M/s.Cochin International Airport Ltd, Cochin V. The ITO, Cochin

ITA 501/COCH/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4418 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 24-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHANTHAM BOSE
• Assessee Lawyers: K GOPI
• Keywords: Charitable institution; Principle of natural justice; Bad and doubtful debts; Right to appeal
• Section: 143(3); 115JB; 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., JM I.T.A. NO. 501/COCH/2016 ASSESSMENT YEAR : 20 12 - 13 COCHIN INTERNATIONAL AIRPORT LTD., KOCHI AIRPORT P.O., NEDUMBASSERY. [PAN : AAACA 9658B] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CORPORATE CIRCLE-1(1), KOCHI. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) A SSESSEE BY SHRI K. GOPI , CA REVENUE BY SHRI SHANTHAM BOSE, CIT(DR) DATE OF HEARING 12 /0 3 /2018 DATE OF PRONOUNCEMENT 15 / 0 3 /2018 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER PASSED BY THE PR. COMMISSIONER OF INCOME TAX, KOCHI U/S. 263 OF T HE I.T. ACT DATED 26/09/2016 AND PERTAINS TO THE ASSESSMENT YEAR 2012 -13. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED ITS RETURN OF INCOME FOR AY 2012-13 ON 25/09/2012, DECLARING TOTAL INCOME AT RS .11,88,92,410/-. THE I.T.A. NO.501/C/2016 2 ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 27/03/2015, DETERMINING THE TOTAL INCOME AT RS.91,56,78,800/-. 3. WHILE EXAMINING THE RECORDS, THE CIT FOUND THA T THE ASSESSEE DEBITED AN AMOUNT OF RS.1,00,33,280/- TOWARDS PROVISION FOR DO UBTFUL DEBTS WHICH WAS NOT ADDED BACK FOR THE PURPOSE OF COMPUTATION OF TOTAL INCOME UNDER REGULAR PROVISIONS AND ALSO FOR THE PURPOSE OF COMPUTATION OF BOOK PROFIT U/S. 115JB. THE CIT NOTICED THAT THE ASSESSING OFFICER HAD ACCE PTED THE ARGUMENT OF THE ASSESSEE THAT THE SAID PROVISION MADE WAS SHOWN AS REDUCTION FROM THE TRADE RECEIVABLES (SUNDRY DEBTORS) A/C IN THE BALANCE SHE ET WHICH AMOUNTS TO WRITE OFF AND ELIGIBLE FOR DEDUCTION WHILE COMPUTING THE TOTAL INCOME IN VIEW VIJAYA BANK VS. CIT (323 ITR 166) AND NO DISALLOWANCE WAS MADE ON THIS ACCOUNT. THE CIT FURTHER OBSERVED THAT THE AMOUNT OF RS.1,00,33, 280 WAS PROVISION MADE DURING THE PREVIOUS YEAR RELATING TO AY 2012-13 AND T HE SAME WAS NOT DEBITED TO PROVISION FOR DOUBTFUL DEBTS ACCOUNT AND CONSEQU ENTLY, THE PROVISION FOR DOUBTFUL DEBTS WAS NOT OBLITERATED. ACCORDING TO T HE CIT IT WAS ONLY FOR DISCLOSURE PURPOSE THAT THE AMOUNT SHOWN AS REDUCTI ON FROM THE TRADE RECEIVABLES IN THE BALANCE SHEET. HENCE, THE CIT H ELD THAT THE PROVISION FOR DOUBTFUL DEBTS AMOUNTING TO RS.1,00,33,280/- WAS NO T ALLOWABLE DEDUCTION WHILE COMPUTING TOTAL INCOME UNDER NORMAL PROVISION AS WE LL AS WHILE COMPUTING BOOK PROFIT U/S. 115JB I.E. VIDE CLAUSE (I) OF 115 JB(2 ) AND IN VIEW OF WHIRLPOOL INDIA VS. UNION OF INDIA IS NOT APPLICABLE IN THIS CASE A S THE FACTS OF THE CASE ARE I.T.A. NO.501/C/2016 3 DIFFERENT. HENCE THE CIT HELD THAT THE ASSESSMEN T WAS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE AND ISSUE D NOTICE U/S. 263 OF THE I.T. ACT ON 05/09/2016. 3.1 FINALLY IN THE ORDER PASSED U/S. 263 OF THE A CT, THE CIT OBSERVED THAT THE ASSESSING OFFICER FAILED TO EXAMINE WHETHER THE CLA IM OF THE ASSESSEE TOWARDS PROVISION FOR DOUBTFUL DEBTS WAS CORRECT OR NOT. A CCORDINGLY, HE DIRECTED THE ASSESSING OFFICER TO RE-EXAMINE THE ISSUE AS THE OR DER OF THE ASSESSING OFFICER WAS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 4. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL B EFORE US BY RAISING THE FOLLOWING GROUNDS: 1) THE ORDER OF THE LEARNED CIT U/S. 263 OF THE INC OME TAX ACT 1961 DATED 26/09/2016 SETTING ASIDE THE ORDER OF THE ASS ESSING OFFICER U/S. 143(3) DATED 27/03/2015 IS NOT VALID IN LAW. THE O NLY FINDING OF THE LEARNED CIT AS PER PARA 3 OF THE ORDER IS THAT THE IMPUGNED ORDER OF ASSESSING OFFICER IS PREJUDICIAL TO THE INTERESTS O F THE REVENUE. FOR ASSUMING JURISDICTION UNDER SECTION 263 OF THE INCO ME TAX ACT, THE LD. CIT OUGHT TO HAVE SATISFIED THAT THE ORDER IS ERRON EOUS AND IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2) THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN SETTING ASIDE THE IMPUGNED PROCEEDINGS U/S. 143(3) ON 27/03/2015, SIN CE THERE WAS NO ERROR PREJUDICIAL TO THE INTEREST OF REVENUE IN THE SAID PROCEEDINGS REQUIRING REVISION UNDER SECTION 263 OF THE I.T. AC T, AS THE SUBJECT MATTER IS DIRECTLY COVERED BY THE JUDICIAL ORDERS I NCLUDING THAT OF THE HON. APEX COURT MENTIONED IN THE ORDER. THE FINDIN G OF THE LD. CIT IS THAT THE ORDER OF THE HON. SUPREME COURT IS APPLICA BLE IN REGARD TO BANK, WHEREAS THE HON APEX COURT HAD MADE IT CLEAR THAT THE ORDER APPLIES TO ALL ASSESSES. I.T.A. NO.501/C/2016 4 3) THE LEARNED CIT ON FACTS IN OBSERVING THAT THE APPELLANT REDUCED THE PROVISION FOR BAD & DOUBTFUL DEBTS/ADVANCES FRO M TRADE RECEIVABLES/ADVANCES FOR DISCLOSURE PURPOSE ONLY AS IN THE AUDITED FINANCIAL STATEMENTS ONLY THE NET AMOUNT OF TRADE RECEIVABLES/SHORT TERM LOANS AND ADVANCES AFTER REDUCING THE PROVISIO N IS SHOWN. 4) WITHOUT PREJUDICE, THE LEARNED CIT CANNOT FIND THE ASSESSING OFFICER AT FAULT FOR FOLLOWING THE SETTLED JUDICIAL DECISION WITH WHICH THE CIT DOES NOT AGREE, AND FOR THAT REASON ALONE THE O RDER CANNOT BE TREATED AS AN ORDER ERRONEOUS OR PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 5) FOR THESE AND OTHER GROUNDS THAT MAY BE FURTHER ADDUCED AT THE TIME OF HEARING THE ORDER OF THE LEARNED CIT REQUIR ES TO BE MODIFIED TO THE EXTENT APPEALED AGAINST. 