Tej Paul Bhardwaj, Sunam V. Pr. CIT, Patiala

ITA 463/CHANDI/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5325 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 12-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP DAHIYA
• Keywords: Unexplained cash credit; Gift; Assessment record; TDS; Set aside; Capital Gains
• Section: 143(3); 142(1); 80HHC; 143(2); 13; 147; 54; 263; 63

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B, CHANDIGARH (VIRTUAL COURT) BEFORE: SHRI N.K. SAINI, VICE PRESIDENT AND SHRI R.L. NEGI, JUDICIAL MEMBER ./ ITA NO. 463/CHD/2019 / ASSESSMENT YEAR : 2014-15 TAJ PAUL BHARDWAJ, MOHALLA BHAIKA, COLLEGE ROAD, SUNAM. THE PR. C.I.T. PATIALA. ./PAN NO: AANPB 8544 M /APPELLANT /RESPONDENT /ASSESSEE BY: SHRI SUDHIR SEHGAL, CA ! / REVENUE BY: SH. SANDEEP DAHIYA CIT (DR) ' # $ /DATE OF HEARING: 18.02.2021 %&'( $ /DATE OF PRONOUNCEMENT: 13.05. 2021 / ORDER PER R.L. NEGI, JUDICIAL MEMBER : THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL AGAINST THE ORDER DATED 31/01/2019 PASSED BY THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX , PATIALA, [IN SHORT THE LD. PR.CIT] U/S 263(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT), WHERE BY THE LD. PR. CIT HAS SET ASIDE THE ASSESSMENT ORDER PASS ED U/S 143(3) OF THE ACT, HOLDING THAT THE SAID ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 2 OF 17 AND DIRECTED THE AO TO PASS THE ORDER AFRESH ON THE ISSUES MENTIONED IN THE SHOW CAUSE NOTICE. 2. THE BRIEF FACTS EMANATING FROM THE RECORD AND TH E PLEADINGS OF THE PARTIES ARE THAT THE ASSESSEE AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR THE ASSES SMENT YEAR UNDER CONSIDERATION DECLARING INCOME OF RS. 2,28,130/- AND AGRICULTURAL INCOME OF RS. 2,47,500/ -. THE CASE WAS SELECTED FOR LIMITED SCRUTINY FOR THE REASON THAT THERE WAS A SUBSTANTIAL INCREASE IN THE CAPITAL DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. ACCORDINGLY, THE AO ISSUED NOT ICES U/S 143(2) AND 142(1) OF THE ACT. IN RESPONSE THERE OF, THE AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE APPEARED BEFORE THE AO AND FURNISHED THE DETAILS CA LLED FOR BY THE AO. AFTER HEARING THE LD. AR, AO ACCEPTE D THE RETURN FILED BY THE ASSESSEE. 3. SUBSEQUENTLY, THE LD. PR. CIT ISSUED NOTICE TO T HE ASSESSEE AS TO WHY THE ASSESSMENT ORDER SHOULD NOT BE REVISED U/S 263 OF THE ACT FOR THE REASONS, (I) THA T THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSM ENT YEAR UNDER CONSIDERATION ON 25.05.2015 WHEREAS THE DUE DATE WAS 31.07.2015 AND THE ASSESSEE HAD NOT ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 3 OF 17 DEPOSITED THE CAPITAL GAIN IN CAPITAL GAIN DEPOSIT ACCOUNT BEFORE THE SPECIFIC DATE. THEREFORE, THE ASSESSEE WAS NOT ENTITLED TO CLAIM EXEMPTION U/S 54 OF THE ACT. SINCE THE AO HAS FAILED TO MAKE ANY ENQUIR Y OR VERIFICATION, THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE; (II) TH E ASSESSEE HAD SHOWN OPENING BALANCE OF CAPITAL AS ON 01.04.2013 AT RS. 65,91,538, HOWEVER, DID NOT FILE HIS RETURN FOR THE A.Y. 2013-14. SINCE THE GENUINENESS OF OPENING BALANCE WAS DOUBTFUL AND THE AO FAILED TO EXAMINE THIS ISSUE, THE ASSESSMENT ORDER IS ERRONEO US AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND (III) THAT SINCE THE AO HAS FAILED TO BRING ON RECORD ANY EVIDENCE WITH REGARD TO AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE, THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ASS ESSEE FILED REPLY TO THE SAID NOTICE AND CONTENDED THAT T HE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICI AL TO THE INTEREST OF THE REVENUE. HOWEVER, THE LD. PR . CIT REJECTING THE CONTENTION OF THE ASSESSEE PASSED THE ORDER U/S 263 OF THE ACT AND DIRECTED THE AO TO MAK E ASSESSMENT AFRESH ON THE ISSUES MENTIONED IN THE NOTICE. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER PASSED BY THE LD. PR. CIT. ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 4 OF 17 4. INITIALLY, THE ASSESSEE CHALLENGED THE IMPUGNED ORDER BY RAISING THE FOLLOWING GROUNDS: 1. THAT THE NOTICE ISSUED U/S 263 BY THE PRINCIP AL COMMISSIONER OF INCOME TAX (HEREINAFTER REFERRED TO AS 'PR CIT') AND THE ORDER PASSED U/S 263 IS ILLEGAL, BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 2. THAT THE LD. PR. CIT HAS ERRED IN INVOKING THE P ROVISIONS OF SECTION 263 OF THE INCOME TAX ACT ON THE GROUND THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICE R FOR AY 2014-15 IS NOT ONLY PREJUDICIAL TO THE INTER EST OF REVENUE BUT IS ALSO ERRONEOUS ON ACCOUNT OF EXEMPTI ON CLAIMED U/S 54, ON ACCOUNT OF OPENING BALANCE OF CA PITAL AMOUNTING TO RS. 65,91,538/- AND ON ACCOUNT OF AGRICULTURE INCOME AMOUNTING TO RS. 2,42,500/-. 