Seth Madan Lal Palriwala Foundation , New Delhi V. CIT(Exemption), New Delhi

ITA 4670/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7094 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 23-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Depreciation; Rule of consistency; Source of fund; Competent authority; Assessment record; Revised return; Set aside
• Section: 143(3); 80G; 48; 13; 263; 12; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4670/DEL./2019 (ASSESSMENT YEAR : 2014-15) M/S. SETH MADAN LAL PALRIWALA FOUNDATION, VS. CIT ( EXEMPTION), C 567, DEFENCE COLONY, NEW DELHI. NEW DELHI 110 024. (PAN : AABTS5785P) (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. SHASHWAT BAJPAI, ADVOCATE SHRI SHARAD AGARWAL, ADVOCATE MS. SWATI RANA, ADVOCATE REVENUE BY : SHRI S.S. RANA, CIT DR DATE OF HEARING : 02.12.2019 DATE OF ORDER : 31.01.2020 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER APPELLANT, M/S. SETH MADAN LAL PALRIWALA FOUNDATIO N (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILI NG THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 18.03.2019 PASSED BY THE COMMISSIONER OF INCOME-TAX (EXEMPTION S), NEW DELHI QUA THE ASSESSMENT YEAR 2014-15 ON THE GROUND S INTER ALIA THAT :- ITA NO.4670/DEL./2019 2 1. THAT THE LEARNED CIT (EXEMPTION), NEW DELHI, HA S ERRED BOTH IN LAW AND ON FACTS IN INVOKING THE PROVISIONS OF S ECTION 263 OF THE ACT STATING THAT THE ASSESSMENT ORDER DATED 28.12.2016 PASSED BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS P REJUDICIAL TO THE INTERESTS OF THE REVENUE. 2. THAT THE LEARNED CIT (EXEMPTION), NEW DELHI, HAS ERRED BOTH IN LAW AND ON FACTS IN CANCELLING THE ASSESSMENT OR DER DATED 28.12.2016, PASSED U/S 143(3) OF THE ACT BY THE ITO [EXEMPTION], WARD-2(1), NEW DELHI, ACCEPTING THE RETURNED INCOME AT NIL IN THE CASE OF THE ASSESSEE, WHEN THE SAID ORDER IS NEITHE R ERRONEOUS NOR PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 3. THAT THE LEARNED CIT (EXEMPTION), NEW DELHI, HAS ERRED BOTH IN LAW AND ON FACTS IN NOT ACCEPTING THE FACT THAT THE ALL DUE ENQUIRIES WERE MADE BY THE AO DURING THE COURSE OF THE ASSESS MENT PROCEEDINGS AND HAS GROSSLY ERRED IN MERELY SUBSTITUTING HIS OW N VIEWS WITHOUT SHOWING ANY ERROR IN THE SAID ORDER AND/OR HIMSELF MAKING ANY ENQUIRIES AND INVESTIGATIONS. 4. THAT THE LEARNED CIT (EXEMPTION), NEW DELHI, HAS GROSSLY ERRED IN APPLYING EXPLANATION 2 TO SECTION 263 WHIC H IS NOT APPLICABLE FOR THE GIVEN ASSESSMENT YEAR (2014-15) AND ALSO WI THOUT PREJUDICE THE SAID EXPLANATION CAN ONLY BE APPLIED IN CASE THE AS SESSMENT ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHI CH IN THIS CASE HAVE BEEN FULLY MADE, REPLIED TO, CONSIDERED AND ACCEPTE D. 5. THAT THE LEARNED CIT (EXEMPTION), NEW DELHI, HAS FAILED TO APPRECIATE THE PRINCIPLE OF CONSISTENCY SINCE ASSES SMENTS HAVE BEEN MADE CONSISTENTLY AND CONTINUOUSLY U/S 143(3) ON TH E SAID ISSUE AFTER MAKING FULL AND COMPLETE ENQUIRIES FOR SEVERAL PREV IOUS ASSESSMENT YEARS AND BEING SATISFIED WITH THE REPLIES & EVIDEN CE PRODUCED BY THE ASSESSEE. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS INTO THE BUSI NESS OF MOBILE HEALTH CARE SERVICES IN UNCOVERED AND REMOTE ISLAND VILLAGES OF SUNDERBAN AREA WITH THE OBJECTIVE TO REACH EFFECTIV E HEALTH CARE TO IMPROVE THE HEALTH STATUS AND REDUCING BURDEN OF DI SEASE IN THE LOCALITY. FOR THE YEAR UNDER ASSESSMENT, INITIAL A SSESSMENT WAS FRAMED AT NIL INCOME AND DEFICIT IS NOT ALLOWED TO BE CARRIED FORWARD. ITA NO.4670/DEL./2019 3 3. LD. CIT (E) ON PERUSAL OF ASSESSMENT RECORD PRIM A FACIE CAME TO THE CONCLUSION THAT THE ASSESSMENT ORDER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF REV ENUE UNDER SECTION 263 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT ). SHOW-CAUSE NOTICE WAS ISSUED. DECLINING THE CONTENTIONS RAISE D BY THE ASSESSEE, CIT (E) REACHED TO THE CONCLUSION THAT AS SESSING OFFICER (AO) DURING THE COURSE OF PROCEEDINGS HAVE FAILED T O MAKE ANY ENQUIRY ABOUT THE SOURCE OF FUNDS BEING RECEIVED FR OM ABROAD, THE TRUE EXISTENCE OF THE ENTITY IN THE PRINCIPALITY OF LIECHTENSTEIN