5. THE LD. AR SUBMITTED THAT THE ONLY FINDING OF THE CIT IS THAT THE IMPUGNED ORDER OF AO IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR ASSUMING JURISDICTION UNDER SECTION 263 OF THE INCOME TAX AC T, THE CIT OUGHT TO HAVE SATISFIED THAT THE ORDER IS ERRONEOUS AND IS PREJUD ICIAL TO THE INTEREST OF THE REVENUE. IT WAS SUBMITTED THAT SO AS TO REOPEN U/S. 263, AN ASSESSMENT COMPLETED LEGALLY AND IN ACCORDANCE WITH THE LAW, T HE CIT OUGHT TO HAVE SATISFIED THE FOLLOWING TWO PREREQUISITES, WHICH AR E CUMULATIVE: I) THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS AND II) IT IS PREJUDICIAL TO THE INTEREST OF REVENUE II) IF ONE OF THE ABOVE CONDITIONS IS ABSENT, THE R ECOURSE CANNOT BE U/S. 263 OF THE IT ACT. RELIANCE IS PLACED IN THIS REGAR D ON THE DECISION OF HON SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO LTD 243 ITR 83 (SC). I.T.A. NO.501/C/2016 5 5.1 THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: 1) RAJASTHAN HIGH COURT IN THE CASE OF JAIN CONSTRU CTION (34TAXMANN.COM 84) 2013. 2) KARNATAKA HIGH COURT IN THE CASE OF D G GOPALA GOWDA (34 TAXMANN.COM 154) 2013. 3) ITAT, CHENNAI BENCH IN THE CASE OF S. MURUGAN V S ITO (17 TAXMANN.COM 194) WHEREIN IT WAS HELD THAT WHERE ASSESSING OFFIC ER AFTER DUE EXAMINATION ACCEPTED ASSESSEE'S CONTENTION, REVISION WAS NOT JU STIFIED ON GROUND THAT HE HAD ACCEPTED ASSESSEE'S CONTENTION WITHOUT VERIFYIN G FACTS PERTAINING TO ENTIRE TRANSACTION. 5.2 THE LD. AR SUBMITTED THAT IN THE PRESENT CAS E, THE LD CIT HAS ONLY HELD THAT THE ORDER OF AO U/S 143 (3) DATED 27.03.2015 I S PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE CIT HAS NO CASE THAT THE ORDER IS ERRONEOUS SINCE THE AO HAS MERELY FOLLOWED THE DECISION OF HON APEX COURT RELI ED UPON BY THE APPELLANT. ACCORDINGLY, IT WAS SUBMITTED THAT THE ORDER PASSED BY THE CIT U/S 263 DOES NOT SATISFY THE PREREQUISITES MANDATORILY REQUIRED UNDE R SECTION 263 OF THE INCOME TAX ACT FOR SETTING ASIDE AN ASSESSMENT ORDER PASSE D U/S 143 (3). HENCE, ACCORDING TO THE LD. AR, THE ORDER PASSED BY CIT U/ S 263 SETTING ASIDE THE ASSESSMENT U/S 143 (3) IS NOT VALID AND REQUIRES TO BE SET ASIDE. 5.3 THE LD. AR SUBMITTED THAT THE CIT ERRED IN HIS CONCLUSION THAT THE AO HAD NOT EXAMINED THE ISSUES MENTIONED IN THE ORDER. ACC ORDING TO THE LD. AR IT WAS EXPLAINED IN DETAIL IN THE REPLY TO THE NOTICE U/S 263 THAT THE MATTER WAS EXAMINED BY THE AO IN DETAIL AND THE AO HAS ONLY FO LLOWED THE LAW AS SETTLED BY I.T.A. NO.501/C/2016 6 THE DECISION OF HON APEX COURT WHICH IS FOLLOWED BY VARIOUS APPELLATE AUTHORITIES INCLUDING ITAT, COCHIN BENCH. IT WAS SUBMITTED THA T IN THE PRESENT CASE, ALL THE RELEVANT RECORDS / DOCUMENTS WERE PRODUCED BEFORE T HE ASSESSING OFFICER AND AFTER EXAMINING ALL THE RELEVANT FACTS RELATED TO T HE MATTER AND RELYING ON THE CASE LAWS SUBMITTED BY THE APPELLANT, THE AO ALLOWE D THE DEDUCTION. THEREFORE, IT WAS SUBMITTED THAT THERE IS NO ERROR PREJUDICIAL TO THE INTEREST OF THE REVENUE REQUIRING REVISION UNDER 263 OF THE INCOME TAX ACT AND COMPLETION OF THE ASSESSMENT IS THE PREROGATIVE OF THE AO AND THE CIT CANNOT SUBSTITUTE HIS OPINION ON THE ASSESSING OFFICER AND HENCE THE EXER CISE OF REVISIONARY POWERS IS WITHOUT ANY BASIS. 5.4 IT WAS FURTHER SUBMITTED THAT THE CIT HAD S TATED THAT THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.1,00,33,280/- TOWARDS PROVI SION FOR BAD & DOUBTFUL DEBTS WHICH WAS NOT ADDED BACK IN THE COMPUTATION O F TOTAL INCOME UNDER THE REGULAR PROVISIONS AND ALSO FOR THE PURPOSE OF COMP UTATION OF BOOK PROFIT U/S 115 JB. THE LD. AR SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ACCEPTED THE ARGUMENT OF THE ASSESSEE THAT THE S AID PROVISION MADE WAS SHOWN AS A REDUCTION FROM THE TRADE RECEIVABLES (SU NDRY DEBTORS) IN THE BALANCE SHEET WHICH AMOUNTS TO WRITE OFF AND ELIGIB LE FOR DEDUCTION WHILE COMPUTING THE TOTAL INCOME IN VIEW OF THE JUDGMENT OF THE HON. APEX COURT IN VIJAYA BANK VS. CIT (323 ITR 166). I.T.A. NO.501/C/2016 7 5.5 IT WAS SUBMITTED THAT ACCORDING TO THE CIT THE AMOUNT DEBITED TO PROFIT & LOSS A/C REPRESENTS ONLY A PROVISION MADE DURING TH E PREVIOUS YEAR RELEVANT TO THE AY 2012-13 AND HAS NOT BEEN DEBITED TO PROVISIO N FOR DOUBTFUL DEBTS ACCOUNT AND CONSEQUENTLY THE PROVISION FOR BAD DEBT S ACCOUNT HAD NOT BEEN OBLITERATED AND THE AMOUNT HAD BEEN REDUCED ONLY FO R THE PURPOSE OF DISCLOSURE AND HENCE THE PROVISION FOR DOUBTFUL DEBTS AMOUNTIN G TO RS ,100,33,280/- WAS NOT ALLOWABLE DEDUCTION. THE LD. AR ALSO SUBMITTED THAT THE CIT HAD ALSO STATED THAT THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF VIJAYA BANK WAS WITH REGARD TO A BANK AND THE ASSESSING OFFICER DID NOT EXAMINE WHETHER THE FACTS IN THAT CASE IS SAME AS THE FACTS IN THE CASE OF THE A SSESSEE. THE LD. AR STATED THE REASONS FOR HIS CONTENTION THAT THE FINDINGS OF CIT WERE NOT FACTUALLY CORRECT. ACCORDING TO THE LD. AR, AS PER THE ACCOUNTS FOR TH E PREVIOUS YEAR ENDED RELEVANT TO ASSESSMENT YEAR 2012-13, THE ASSESSEE H AD DEBITED TO THE PROFIT & LOSS ACCOUNT WITH PROVISION FOR DOUBTFUL DEBTS/ADVA NCES RS.1,00,33,280/- AND THE SAID AMOUNT WAS REDUCED FROM THE AMOUNT OF TRAD E RECEIVABLES AND SHORT TERM LOANS AND ADVANCES. THE LD. AR SUBMITTED THAT THE TRADE RECEIVABLES AND SHORT TERM LOANS AND ADVANCES DISCLOSED IN THE BALA NCE SHEET IS RS.53.80 CRS AND RS 5.37 CRORES RESPECTIVELY. THUS, ACCORDING TO THE LD. AR THE TRADE RECEIVABLES AND TERM LOANS AND ADVANCES DISCLOSED I N THE BALANCE SHEET WAS NET OF THE PROVISION FOR DOUBTFUL DEBTS AND WHAT IS DIS CLOSED IN THE FACE OF THE BALANCE SHEET IS THE REAL AMOUNT OF TRADE RECEIVABL ES/SHORT TERM ADVANCES. I.T.A. NO.501/C/2016 8 5.6 FURTHER, IT WAS SUBMITTED THAT THIS ISSUE W AS DEALT WITH BY THE HON. APEX COURT IN THE DECISION OF VIJAYA BANK (323 ITR 166). THE HON. APEX COURT HAD CLEARLY CLARIFIED THE DIFFERENCE BETWEEN MAKING A P ROVISION FOR DOUBTFUL DEBTS AND WRITE OFF OF BAD DEBTS. BOTH IN THE CASE OF VIJAYA BANK AND ALSO IN THE CASE OF SOUTHERN TECHNOLOGIES LTD VS. JT.CIT (320 ITR 577), IT WAS HELD BY THE HON.APEX COURT AS UNDER: 'PRIOR TO APRIL 1,1989, THE LAW, AS IT THEN STOOD, TOOK THE VIEW THAT EVEN IN CASES IN WHICH THE ASSESSE(S) MAKES ONLY A PROVISION IN ITS ACCOUNTS FOR BAD DEBTS