3. THAT THE PROCEEDING AND THE ORDER PASSED BY THE LD. PR. CIT U/S 263 IS PERVERSE AS IT IS BASED ON GENERAL OBSERVATION AND NOT SPECIFIC TO THE FACTS OF THE CA SE. 4. THAT THE LD. PR. CIT HAS PASSED THE ORDER U/S 26 3 OF THE ACT ON SURMISES AND CONJECTURES AND THEREFORE IS LI ABLE TO BE SET ASIDE. 5. THAT THE APPELLANT SEEKS LEAVE TO ADD, AMEND, AL TER, ABANDON OR SUBSTITUTE ANY OF THE ABOVE GROUNDS DURI NG THE HEARING OF THE APPEAL.' 5. DURING PENDENCY OF THE APPEAL, THE LD. COUNSEL FOR THE ASSESSEE MOVED AN APPLICATION FOR PERMISSION TO ALLOW THE REVISED GROUND OF APPEAL WHICH ARE AS UNDER: 1. THAT THE LD. PR. CIT HAS ERRED IN PASSING THE ORDER U/S 263 AS HE COULD NOT HAVE PASSED THE ORDER U/S 263, BEIN G TAKEN THE CASE FOR LIMITED SCRUTINY UNDER CASS AND, THERE FORE, THE PR. CIT HAS EXCEEDED HIS JURISDICTION IN ISSUING THE NO TICE U/S 263 AND PASSING THE ORDER U/S 263(1). ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 5 OF 17 2 . THAT THE ORDER AS PASSED BY THE LD. PR. CIT IS AGAI NST THE PRINCIPLE LAID DOWN UNDER THE CBDT CIRCULAR AND HAV ING NOT RAISED THE ISSUE IN THE SHOW CAUSE NOTICE WITH REGA RD TO ISSUE IN THE 'LIMITED SCRUTINY CASE' AND RAISING OTHER IS SUES IN THE. SHOW CAUSE NOTICE, IS AGAINST THE FACTS AND CIRCUMS TANCES OF THE CASE. HENCE THE ORDER AS PASSED BY THE PR. CIT DESERVES TO BE QUASHED. 6. VIDE REVISED GROUND, THE ASSESSEE HAS RAISED THE LEGAL ISSUE THAT THE IMPUGNED ORDER IS BAD IN LAW A S THE LD. PR. CIT COULD NOT HAVE PASSED THE IMPUGNED ORDE R BEING TAKEN THE CASE FOR LIMITED SCRUTINY UNDER CAS S, THEREFORE THE LD. PR. CIT HAS EXCEEDED JURISDICTION IN ISSUING NOTICE U/S 263 ACT AND PASSING ORDER U/S 26 3(1) OF THE ACT. SINCE, THE ASSESSEE HAS RAISED THE LEGA L ISSUE IN ITS REVISED GROUNDS, WHICH DOES NOT REQUIRE ANY VERIFICATION OF ENQUIRY, WE ALLOWED THE APPLICATION AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE (DR) AN D PERMITTED THE LD. COUNSEL TO ARGUE ON THE LEGAL GRO UND RAISED BY THE ASSESSEE. 7. AT THE OUTSET, THE LD. COUNSEL SUBMITTED THAT TH E LEGAL ISSUE RAISED IN THIS CASE IS COVERED IN FAVOU R OF THE ASSESSEE BY THE DECISIONS OF THE VARIOUS BENCHES OF THE TRIBUNAL. THE LD. COUNSEL FURTHER CONTENDED THAT SI NCE THE HAS HAD PASSED THE IMPUGNED ORDER IN ACCORDANCE WITH THE CBDT INSTRUCTION NO. 20/2015 DATED 29.12.2015, THE LD. PR. CIT HAS WRONGLY EXERCISED T HE ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 6 OF 17 JURISDICTION U/S 263 OF THE ACT. THE LD. COUNSEL RE LIED ON THE FOLLOWING DECISION TO SUBSTANTIATE HIS CONTE NTION: 1. NAYEK PAPER CONVERTERS VS. ACIT 93 ITD 144 KOL TRIB., 2. GIFT LAND HANDICRAFTS VS. CIT 108 TTJ 312 DEL TRIB., 3. AJIT GUPTA VS. ITO 108 TTJ 301 DEL. TRIB., 4. SU-RAJ DIAMOND DEALERS PVT. LTD. VS. CIT ITA NO 3098/ MUM, 5. R &H PROPERTY DEVELOPERS VS. CIT ITA NO 1906/ MUM/2019., 6. SONALI HEMANT BHAVSAR VS. PR. CIT ITA NO. 742/ MUMBAI/2019 AND 7. AKASH GANGA PROMOTORS & DEVELPOERS VS. PR. CIT ITA NO 164/CTK/2019 8. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE IMPUGNED ORDER IS CONTRARY TO THE RATIO LAID DOWN B Y THE VARIOUS BENCHES OF THE TRIBUNAL, REFERRED ABOVE THE SAME IS LIABLE TO BE QUASHED. 9. ON THE OTHER HAND, THE LD. DR SUPPORTING THE ORDER PASSED BY THE LD. PR. CIT SUBMITTED THAT SINC E THE AO HAD NOT EXAMINED THE ISSUES POINTED OUT BY THE L D. PR. CIT, THERE IS NO INFIRMITY IN THE ORDER PASSED U/S 263 OF THE ACT. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PART IES AND GONE THROUGH THE MATERIAL ON RECORD INCLUDING T HE ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 7 OF 17 CASES RELIED UPON BY THE PARTIES. AS POINTED OUT BY THE LD. COUNSEL, THE MUMBAI BENCH OF THE TRIBUNAL IN TH E CASE OF M/S SU-RAJ DIAMOND DEALERS PVT. LTD. (SUPRA) HAS QUASHED THE ORDER PASSED U/S 263 OF THE ACT IN THE CASE OF LIMITED SCRUTINY ASSESSMENT, HOLDING THAT T HE LD. PR. CIT UNDER THE GARB OF SECTION 263 OF THE AC T, CANNOT EXCEED HIS JURISDICTION. THE OBSERVATIONS OF THE BENCH ARE AS UNDER: 8. WE SHALL NOW IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS DELIBERATE ON THE VALIDITY OF THE ORDER PASSED BY T HE PR. CIT UNDER SEC. 263. AS OBSERVED BY US HEREINABOVE, THE PR. CI T HAD HELD THE ORDER PASSED BY THE A.O UNDER SEC. 143(3), DATED 08 .12.2016 AS ERRONEOUS, IN SO FAR IT WAS PREJUDICIAL