AND ACTIVITIES UNDERTAKEN BY THE SAID FOUNDATION ABROAD . CIT (E) ALSO NOTED THAT AO OUGHT TO HAVE MADE ENQUIRIES ABOUT TH E SOURCE OF FUNDS IN THE LIGHT OF THE AGREEMENT FOR EXCHANGE OF INFORMATION WITH RESPECT TO TAXES WITH PRINCIPALITY OF LIECHTEN STEIN EFFECTIVE FOR TAXABLE PERIOD COMPRISING OF AY 2014-15 ONWARDS THR OUGH THE COMPETENT AUTHORITIES IN THE FOREIGN TAX DIVISION O F THE CENTRAL BOARD OF DIRECT TAXES (CBDT). CIT (E) ALSO NOTED T HAT THE ASSESSEE HAS FILED NUMEROUS FOREIGN DOCUMENTS RELIE D UPON IN THE SUBMISSIONS WHICH WERE NOT FILED AND EXAMINED BY TH E AO DURING THE ASSESSMENT PROCEEDINGS WHICH WAS NECESSARY FOR EXAMINATION OF RECEIPT OF FUNDS. MOREOVER, AUTHENTICITY OF THO SE DOCUMENTS HAS ALSO NOT BEEN EXAMINED. ASSESSEE HAS ALSO FAILED T O EXPLAIN WHETHER THE AMOUNT RECEIVED IS A SPECIFIED GRANT OR A CORPUS ITA NO.4670/DEL./2019 4 DONATION. RELYING UPON THE AMENDED PROVISIONS, CIT (E) ALSO DECLINED THE CONTENTIONS OF THE ASSESSEE THAT WHEN TWO VIEWS ARE POSSIBLE AND AO HAS TAKEN ONE OF THE POSSIBLE VIEWS TO WHICH CIT(E) DOES NOT AGREE, THE ORDER IS NOT AMENABLE TO THE PROVISIONS CONTAINED U/S 263 OF THE ACT. LD. CIT (E) RELIED U PON THE EXPLANATION (2) TO SECTION 263 OF THE ACT AND THERE BY CANCELLED THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT AND D IRECTED THE AO TO PASS A FRESH ASSESSMENT ORDER IN VIEW OF THE OBS ERVATIONS MADE BY THE LD. CIT (E). 4. FEELING AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT (E), THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNED ORDER CONTENDED THAT EXPLANATION (2) TO SECTION 263 OF TH E ACT INSERTED BY THE FINANCE ACT, 2015 W.E.F. 01.06.2015 IS NOT A PPLICABLE TO THE PRESENT CASE PERTAINING TO AY 2014-15. 7. ON THE OTHER HAND, TO REPEL THE ARGUMENTS ADDRES SED BY THE LD. AR FOR THE ASSESSEE, LD. DR FOR THE REVENUE CON TENDED THAT ITA NO.4670/DEL./2019 5 EXPLANATION (2) TO SECTION 263 IS APPLICABLE TO THE YEAR UNDER ASSESSMENT AND FURTHER CONTENDED THAT DONATION HAS BEEN RECEIVED BY THE ASSESSEE TRUST FROM FOREIGN ENTITY BUT NO TH IRD PARTY VERIFICATION HAS BEEN DONE AND RELIED UPON THE DECI SION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF DANIEL MERCHANTS PVT. LTD. VS. ITO (APPEAL NO.2396/2017 DATED 29.11.2017) . 8. BUT, WE ARE OF THE CONSIDERED VIEW THAT THE ISSU E IS TO BE DETERMINED BY THE BENCH AT THIS STAGE IS :- AS TO WHETHER EXPLANATION (2) TO SECTION 263 IS APPLICABLE TO THE PRESENT CASE PERTAINING TO AY 2014-15 . THE ISSUE DECIDED BY HONBLE SUPREME COURT IN THE C ASE OF DANIEL MERCHANTS PVT. LTD. (SUPRA) THAT AO DID NOT MAKE ANY PROPER ENQUIRY WHILE MAKING ADJUSTMENT AND EXPLAINING THE ASSESSMENT OF THE ASSESSEE WOULD BE DECIDED ON MERIT. SO, WE ARE OF THE CONSIDERED VIEW THAT THE JUDGMENT (SUPRA) RELIED UP ON BY THE LD. DR FOR THE REVENUE IS NOT APPLICABLE TO THE PROPOSI TION AT HAND. 9. BEFORE PROCEEDING FURTHER, PROVISIONS CONTAINED UNDER EXPLANATION (2) TO SECTION 263 ARE EXTRACTED FOR RE ADY PERUSAL AS UNDER :- 263 .. 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 ITA NO.4670/DEL./2019 6 INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, (A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES O R VERIFICATION WHICH SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOU T INQUIRING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WI TH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, REND ERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE C ASE OF THE ASSESSEE OR ANY OTHER PERSON. 