AND INTEREST THEREON AND EVE N THOUGH THE AMOUNT IS NOT ACTUALLY WRITTEN OFF BY DEBITING THE PROFIT AND LOSS ACCOUNT OF THE ASSESSE AND CREDITING THE AMOUNT TO THE ACCOUNT OF THE DEBTOR, THE ASSESSE WAS STILL ENTITLED TO DEDUC TION UNDER SECTION 36(L)(VII). [SEE CIT V. JWALA PRASAD TIWARI (1953) 24 ITR 537 (BOM) AND VITHALDAS H. DHANJIBHAI BARDANWALA VS. CIT (198 1) 130 ITR 95 (GUJ)] SUCH STATE OF LAW PREVAILED UP TO AND INCLUD ING THE ASSESSMENT YEAR 1988-89. HOWEVER, BY INSERTION (WIT H EFFECT FROM APRIL 1, 1989) OF A NEW EXPLANATION IN SECTION 36(L )(VII), IT HAS BEEN CLARIFIED THAT ANY BAD DEBT WRITTEN OFF AS IRRECOVE RABLE IN THE ACCOUNT OF THE ASSESSE WILL NOT INCLUDE ANY PROVISION FOR B AD AND DOUBTFUL DEBT MADE IN THE ACCOUNTS OF THE ASSESSE. THE SAID AMENDMENT INDICATES THAT BEFORE APRIL 1,1989, EVEN A PROVISIO N COULD BE TREATED AS A WRITE OFF. HOWEVER, AFTER APRIL 1, 1989, A DIS TINCT DICHOTOMY IS BROUGHT IN BY WAY OF THE SAID EXPLANATION TO SECTIO N 36(L)(VII). CONSEQUENTLY, AFTER APRIL 1,1989, A MERE PROVISION FOR BAD DEBT WOULD NOT BE ENTITLED TO DEDUCTION UNDER SECTION 36 (L)(VII). TO UNDERSTAND THE ABOVE DICHOTOMY, ONE MUST UNDERSTAND HOW TO WRITE OFF. IF AN ASSESSEE DEBITS AN AMOUNT OF DOUBTFUL DE BT TO THE PROFIT AND LOSS ACCOUNT AND CREDITS THE ASSET ACCOUNT LIKE SUN DRY DEBTOR'S ACCOUNT, IT WOULD CONSTITUTE A WRITE OFF OF AN ACTU AL DEBT. HOWEVER, IF AN ASSESSEE DEBITS PROVISION FOR DOUBTFUL DEBT' TO THE PROFIT AND LOSS ACCOUNT AND MAKES A CORRESPONDING CREDIT TO THE CUR RENT LIABILITIES AND PROVISIONS' ON THE LIABILITIES SIDE OF THE BALA NCE-SHEET, THEN IT WOULD CONSTITUTE A PROVISION FOR DOUBTFUL DEBT. IN THE LATTER CASE, THE ASSESSEE WOULD NOT BE ENTITLED TO DEDUCTION AFTER A PRIL 1,1989' (EMPHASIS SUPPLIED). I.T.A. NO.501/C/2016 9 5.7 THE LD. AR SUBMITTED THAT FROM THE ABOVE IT C OULD BE SEEN THAT THE HON. APEX COURT HAD MADE VERY CLEAR THAT IF AN ASSESSEE DEBITS AN AMOUNT OF PROVISION FOR BAD & DOUBTFUL DEBTS TO THE PROFIT & LOSS ACCOUNT AND SIMULTANEOUSLY REDUCES IT FROM THE DEBTS/ADVANCES, IT WOULD CONSTITUTE A WRITE OFF OF ACTUAL DEBT. HOWEVER, IT WAS SUBMITTED THAT IF AN ASSESSEE DEBITS PROVISION FOR DOUBTFUL DEBTS TO THE PROFIT & LOSS ACCOUNT AND MAKES A CORRESPONDING CREDIT TO THE CURRENT LIABILITIES & PROVISIONS ON THE LIAB ILITY SIDE OF THE BALANCE SHEET, THIS WOULD CONSTITUTE A PROVISION FOR DOUBTFUL DEBT S. IN THE LATTER CASE, IT WAS SUBMITTED THAT THE ASSESSEE WOULD NOT BE ENTITLED T O DEDUCTION AFTER 1.4.89. IN THE PRESENT CASE THE ASSESSEE HAS REDUCED THE AMOUN T OF PROVISION FOR BAD AND DOUBTFUL DEBTS/ADVANCES FROM TRADE RECEIVABLES/ADVA NCES ACCOUNT FROM THE ASSET SIDE OF THE BALANCE SHEET. IN OTHER WORDS, AC CORDING TO THE LD. AR ONLY THE NET AMOUNT AFTER DEDUCTION WAS SHOWN IN THE BALANCE SHEET AND THE PROVISION WAS NOT SHOWN UNDER THE CURRENT LIABILITIES & PROVI SIONS ON THE LIABILITY SIDE OF THE BALANCE SHEET. ACCORDINGLY, THE LD. AR SUBMITTE D THAT THE OBSERVATION OF CIT THAT THE ASSESSEE HAD NOT OBLITERATED THE PROVISION FOR DOUBTFUL DEBTS WAS NOT FACTUALLY CORRECT. 5.8 THE LD. AR FURTHER SUBMITTED THAT THE APEX COURT HAD ALSO CLARIFIED THAT THE AO WAS NOT RIGHT IN INSISTING THAT SUCH ACCOUNT SHOULD BE WRITTEN OFF SEPARATELY AS A PRE-CONDITION FOR CLAIMING DEDUCTIO N U/S 36(L)(VII) OF THE ACT. ACCORDING TO THE LD. AR THE HON. APEX COURT HELD T HAT FOR VARIOUS REASONS THE I.T.A. NO.501/C/2016 10 ASSESSEE MAY NOT SQUARE OFF THE INDIVIDUAL ACCOUNTS BUT IF THE AMOUNT IS REDUCED FROM TRADE RECEIVABLES/ADVANCES IT WOULD BE SUFFICI ENT TO TREAT THE AMOUNTS AS WRITTEN OFF IN THE ACCOUNTS. IT WAS SUBMITTED THAT T HIS PRINCIPLE WAS FOLLOWED BY THE ITAT COCHIN BENCH ALSO IN THE CASE OF HI-BUILD COATINGS P LTD VS THE ADDL CIT. ITA NO 310/COCH/2014. 5.9 THE LD. AR FURTHER RELIED ON THE FOLLOWING D ECISIONS IN THIS REGARD: I) HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS YOKOGAWA INDIA LTD (204 TAXMANN 305 ) II) HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS KIRLOSKAR SYSTEMS LTD (200 TAXMANN 1) III) HIGH COURT OF BOMBAY IN THE CASE OF TAINWALA CHEMICALS & PLASTICS LIMITED (34TAXMANN.COM 159). IV) HIGH COURT OF GUJARAT IN THE CASE OF INDIAN P ETROCHEMICALS CORPORATION LTD (74 TAXMANN.COM L63) 5.10 IT WAS SUBMITTED THAT SINCE THE MATTER WAS ALREADY COVERED BY THE JUDGMENTS OF THE APEX COURT AND OTHER DECISIONS AS CITED ABOVE, THE CIT OUGHT TO HAVE FOLLOWED THE DECISIONS. ACCORDING TO THE LD . AR THE REFERENCE TO THE DECISION OF WHIRLPOOL INDIA (355 ITR 51) IS ALSO ER RONEOUS AS IT HAS NO APPLICATION TO THE FACTS OF THE CASE. THEREFORE, IT WAS SUBMITT ED THAT THERE IS NO ERROR PREJUDICIAL TO THE INTEREST OF THE REVENUE REQUIRIN G REVISION UNDER SECTION 263 OF I.T.A. NO.501/C/2016 11 THE I.T. ACT. IT WAS ALSO SUBMITTED THAT WHEN TWO VIEWS ARE POSSIBLE, PROVISIONS OF SECTION 263 HAS NO JURISDICTION AND THE ORDER PA SSED BY THE ASSESSING OFFICER CANNOT BE TREATED AS ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. AR SUBMITTED THAT THE CIT O UGHT TO HAVE APPRECIATED THAT THE AO HAD TAKEN ONE OF THE POSSIBLE VIEWS PREVAILING AT THE R ELEVANT POINT OF TIME BASED ON THE DECISIONS OF HON APEX COURT AND OTHER DECISIONS CITED ABOVE AND RELIED BY THE ASSESSE AND THE ORDER PASSED BY THE AO WAS IN C ONSONANCE WITH THE JUDGMENTS OF HON APEX COURT AND OTHER JUDGMENTS AS CITED ABOVE. IT WAS SUBMITTED THAT THIS PRINCIPLE WAS FOLLOWED BY THE I TAT COCHIN BENCH ALSO IN THE FOLLOWING CASES: I) ACUMEN CAPITAL MARKETING (I) LTD ( 81 TAXMANN.C OM 334) II) TRINITY CHARITABLE TRUST VS ITO, WARD-1, THIRUVALLA (51 TAXMANN.COM 44) III) V. K NATESAN VS DCIT, CENTRAL CIRCLE-2, KOCHI (9 TA XMAN. COM 76). IV) CIT VS MAX INDIA LTD (295 ITR 282 (SC). V) CIT VS HONDS SIEL POWER PRODUCTS LTD (19 4 TAXMAN 175 (DELHI) VI) CIT VS SAK SOFT LTD (298 ITR 63 (MADRAS ) 6. THE LD. DR SUBMITTED THAT THERE WAS NO ENQUIRY FROM THE END OF THE ASSESSING OFFICER WITH REGARD TO THE CLAIM OF THE A SSESSEE WHETHER THE PROVISION I.T.A. NO.501/C/2016 12 OF BAD AND DOUBTFUL DEBTS COULD BE ALLOWED AS BUSIN ESS EXPENDITURE WHILE COMPUTING THE INCOME OF THE ASSESSEE OR NOT. HE S UBMITTED THAT IT IS VERY NECESSARY FOR THE ASSESSING OFFICER TO CONDUCT ENQU IRY TO COME TO THE CORRECT CONCLUSION WHETHER THE CLAIM OF THE ASSESSEE IS TO BE ALLOWED OR NOT. HE SUBMITTED THAT IN THIS CASE THERE IS NO APPLICATION OF MIND BY THE ASSESSING OFFICER AND THEREBY INCORRECT ASSESSMENT WAS MADE W HICH IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENU E WHICH IS CLEARLY MENTIONED BY THE CIT IN HIS ORDER. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS IN THE LIGHT OF MATERIAL PLACED BEFORE US AND ALSO GONE THROUGH ALL THE JUDG MENTS CITED BY THE PARTIES BEFORE US. WE SHALL TAKE UP THE LEGAL ISSUE WITH R EFERENCE TO THE JURISDICTION OF INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT B Y THE LEARNED CIT. THE SCHEME OF THE IT ACT IS TO LEVY AND COLLECT TAX IN ACCORDA NCE WITH THE PROVISIONS OF THE ACT AND THIS TASK IS ENTRUSTED TO THE REVENUE. IF D UE TO ERRONEOUS ORDER OF THE ASSESSING OFFICER, THE REVENUE IS LOSING TAX LAWFUL LY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO THE INTEREST OF THE REV ENUE. AS HELD IN THE CASE OF MALABAR INDUSTRIES CO. LTD., VS. CIT ( 243 ITR 83 ( SC), THE COMMISSIONER CAN EXERCISE REVISION JURISDICTIONAL U/S 263 IF HE IS S ATISFIED THAT THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS (I)ERRONE OUS; AND ALSO (II) PREJUDICIAL TO THE INTERESTS OF THE REVENUE. I.T.A. NO.501/C/2016 13 7.1 IN ORDER TO ASCERTAIN WHETHER AN ORDER SOUGHT TO BE REVISED UNDER SECTION 263 IS ERRONEOUS, IT SHOULD BE SEEN WHETHER IT SUFF ERS FROM ANY OF THE AFORESAID FORMS OF ERROR. IN OUR VIEW, AN ORDER SOUGHT TO BE REVISED UNDER SECTION 263 WOULD BE ERRONEOUS AND FALL IN THE AFORESAID CATEGO RY OF 'ERRORS' IF IT IS, INTER ALIA, BASED ON AN INCORRECT ASSUMPTION OF FACTS OR AN INC ORRECT APPLICATION OF LAW OR NON-APPLICATION OF MIND TO SOMETHING WHICH WAS OBVI OUS AND REQUIRED APPLICATION OF MIND OR BASED ON NO OR INSUFFICIENT MATERIALS SO AS TO AFFECT THE MERITS OF THE CASE AND THEREBY CAUSE PREJUDICE TO T HE INTEREST OF THE REVENUE. 7.2 SECTION 263 OF THE INCOME-TAX ACT SEEKS TO RE MOVE THE PREJUDICE CAUSED TO THE REVENUE BY THE ERRONEOUS ORDER PASSED BY THE AS SESSING OFFICER. IT EMPOWERS THE COMMISSIONER TO INITIATE SUO MOTO PROC EEDINGS EITHER WHERE THE ASSESSING OFFICER TAKES A WRONG DECISION WITHOUT CO NSIDERING THE MATERIALS AVAILABLE ON RECORD OR HE TAKES A DECISION WITHOUT MAKING AN ENQUIRY INTO THE MATTERS, WHERE SUCH INQUIRY WAS PRIMA FACIE WARRANT ED. THE COMMISSIONER WILL BE WELL WITHIN HIS POWERS TO REGARD AN ORDER AS ERR ONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICE R SHOULD HAVE MADE FURTHER INQUIRIES BEFORE ACCEPTING THE CLAIM MADE BY THE AS SESSEE IN HIS RETURN. THE REASON IS OBVIOUS. UNLIKE THE CIVIL COURT WHICH IS NEUTRAL IN GIVING A DECISION ON THE BASIS OF EVIDENCE PRODUCED BEFORE IT, THE ROLE OF AN ASSESSING OFFICER UNDER THE INCOME-TAX ACT IS NOT ONLY THAT OF AN ADJUDICAT OR BUT ALSO OF AN INVESTIGATOR. HE CANNOT REMAIN PASSIVE IN THE FACE OF A CLAIM, WH ICH IS APPARENTLY IN ORDER BUT I.T.A. NO.501/C/2016 14 CALLS FOR FURTHER ENQUIRY. HE MUST DISCHARGE BOTH T HE ROLES EFFECTIVELY. IN OTHER WORDS, HE MUST CARRY OUT INVESTIGATION WHERE THE FA CTS OF THE CASE SO REQUIRE AND ALSO DECIDE THE MATTER JUDICIOUSLY ON THE BASIS OF MATERIALS COLLECTED BY HIM AS ALSO THOSE PRODUCED BY THE ASSESSEE BEFORE HIM. THE SCHEME OF ASSESSMENT HAS UNDERGONE RADICAL CHANGES IN RECENT YEARS. IT DESER VES TO BE NOTED THAT THE PRESENT ASSESSMENT WAS MADE UNDER SECTION 143(3) OF THE INCOME-TAX ACT. IN OTHER WORDS, THE ASSESSING OFFICER WAS STATUTORILY REQUIRED TO MAKE THE ASSESSMENT UNDER SECTION 143(3) AFTER SCRUTINY AND NOT IN A SUMMARY MANNER AS CONTEMPLATED BY SUB-SECTION (1) OF SECTION 143. BUL K OF THE RETURNS FILED BY THE ASSESSEES ACROSS THE COUNTRY IS ACCEPTED BY THE DEP ARTMENT UNDER SECTION 143(1) WITHOUT ANY SCRUTINY. ONLY A FEW CASES ARE PICKED UP FOR SCRUTINY. THE ASSESSING OFFICER IS THEREFORE, REQUIRED TO ACT FAI RLY WHILE ACCEPTING OR REJECTING THE CLAIM OF THE ASSESSEE IN CASES OF SCRUTINY ASSE SSMENTS. HE SHOULD BE FAIR NOT ONLY TO THE ASSESSEE BUT ALSO TO THE PUBLIC EXCHEQUE R. THE ASSESSING OFFICER HAS GOT TO PROTECT, ON ONE HAND, THE INTEREST OF THE AS SESSEE IN THE SENSE THAT HE IS NOT SUBJECTED TO ANY AMOUNT OF TAX IN EXCESS OF WHA T IS LEGITIMATELY DUE FROM HIM, AND ON THE OTHER HAND, HE HAS A DUTY TO PROTEC T THE INTERESTS OF THE REVENUE AND TO SEE THAT NO ONE DODGED THE REVENUE AND ESCAP ED WITHOUT PAYING THE LEGITIMATE TAX. THE ASSESSING OFFICER IS NOT EXPECT ED TO PUT BLINKERS ON HIS EYES AND MECHANICALLY ACCEPT WHAT THE ASSESSEE CLAIMS BE FORE HIM. IT IS HIS DUTY TO ASCERTAIN THE TRUTH OF THE FACTS STATED AND THE GEN UINENESS OF THE CLAIMS MADE IN THE RETURN WHEN THE CIRCUMSTANCES OF THE CASE ARE S UCH AS TO PROVOKE INQUIRY. I.T.A. NO.501/C/2016 15 ARBITRARINESS IN EITHER ACCEPTING OR REJECTING THE CLAIM HAS NO PLACE. THE ORDER PASSED BY THE ASSESSING OFFICER BECOMES ERRONEOUS B ECAUSE AN ENQUIRY HAS NOT BEEN MADE OR GENUINENESS OF THE CLAIM HAS NOT BEEN EXAMINED WHERE THE INQUIRIES OUGHT TO HAVE BEEN MADE AND THE GENUINENE SS OF THE CLAIM OUGHT TO HAVE BEEN EXAMINED AND NOT BECAUSE THERE IS ANYTHIN G WRONG WITH HIS ORDER IF ALL THE FACTS STATED OR CLAIM MADE THEREIN ARE ASSU MED TO BE CORRECT. THE COMMISSIONER MAY CONSIDER AN ORDER OF THE ASSESSING OFFICER TO BE ERRONEOUS NOT ONLY WHEN IT CONTAINS SOME APPARENT ERROR OF RE ASONING OR OF LAW OR OF FACT ON THE FACE OF IT BUT ALSO WHEN IT IS A STEREO-TYPE D ORDER WHICH SIMPLY ACCEPTS WHAT THE ASSESSEE HAS STATED IN HIS RETURN AND FAIL S TO MAKE ENQUIRIES OR EXAMINE THE GENUINENESS OF THE CLAIM WHICH ARE CALL ED FOR IN THE CIRCUMSTANCES OF THE CASE. IN TAKING THE AFORESAID VIEW, WE ARE S UPPORTED BY THE DECISIONS OF THE HON'BLE SUPREME COURT IN RAMPYARI DEVI SARAOGI V. CIT (67 ITR 84) (SC), SMT. TARA DEVI AGGARWAL V. CIT (88 ITR 323) (SC), AND MALABAR INDUSTRIAL CO. LTD'S CASE ( 243 ITR 83) (SC). 