TO THE INTE REST OF THE REVENUE, FOR THE REASON, THAT HE HAD FAILED TO CARRY OUT PRO PER INVESTIGATION AS REGARDS THE ISSUE OF VALUATION OF THE 'CLOSING S TOCK' AS REFLECTED IN THE AUDITED ACCOUNTS OF THE ASSESSEE. WE ARE OF A S TRONG CONVICTION THAT NOW WHEN THE CASE OF THE ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY FOR THE REASONS VIZ. (I). LARGE OTHER EXPE NSES CLAIMED IN THE P&L A/C; AND (II). LOW INCOME IN COMPARISON TO HIGH LOANS/ADVANCE /INVESTMENT IN SHARES, THEREFORE, NO INFIRMITY COULD BE ATTRIBUTED TO THE ASSESSMENT FRAMED BY THE A.O O N THE GROUND THAT HE HAD FAILED TO DEAL WITH OTHER ISSUES WHICH THOUGH DID NOT FALL WITHIN THE REALM OF THE LIMITED REASONS FOR WH ICH THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT. IN OTHER WORDS, T HE PR. CIT IN THE GARB OF HIS REVISIONAL JURISDICTION U/S 263 CANNOT BE PERMITTED TO TRAVERSE BEYOND THE JURISDICTION THAT WAS VESTED WI TH THE A.O WHILE FRAMING THE ASSESSMENT. IN SUM AND SUBSTANCE, REVIS IONAL JURISDICTION CANNOT BE EXERCISED FOR BROADENING THE SCOPE OF JURISDICTION THAT WAS VESTED WITH THE A.O WHILE FRA MING THE ASSESSMENT. AS A MATTER OF FACT, WHAT CANNOT BE DON E DIRECTLY CANNOT BE DONE INDIRECTLY. ACCORDINGLY, IN TERMS OF OUR AFORESAID OBSERVATIONS, WE ARE OF THE CONSIDERED VIEW THAT AS THE A.0 HAD APTLY CONFINED HIMSELF TO THE ISSUES FOR WHICH THE CASE OF THE ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY, THEREFO RE, NO INFIRMITY CAN BE ATTRIBUTED TO HIS ORDER, FOR THE REASON, THA T HE HAD FAILED TO DWELL UPON CERTAIN OTHER ISSUES WHICH DID NOT FORM PART OF THE REASONS FOR WHICH THE CASE WAS SELECTED FOR LIMITED SCRUTINY UNDER ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 8 OF 17 CASS. WE THUS NOT BEING ABLE TO CONCUR WITH THE VIE W TAKEN BY THE PR. CIT THAT THE ORDER PASSED BY THE A.O UNDER SEC. 143(3), DATED 08.12.2016 IS ERRONEOUS, THEREFORE, 'SET ASIDE' HIS ORDER AND RESTORE THE ORDER PASSED BY THE A.O. AS WE HAVE QUA SHED THE ORDER PASSED BY THE PR. CIT UNDER SEC. 263 ON THE GROUND OF INVALID ASSUMPTION OF JURISDICTION BY HIM, THEREFORE, WE RE FRAIN FROM ADVERTING TO AND THEREIN ADJUDICATING THE CONTENTIO NS ADVANCED BY THE ID. A.R ON THE MERITS OF THE CASE, WHICH THUS A RE LEFT OPEN. 11. IN THE CASE OF R &H PROPERTY DEVELOPERS VS. CIT ITA (SUPRA) THE D BENCH OF THE TRIBUNAL HAS SET ASIDE THE ORD ER PASSED BY THE LD. PR. CIT U/S 263 OF THE ACT, IN A LIMITED SCRUTINY ASSESSMENT CASE HOLDING THAT THE LD. PR. CIT HAS WR ONGLY ASSUMED THE JURISDICTION U/S 263 OF THE ACT. 12. SIMILARLY, THE G BENCH OF THE MUMBAI TRIBUNAL BENCH IN THE CASE OF SONALI HEMANT BHAVSAR VS. PR. CIT (SUPRA) HAS QUASHED THE ORDER PASSED BY THE PR. CIT U/S 263 OF THE ACT IN A LIMITED SCRUTINY ASSESSMENT BY FOLLOWING THE DECISION OF KO LKATA BENCH IN THE CASE OF SANJEEV KR. KHEMKA VS. PR. CIT IN ITA NO. L361/KOL /2016 A.Y. 2011-12. THE RELEVANT PARAS OF THE DECISION READ AS UNDER: 6. AFTER HEARING BOTH THE PARTIES AND PERUSING T HE MATERIALS BEFORE US, WE OBSERVE FROM THE NOTICE ISSUED UNDER SECTION 143(2) OF THE ACT FOR LIMITED SCRUTINY DATED 19.09.2016 AND F IND MERITS IN THE CONTENTIONS OF THE ASSESSEE THAT THE SAID LIMITED S CRUTINY CANNOT BE EXPANDED UNLESS THE AO CONVERTED IT INTO COMPLETE S CRUTINY WITH THE APPROVAL OF LD. PR. CIT AND IF THE A.O. AFTER CONSI DERING THE SUBMISSIONS OF THE ASSESSEE DOES NOT COME TO THE CO NCLUSION OF POTENTIAL ESCAPEMENT THE LD. PR. CIT CANNOT HOLD TH E ORDER TO BE ERRONEOUS ON THE GROUND THAT AO OUGHT TO HAVE REACH ED TO SUCH CONCLUSION. THE CASE OF THE ASSESSEE IS SQUARELY CO VERED BY THE DECISION OF KOLKATA BENCH IN THE CASE OF SANJEEV KR . KHEMKA VS. PR. CIT IN ITA NO. L361/KOL/2016 A.Y. 2011-12 DATED 02. 06.2017 WHEREIN THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS H ELD AS UNDER: ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 9 OF 17 '4. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PART IES AND PERUSED THE MATERIALS ON RECORD. THE PRIMARY ISSUE IN THE C ASE ON HAND REVOLVES WHETHER IT IS A CASE SELECTED UNDER CASS FOR LIMITE D SCRUTINY OR REGULAR SCRUTINY. IT CAN BE SEEN FROM THE GROUNDS OF APPEAL THAT THE ASSESSEE WANTS TO CONTEND THAT THE VERY INITIATION OF PROCEE DINGS U/S 143(3) OF THE ACT ON THE BASIS OF REGULAR SCRUTINY UNDER THE ACT WAS BAD IN LAW. THE PROCEEDINGS UNDER SECTION 143(3) OF THE ACT SHOULD HAVE BEEN LIMITED TO THE EXTENT OF THE INFORMATION GATHERED T HROUGH AIR. ACCORDINGLY, THE PROCEEDINGS U/S 263 OF THE ACT CAN NOT BE EXPANDED BEYOND THE ISSUE RAISED IN AIR. THUS, THE ORDER U/S 143(3) OF THE ACT BEYOND THE POINTS OF AIR IS INVALID IN LAW AND SO T HE SAME IS WITH THE ORDER PASSED U/S 263 OF THE ACT. IT IS THE FURTHER CONTENTION OF THE ASSESSEE THAT IN THE ITEMS WHICH ARE NOT SUBJECT MA TTER OF AIR CANNOT SUBJECT MATTER OF SCRUTINY. SUCH MATTERS INCLUDE SA LARY OF THE ASSESSEE, LOANS & INTEREST ON LOANS, PAYMENT OF LIC, COMMISSI ON & BROKERAGE INCOME ETC. IT IS THE CASE OF THE ASSESSEE THAT IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, THE AO HAS TRAVELLED BEYOND THE POINTS OF THE AIR ON THE BASIS OF WHICH THE CASE OF SCRUTINY WAS SELECTED UNDER CASS MODULE. IT IS THE PLEA OF THE ASSESSEE THAT WH EN NO ADDITION/DISALLOWANCE CAN BE MADE BEYOND THE POINTS MENTIONED IN AIR IN THE ASSESSMENT PROCEEDINGS THEN SAME IS THE CASE WITH PROCEEDINGS, INITIATED U/S 263 OF THE ACT. 4.1 THE FIRST ASPECT WHICH NEEDS TO BE EXAMINED IS AS TO WHETHER THE ASSESSEE IS ENTITLED TO CHALLENGE THE VALIDITY OF INITIATION EXPANDED IN THE PROCEEDINGS U/S 143(3) OF THE ACT IN THE PRE SENT APPEALS IN WHICH HE HAS CHALLENGED THE VALIDITY OF EXPANDED OR DER PASSED U/S 263 OF THE ACT COVERING THE POINTS WHICH ARE NOT PA RT OF THE AIR. THE ID. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT I T IS OPEN TO AN ASSESSEE IN AN APPEAL AGAINST THE ORDER U/S 263 OF THE ACT WHICH SEEKS TO REVISE AN ORDER PASSED U/S 143(3) OF THE A CT, TO CHALLENGE THE VALIDITY OF THE EXPANSION OF ORDER PASSED U/S. 143( 3) OF THE ACT COVERING THE POINTS WHICH ARE NOT PART OF THE AIR. IN THIS REGARD WE FIND THAT LUCKNOW BENCH OF HON'BLE ITAT IN THE CASE OF I NDER KUMAR BACHANI (HUF) VS ITO 99 ITD 621 (LUCK) AND ITAT MUMBAI 'G' BENCH IN THE CASE OF M/S. WESTLIFE DEVELOPMENT LTD. VS PRINC IPAL C.L.T. IN ITA NO.688/MUM/2016 HAVE TAKEN A VIEW THAT WHEN AN ASSE SSMENT ORDER PASSED U/S 147 OF THE ACT WAS ILLEGAL THE LD. CIT CANNOT INVOKE THE JURISDICTION U/S 263 OF THE ACT AGAINST SUCH VO ID OR NON-EST ORDER. IN THE SECOND DECISION CITED THE HON'BLE MUMBAI BENCH OF THE TRIBUNAL HAS SPECIFICALLY FRAMED THE FOLLOWING QUESTIONS: - '1. WHETHER THE ASSESSEE CAN CHALLENGE THE VALIDITY OF AN ASSESSMENT ORDER DURING THE APPELLATE PROCEEDINGS P ERTAINING TO EXAMINATION OF VALIDITY OF ORDER PASSED U/S 263? 2. WHETHER THE IMPUGNED ASSESSMENT ORDER PASSED U/S 143(3) DATED 24-10-2013 WAS VALID IN THE EYES OF LAW OR A NULLITY AS HAS BEEN CLAIMED BY THE ASSESSEE? 3. IF THE IMPUGNED ASSESSMENT ORDER PASSED U/S 143( 3) WAS ILLEGAL OR NULLITY IN THE EYES OF LAW, THEN, WHETHE R THE CIT HAD A VALID JURISDICTION TO PASS THE IMPUGNED ORDER U/S 263 TO REVISE THE NON-EST ASSESSMENT ORDER?' ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 10 OF 17 ON QUESTION NO. 1 AND 3 WHICH IS RELEVANT TO THE PR ESENT CASE THE HON'BLE MUMBAI BENCH OF THE TRIBUNAL HAS TAKEN THE VIEW THAT WHEN THE ORIGINAL ASSESSMENT PROCEEDINGS ARE NULL AND VO ID IN THE EYES OF LAW FOR WANT OF PROPER ASSUMPTION OF JURISDICTION T HEN SUCH VALIDITY CAN BE CHALLENGED EVEN IN COLLATERAL PROCEEDINGS. THE M UMBAI BENCH TOOK THE VIEW THAT THE PROCEEDINGS U/S 147 OF THE ACT AR E PRIMARY PROCEEDINGS AND PROCEEDINGS U/S 263 OF THE ACT ARE COLLATERAL PROCEEDINGS AND IN SUCH COLLATERAL PROCEEDINGS, THE VALIDITY OF INITIATION OF THE ORIGINAL PROCEEDINGS U/S 147 OF THE ACT CAN BE CHALLENGED. THE MUMBAI BENCH OF THE TRIBUNAL IN THIS REGARD HAS PLA CED RELIANCE ON SEVERAL DECISIONS, THE PRINCIPAL DECISION BEING THA T OF THE HON'BLE SUPREME COURT IN THE CASE OF KIRAN SINGH & ORS. V. CHAMAN PASWAN & ORS . [1955] 1 SCR 117(SC) WHEREIN THE HON'BLE SUPREME COURT OBSERVED AS FOLLOWS: - 'IT IS A FUNDAMENTAL PRINCIPLE WELL-ESTABLISHED THA T A DECREE PASSED BY A COURT WITHOUT JURISDICTION IS A NULLITY, AND T HAT ITS INVALIDITY COULD BE SET UP WHENEVER AND WHEREVER IT IS SOUGHT TO BE ENFORCED OR RELIED UPON, EVEN AT THE STAGE OF EXECUTION AND EVEN IN CO LLATERAL PROCEEDINGS. A DEFECT OF JURISDICTION, WHETHER IT IS PECUNIARY O R TERRITORIAL, OR WHETHER IT IS IN RESPECT OF THE SUBJECT-MATTER OF THE ACTIO N, STRIKES AT THE VERY AUTHORITY OF THE COURT TO PASS ANY DECREE AND SUCH A DEFECT CANNOT BE CURED EVEN BY CONSENT OF PARTIES.' NOW COMING TO THE FACTS OF THE INSTANT CASE, WE FIN D THAT THE INSTANT CASE WAS SELECTED ON THE BASIS OF AIR INFORMATION A S EVIDENT FROM THE ORDER OF AO UNDER SECTION 143(3) OF THE ACT. THERE IS ALSO NO WHISPER IN THE ORDER OF THE AO FOR EXPANDING THE SCOPE OF LIMI TED SCRUTINY