10. BARE PERUSAL OF EXPLANATION (2) TO SECTION 263 SHOWS THAT THE SAME WAS INSERTED BY THE FINANCE ACT, 2015 W.E.F. 0 1.06.2015 WHICH IS NOT APPLICABLE TO THE PRESENT CASE PERTAIN ING TO AY 2014-15 BEING DEEMING PROVISIONS 11. LD. AR FOR THE ASSESSEE FURTHER CONTENDED THAT THERE IS NO LACK OF ENQUIRY NOR EVEN INADEQUATE ENQUIRY CONDUCT ED BY THE AO AT THE TIME OF FRAMING ASSESSMENT U/S 143 (3) OF TH E ACT NOR ANY CONTRAVENTION OF FACTS HAS BEEN POINTED OUT AND REL IED UPON THE QUESTIONNAIRE ISSUED BY THE AO AND REPLY FILED THER ETO BY THE ASSESSEE. HOWEVER, LD. DR FOR THE REVENUE CONTENDE D THAT AO HAS FAILED TO MAKE PROPER ENQUIRY OR VERIFICATION WHICH SHOULD HAVE BEEN MADE BECAUSE THE AO HAS NOT DECIDED THE ISSUE IF IT WAS ACTUALLY A CORPUS DONATION RECEIVED BY THE ASSESSEE AS EXEMPTED U/S 11(1)(D) OF THE ACT. ITA NO.4670/DEL./2019 7 12. WHEN WE EXAMINE THE QUESTIONNAIRE DATED 11.04.2 016 ISSUED BY THE AO TO THE ASSESSEE, AVAILABLE AT PAGES 1 TO 3 OF THE PAPER BOOK, QUESTIONS NO.2 TO 11, 17 & 21 ARE RELEVANT PE RTAINING TO THE CONTROVERSY AT HAND, WHICH ARE EXTRACTED FOR READY PERUSAL AS UNDER:- 2. PLEASE FURNISH A DETAILED NOTE ON THE ACTIVITIE S CARRIED OUT BY YOUR TRUST/SOCIETY/INSTITUTION DURING THE YEAR U NDER CONSIDERATION AND ALSO IN THE LAST TWO PRECEDING YE ARS. PLEASE ALSO STATE THE LIMB IN WHICH YOUR ACTIVITIES ARE CO VERED WITHIN THE MEANING OF SECTION 2 (15) OF THE INCOME TAX ACT AND HOW THEY ARE CHARITABLE AS PER SECTION 11, 12 & 13. 3. WHETHER THE TRUST/SOCIETY IS REGISTERED UNDER SE CTION 12A/12AAA OF THE I. T. ACT. IF SO, FURNISH LEGIBLE COPY OF CERTIFICATE. FURTHER, PLEASE ALSO STATE WHETHER TH E TRUST/SOCIETY IS ALSO NOTIFIED UNDER SECTION 80G OR U/S 10 OF THE I. T. ACT, 1961, IF SO, FILE LEGIBLE COPY OF CERTIFICATE. 4. FURNISH NAME, COMPLETE ADDRESS AND ASSESSMENT PARTICULARS OF EACH TRUSTEE / MEMBER OF THE COMPANY IN THE FOLLOWING FORMAT. NAME & ADDRESS CIRCLE/ WARD OF INCOME TAX PAN SOURCE OF INCOME MOBILE NO. / CONTACT NO. 5. PLEASE GIVE ADDRESS OF ALL THE PREMISES USED BY THE TRUST FOR ITS NORMAL WORKING. 6. PLEASE FURNISH LIST CONTAINING NAME OF ANY OF TRUST/SOCIETY/INSTITUTION FUNCTIONING AT YOUR PREMI SES ALONG WITH COPY OF ACKNOWLEDGEMENT OF FILING OF THEIR INCOME T AX RETURN. 7. PLEASE STATE WHETHER ANY APPEAL IS PENDING AT AN Y APPELLATE STAGE FOR ANY A.Y? IF YES, PLEASE PROVID E BRIEF SUMMARY OF THE ISSUE INVOLVED ALONG WITH COPY OF ASSESSMENT ORDER /CIT (A) ORDER/ ITAT ORDER/H.C. ORDER. 8. PLEASE FURNISH CERTIFIED TRUE COPY OF THE FOLLOW ING DOCUMENTS OF THE AY 2014-15 AS WELL AS FOR PRECEDIN G LAST TWO YEARS :- ITA NO.4670/DEL./2019 8 A. RETURN OF INCOME AND REVISED RETURN, IF ANY B. RECEIPT & PAYMENT ACCOUNT C. INCOME & EXPENDITURE ACCOUNT. D. BALANCE SHEET, E. AUDIT REPORT U/S 12A(B) OF THE ACT. F. COMPUTATION OF INCOME INDICATING AS TO HOW 85% OF INCOME DERIVED HAS BEEN APPLIED FOR OBJECTS OF THE TRUST/INSTITUTION. 9. PLEASE PROVIDE THE NAME AND ADDRESS OF THE PERSO NS WHO HAVE BEEN GIVEN FEE CONCESSION/GRANTS/BENEFITS CHAR ITY ETC. WHICH JUSTIFIES RUNNING OF TRUST/SOCIETY/INSTITUTION ON C HARITABLE BASIS. 10. PLEASE PROVIDE THE SOURCE AND MODE OF DONATION WITH JUSTIFICATION. PLEASE ALSO SPECIFY THE NATURE OF AC TIVITIES DONE BY THE DONEES AND FILE THEIR COPY OF 12A/80G CERTIFICA TE. 11. PLEASE FURNISH THE LIST OF SPECIFIED PERSONS CO VERED U/S 13(3) OF THE ACT. DETAILS OF APPLICATION/UTILIZATI ON OF INCOME OR PROPERTY OF THE TRUST/SOCIETY/INSTITUTION FOR TH E BENEFIT / USE OF THE PERSON REFERRED TO IN SECTION 13(3) OF THE ACT ALONG WITH AN EXPLANATION OF ITS JUSTIFICATION. . 17. DETAILS OF ADDITIONS TO CORPUS FUND. PLEASE PR OVIDE SPECIFIC PURPOSE LETTERS W.R.T CORPUS DONATION IN T HE FOLLOWING FORMAT: NAME / CURRENT ADDRESS/ PAN OF THE PARTY TOTAL AMOUNT CHEQUE NO. DATE OF ENTRY IN BANK STATEMENT (MARK THE ENTRY IN THE BANK STATEMENT) DETAILS OF ANY RELATION TO THE PARTY .. 21. PLEASE FURNISH DETAILS OF FCRA REGISTRATION. HA VE YOU FILED FC-3 RETURN FOR A.Y. 2014-15? IF YES, PLEASE FILE COPY OF THE SAME. 13. PERUSAL OF THE AFORESAID QUESTIONS NO.2 TO 11, 17 & 21 GOES TO PROVE THAT AO HAS CALLED FOR MINUTE DETAIL AS TO THE ACTIVITIES BEING CARRIED OUT BY THE ASSESSEE TRUST WITH COMPLE TE DETAILS OF EACH ITA NO.4670/DEL./2019 9 TRUSTEE/MEMBER, CALLED FOR RETURN OF INCOME, REVISE D RETURN IF ANY FOR THE LAST TWO YEARS, RECEIPT AND PAYMENT ACCOUNT , INCOME & EXPENDITURE ACCOUNT ETC; COMPLETE DETAILS OF THE PA RSONS WHO HAVE BEEN GIVEN FEE CONCESSIONS/GRANTS/BENEFITS/CHARITY ETC.; CALLED FOR SOURCE AND MODE OF DONATION WITH JUSTIFICATION; DET AIL OF APPLICATION/UTILIZATION OF INCOME OR PROPERTY OF TH E TRUST; CALLED FOR DETAIL OF ADDITIONS TO CORPUS FUND IN TABULATED FOR M AND ALSO CALLED FOR DETAIL OF FCRA REGISTRATION WITH FC-3 RETURN FO R AY 2014-15, IF FILED. 