7.3 IN MALABAR INDUSTRIAL CO. LTD. CASE THE HON'B LE COURT HAS HELD AS UNDER: THERE CAN BE NO DOUBT THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WI LL BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLI CATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SA ME CATEGORY FALL THE ORDERS PASSED WITHOUT APPLYING THE PRINCIPLES OF NA TURAL JUSTICE OR WITHOUT APPLICATION OF MIND. I.T.A. NO.501/C/2016 16 IN OUR HUMBLE VIEW, ARBITRARINESS IN DECISION-MAKIN G WOULD ALWAYS NEED CORRECTION REGARDLESS OF WHETHER IT CAUSES PREJUDIC E TO AN ASSESSEE OR TO THE STATE EXCHEQUER. THE LEGISLATURE HAS TAKEN AMPLE CAR E TO PROVIDE FOR THE MECHANISM TO HAVE SUCH PREJUDICE REMOVED. WHILE AN ASSESSEE CAN HAVE IT CORRECTED THROUGH REVISIONAL JURISDICTION OF THE CO MMISSIONER UNDER SECTION 264 OR THROUGH APPEALS AND OTHER MEANS OF JUDICIAL REVI EW, THE PREJUDICE CAUSED TO THE STATE EXCHEQUER CAN ALSO BE CORRECTED BY INVOKIN G REVISIONAL JURISDICTION OF THE COMMISSIONER UNDER SECTION 263. ARBITRARINESS I N DECISION-MAKING CAUSING PREJUDICE TO EITHER PARTY CANNOT THEREFORE BE ALLOW ED TO STAND AND STARE AT THE LEGAL SYSTEM. IT IS DIFFICULT TO COUNTENANCE SUCH A RBITRARINESS IN THE ACTIONS OF THE ASSESSING OFFICER. IT IS THE DUTY OF THE ASSESSING OFFICER TO ADEQUATELY PROTECT THE INTEREST OF BOTH THE PARTIES, NAMELY, THE ASSESSEE AS WELL AS THE STATE. IF HE FAILS TO DISCHARGE HIS DUTIES FAIRLY, HIS ARBITRARY ACTIO NS CULMINATING IN ERRONEOUS ORDERS CAN ALWAYS BE CORRECTED EITHER AT THE INSTAN CE OF THE ASSESSEE, IF THE ASSESSEE IS PREJUDICED OR AT THE INSTANCE OF THE CO MMISSIONER, IF THE REVENUE IS PREJUDICED. WHILE MAKING AN ASSESSMENT, THE ITO HAS A VARIED ROLE TO PLAY. HE IS THE INVESTIGATOR, PROSECUTOR AS WELL AS ADJUDICATOR . AS AN ADJUDICATOR HE IS AN ARBITRATOR BETWEEN THE REVENUE AND THE TAXPAYER AND HE HAS TO BE FAIR TO BOTH. HIS DUTY TO ACT FAIRLY REQUIRES THAT WHEN HE ENQUIR ES INTO A SUBBSTANTIAL MATTER LIKE THE PRESENT ONE, HE MUST RECORD A FINDING ON T HE RELEVANT ISSUE GIVING, HOWSOEVER BRIEFLY, HIS REASONS THEREFOR. IN S.N. M UKHERJEE V. UNION OF INDIA AIR 1990 SC 1984, IT HAS BEEN OBSERVED BY THE HON'BLE S UPREME COURT AS FOLLOWS: I.T.A. NO.501/C/2016 17 REASONS, WHEN RECORDED BY AN ADMINISTRATIVE AUTHOR ITY IN AN ORDER PASSED BY IT WHILE EXERCISING QUASI-JUDICIAL FUNCTI ONS, WOULD NO DOUBT FACILITATE THE EXERCISE OF ITS JURISDICTION BY THE APPELLATE OR SUPERVISORY AUTHORITY. BUT THE OTHER CONSIDERATIONS, REFERRED T O ABOVE, WHICH HAVE ALSO WEIGHED WITH THIS COURT IN HOLDING THAT AN ADMINIST RATIVE AUTHORITY MUST RECORD REASONS FOR ITS DECISION ARE OF NO LESS SIGN IFICANCE. THESE CONSIDERATIONS SHOW THAT THE RECORDING OF REASONS B Y AN ADMINISTRATIVE AUTHORITY SERVES A SALUTARY PURPOSE, NAMELY, IT EXC LUDES CHANCES OR ARBITRARINESS AND ENSURES A DEGREE OF FAIRNESS IN T HE PROCESS OF DECISION- MAKING. THE SAID PURPOSE WOULD APPLY EQUALLY TO ALL DECISIONS AND ITS APPLICATION CANNOT BE CONFINED TO DECISIONS WHICH A RE SUBJECT TO APPEAL, REVISION OR JUDICIAL REVIEW. IN OUR OPINION, THEREF ORE, THE REQUIREMENT THAT REASONS BE RECORDED SHOULD GOVERN THE DECISIONS OF AN ADMINISTRATIVE AUTHORITY EXERCISING QUASI-JUDICIAL FUNCTIONS IRRES PECTIVE OF THE FACT MAY, HOWEVER, BE ADDED THAT IT IS NOT REQUIRED THAT THE REASONS SHOULD BE AS ELABORATE AS IN THE DECISION OF A COURT OF LAW. THE EXTENT AND NATURE OF THE REASONS WOULD DEPEND ON PARTICULAR FACTS AND CI RCUMSTANCES. WHAT IS NECESSARY IS THAT THE REASONS ARE CLEAR AND EXPLICI T SO AS TO INDICATE THAT THE AUTHORITY HAS GIVEN DUE CONSIDERATION TO THE PO INTS IN CONTROVERSY. THE NEED FOR RECORDING OF REASONS IS GREATER IN A C ASE WHERE THE ORDER IS PASSED AT THE ORIGINAL STAGE. THE APPELLATE OR REVI SIONAL AUTHORITY, IF IT AFFIRMS SUCH AN ORDER, NEED NOT GIVE SEPARATE REASO NS IF THE APPELLATE OR REVISIONAL AUTHORITY AGREES WITH THE REASONS CONTAI NED IN THE ORDER UNDER CHALLENGE. 7.4 SIMILAR VIEW WAS EARLIER TAKEN BY THE HON'BLE SUPREME COURT IN SIEMENS ENGG. & MFG. CO. LTD. V. UNION OF INDIA AIR 1976 SC 1785. IT IS SETTLED LAW THAT WHILE MAKING ASSESSMENT ON ASSESSEE, THE ITO ACTS I N A QUASI-JUDICIAL CAPACITY. AN ASSESSMENT ORDER IS AMENABLE TO APPEAL BY THE AS SESSEE AND TO R EVISION BY THE COMMISSIONER UNDER SECTIONS 263 AND 264. THEREFORE, A REASONED ORDER ON A SUBSTANTIAL ISSUE IS LEGALLY NECESSARY. THE JUDGM ENTS ON WHICH RELIANCE WAS PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ALSO POINTS TO THE SAME DIRECTION. THEY HAVE HELD THAT ORDERS, WHICH ARE SUBVERSIVE OF THE ADMINISTRATION OF REVENUE, MUST BE REGARDED AS ERRONEOUS AND PREJUDIC IAL TO THE INTERESTS OF THE I.T.A. NO.501/C/2016 18 REVENUE. IF THE ASSESSING OFFICERS ARE ALLOWED TO M AKE ASSESSMENTS IN AN ARBITRARY MANNER, AS HAS BEEN DONE IN THE CASE BEFO RE US, THE ADMINISTRATION OF REVENUE IS BOUND TO SUFFER. IF WITHOUT DISCUSSING T HE NATURE OF THE TRANSACTION AND MATERIALS ON RECORD, THE ASSESSING OFFICER HAD MADE CERTAIN ADDITION TO THE INCOME OF THE ASSESSEE, THE SAME WOULD HAVE BEEN CO NSIDERED ERRONEOUS BY ANY APPELLATE AUTHORITY AS BEING VIOLATIVE OF THE PRINC IPLES OF NATURAL JUSTICE WHICH REQUIRE THAT THE AUTHORITY MUST INDICATE THE REASON S FOR AN ADVERSE ORDER. WE FIND NO REASON WHY THE SAME VIEW SHOULD NOT BE TAKE N WHEN AN ORDER IS AGAINST THE INTERESTS OF THE REVENUE. AS A MATTER OF FACT S UCH ORDERS ARE PREJUDICIAL TO THE INTERESTS OF BOTH THE PARTIES, BECAUSE EVEN THE ASSESSEE IS DEPRIVED OF THE BENEFIT OF A POSITIVE FINDING