASSESSEE FOLLOWS CASH SYSTEM OF ACCOUNTING AND THE CLAIM REG ARDING ADDITIONAL EXPENSES WAS MADE THROUGH DULY VERIFIED REVISED RETURN. THE CLAIM WAS PRESSED DURING ASSESSMENT PRO CEEDINGS CARRIED ON BY A.O. AFTER FILING REVISED RETURN AND IT WAS SPECIALLY STATED IN LETTER DATED 13.02.2004 THAT EX PENSES WERE FOR SECURITY PURPOSES AND THAT PAYMENTS HAVE BEEN M ADE OUT OF CASH BALANCES AVAILABLE ETC. UNDER THE CIRCUMSTA NCES, THE ASSESSING OFFICER WAS EXPECTED TO EXAMINE THE MATTE R FURTHER TO ARRIVE AT A DEFINITE FINDING WHETHER ASSESSEE IN CURRED EXPENSES OR NOT AND IN CASE, ACTUALLY INCURRED, THE N WHAT WERE SOURCES FOR INCURRING THESE EXPENSES. ASSESSING OFF ICER 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 ERRONEOU S ORDER WHICH 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 ASSESSI NG OFFICER AND THEREAFTER ON WITHDRAWAL OF THE CLAIM BY THE AS SESSEE THE STARTECH ENGINEERS ITA NO.3898/MUM/2017 27 ASSESSING OFFICER THOUGHT THAT THE MATTER OUGHT NOT TO BE INVESTIGATED ANY FURTHER. THIS, ACCORDING TO THE LE ARNED COUNSEL FOR THE ASSESSEE, IS A POSSIBLE VIEW AND WH EN TWO VIEWS ARE POSSIBLE ON AN ISSUE, EXERCISE OF REVISIO NAL POWER UNDER SECTION 263 WOULD NOT BE JUSTIFIED. RELIANCE IN THIS REGARD HAS BEEN PLACED ON A JUDGMENT OF THIS COURT 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 POWER IN TH E 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 FELT THAT THE MATTER NEEDED FURTHER INVESTIGATION, A VIEW WITH WHICH WE WHOLLY AGREE. MAKING A CLAIM WHICH WOULD PRIMA FACIE DISCLOSE THAT THE EXPENSES IN RESPECT OF WHICH DEDUCTION HAS BEEN CLAIMED HAS BEEN INCURRED AND THEREAFTER ABANDONING/WITHDRA WING THE SAME GIVES RISE TO THE NECESSITY OF FURTHER ENQ UIRY IN THE INTEREST OF THE REVENUE. THE NOTICE ISSUED UNDER SE CTION 69-C OF THE ACT COULD NOT HAVE BEEN SIMPLY DROPPED ON TH E GROUND THAT THE CLAIM HAS BEEN WITHDRAWN. WE, THEREFORE, A RE OF THE OPINION THAT THE LEARNED C.I.T. WAS PERFECTLY JUSTI FIED IN COMING TO HIS CONCLUSIONS INSOFAR AS THE ISSUE NO. (III) I S CONCERNED AND IN PASSING THE IMPUGNED ORDER ON THAT BASIS. TH E LEARNED 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 STARTECH ENGINEERS ITA NO.3898/MUM/2017 28 23. LEAVE GRANTED. 24. PURSUANT TO THE REVISIONAL ORDER DATED 20TH MARCH, 2006 UNDER SECTION 263 OF THE INCOME TAX ACT SETTING ASI DE THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2001-2002 AND DIRECTING FRESH ASSESSMENT, A FRESH ASSESSMENT HAD BEEN MADE BY THE ASSESSING OFFICER BY ORDER DATED 29TH DECEMB ER, 2006. AGAINST THE SAID ORDER THE RESPONDENT ASSESSEE FILE D AN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS). BY ORDER DATED 18TH OCTOBER, 2007 THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS) HAD SET ASIDE THE ASSESSMENT O RDER DATED 29TH DECEMBER, 2006 AS IN THE MEANTIME, BY OR DER DATED 28TH AUGUST, 2007 OF THE LEARNED INCOME TAX A PPELLATE TRIBUNAL THE REVISIONAL ORDER DATED 20TH MARCH, 200 6 UNDER SECTION 263 OF THE ACT WAS SET ASIDE. THE REVENUE'S APPEAL BEFORE THE LEARNED TRIBUNAL AGAINST THE ORDER DATED 18TH OCTOBER, 2007 WAS DISMISSED ON 11TH JANUARY, 2000 A ND BY THE HIGH COURT ON 29TH FEBRUARY, 2012. AGAINST THE AFORESAID ORDER OF THE HIGH COURT THIS APPEAL HAS BEEN FILED BY THE REVENUE. AS BY THE ORDER PASSED TODAY IN THE CIVIL APPEAL ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO.11 621 OF 2009 WE HAVE RESTORED THE SUO MOTU REVISIONAL ORDER DATED 20TH MARCH, 2006 PASSED BY THE LEARNED C.I.T., WE ALLOW THIS APPEAL FILED BY THE REVENUE AND SET ASIDE THE ORDER DATED 11TH JANUARY, 2010 PASSED BY THE LEARNED TRIBUNAL AND TH E ORDER DATED 29TH FEBRUARY, 2012 PASSED BY THE HIGH COURT REFERRED TO ABOVE. HOWEVER, WE HAVE TO ADD THAT AS THE RE-AS SESSMENT ORDER DATED 29TH DECEMBER, 2006 HAD NOT BEEN TESTED ON MERITS THE ASSESSEE WOULD BE FREE TO DO SO, IF HE I S 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 THE L D. PR. COMMISSIONER ISSUED SHOW CAUSE NOTICE TO THE ASSESS EE AND PROVIDED DUE OPPORTUNITY TO THE ASSESSEE TO SUBSTAN TIATE ITS CLAIM AND AFTER BEING SATISFIED THAT THE ORDER IS E RRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE AND AFTER STARTECH ENGINEERS ITA NO.3898/MUM/2017 29 RECORDING THE DUE REASONS, DIRECTED THE ASSESSING O FFICER TO FRAME THE ASSESSMENT AFRESH AND THAT TOO AFTER PROV IDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE, THUS, NO GR IEVANCE IS CAUSED TO THE ASSESSEE. EVEN OTHERWISE, THE MANDATE OF ARTICLE 265 OF CONSTITUTION OF INDIA IS TO LEVY AND COLLECT DUE TAXES. IN VIEW OF THIS FACTUAL MATRIX, WE AFFIRM THE STAND OF THE LD. PR. COMMISSIONER, RESULTANTLY THE APPEAL OF THE ASSESSE E IS THEREFORE HAVING NO MERIT, CONSEQUENTLY, DISMISSED. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 01/02/2018 SD/- SD/- ( N.K. PRADHAN ) (JOGINDER SINGH) ' # / ACCOUNTANT MEMBER $ # / JUDICIAL MEMBER MUMBAI; * DATED : 01/02/2018 F{X~{T? P.S / +% !%$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 0./ / THE RESPONDENT. 3. 1 1 2$ ( ,- ) / THE CIT, MUMBAI. 4. 1 1 2$ / CIT(A)- , MUMBAI STARTECH ENGINEERS ITA NO.3898/MUM/2017 30 5. 4%5$ , 1 ,-(, 6 , / DR, ITAT, MUMBAI 6. 7'8 / GUARD FILE. ! / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI, 04-$$ //TRUE COPY//