14. ASSESSEE FILED DETAILED REPLY TO THE AFORESAID QUESTIONNAIRE, AVAILABLE AT PAGES 4 TO 6 OF THE PAPER BOOK ALONG W ITH REQUISITE DOCUMENTS, RELEVANT PORTION THEREOF IS EXTRACTED FO R READY PERUSAL AS UNDER :- 9. DETAILS REGARDING NAMES, ADDRESSES OF PERSONS/ORGANIZATIONS TO WHOM SMPF HAS GIVEN GRANT/ DONATION DURING THE FY 2013-14, RELEVANT TO THE A Y 2014-15 IS ENCLOSED AS ANNEXURE NO.6. 10. DURING THE YEAR, THE TRUST RECEIVED A SUM OF RS.3,31,50,325/- AS CORPUS CONTRIBUTION FROM PALRIW ALA INDIA FOUNDATION (PIF), LANDSTRSSEE 97, PO BOX 27, F-1949 4, SCHAAN, PRINCIPALITY OF LIECHTENSTEIN, THROUGH RUNBRIDGE IN VESTMENTS. A CHART SHOWING THE REMITTANCES RECEIVED DURING THE Y EAR ARE GIVEN IN ANNEXURE NO.7. THE COPY OF BANK ADVICE ALONG WIT H RELEVANT LEDGER ACCOUNT IS ALSO ENCLOSED. ALL THESE REMITTAN CES RECEIVED BY THE TRUST IN THE ACCOUNT WITH INDIAN OVERSEAS BANK, NEW DELHI. THE TRUST IS DULY REGISTERED WITH THE MINISTRY OF H OME AFFAIRS, GOVT. OF INDIA UNDER FCRA FOR FOREIGN CONTRIBUTION AND A COPY OF ITS REGISTRATION, ALONG-WITH COPY OF R/ FILED IN FC-6, IS BEING FILED AS ANNEXURE NO.8. 11. NO PAYMENTS WERE MADE BY THE TRUST U/S 13(3) DU RING THE YEAR. HOWEVER, A SUM OF RS.6,35,284/- WAS PAID TOWA RDS MEDICAL ITA NO.4670/DEL./2019 10 EXPENSES REIMBURSEMENT OF MR.GAJANAND PALRIWALA, MA NAGING TRUSTEE OF THE TRUST, WHO WAS MORE THAN 80 YEARS OL D AND WAS MANAGING THE TRUST FOR A VERY LONG PERIOD AT THAT P OINT OF TIME. THIS REIMBURSEMENT IS MADE OUT OF FUNDS RECEIVED FR OM PALRIWALA INDIA FOUNDATION (PIF) AS PER THEIR DIREC TION IN TERMS OF CONTRIBUTION GIVEN TO THE TRUST. NO OTHER PAYMEN T IN THE FORM OF SALARY, ETC., HAS BEEN PAID TO THE MANAGING TRUS TEE OR ANY OTHER TRUSTEE OR THEIR RELATIVES DURING THE YEAR. H OWEVER, MR.PALRIWALA HAS EXPIRED IN THE YEAR 2014. 17. AS EXPLAINED IN PARA-10 ABOVE, THE TRUST RECEIV ED FOREIGN DONATION OF RS.3,31,50,325/- DURING THE YEAR. THIS CONTRIBUTION WAS RECEIVED FROM PALRIWALA INDIA FOUNDATION (PIF), LANDSTRSSEE 97, PO BOX 27, F-19494, SCHAAN, PRINCIP ALITY OF LIECHTENSTEIN THROUGH RUNBRIDGE INVESTMENTS. THE TR UST IS DULY REGISTERED WITH THE MINISTRY OF HOME AFFAIRS, GOVT. OF INDIA UNDER FCRA FOR FOREIGN CONTRIBUTION. 15. PERUSAL OF INCOME AND EXPENDITURE ACCOUNT, AVAI LABLE AT PAGES 9 TO 14 OF THE PAPER BOOK, FURNISHED IN FORM FC-3 TO THE SECRETARY TO THE GOVERNMENT OF INDIA, MINISTRY OF H OME AFFAIRS, NEW DELHI SHOWS THAT EVERY MINUTE DETAILS HAVE BEEN GIVEN BY THE ASSESSEE IN THE SAME AS TO THE TOTAL NUMBER OF FORE IGN CONTRIBUTION RECEIVED DURING THE YEAR WITH PURPOSE FOR WHICH THE FOREIGN CONTRIBUTION HAS BEEN RECEIVED AND UTILIZED. 16. AT PAGE 11 OF THE PAPER BOOK, COMPLETE DETAILS OF EACH DONOR WITH THE DONATION AMOUNT HAVE BEEN GIVEN. WHEN WE EXAMINE DETAIL OF CORPUS RECEIPT AVAILABLE AT PAGE 15 OF TH E PAPER BOOK, AGAIN THERE IS MINUTE DETAIL CALLED FOR BY THE AO. ASSESSEE HAS ALSO GIVEN DETAIL OF REMITTANCE INFORMATION, AVAILA BLE AT PAGES 16 & 17 OF THE PAPER BOOK. WHEN ASSESSEE HAS AGAIN GIVE N THE COMPLETE ITA NO.4670/DEL./2019 11 DETAILS OF DONEES WITH PAN, ADDRESSES AND THE AMOUN T OF GRANT/DONATION, AVAILABLE AT PAGE 25 OF THE PAPER B OOK, ALL THESE DOCUMENTS HAVE BEEN EXAMINED BY THE AO AT THE TIME OF FRAMING ASSESSMENT U/S 143(3) OF THE ACT. 17. NOW, WE WOULD PROCEED TO EXAMINE AFORESAID DOCU MENTS/ DETAILS CALLED FOR BY THE AO AND FURNISHED BY THE A SSESSEE IN THE LIGHT OF THE IMPUGNED ORDER PASSED BY THE LD. CIT ( E) SO AS TO WORK OUT IF THE ASSESSMENT U/S 143 (3) HAS BEEN FRAMED B Y THE ASSESSEE WITHOUT MAKING ENQUIRIES/INFORMATION WHICH SHOULD H AVE BEEN MADE. 18. LD. AR FOR THE ASSESSEE CONTENDED THAT BARE PER USAL OF PARA 4.2 OF THE IMPUGNED ORDER PASSED BY THE LD. CIT SHO WS THAT THE LD. CIT HAS PROCEEDED ON THE BASIS OF CONJECTURES AND S URMISES. FOR READY PERUSAL, PARA 4.2 IS EXTRACTED AS UNDER :- 4.2 DURING THE COURSE OF PRESENT PROCEEDINGS, THE ASSESSEE HAS ALSO FILED VARIOUS FOREIGN DOCUMENTS AS MENTION