IN HIS FAVOUR, THOUGH HE MAY HAVE SUFFICIENTLY ESTABLISHED HIS CASE. 7.5 IN VIEW OF THE FOREGOING, IT CAN SAFELY BE S AID THAT AN ORDER PASSED BY THE ASSESSING OFFICER BECOMES ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNDER SECTION 263 IN THE FOLLOWING CASES: (I) THE ORDER SOUGHT TO BE REVISED CONTAINS ERROR O F REASONING OR OF LAW OR OF FACT ON THE FACE OF IT. (II) THE ORDER SOUGHT TO BE REVISED PROCEEDS ON INC ORRECT ASSUMPTION OF FACTS OR INCORRECT APPLICATION OF LAW. IN THE SAME CATEGO RY FALL ORDERS PASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. (III) THE ORDER PASSED BY THE ASSESSING OFFICER IS A STEREOTYPE ORDER WHICH SIMPLY ACCEPTS WHAT THE ASSESSEE HAS STATED IN HIS RETURN OR WHERE HE FAILS TO I.T.A. NO.501/C/2016 19 MAKE THE REQUISITE ENQUIRIES OR EXAMINE THE GENUINE NESS OF THE CLAIM WHICH IS CALLED FOR IN THE CIRCUMSTANCES OF THE CASE. 7.6 WE SHALL NOW TURN TO THE FACTS OF THE CASE TO SEE WHETHER THE CASE BEFORE US IS COVERED BY THE AFORESAID PRINCIPLES. PERUSAL OF THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER DOES NOT SHOW ANY APPLICATION OF MIND ON HIS PART. HE SIMPLY ACCEPTED THE IMPUGNED CLAIM OF THE ASSESSEE. THIS IS A CASE WHERE THE ASSESSING OFFICER MECHANICALLY ACCEPTED WHAT THE AS SESSEE WANTED HIM TO ACCEPT WITHOUT ANY APPLICATION OF MIND OR ENQUIRY ON THIS ISSUE. THE EVIDENCE AVAILABLE ON RECORD IS NOT ENOUGH TO HOLD THAT THIS CLAIM OF THE ASSESSEE WAS OBJECTIVELY EXAMINED OR CONSIDERED BY THE ASSESSING OFFICER. IT IS BECAUSE OF SUCH NON CONSIDERATION OF THE ISSUES ON THE PART OF THE ASSE SSING OFFICER THAT THE CLAIM OF THE ASSESSEE STOOD AUTOMATICALLY ACCEPTED WITHOUT A NY PROPER SCRUTINY. THE ASSESSMENT ORDER PLACED BEFORE US IS CLEARLY ERRONE OUS AS IT WAS PASSED WITHOUT PROPER EXAMINATION OR ENQUIRY OR VERIFICATION OR OB JECTIVE CONSIDERATION OF THE CLAIM MADE BY THE ASSESSEE. THE ASSESSING OFFICER H AS COMPLETELY OMITTED TO EXAMINE THE ISSUES IN QUESTION FROM CONSIDERATION A ND MADE THE ASSESSMENT IN AN ARBITRARY MANNER. THERE IS NO DISCUSSION IN HIS ORDER WITH REFERENCE TO THIS ISSUE. IN OUR VIEW, IT WAS A FIT CASE FOR THE LEARN ED COMMISSIONER TO EXERCISE HIS REVISIONAL JURISDICTION UNDER SECTION 263 WHICH HE RIGHTLY EXERCISED BY CANCELLING THE ASSESSMENT ORDER AND DIRECTING THE ASSESSING OF FICER TO PASS A FRESH ORDER CONSIDERING THE ISSUES RAISED BY THE CIT. IN OUR VI EW, THE ASSESSEE SHOULD HAVE NO GRIEVANCE IN THE ACTION OF LEARNED COMMISSIONER IN EXERCISING THE JURISDICTION I.T.A. NO.501/C/2016 20 U/S. 263 OF THE IT ACT AS HE HAS RIGHTLY MENTIONED IN HIS ORDER IN PARA 3 THAT THE ASSESSMENT ORDER WAS ERRONEOUS IN SO FAR AS IT IS P REJUDICIAL TO THE INTEREST OF REVENUE. IT IS TO BE NOTED THAT ORDER OF THE CIT IS TO BE READ IN WHOLE AND NOT IN A PIECEMEAL MANNER. 7.7 IT WAS HOWEVER CONTENDED BY THE LEARNED COUNS EL THAT THE ASSESSING OFFICER HAD TAKEN A POSSIBLE VIEW IN ACCEPTING THE CLAIM OF THE ASSESSEE WITH REFERENCE TO EXPENDITURE AND HENCE, THE COMMISSIONE R WAS NOT JUSTIFIED IN ASSUMING THE REVISIONAL JURISDICTION UNDER SECTION 263. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE AFORESAID SUBMISSIO NS. AS ALREADY STATED EARLIER, AN ORDER BECOMES ERRONEOUS BECAUSE INQUIRIES, WHICH OUGHT TO HAVE BEEN MADE ON THE FACTS OF THE CASE, WERE NOT MADE AND NOT BEC AUSE THERE IS ANYTHING WRONG WITH THE ORDER IF ALL THE FACTS STATED OR THE CLAIMS MADE IN THE RETURN ARE ASSUMED TO BE CORRECT. THUS, IT IS MERE FAILURE ON THE PART OF THE ASSESSING OFFICER TO MAKE THE NECESSARY INQUIRIES OR TO EXAMI NE THE CLAIM MADE BY THE ASSESSEE IN ACCORDANCE WITH LAW, WHICH RENDERS THE RESULTANT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. NOT HING MORE IS REQUIRED TO BE ESTABLISHED IN SUCH A CASE. ONE WOULD NOT KNOW AS T O WHAT WOULD HAVE HAPPENED IF THE ASSESSING OFFICER HAD MADE THE REQU ISITE INQUIRIES OR EXAMINED THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW. H E COULD HAVE ACCEPTED THE ASSESSEE'S CLAIM. EQUALLY, HE COULD HAVE ALSO REJECT ED THE ASSESSEE'S CLAIM DEPENDING UPON THE RESULTS OF HIS ENQUIRY OR EXAMIN ATION INTO THE CLAIM OF THE I.T.A. NO.501/C/2016 21 ASSESSEE. THUS, THE FORMATION OF ANY VIEW BY THE AS SESSING OFFICER WOULD NECESSARILY DEPEND UPON THE RESULTS OF HIS INQUIRY AND CONSCIOUS, AND NOT PASSIVE, EXAMINATION INTO THE CLAIM OF THE ASSESSEE . IF THE ASSESSING OFFICER PASSES AN ORDER MECHANICALLY WITHOUT MAKING THE REQ UISITE INQUIRIES OR EXAMINING THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW, S UCH AN ORDER WILL CLEARLY BE ERRONEOUS IN LAW AS IT WOULD NOT BE BASED ON OBJECT IVE CONSIDERATION OF THE RELEVANT MATERIALS. IT IS THEREFORE, THE MERE FAILU RE ON THE PART OF THE ASSESSING OFFICER IN NOT MAKING THE INQUIRIES OR NOT EXAMININ G THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW THAT PER SE RENDERS THE RESULTA NT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. NOTHING ELSE IS REQUIRED TO BE ESTABLISHED IN SUCH A CASE TO SHOW THAT THE ORDER S OUGHT TO BE REVISED IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. 