AFTER OBTAINING THE PERMISSION FROM THE ADMINISTRATIVE CI T. THE ID. DR HAS ALSO FAILED TO BRING ANYTHING CONTRARY TO THE ARGUM ENT OF THE ID. AR. THEREFORE, IN OUR CONSIDERED VIEW THE SCRUTINY SHOU LD HAVE BEEN LIMITED ONLY TO THE INFORMATION EMANATING FROM THE AIR. ADM ITTEDLY, THE ASSESSEE HAS CLAIMED TO HAVE FILED AN APPEAL BEFORE LD. CIT(A) CHALLENGING THE JURISDICTION EXCEEDED BY THE AO WHI LE FRAMING THE ASSESSMENT ORDER U/S 143(3) OF THE ACT. WE FIND THA T THE IMPUGNED ISSUE BEING LEGAL IN NATURE AND GOES TO THE ROOT OF THE MATTER THEREFORE WE ARE INCLINED TO PROCEED WITH THIS ISSUE FIRST BY HOLDING THAT, FROM THE ABOVE SUBMISSION AND AFTER EXAMINING OF THE RECORDS , WE FIND THAT THE LD. CIT IN HIS IMPUGNED ORDER U/S 263 OF THE ACT HA S EXCEEDED HIS JURISDICTION WHILE HOLDING THE ORDER OF AO AS ERRON EOUS IN SO FAR PREJUDICIAL TO THE INTEREST OF REVENUE. IN VIEW OF THE ABOVE WE HOLD THAT THE ID. CIT HAS IN HIS ORDER U/S. 263 OF THE ACT EX CEEDED THE JURISDICTION BY HOLDING THE ORDER OF AO AS ERRONEOU S IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE ON THOSE ITE MS WHICH ARE NOT EMANATING FROM THE AIR. THUS, WE ARE INCLINED TO AD JUDICATE ONLY THOSE MATTERS WHICH ARE EMANATING FROM THE AIR AS DISCUSS ED ABOVE. 4.2 THE ASSESSMENT WAS FRAMED BY AO FOR THE A.Y. 20 11-12 UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 29.03.2014 AFTER MAKIN G CERTAIN ADDITIONS/ DISALLOWANCES TO THE TOTAL INCOM E OF ASSESSEE. SUBSEQUENTLY, LD. CIT U/S 263 OF THE ACT OBSERVED C ERTAIN ERRORS IN THE ORDER OF AO, THEREFORE, HE WAS OF THE VIEW THAT THE ORDER PASSED BY THE AO IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INT EREST OF REVENUE ON ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 11 OF 17 ACCOUNT OF NO PROPER-ENQUIRY BEFORE COMPLETING ASSE SSMENT AS DISCUSSED BELOW: - (I) THE ASSESSEE HAS DEPOSITED IN ITS BANK ACCOUNT IN HDFC BANK GOA FOR RS. 17.56 LAKH AND OUT OF THAT THERE WAS A WITHDRAWAL ONLY RS. 1.50 LAKH BUT THE AO HAS MADE THE ADDITION ONLY TO THE EXTENT OF RS.4 LAKH ON ACCOUNT OF UNEXPLAINED CASH CREDIT. THEREFO RE, CERTAIN UNEXPLAINED CASH CREDIT OF THE ASSESSEE HAS BEEN UN DER ASSESSED BY THE AO. II) THERE WAS ANOTHER BANK ACCOUNT OF THE ASSESSEE IN HDFC BANK IN GOA WHERE TOTAL DEPOSITS OF RS. 19,31,750/- WAS MADE BY THE ASSESSEE BUT THE AO FOUND CREDITED AMOUNT OF RS. 5, 76,056/- ONLY. THUS, TOTAL DEPOSITS MADE IN THE BANK WERE NOT BROU GHT TO TAX; (III) THERE WAS TRANSACTIONS OF RS.3 76,225/- THROU GH CREDIT CARD WHICH WAS NOT EXPLAINED AND THUS THE ENTIRE AMOUNT WAS LIABLE TO BE ADDED TO THE TOTAL INCOME OF ASSESSEE BUT THE AO HA S ADDED ONLY A SUM OF RS.2,98,225/- TO THE TOTAL INCOME OF ASSESSE E. THUS, THERE WAS UNDER ASSESSMENT OF INCOME BY RS.78,000/-; (IV) THE ASSESSEE DURING THE YEAR HAS SOLD PROPERTY FOR RS.36 LAKH AND EXEMPTION OF RS.19,74,763/- WAS CLAIMED BY ASSE SSEE U/S. 10(38) OF THE ACT. THIS FACT WAS NOT VERIFIED BY THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS. IN VIEW OF ABOVE, THE LD. CIT FOUND THE ORDER OF AO IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE AN D THEREFORE SHOW- CAUSE NOTICE WAS ISSUED U/S. 263 OF THE ACT VIDE DA TED 13.10.2015 FOR THE CLARIFICATION OF THE ABOVE TRANSACTIONS. IN COMPLIANCE THERETO, THE ASSESSEE SUBMITTED AS UN DER: I) THE DEPOSIT IN HDFC BANK ACCOUNT NO. 0315193000 0609 WAS DULY REFLECTED IN HIS IT RETURN. THEREFORE, NO CAUSE HAS HAPPENED TO THE REVENUE WHICH IS PREJUDICIAL TO THE INTEREST OF REVENUE. II) THE DEPOSIT OF RS.19,73,750/- WAS DULY REFLECT ED IN THE IT RETURN AND THEREFORE THERE WAS NO ERROR WHICH IS PR EJUDICIAL TO THE INTEREST OF REVENUE. III) REGARDING THE CREDIT CARD PAYMENT, THE ADDITIO N ON ACCOUNT OF UNDISCLOSED CASH DEPOSIT HAS ALREADY BEEN ADDED BY THE AO AND THEREFORE THERE IS NO ERROR CAUSING PREJUDICE TO TH E INTEREST OF REVENUE. IV) THERE WAS NO SALE OF THE PROPERTY AND THEREFORE NO EXEMPTION U/S10(38) OF THE ACT WAS CLAIMED. HOWEVER, THE LD. CIT AFTER CONSIDERING THE SUBMISSI ON OF ASSESSEE HAS HELD THE ORDER OF AO IS ERROR AND PREJUDICIAL T O THE INTEREST OF REVENUE BY OBSERVING AS UNDER: - 'I HAVE CAREFULLY CONSIDERED THE ISSUES WITH SPECIF IC REFERENCE TO THE RELEVANT ASSESSMENT RECORDS AS WELL AS WRITTEN SUBM ISSION FURNISHED BY THE A/R. THE AO HAS NOT TAKEN COGNIZANCE OF THE FOLLOWING ISSUES, DESPITE BEING APPARENT FROM RECORD: - (1) ADDITION OF RS. 4 LAKH ONLY WAS MADE AGAINST TO TAL CASH DEPOSIT OF RS.17,56,000/- WITHOUT TAKING ANY EXPLAN ATION FROM THE ASSESSEE. ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 12 OF 17 (2) THE BALANCE DEPOSITS IN ANOTHER ACCOUNT WITH HD FC, PORVORIM, GOA WAS NOT CONSIDERED IN ASSESSMENT. (3) INTEREST INCOME FROM ALL SAVINGS ACCOUNTS AND F DRS WAS NOT CONSIDERED AT THE TIME OF ASSESSMENT. (4) SUBMISSION OF ASSESSEE REGARDING EXPLANATION OF CREDIT CARD PAYMENT OF RS.3,76,225/- WAS PARTLY ACCEPTED IN ASS ESSMENT WITHOUT PROPER VERIFICATION. (5) ALTHOUGH A SALARIED PERSON, THE ASSESSEE'S BANK ACCOUNT REFLECTS HUGE TRANSACTIONS/TRANSFER ENTRIES, WHICH REQUIRED FURTHER INVESTIGATION. (6) LONG TERM CAPITAL GAIN OF RS.19, 74,763/- WAS NOT PROPERLY VERIFIED. (7) LOAN TRANSACTIONS AND INTERE ST ON LOANS REQUIRED PROPER VERIFICATION. (8) SALARY WAS RECEIVED IN CAS H WITHOUT TDS, WHICH SHOULD HAVE BEEN VIEWED ADVERSELY. (9) LIC PREMIUM WAS PAID FOR A MINOR BUT ASSESSEE'S CAPITAL ACCOUNT DID NOT REFLECT THE SAME. (10) LASTLY, THE ASSESSEE DECLARED INCOME FROM COMMISSION/BROKERAGE IN THE PREVIOUS TWO AYS BUT NO SUCH INCOME WAS SHOWN IN THIS YEAR. 'AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT A PPLICATION OF LAW WILL ALWAYS MAKE THE ORDER PASSED BY THE ASSESSING OFFICER ERRONEOUS. THE ASSESSING OFFICER HAS NOT MADE PROPER ENQUIRY B EFORE COMPLETING ASSESSMENT REGARDING ABOVE ISSUES. BY NOT CHECKING THE ABOVE ISSUES AND BY NOT MAKING ADEQUATE ENQUIRY THE ASSESSING OF FICER HAS NOT ASSESSED THE PROPER INCOME AND THE ORDER HAS BECOME ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN VIEW OF THE ABOVE, THE ORDER DATED 29/03/2014 PASSED BY ACIT, CIRCLE-43, KOLKATA IS FOUND TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E AND HENCE IT IS SET ASIDE WITH THE DIRECTION TO PASS FRESH ASSESSMENT O RDER AFTER EXAMINING THE EVIDENCES AND DOCUMENTS IN RESPECT OF THE ABOVE ISSUES RAISED AFTER GIVING OPPORTUNITY TO THE ASSESSEE AND IN ACCORDANCE WITH LAW.' BEING AGGRIEVED BY THIS ORDER OF LD. CIT ASSESSEE I S IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: - '(1) FOR THAT THE L'D PR. COMMISSIONER OF INCOME TA X ERRED IN EXERCISING THE POWER OF REVISION FOR THE PURPOSE OF DIRECTING THE AO TO HOLD ANOTHER INVESTIGATION WHEN THE ORDER PASSED BY THE AO WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F REVENUE. (2) FOR THAT THE L'D PR.CIT ERRED AND EXCEEDED JURI SDICTION BY GIVING DIRECTION IN RESPECT OF THE MATTERS WHICH ARE SUBJE CT MATTERS OF APPEAL BEFORE THE CIT(A), THEREFORE ORDER PASSED BY PR. CI T-15 IS UNLAWFUL, BEYOND PROVISION OF LAW AND THEREFORE LIABLE TO BE QUASHED. (3) FOR THAT THE L'D PR. CIT HAD ALLEGED ARBITRARIL Y IRRELEVANT MATTERS, FACTUAL AND UNTRUE POSITION IN THE SHOW CA USE NOTICE U/S. 263 AND THEREFORE ORDER PASSED BY PR. CIT-15 KOLKATA U/ S. 263 IS NULLITY AND LIABLE TO BE QUASHED. (4) FOR THAT L'D PR. CIT HAS WRONGLY ASSUMED THE JU RISDICTION U/S. 263 BY WRONGLY MENTIONING THAT DEPOSITS IN HDFC GOA A/C & HDFC PORVORIM GOA A/C WERE UNDER-ASSESSED BY THE AO DESP ITE THESE TWO ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 13 OF 17 A/CS WERE DISCLOSED IN THE BALANCE SHEET AND DEPOSI TS WERE EXPLAINED, THEREFORE ALLEGATION SO MADE IS BAD IN LAW AND VOID AB-INITIO. (5) FOR THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE L'D PR. CIT WAS NOT JUSTIFIED IN INITIATING PROCEEDING U/S. 263. (6) FOR THAT YOUR PETITIONER CRAVES THE RIGHT TO PU T ADDITIONAL GROUNDS AND/OR TO ALTER/AMEND/MODIFY THE PRESENT GR OUNDS BEFORE OR AT THE TIME OF HEARING.' THE ID. AR BEFORE US FILED TWO PAPER BOOKS WHICH AR E RUNNING FROM PAGES 1 TO 27 AND 28 TO 31. THE ID. AR BEFORE US SU BMITTED THAT THE NECESSARY ENQUIRIES WERE MADE BY THE AO AT THE TIME OF ASSESSMENT. THUS THE ORDER OF THE AO CANNOT BE HELD ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF REVENUE ON ACCOUNT OF NON-ENQUIRY W HEREAS THE ID. DR VEHEMENTLY SUPPORTED THE ORDER OF THE ID. CIT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS & PERUSED TH E MATERIALS AVAILABLE ON RECORD. FROM THE FOREGOING DISCUSSION, WE FIND THAT ORDER OF AO HAS BEEN TREATED ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE GROUND THAT PROPER ENQUIRY WAS NOT M ADE BY THE AO. THEREFORE, LD. CIT HELD THAT THE ORDER OF AO IS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. HOWEVER, AF TER EXAMINING THE ORDER OF AUTHORITIES BELOW AND OTHER RELEVANT RECOR DS OUR OBSERVATIONS ARE AS FOLLOWS: - A) DEPOSIT OF CASH OF RS. 17.56 LAKH IN HDFC BANK A /C NO.03151930000609 FROM THE ORDER OR AO, WE FIND THA T THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS HAS APPLIED HIS MIND WHILE DETERMINING THE UNDISCLOSED INCOME FROM THE SAID BA NK ACCOUNT FOR RS. 4 LACS. THUS, THE AO AFTER CONSIDERING THE BANK STA TEMENTS OF THE ASSESSEE HAS CONSCIOUSLY MADE THE ADDITION OF RS. 4 LAKH AS UNEXPLAINED CASH CREDIT AGAINST WHICH ASSESSEE CLAI MED TO HAVE FILED APPEAL BEFORE LD. CIT(A). THEREFORE, IN OUR CONSIDE RED VIEW, THE ALLEGATION OF LD. CIT THAT PROPER ENQUIRY WAS NOT M ADE BY THE AO IS NOT TRUE. B) DEPOSIT OF CASH RS. 19,31,750/- IN HDFC BANK A/C 0315100006743 FROM THE ORDER OF AO WE FIND THAT AO HAS ALREADY MADE THE ADDITION OF THE ENTIRE AMOUNT AS UNEXPLAIN ED CASH CREDIT. THEREFORE, THE ALLEGATION OF THE ID. CIT-A THAT THE ORDER OF AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E IS NOT TRUE. C) CREDIT CARD PAYMENT OF RS. 3,76,225/- FROM THE ORDER OF AO, WE FIND THAT THE AO HAS MADE THE ADDITION OF RS. 2,78,225/- OUT OF TOTAL CREDIT CARD PAYMENT OF RS. 3,76,225/-. THEREFORE, IT IS CLEAR THAT AO HAS APPLIED HIS MIND WHILE FRAMING THE ASSESSMENT PROCEEDINGS U/S. 143(3) OF THE ACT. THUS , THE ALLEGATION OF THE AO IN THE IMPUGNED ORDER OR LD. CIT U/S. 263 OF THE ACT THAT THERE WAS NO PROPER ENQUIRY CONDUCTED BY AO AT THE TIME O F ASSESSMENT PROCEEDINGS IS NOT TRUE. D) SALE OF PROPERTY FOR CONSIDERATION OF RS. 36 LA KH. ON PERUSAL OF AIR INFORMATION WHICH IS PLACED ON PA GE 1 OF THE PAPER BOOK, WE FIND THAT NO IMMOVABLE PROPERTY HAS BEEN SOLD BY ASSESSEE IN THE YEAR UNDER CONSIDERATION. BESIDES T HE ABOVE, THERE IS ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 14 OF 17 ALSO NO WHISPER IN THE ASSESSMENT ORDER FOR ANY ADD ITION ON ACCOUNT OF CAPITAL GAINS. THEREFORE, WE FIND THAT THE ALLEGATI ON OF LD. CIT THAT AO HAS NOT CONDUCTED SUFFICIENT ENQUIRY IN RELATION TO SALE OF IMMOVABLE PROPERTY IS NOT TRUE. 5.1 IN VIEW OF THE ABOVE WE FIND THAT LD. CIT HAS P ASSED IMPUGNED ORDER U/S. 263 OF THE ACT BY HOLDING THE ORDER OF A O AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE ON AC COUNT OF INADEQUATE ENQUIRY MADE BY AO WHILE PASSING ORDER U/S. 143(3) OF THE ACT. HOWEVER, WE FIND THAT PROPER AND SUFFICIENT ENQUIRI ES WERE CONDUCTED BY THE AO AT THE TIME OF ASSESSMENT AS EVIDENT FROM THE ORDER OF AO. THEREFORE, IT CANNOT BE CONCLUDED THAT NO PROPER EN QUIRY HAS BEEN CONDUCTED BY THE AO AT THE TIME OF ASSESSMENT PROCE EDINGS. THE AO HAS TAKEN CONSCIOUS VIEW AFTER CONSIDERING THE FACT S AND CIRCUMSTANCES OF THE CASE AND GIVING PROPER OPPORTU NITY TO THE ASSESSEE. THUS, THE VIEW EXPRESSED BY AO IN THE FOR M IN HIS ASSESSMENT ORDER CANNOT BE REPLACED WITH THE VIEW O F LD. CIT U/S 263 OF THE ACT. IN HOLDING SO, WE FIND SUPPORT AND GUID ANCE FROM THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. M/S. J.L. MORRISON (INDIA) LTD. (ITA NO 168 OF 2011) IN GA NO 1541 OF 2012 DATED 15.05.2014, WHEREIN IT WAS HELD AS UNDER : - 'BY SECTIONS 3 AND 4, THE INDIAN INCOME-TAX ACT. 1922, IMPOSES A GENERAL LIABILITY TO TAX UPON ALL INCOME. BUT THE A CT DOES NOT PROVIDE THAT WHATEVER IS RECEIVED BY A PERSON MUST BE REGAR DED AS INCOME LIABLE TO TAX. IN ALL CASES IN WHICH A RECEIPT IS S OUGHT TO BE TAXED AS INCOME, THE BURDEN LIES UPON THE DEPARTMENT TO PROV E THAT IT IS WITHIN THE TAXING PROVISION.' WE ALSO RELY ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. MAX INDIA LIMITED REPORTED IN 295 I TR 282 WHEREIN IT WAS HELD AS UNDER : 'WHEN THE CIT PASSED THE IMPUGNED ORDER UNDER S. 26 3, TWO VIEWS WERE INHERENTLY POSSIBLE ON THE WORD 'PROFITS' OCCU RRING IN THE PROVISO TO S.80HHC(3) AND THEREFORE, SUBSEQUENT AMENDMENT O F S. 80HHC MADE IN THE ITA NO.L361/KOL/2016 A.Y. 2011-12 S.K. KHEMKA VS. PR. CIT-15 KOL. PAGE 12 YEAR 2005, THOUGH RETROSPECTIVE , DID NOT RENDER THE ORDER OF THE AO ERRONEOUS AND PREJUDICIAL TO THE IN TEREST OF THE REVENUE, AND CIT COULD NOT EXERCISE POWERS UNDER S. 263 .' IN VIEW OF THE ABOVE PROPOSITION, AND RESPECTFULLY FOLLOWING PRINCIPLE LAID DOWN BY THE HON'BLE COURTS AND KEEPI NG IN VIEW ALL THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF TH E CASE, WE DEEM IT FIT AND PROPER TO UPHOLD THE GRIEVANCE OF THE ASSESSEE AND QUASH THE IMPUGNED REVISION ORDER AS DEVOID OF JURISDICTION. THE ASSESSEE GETS THE RELIEF, ACCORDINGLY. 