ED IN THE GIST OF SUBMISSIONS OF THE ASSESSEE MENTIONED ABOVE. TH E FILING OF NEW DOCUMENTS TO SUPPORT ITS CLAIM CLEARLY SHOWS TH ESE DOCUMENTS WERE NOT FILED AND EXAMINED BY THE AO DUR ING THE COURSE OF THE PROCEEDINGS, WHICH EVEN THE ASSESSEE CONCEDES THAT THE SAME WERE NECESSARY FOR EXAMINATION OF RECEIPT OF THE FUNDS. SECONDLY, THESE DOCUMENTS BEING FOREIGN DOCUMENTS A RE REQUIRED TO BE EXAMINED FOR ITS AUTHENTICITY BY MAKING REFER ENCE TO THE COMPETENT AUTHORITY UNDER THE EXCHANGE OF INFORMATI ON ROUTE. AS CAN BE SEEN FROM THE ABOVE, THE ASSESSING OFFICE R HAS FAILED TO UNDERTAKE ANY SUCH EXERCISE AND ACCEPTED THE CLAIM OF THE ASSESSEE WITHOUT PROPERLY ENQUIRING INTO THE SAME. ITA NO.4670/DEL./2019 12 19. BARE PERUSAL OF PARA 4.2 ABOVE SHOWS THAT THE L D. CIT HAS PROCEEDED ON THE BASIS OF SURMISES THAT VARIOUS FOR EIGN DOCUMENTS FILED BY THE ASSESSEE DURING PROCEEDINGS U/S 263 OF THE ACT HAVE NOT BEEN EXAMINED BY THE AO WHICH EVEN ASSESSEE CON CEDES THAT THE SAME WERE NECESSARY FOR ADMISSION OF RECEIPT OF THE FUNDS. IT IS VERY SURPRISING THAT WITHOUT DISCUSSING NATURE AND RELEVANCY OF THOSE FOREIGN DOCUMENTS, HOW LD. CIT CAN REACH THE CONCLUSION THAT THE AO HAS ACCEPTED THOSE DOCUMENTS WITHOUT MAKING PROPER ENQUIRY THEREOF. LD. AR FOR THE ASSESSEE ALSO CONT ENDED THAT ASSESSEE HAS NEVER CONCEDED THAT THOSE DOCUMENTS WE RE NECESSARY FOR RECEIPT OF FUNDS. WHEN NATURE AND VERACITY OF THE SAID DOCUMENTS HAVE NEITHER BEEN BROUGHT ON RECORD NOR E XAMINED BY THE LD. CIT, IT IS DIFFICULT TO ACCEPT THE FINDINGS RETURNED BY THE LD. CIT THAT AO HAS ACCEPTED THE SAME WITHOUT PROPERLY BEEN ENQUIRED INTO THOSE DOCUMENTS. 20. FURTHERMORE, SO FAR AS QUESTION OF CLAIM OF APP LICATION OF CORPUS FUND IS CONCERNED, THE ASSESSEE HAS COME UP WITH SPECIFIC PLEA THAT THE TREATMENT OF APPLICATION OUT OF CORPU S FUND IS ONLY AN ACCOUNTING ENTRY AS EQUIVALENT AMOUNT HAS BEEN TRAN SFERRED FROM THE CORPUS FUND TO THE INCOME AND EXPENDITURE ACCOU NT AND AS SUCH, NO EXTRA APPLICATION IS CLAIMED. LD. CIT THOUGH AD MITTED ARGUMENT ADVANCED BY THE ASSESSEE THAT NO DEFICIT HAS BEEN C REDITED BY ITA NO.4670/DEL./2019 13 CLAIMING THE APPLICATION OUT OF CORPUS FUND, IT IS AGAIN SURPRISING AS TO HOW LD. CIT REACHED THE CONCLUSION THAT, AO OUGHT TO EXAMINE THE VACILLATING STANDS OF THE ASSESSEE AND TO FIND OUT THE CORRECT NATURE OF THE RECEIPT WHICH HAVE NOT BEEN DONE MERE LY ON THE PREMISE THAT, ASSESSEE ITSELF WAS NOT SURE WHETHER THE AMOUNT RECEIVED AS A SPECIFIC GRANT OR IT IS A CORPUS DONA TION WITHOUT RETURNING ANY SPECIFIC FINDINGS. 21. SO, WHEN LD. CIT HAS HIMSELF ADMITTED THAT NO D EFICIT HAS BEEN CREDITED AS EXPLAINED IN DOCUMENTS AVAILABLE A T PAGES 25 TO 27 AND 29 & 30 OF THE PAPER BOOK, ALL THESE DOCUMENTS NOW AVAILABLE AT PAGES 1 TO 37 OF THE PAPER BOOK HAVE BEEN DULY P LACED BEFORE AO DURING THE ASSESSMENT PROCEEDINGS IN REPLY TO TH E QUERIES RAISED BY PARA 2 OF THE LETTER DATED 11.04.2016, AV AILABLE AT PAGE 1 OF THE PAPER BOOK ISSUED BY THE AO. 22. IN THE EARLIER YEARS, SAME QUESTIONNAIRE WAS IS SUED BY THE AO AND REPLY THERETO WAS FILED, AS IS EVIDENT FORM PAGES 1 TO 48 OF THE PAPER BOOK, AND ALL THESE DOCUMENTS WERE EXAMIN ED AND ACCEPTED BY THE AO AND DETAILS THEREOF HAVE NEVER B EEN DISPUTED. PERUSAL OF THE DOCUMENTS BROUGHT ON RECORD BY THE A SSESSEE FROM PAGES 55 TO 57 OF THE PAPER BOOK WHICH IS CORRESPON DENCE BETWEEN NATIONAL TAX ADMINISTRATION SWISS AUTHORITIES AND P ALRIWALA INDIA FOUNDATION, AND A CERTIFICATE ISSUED BY THE SWISS A UTHORITIES IN ITA NO.4670/DEL./2019 14 FAVOUR OF THE PALRIWAL INDIA FOUNDATION, AVAILABLE AT PAGE 63 OF THE PAPER BOOK, THAT THE ASSETS OF THE FOUNDATION HAVE BEEN MANAGED AND UTILIZED BY THE FOUNDATION BOARD IN CONFORMITY WITH THE FOUNDATION AIM AND IN ACCORDANCE WITH THE PROVISION S OF LAW AND THE FOUNDATION DOCUMENTS. IT GOES TO PROVE THAT TH E CONTENTION RAISED BY THE LD. CIT QUA DONATION RECEIVED FROM FO REIGN COUNTRY, NO THIRD PARTY VERIFICATION HAS BEEN DONE AND RELIE D UPON THE DECISION RENDERED BY HONBLE SUPREME COURT IN DANIEL MERCHANTS PVT. LTD. (SUPRA) WHICH IS HOWEVER