7.8 WE ARE UNABLE TO ACCEPT THE SUBMISSION OF THE LEARNED COUNSEL FOR TWO OTHER REASONS ALSO. FIRST REASON IS THAT THE VIEW S O TAKEN BY THE ASSESSING OFFICER WITHOUT MAKING THE REQUISITE INQUIRIES OR EXAMINING THE CLAIM OF THE ASSESSEE WILL PER SE BE AN ERRONEOUS VIEW AND HENCE WILL BE AMENA BLE TO REVISIONAL JURISDICTION UNDER SECTION 263. SECOND REASON IS THAT IT IS NOT TAKING OF ANY VIEW THAT WILL TAKE THE MATTER UNDER THE SCOPE OF SECTION 263. THE VIEW TAKEN BY THE ASSESSING OFFICER SHOULD NOT BE A MERE VIEW IN VACUUM BUT A J UDICIAL VIEW. IT IS WELL ESTABLISHED THAT THE ASSESSING OFFICER BEING A QUAS I-JUDICIAL AUTHORITY CANNOT TAKE A VIEW, EITHER AGAINST OR IN FAVOUR OF THE ASSESSEE / REVENUE, WITHOUT MAKING I.T.A. NO.501/C/2016 22 PROPER INQUIRIES AND WITHOUT PROPER EXAMINATION OF THE CLAIM MADE BY THE ASSESSEE IN THE LIGHT OF THE APPLICABLE LAW. AS ALR EADY STATED EARLIER, WE ARE NOT ABLE TO APPRECIATE ON WHAT MATERIAL WAS PLACED BEFO RE THE ASSESSING OFFICER AT THE ASSESSMENT STAGE TO TAKE SUCH A VIEW. THE ASSES SEE HAS ALSO NOT BEEN ABLE TO LEAD ENOUGH EVIDENCE TO SHOW TO US THAT ANY INQU IRY WAS MADE BY THE ASSESSING OFFICER IN THIS REGARD. THEREFORE MERE AL LEGATION THAT THE ASSESSING OFFICER HAS TAKEN A VIEW IN THE MATTER WILL NOT PUT THE MATTER BEYOND THE PURVIEW OF SECTION 263 UNLESS THE VIEW SO TAKEN BY THE ASSE SSING OFFICER IS A JUDICIAL VIEW CONSCIOUSLY BASED UPON PROPER INQUIRIES AND APPRECI ATION OF ALL THE RELEVANT FACTUAL AND LEGAL ASPECTS OF THE CASE. THE JUDICIAL VIEW TAKEN BY THE ASSESSING OFFICER MAY PERHAPS PLACE THE MATTER OUTSIDE THE PU RVIEW OF SECTION 263 UNLESS IT IS SHOWN THAT THE VIEW SO TAKEN BY THE ASSESSING OFFICER CONTAINS SOME APPARENT ERROR OF REASONING OR OF LAW OR OF FACT ON THE FACE OF IT. 7.9 THE LEARNED COUNSEL SUBMITTED THAT THE COMMIS SIONER WAS NOT JUSTIFIED IN SUBSTITUTING HIS VIEW FOR THAT OF THE ASSESSING OFF ICER. 7.10 'ADOPTING' ONE OF THE COURSES PERMISSIBLE IN LAW NECESSARILY REQUIRES THE ASSESSING OFFICER TO CONSCIOUSLY ANALYSE AND EVALUA TE THE FACTS IN THE LIGHT OF RELEVANT LAW AND BRING THEM ON RECORD. IT IS ONLY T HEN THAT HE CAN BE SAID TO HAVE 'ADOPTED' OR CHOSEN ONE OF THE COURSES PERMISS IBLE IN LAW. THE ASSESSING OFFICER CANNOT BE PRESUMED OR ATTRIBUTED TO HAVE 'A DOPTED' OR CHOSEN A COURSE I.T.A. NO.501/C/2016 23 PERMISSIBLE IN LAW WHEN HIS ORDER DOES NOT SPEAK IN THAT BEHALF. SIMILARLY, 'TAKING' ONE VIEW WHERE TWO OR MORE VIEWS ARE POSSI BLE ALSO NECESSARILY IMPORTS THE REQUIREMENT OF ANALYSING THE FACTS IN THE LIGHT OF APPLICABLE LAW. THEREFORE, PROPER EXAMINATION OF FACTS IN THE LIGHT OF RELEVAN T LAW IS A NECESSARY CONCOMITANT IN ORDER TO SAY THAT THE ASSESSING OFFI CER HAS ADOPTED A PERMISSIBLE COURSE OF LAW OR TAKEN A VIEW WHERE TWO OR MORE VIE WS ARE POSSIBLE. IT IS ONLY AFTER SUCH PROPER EXAMINATION AND EVALUATION HAS BE EN DONE BY THE ASSESSING OFFICER THAT HE CAN COME TO A CONCLUSION AS TO WHAT ARE THE PERMISSIBLE COURSES AVAILABLE IN LAW OR WHAT ARE THE POSSIBLE VIEWS ON THE ISSUE BEFORE HIM. IN CASE HE COMES TO THE CONCLUSION THAT MORE THAN ONE VIEW IS POSSIBLE THEN HE HAS NECESSARILY TO CHOOSE A VIEW, WHICH IS MOST APPROPR IATE ON THE FACTS OF THE CASE. IN ORDER TO APPLY THE AFORESAID OBSERVATIONS TO A G IVEN CASE, IT MUST THEREFORE FIRST BE SHOWN THAT THE ASSESSING OFFICER HAS 'ADOP TED' A PERMISSIBLE COURSE OF LAW OR, WHERE TWO VIEWS ARE POSSIBLE, THE ASSESSING OFFICER HAS 'TAKEN' ONE SUCH POSSIBLE VIEW IN THE ORDER SOUGHT TO BE REVISED UND ER SECTION 263. THIS REQUIRES THE ASSESSING OFFICER TO TAKE A CONSCIOUS DECISION; ELSE HE WOULD NEITHER BE ABLE TO 'ADOPT' A COURSE PERMISSIBLE IN LAW NOR 'TAKE' A VIEW WHERE TWO OR MORE VIEWS ARE POSSIBLE. IN OTHER WORDS, IT IS THE ASSES SING OFFICER WHO HAS TO ADOPT A PERMISSIBLE COURSE OF LAW OR TAKE A VIEW WHERE TWO OR MORE VIEWS ARE POSSIBLE. IT IS DIFFICULT TO COMPREHEND AS TO HOW THE ASSESSI NG OFFICER CAN BE ATTRIBUTED TO HAVE 'ADOPTED' A PERMISSIBLE COURSE OF LAW OR 'TAKE N' A VIEW WHERE TWO OR MORE VIEWS ARE POSSIBLE WHEN THE ORDER PASSED BY HIM DOE S NOT SPEAK IN THAT BEHALF. I.T.A. NO.501/C/2016 24 WE CANNOT ASSUME, IN ORDER TO PROVIDE LEGITIMACY TO THE ASSESSMENT ORDER, THAT THE ASSESSING OFFICER HAS ADOPTED A PERMISSIBLE COU RSE OF LAW OR TAKEN A POSSIBLE VIEW WHERE HIS ORDER DOES NOT SAY SO. THE SUBMISSIO NS MADE BY THE LEARNED COUNSEL, IF ACCEPTED, WOULD REQUIRE US TO FORM, SUB STITUTE AND READ OUR VIEW IN THE ORDER OF THE ASSESSING OFFICER WHEN THE ASSESSI NG OFFICER HIMSELF HAS NOT TAKEN A VIEW. IT COULD HAVE BEEN A DIFFERENT POSITI ON IF THE ASSESSING OFFICER HAD 'ADOPTED' OR 'TAKEN' A VIEW AFTER ANALYSING THE FAC TS AND DECIDING THE MATTER IN THE LIGHT OF THE APPLICABLE LAW. HOWEVER, IN THE CA SE BEFORE US, THE ASSESSING OFFICER HAS NOT AT ALL EXAMINED AS TO WHETHER ONLY ONE VIEW WAS POSSIBLE OR TWO OR MORE VIEWS WERE POSSIBLE AND HENCE, THE QUESTION OF HIS ADOPTING OR CHOOSING ONE VIEW IN PREFERENCE TO THE OTHER DOES NOT ARISE. THE AFORESAID OBSERVATIONS OF THE HON'BLE SUPREME COURT DO NOT, IN OUR VIEW, HELP THE ASSESSEE; AND RATHER THEY ARE AGAINST THE ASSESSEE. 7.11 IN THE CASE OF PADMASUNDARA RAO V. STATE OF TAMIL NADU (255 ITR 147), THE HON'BLE SUPREME COURT HAS HELD THAT: '... THERE IS ALWAYS PERIL IN TREATING THE WORDS OF A SPEECH OR JUDGMENT AS THOUGH THEY ARE WORDS IN A LEGISLATIVE ENACTMENT, A ND IT IS TO BE REMEMBERED THAT JUDICIAL UTTERANCES ARE MADE IN THE SETTING OF THE FACTS OF A PARTICULAR CASE, SAID LORD MORRIN IN HARRINGTON V. BRITISH RAILWAYS BOARD [1972] 2 WLR 537 (HL). CIRCUMSTANTIAL FLEXIBILITY, ONE ADDITIONAL OR DIFFERENT FACT MAY MAKE A WORLD OF DIFFERENCE BETWEEN CONCLUSIONS IN TWO CASE S....' THEREFORE, THE OBSERVATIONS OF THE HON'BLE SUPREME COURT IN MALABA R INDUSTRIAL CO. LTD'S CASE (SUPRA) ON WHICH RELIANCE HAS BEEN PLACED BY THE LE ARNED COUNSEL CANNOT BE READ IN ISOLATION. THE JUDGMENT DESERVES TO BE READ IN ITS ENTIRETY TO CULL OUT THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT. IF SO READ, IT IS QUITE EVIDENT THAT THE ORDERS PASSED ON AN INCORRECT ASSUMPTION O F FACTS OR INCORRECT APPLICATION OF LAW OR WITHOUT APPLYING THE PRINCIPL ES OF NATURAL JUSTICE OR I.T.A. NO.501/C/2016 25 WITHOUT APPLICATION OF MIND WILL SATISFY THE REQUIR EMENT OF THE ORDER BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. IF THE ORDER SOUGHT TO BE REVISED UNDER SECTION 263 SUFFERS FROM ANY OF TH E AFORESAID VICES, IT CANNOT BE SAID THAT THE ASSESSING OFFICER HAS 'ADOPTED', I N SUCH AN ORDER, A COURSE PERMISSIBLE IN LAW OR 'TAKEN' A VIEW WHERE TWO OR M ORE VIEWS ARE POSSIBLE. 