6. IN THE RESULT, ASSESSEE'S APPEAL STANDS ALLOWED. ' 7. WE HAVE PERUSED THE LETTER DATED 09.11.2016 ADDR ESSED BY THE DDIT (INV.), MUMBAI TO ITO-29(3)(4), MUMBAI WHEREIN THE DETAILS OF ON MONEY IN THE CASE OF RUNWAL GREEN (SHOPS) WERE G IVEN AND WE FIND THAT ON MONEY WAS DETERMINED BY TAKING THE RAT E @ RS.26,000/- PER SQR. FT. WHILE AGREEMENTS WERE FOR LOWER AMOUNTS. HOWEVER, IN THE CASE OF THE ASSESSEE WE OBSERVE THA T THE AGREEMENT ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 15 OF 17 VALUE WAS EXECUTED @ RS.26,000/- PER SQR. FT. THUS WE FIND MERITS IN THE CONTENTION OF THE ASSESSEE THAT THERE IS NO QUESTION OF ON MONEY AS THE AGREEMENT VALUE WAS EVEN HIGHER THAN T HE MAXIMUM RATE WHICH WAS TAKEN BY THE DDIT (INV.), MUMBAI TO ASCERTAIN THE AMOUNT OF ON MONEY RECEIVED BY THE BUILDER. MOREOVE R, THE CASE OF M/S. RUNWAL HOMES PVT. LTD. VS. DCIT IN ITA NO.5621 /M/2017 A.Y. 2015-16 THE ISSUE OF ON MONEY HAS BEEN DECIDED IN F AVOUR OF THE M/S. RUNWAL HOMES PVT. LTD. BY DELETING THE ADDITIO N ON ACCOUNT OF ON MONEY. IN VIEW OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT THE REVISIONARY ORDER PASSED BY THE LD. PR. CIT(A) IS W ITHOUT JURISDICTION AND HAS TO BE QUASHED ON LEGAL ISSUE AS WELL AS ON MERIT. ACCORDINGLY, WE QUASH THE REVISIONARY ORDER PASSED UNDER SECTION 263 OF THE ACT BY LD. PR. CIT. 13. IN THE CASE OF NAYEK PAPER CONVERTERS VS. ACIT (SUPRA) THE KOLKATA BENCH OF THE TRIBUNAL HAS HELD THAT WHERE THE CASE WAS SE LECTED FOR LIMITED SCRUTINY UNDER SECTION 143(2)(I) OF THE ACT, THE AO CANNOT B E EXPECTED TO MAKE AN ENQUIRY OF THE ISSUES POINTED OUT BY THE LD. CIT IN HIS ORDER U/S 263 OF THE ACT, AND DIRECTING THE AO TO MAKE ENQUIRY OF THE SAID IS SUES WAS BEYOND THE POWERS OF THE AO U/S 143(2)(I) READ WITH SECTION 143(3)(I) OR BEYOND THE SCOPE OF LIMITED SCRUTINY. SIMILARLY, IN THE CASE OF GIFT LAND HANDICRAFTS VS. CIT (SUPRA), THE KOLKATA BENCH OF THE TRIBUNAL HAS HELD THAT THE LD. CIT WAS NOT JUSTIFIED IN INVOKING JURISDICTION UNDER SECTION 263 ON THE ISSUES OTHER THAN THOSE DECIDED IN LIMITED SCRUTINY ASSESSMENT UNDER SECTION 143(2)(I) OF THE ACT. IN THE CASE OF AJIT GUPTA VS. ITO (SUPRA), THE F BENCH OF THE DELHI TRIBUNAL HAS HELD THAT SINCE THE CLAIM OF DED UCTION UNDER SECTION 80HHG WAS NOT THE SUBJECT MATTER OF L IMITED SCRUTINY MADE BY THE AO UNDER SECTION 143(2)(I), TH E SAME COULD NOT BE GONE INTO BY THE LD. CIT BY EXERCISING JURISDICTION UNDER SECTION 263 OF THE ACT. ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 16 OF 17 14. ADMITTEDLY, THE CASE OF THE ASSESSEE WAS SELECT ED FOR LIMITED SCRUTINY UNDER CASS FOR THE REASON THAT THE RE IS SUBSTANTIAL INCREASE IN THE CAPITAL IN THE RELEVANT YEAR AND THE AO PASSED THE ASSESSMENT ORDER AND ACCEPTED THE RETURN FILED BY THE ASSESSEE AFTER EXAMINING THE ISSUE REG ARDING INCREASE IN CAPITAL ACCOUNT AS THE ASSESSEE HAD CRE DITED HIS CAPITAL ACCOUNT WITH AGRICULTURAL INCOME OF RS. 2,4 7,500/- AND THE CAPITAL GAIN AMOUNTING TO RS. 54,56,000/-FR OM SALE OF FLAT. THE ASSESSEE HAS REFLECTED THAT SAME IN IT S CAPITAL ACCOUNT, COPY OF WHICH IS AVAILABLE AT PAGE 2 OF TH E PAPER BOOK. FURTHER IN RESPONSE TO THE LETTER DATED 07.10 .2016 ISSUED BY THE AO DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED HIS REPLY EXPLAINING THE REASON FOR INCREASE IN CAPITAL. THE COPY OF REPLY IS AVAILABLE AT PAGE 7 TO 9 OF THE PAPER BOOK FILED BY THE ASSESSEE. HOWEV ER, THE LD. PR. CIT EXERCISING JURISDICTION UNDER SECTION 2 63 OF THE ACT, DIRECTED THE AO TO MAKE FRESH ASSESSMENT ON TH E ISSUES WHICH WERE NOT THE SUBJECT MATTER OF THE LIMITED SC RUTINY. SINCE, THE ISSUE RAISED BY THE ASSESSEE IN THIS CAS E HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY T HE VARIOUS BENCHES OF THE TRIBUNAL DISCUSSED ABOVE, WE FIND ME RIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE LD. PR. CIT(A) HAS EXCEEDED JURISDICTION U/S 263 OF THE ACT BY DIRECTING THE AO TO MAKE FRESH ASSESSMENT ON THE ISSUES ITA NO.463/CHD/2019 A.Y.2014-15 PAGE 17 OF 17 WHICH WERE NOT THE SUBJECT MATTER OF THE ASSESSMENT FRAMED ON THE BASIS OF LIMITED SCRUTINY. FURTHER, NO CONTR ARY DECISION WAS BROUGHT TO OUR NOTICE BY THE LD. DR. H ENCE, RESPECTFULLY FOLLOWING THE DECISIONS OF THE TRIBUNA L DISCUSSED IN THE FOREGOING PARAS, WE ALLOW THE APPEAL OF THE ASSESSEE AND SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. PR. CIT U/S 263 OF THE ACT. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 13.05.2021. SD/- SD/- (N. K. SAINI) (R.L. NEGI) (VICE PRESIDENT) (JUDICIAL MEMBER) DATED: 13 TH MAY, 2021 *RANJAN &) *+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $ 0 , 123/4 / DR, ITAT, CHANDIGARH 6. /3 5# / GUARD FILE &) ' / BY ORDER, 6 ! / ASSISTANT REGISTRAR