ON DIFFERENT FACTS AND IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CA SE. 23. LD. CIT PROCEEDED ON THE PREMISE THAT NO COMPLE TE DETAILS HAVE BEEN BROUGHT ON FILE BY THE ASSESSEE IS NOT SU STAINABLE BECAUSE THE ENTIRE DETAILS CALLED UPON BY THE AO AS WELL AS BY THE LD. CIT HAVE THEMSELVES BROUGHT ON RECORD AND AS SUCH CORPU S DONATION IS EXEMPTED U/S 11(1)(D) OF THE ACT. LD. CIT WAS REQU IRED TO RETURN INDEPENDENT FINDINGS IN THIS REGARD SO AS TO REACH THE CONCLUSION U/S 263 OF THE ACT. 24. FURTHERMORE, ASSESSEE HAS BROUGHT ON RECORD COM PLETE REMITTANCE INFORMATION, AVAILABLE AT PAGES 32 & 33 OF THE PAPER BOOK, WHEREIN IT IS MENTIONED THAT PALRIWALA INDIA FOUNDATION HAS DONATED US $ 2,00,000 TO THE ASSESSEE TRUST TO BE U SED FOR CORPUS ITA NO.4670/DEL./2019 15 FUND FOR PIF PROJECTS ACCORDING TO THE OBJECT FOR A Y 2013-14. SO, ALL THESE FACTS WERE EXAMINED AND FOUND TO BE CORRE CT BY THE AO. 25. MORE PARTICULARLY, ASSESSEE HAS BROUGHT ON RECO RD INCOME & EXPENDITURE ACCOUNT, FORM FC-3 SHOWING DETAIL OF TO TAL NUMBER OF FOREIGN CONTRIBUTION ETC. AS DISCUSSED IN PRECEDING PARA 14, ALL THESE DETAILS HAVE BEEN DULY EXAMINED BY THE AO DUR ING ASSESSMENT U/S 143(3) OF THE ACT. 26. THE LD. AR FOR THE ASSESSEE FURTHER CONTENDED T HAT AO HAS TAKEN ONE POSSIBLE VIEW WITH WHICH LD. CIT DOES NOT AGREE, THE PROVISIONS CONTAINED U/S 263 OF THE ACT ARE NOT ATT RACTED. FINDINGS OF THE LD. CIT IN PARA 4.4 OF THE IMPUGNED ORDER IN THIS REGARD ALSO SHOWS THAT THIS ARGUMENT OF THE ASSESSEE HAS BEEN S UMMARILY REJECTED ON THE GROUND THAT THE ASSESSEES RETURN H AS BEEN ACCEPTED WITHOUT ANY NECESSARY ENQUIRY AND INVOKED THE DEEMI NG PROVISIONS CONTAINED UNDER EXPLANATION (2) TO SECTION 263 OF T HE ACT. AS DISCUSSED IN THE PRECEDING PARAS 8 TO 10, WE ARE OF THE CONSIDERED OPINION THAT DEEMING PROVISIONS CONTAINED UNDER EXP LANATION (2) TO SECTION 263 OF THE ACT ARE NOT APPLICABLE TO THE PRESENT CASE WHICH PERTAINS TO AY 2014-15. 27. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE CONSIDERED VIEW THAT FIRST OF ALL, WE HAVE TO EXAMINE WHETHER AO HAS APPLIED HIS MIND ON THE ISSUE IN QUESTION AND TO DETERMINE THE VALIDITY OF ITA NO.4670/DEL./2019 16 ORDER U/S 263 OF THE ACT, THE STARK DIFFERENCE HAS TO BE MADE OUT BETWEEN LACK OF ENQUIRY AND INADEQUATE ENQUIRY. 28. HONBLE BOMBAY HIGH COURT IN CASE OF GABRIEL INDIA LTD. (1993) 203 ITR 108 (BOM.) HELD AS UNDER :- ..THE COMMISSIONER CANNOT INITIATE PROCEEDINGS W ITH A VIEW TO STARTING FISHING AND ROVING ENQUIRIES IN MA TTERS OR ORDERS WHICH ARE ALREADY CONCLUDED. SUCH ACTION WILL BE AG AINST THE WELL-ACCEPTED POLICY OF LAW THAT THERE MUST BE A PO INT OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPS E OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI -JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY. (SEE PARASHURAM POTTERY WORKS CO. LTD. V. ITO [1977] 106 ITR 1 (SC) AT PAGE 10) . . . FROM THE AFORESAID DEFINITIO NS IT IS CLEAR THAT AN ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF AN INCOME-TAX OFFICER ACTIN G IN ACCORDANCE WITH LAW MAKES A CERTAIN ASSESSMENT, THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BE EN WRITTEN MORE ELABORATELY. THIS SECTION DOES NOT VISUALISE A CASE OF SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FO R THAT OF THE INCOME-TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISION IS HELD TO BE ERRONEOUS. CASES MAY BE VISUALISED WHERE THE INCOME- TAX OFFICER WHILE MAKING AN ASSESSMENT EXAMINES THE ACCOUNTS, MAKES ENQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME EITHER BY ACC EPTING THE ACCOUNTS OR BY MAKING SOME ESTIMATE HIMSELF. THE COMMISSIONER, ON PERUSAL OF THE RECORDS, MAY BE OF THE OPINION THAT THE ESTIMATE MADE BY THE OFFICER CONCERNED WAS ON THE LOWER SIDE AND LEFT TO THE COMMISSIONER HE WOULD HAVE EST IMATED THE INCOME AT A FIGURE HIGHER THAN THE ONE DETERMINED B Y THE INCOME-TAX OFFICER. THAT WOULD NOT VEST THE COMMISS IONER WITH POWER TO RE-EXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIMSELF AT A HIGHER FIGURE. IT IS BECAUSE THE INCOM E-TAX OFFICER HAS EXERCISED