7.12 IT WAS NEXT CONTENDED BY THE LD. COUNSEL THAT THE ASSESSING OFFICER HAD CONSIDERED ALL THE RELEVANT ASPECTS OF THE CASE CAR EFULLY WHILE PASSING THE ORDER. ACCORDING TO HIM, THE MERE FACT THAT THE ASSESSING OFFICER HAS NOT DISCUSSED THE ISSUE WOULD NEITHER MEAN FAILURE ON HIS PART IN NOT EXAMINING THE MATTER CAREFULLY NOR WOULD RENDER HIS ORDER ERRONEOUS SO L ONG AS THE VIEW TAKEN BY HIM WAS A POSSIBLE VIEW. IN OUR VIEW, THE AFORESAID SUB MISSION OF THE ASSESSEE MUST FAIL FOR THE REASONS ALREADY EXPLAINED IN THE FOREG OING PARAS OF THIS ORDER AS THE ORDER, WHICH IS SOUGHT TO BE REVISED UNDER SECTION 263 REFLECTS NO PROPER APPLICATION OF MIND BY THE ASSESSING OFFICER AND TH US BE AMENABLE TO REVISION UNDER SECTION 263. IN THIS CASE BEFORE US, THE ASSE SSMENT ORDER PASSED BY THE ASSESSING OFFICER LACKS JUDICIAL STRENGTH TO STAND. IT IS NOT A CASE WHERE THE ORDER IS SHORT BUT IS NOT SUPPORTED BY JUDICIAL STRENGTH. IT IS IN THIS VIEW OF THE MATTER THAT WE FEEL THAT THE LEARNED COMMISSIONER HAS CORR ECTLY EXERCISED HIS REVISIONAL JURISDICTION UNDER SECTION 263. 7.13 IN OUR OPINION, THE ASSESSING OFFICER HAS BEEN ENTRUSTED THE ROLE OF AN INVESTIGATOR, PROSECUTOR AS WELL AS ADJUDICATOR UND ER THE SCHEME OF THE INCOME- TAX ACT. IF HE COMMITS AN ERROR WHILE DISCHARGING T HE AFORESAID ROLES AND CONSEQUENTLY PASSES AN ERRONEOUS ORDER CAUSING PREJ UDICE EITHER TO THE ASSESSEE I.T.A. NO.501/C/2016 26 OR TO THE STATE EXCHEQUER OR TO BOTH, THE ORDER SO P ASSED BY HIM IS LIABLE TO BE CORRECTED. AS MENTIONED EARLIER, THE ASSESSEE CAN H AVE THE PREJUDICE CAUSED TO HIM CORRECTED BY FILING AN APPEAL; AS ALSO BY FILIN G A REVISION APPLICATION UNDER SECTION 264. BUT THE STATE EXCHEQUER HAS NO RIGHT OF APPEAL AGAINST THE ORDERS OF THE ASSESSING OFFICER. SECTION 263 HAS THEREFORE BE EN ENACTED TO EMPOWER THE COMMISSIONER TO CORRECT AN ERRONEOUS ORDER PASSED B Y THE ASSESSING OFFICER WHICH HE CONSIDERS TO BE PREJUDICIAL TO THE INTERES T OF THE REVENUE. THE COMMISSIONER HAS ALSO BEEN EMPOWERED TO INVOKE HIS REVISIONAL JURISDICTION UNDER SECTION 264 AT THE INSTANCE OF THE ASSESSEE A LSO. THE LINE OF DIFFERENCE BETWEEN SECTIONS 263 AND 264 IS THAT WHILE THE FORM ER CAN BE INVOKED TO REMOVE THE PREJUDICE CAUSED TO THE STATE THE LATER CAN BE INVOKED TO REMOVE THE PREJUDICE CAUSED TO THE ASSESSEE. THE PROVISIONS OF SECTION 263 WOULD LOSE SIGNIFICANCE IF THEY WERE TO BE INTERPRETED IN A MA NNER THAT PREVENTED THE COMMISSIONER FROM REVISING THE ERRONEOUS ORDER PASS ED BY THE ASSESSING OFFICER, WHICH WAS PREJUDICIAL TO THE INTEREST OF THE REVENU E. IN FACT, SUCH A COURSE WOULD BE COUNTER PRODUCTIVE AS IT WOULD HAVE THE EFFECT O F PROMOTING ARBITRARINESS IN THE DECISIONS OF THE ASSESSING OFFICERS AND THUS DE STROY THE VERY FABRIC OF SOUND TAX DISCIPLINE. IF ERRONEOUS ORDERS, WHICH ARE PREJ UDICIAL TO THE INTEREST OF THE REVENUE, ARE ALLOWED TO STAND, THE CONSEQUENCES WOU LD BE DISASTROUS IN THAT THE HONEST TAX PAYERS WOULD BE REQUIRED TO PAY MORE THA N OTHERS TO COMPENSATE FOR THE LOSS CAUSED BY SUCH ERRONEOUS ORDERS. FOR THIS REASON ALSO, WE ARE OF THE I.T.A. NO.501/C/2016 27 VIEW THAT THE ORDERS PASSED ON AN INCORRECT ASSUMPT ION OF FACTS OR INCORRECT APPLICATION OF LAW OR WITHOUT APPLYING THE PRINCIPL ES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND OR WITHOUT MAKING REQUISITE INQ UIRIES WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS AND PREJUD ICIAL TO THE INTEREST OF THE REVENUE WITHIN THE MEANING OF SECTION 263. 8. COMING TO THE FACTS OF THE PRESENT CASE AS ALR EADY POINTED BY THE LD. DR, THERE IS NO WHISPER IN THE ASSESSMENT ORDER WITH RE GARD TO THE CLAIM OF THE ASSESSEE WHICH REFERS TO THE PROVISIONS OF BAD AND DOUBTFUL DEBTS. SINCE THERE WAS NO ENQUIRY AT THE END OF THE ASSESSING OFFICER ON THIS ISSUE, THE CIT TOOK UP THE CASE UNDER SECTION 263 OF THE ACT AND THE ASSES SING OFFICER, BEING A QUASI- JUDICIAL AUTHORITY CANNOT TAKE A VIEW, EITHER AGAIN ST OR IN FAVOUR OF THE ASSESSEE WITHOUT MAKING PROPER ENQUIRIES AND WITHOUT PROPER EXAMINATION OF THE CLAIM MADE BY THE ASSESSEE IN THE LIGHT OF THE APPLICABLE LAW. THE COMMISSIONER IS EMPOWERED TO INITIATE SUO MOTO PROCEEDINGS UNDER SE CTION 263 OF THE ACT WHERE THE ASSESSING OFFICER TAKES A WRONG DECISION WITHOU T CONSIDERING THE MATERIAL AVAILABLE ON RECORD OR HE TAKES A DECISION WITHOUT MAKING ANY ENQUIRY INTO MATTERS WHERE SUCH ENQUIRY WAS PRIMA FACIE WARRANTE D. 9. IN THE PRESENT CASE, THE CIT WAS OF THE OPINION THAT THERE IS NO PROPER ENQUIRY BY THE ASSESSING OFFICER AND HE ACCEPTED TH E CLAIM OF THE ASSESSEE WITHOUT MAKING ANY ENQUIRY WITH REGARD TO THE BAD A ND DOUBTFUL DEBTS. HE HAS I.T.A. NO.501/C/2016 28 NOT GATHERED ANY INFORMATION AND EVIDENCE TO SUGGES T THAT THE CLAIM OF THE ASSESSEE WAS RIGHT. THE ASSESSING OFFICER ABSOLUTE LY CLOSED HIS EYES AND ACCEPTED THE CLAIM OF THE ASSESSEE TOWARD THE PROVI SION FOR BAD AND DOUBTFUL DEBTS AMOUNTING TO RS. 1,00,33,280/- BOTH UNDER THE NORMAL COMPUTATION OF INCOME AS WELL AS UNDER SECTION 115JB OF THE I.T. A CT. THE ASSESSING OFFICER IS REQUIRED TO CAUSE ENQUIRIES WITH REGARD TO THE CLAI M OF THE ASSESSEE. AS SUCH, THE CIT IS JUSTIFIED IN REMITTING THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR RE-EXAMINATION. WE DO NOT FIND ANY MERIT IN THE AR GUMENT OF THE LD. AR BEFORE US. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE AS SESSEE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THI S 15 TH MARCH, 2018. SD/- SD/- ( GEORGE GEORGE K.) (CHAN DRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: DATED: 15 TH MARCH, 2018 GJ COPY TO: 1. COCHIN INTERNATIONAL AIRPORT LTD., KOCHI AIRPORT P.O., NEDUMBASSERY. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CORPOR ATE CIRCLE-1(4), KOCHI. 3. THE PR. COMMISSIONER OF INCOME-TAX, KOCHI 4. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 5. GUARD FILE. BY ORDER (ASSISTANT REGISTRA R) I.T.A.T. , COCHIN I.T.A. NO.501/C/2016 29