THE QUASI-JUDICIAL POWER VESTED IN HI M IN ACCORDANCE WITH LAW AND ARRIVED AT A CONCLUSION AND SUCH A CONCLUSION CANNOT BE FORMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE CONCL USION . . . THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD T O SHOW THAT TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSE D OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCOR RECT OR INCOMPLETE INTERPRETATION A LESSER TAX THAN WHAT WA S JUST HAS BEEN IMPOSED . . . WE MAY NOW EXAMINE THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE POWERS OF THE COMMISSIONER SET OUT ABOVE. THE INCOME-TAX OFFICER IN THIS CASE HAD MADE ENQUIR IES IN ITA NO.4670/DEL./2019 17 REGARD TO THE NATURE OF THE EXPENDITURE INCURRED BY THE ASSESSEE. THE ASSESSEE HAD GIVEN DETAILED EXPLANATION IN THAT REGARD BY A LETTER IN WRITING. ALL THESE ARE PART OF THE RECORD OF THE CASE. EVIDENTLY, THE CLAIM WAS ALLOWED BY THE INCOME-TAX OFFICER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSE E. SUCH DECISION OF THE INCOME-TAX OFFICER CANNOT BE HELD T O BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. 16. THUS, IN CASES OF WRONG OPINION OR FINDING ON M ERITS, THE CIT HAS TO COME TO THE CONCLUSION AND HIMSELF DECID E THAT THE ORDER IS ERRONEOUS, BY CONDUCTING NECESSARY ENQUIRY , IF REQUIRED AND NECESSARY, BEFORE THE ORDER UNDER SECTION 263 I S PASSED. IN SUCH CASES, THE ORDER OF THE ASSESSING OFFICER WILL BE ERRONEOUS BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW AND THE SAID FINDING MUST BE RECORDED. CIT CANNOT REMAND THE MAT TER TO THE ASSESSING OFFICER TO DECIDE WHETHER THE FINDINGS RE CORDED ARE ERRONEOUS. IN CASES WHERE THERE IS INADEQUATE ENQUI RY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT THE ORDER/INQUIRY MADE IS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT AN D HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTAKE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASES POSSIBLY THOUGH RARELY, THE CIT CAN ALSO SHOW AND E STABLISH THAT THE FACTS ON RECORD OR INFERENCES DRAWN FROM FACTS ON RECORD PER SE JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVEST IGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN TH E SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, UNAMBIGUOU S AND NOT DEBATABLE. THE MATTER CANNOT BE REMITTED FOR A FRES H DECISION TO THE ASSESSING OFFICER TO CONDUCT FURTHER ENQUIRIES WITHOUT A FINDING THAT THE ORDER IS ERRONEOUS. FINDING THAT T HE ORDER IS ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER SECTION 263 OF T HE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSIN G OFFICER WOULD IMPLY AND MEAN THE CIT HAS NOT EXAMINED AND D ECIDED WHETHER OR NOT THE ORDER IS ERRONEOUS BUT HAS DIREC TED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. 17. THIS DISTINCTION MUST BE KEPT IN MIND BYTHE CIT WHILE EXERCISING JURISDICTION UNDER SECTION 263 OF THE AC T AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, EXERCISE OF JURISDICTIO N UNDER THE SAID SECTION IS NOT SUSTAINABLE. IN MOST CASES OF ALLEGE D INADEQUATE INVESTIGATION, IT WILL BE DIFFICULT TO HOLD THAT T HE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS ERRONEOUS, WITHOUT CIT CONDUCTI NG VERIFICATION/INQUIRY. THE ORDER OF THE ASSESSING OF FICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECONSIDERATION ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. AN ORD ER OF REMIT CANNOT BE PASSED BY THE CIT TO ASK THE ASSESSING OF FICER TO ITA NO.4670/DEL./2019 18 DECIDE WHETHER THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECO ME ERRONEOUS BECAUSE ON REMIT, THE ASSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFTER RECORDING RE ASONS HOLD THAT THE ORDER IS ERRONEOUS. THE JURISDICTIONAL PRE CONDITION STIPULATED IS THAT THE CIT MUST COME TO THE CONCLUS ION THAT THE ORDER IS ERRONEOUS AND IS UNSUSTAINABLE IN LAW. WE MAY NOTICE THAT THE MATERIAL WHICH THE CIT CAN RELY INCLUDES N OT ONLY THE RECORD AS IT STANDS AT THE TIME WHEN THE ORDER IN Q UESTION WAS PASSED BY THE ASSESSING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATION BY THE CIT [SEE CIT VS. SHR EE MANJUNATHESWARE PACKING PRODUCTS, (1998) 231 ITR 53 (SC)]. NOTHING BARS/PROHIBITS THE CIT FROM COLLECTING AND RELYING UPON NEW/ADDITIONAL MATERIAL/EVIDENCE TO SHOW AND STATE THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS. 29. HONBLE DELHI HIGH COURT IN CASE OF DIT VS. JYOTI FOUNDATION (2013) 357 ITR 388 (DELHI) HELD THAT WHEN ENQUIRIES WERE CERTAINLY CONDUCTED BY THE AO AS IN THE INSTAN T CASE, LD. CIT U/S 263 IS REQUIRED TO CONDUCT THE ENQUIRY HIMSELF TO RECORD THE FINDING THAT ASSESSMENT ORDER WAS ERRONEOUS IN CASE HE REACHES THE CONCLUSION THAT IT IS A CASE OF NO ENQUIRY. 30. IN THE INSTANT CASE, NEITHER IT IS A CASE OF NO ENQUIRY NOR THE LD. CIT HAS CONDUCTED THE ENQUIRY HIMSELF SO AS TO RECORD THE FINDING THAT ASSESSMENT ORDER WAS ERRONEOUS RATHER SET ASIDE THE ORDER AND DIRECTED THE AO TO CONDUCT THE SAID ENQUI RY WHICH IS NOT SUSTAINABLE IN THE EYES OF LAW. SO, IT IS NOT A CA SE OF NO ENQUIRY NOR THE LD. CIT HIMSELF HAS CONDUCTED ANY INDEPENDENT E NQUIRY SO AS TO REACH A DIFFERENT CONCLUSION THAN REACHED BY THE AO TO MAKE OUT THAT ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST ITA NO.4670/DEL./2019 19 OF THE REVENUE. WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ORDER PASSED U/S 263 IS NOT SUSTAINABLE. 31. HONBLE DELHI HIGH COURT IN CASE OF PCIT VS. DELHI AIRPORT METRO EXPRESS (P.) LTD. (2017) 398 ITR 8 (DELHI) HELD THAT IN CASE, LD. CIT IS OF THE VIEW THAT AO DID NOT UNDERT AKE ANY ENQUIRY, IT BECOMES INCUMBENT ON THE CIT TO CONDUCT SUCH ENQ UIRY HIMSELF BY RETURNING FOLLOWING FINDINGS :- 10. FOR THE PURPOSES OF EXERCISING JURISDICTION UN DER SECTION 263 OF THE ACT, THE CONCLUSION THAT THE ORD ER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF TH E REVENUE HAS TO BE PRECEDED BY SOME MINIMAL INQUIRY. IN FACT , IF THE PCIT IS OF THE VIEW THAT THE AO DID NOT UNDERTAKE A NY INQUIRY, IT BECOMES INCUMBENT ON THE PCIT TO CONDUCT SUCH IN QUIRY. ALL THAT PCIT HAS DONE IN THE IMPUGNED ORDER IS TO REFER TO THE CIRCULAR OF THE CBDT AND CONCLUDE THAT IN THE CASE OF THE ASSESSEE COMPANY, THE AO WAS DUTY BOUND TO CALCULAT E AND ALLOW DEPRECIATION ON THE BOT IN CONFORMITY OF THE CBDT CIRCULAR 9/2014 BUT THE AO FAILED TO DO SO. THEREFO RE, THE ORDER OF THE AO IS ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. 11. IN THE CONSIDERED VIEW OF THE COURT, THIS CAN HARDLY CONSTITUTE THE REASONS REQUIRED TO BE GIVEN BY THE PCIT TO JUSTIFY THE EXERCISE OF JURISDICTION UNDER SECTION 263 OF THE ACT. IN THE CONTEXT OF THE PRESENT CASE IF, AS URGE D BY THE REVENUE, THE ASSESSEE HAS WRONGLY CLAIMED DEPRECIAT ION ON ASSETS LIKE LAND AND BUILDING, IT WAS INCUMBENT UPO N THE PCIT TO UNDERTAKE AN INQUIRY AS REGARDS WHICH OF THE ASS ETS WERE PURCHASED AND INSTALLED BY THE ASSESSEE OUT OF ITS OWN FUNDS DURING THE AY IN QUESTION AND, WHICH WERE THOSE ASS ETS THAT WERE HANDED OVER TO IT BY THE DMRC. THAT BASIC EXER CISE OF DETERMINING TO WHAT EXTENT THE DEPRECIATION WAS CLA IMED IN EXCESS HAS NOT BEEN UNDERTAKEN BY THE PCIT. 32. SO, IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, W E ARE OF THE CONSIDERED VIEW THAT WHEN IT IS NOT A CASE OF NO EN QUIRY RATHER THOROUGH ENQUIRY HAS BEEN CONDUCTED BY THE AO BY IS SUING A ITA NO.4670/DEL./2019 20 DETAILED QUESTIONNAIRE AND AFTER EXAMINING REPLY AN D DOCUMENTS FURNISHED BY THE ASSESSEE FRAMED ASSESSMENT U/S 143 (3) OF THE ACT, THE LD. CIT HAS INVOKED THE PROVISIONS CONTAINED U/ S 263 OF THE ACT ON THE BASIS OF CONJECTURES AND SURMISES WITHOUT CO NDUCTING ANY SUCH ENQUIRY HIMSELF SO AS TO REACH THE CONCLUSION THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF THE REVENUE RATHER SET ASIDE THE MATTER TO AO FOR FURTH ER ENQUIRY WHICH IS NOT PERMISSIBLE UNDER LAW, HENCE ORDER PAS SED BY THE LD. CIT IS SET ASIDE BY ALLOWING THE APPEAL FILED BY TH E ASSESSEE. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF JANUARY, 2020. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 31 ST DAY OF JANUARY , 2020 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(E), NEW DELHI 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.