GLOBALWORTH SECURITIES LTD., MUMBAI V. ACIT, CIRCLE 4(1)(1), MUMBAI

ITA 620/MUM/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0850 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 06-10-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 04-04-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Reason to believe; Reassessment proceedings; Set aside
• Section: 147; 148; 263; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 620/MUM/2022 Assessment Year: 2012-13 Globalworth Securities Limited, 716, Neelkanth Corporate Park, Kirol Road, Vidyavihar (West), Mumbai-400086. Vs. ACIT, Circle-4(1)(1), Room No. 640, 6th floor, Aayakar Bhavan, Maharshi Karve Road, Mumbai-400020. PAN No. AADCG 7624 G Appellant Respondent Assessee by : Mr. Aditya Ramachndran, AR Revenue by : Mr. Ashok Kumar Kardam, CIT-DR Date of Hearing : 07/10/2022 Date of pronouncement : 14/10/2022 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against revision order dated 22.03.2022 passed by the Ld. Pr. Commissioner of Income-tax-4, Mumbai (in short ‘the Ld. PCIT’) for assessment year 2012-13, raising following grounds : 1. On the facts and circumstances of the case and in law, the learned Pr. CIT reassessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue.2. On the facts and circumstances of the case and in law, the learned Pr. CIT reasons recorded under Sectappellant were referring to transactions in only one scrip which was alleged to be a penny stock and there cannot be another version of the reasons referring to three scrips as claimed by him.3. On the facts and circumstances oflearned Pr. CIT Assessing Officer failed to deal with the transactions in alleged two penny scrips namely Exelon Infrastructure Ltd. and Scan Steels Ltd. without appreciating that a. a. theyper the reasons recorded by the Assessing Officer; andb. b. no addition could have been made with respect to the transactions in the said two scrips since no addition was made on the issue which was the subreassessment as per the reasons recorded by the Assessing Officer.2. Briefly stated, the facts of the case are that the assessee filed its return of income for the year under consideration i.e. AY 201230.09.2022 declaring total iM/s Globalworth Securities Ltd. On the facts and circumstances of the case and in law, the learned Pr. CIT -4, Mumbai has erred in holding that the sessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue. On the facts and circumstances of the case and in law, the learned Pr. CIT -4, Mumbai ought to have appreciated that the reasons recorded under Section 148(2) as provided to the appellant were referring to transactions in only one scrip which was alleged to be a penny stock and there cannot be another version of the reasons referring to three scrips as claimed by him.On the facts and circumstances of the case and in law, the learned Pr. CIT -4, Mumbai has erred in holding that the Assessing Officer failed to deal with the transactions in alleged two penny scrips namely Exelon Infrastructure Ltd. and Scan Steels Ltd. without appreciating that - a. they were not the subject matter of the reassessment as per the reasons recorded by the Assessing Officer; andb. no addition could have been made with respect to the transactions in the said two scrips since no addition was made on the issue which was the subject matter of the reassessment as per the reasons recorded by the Assessing Officer. Briefly stated, the facts of the case are that the assessee filed its return of income for the year under consideration i.e. AY 201230.09.2022 declaring total income of ₹34,38,840/-M/s Globalworth Securities Ltd. ITA No. 620/M/2022 2 On the facts and circumstances of the case and in law, the 4, Mumbai has erred in holding that the sessment order passed by the Assessing Officer is erroneous On the facts and circumstances of the case and in law, the 4, Mumbai ought to have appreciated that the ion 148(2) as provided to the appellant were referring to transactions in only one scrip which was alleged to be a penny stock and there cannot be another version of the reasons referring to three scrips as claimed by him. the case and in law, the 4, Mumbai has erred in holding that the Assessing Officer failed to deal with the transactions in alleged two penny scrips namely Exelon Infrastructure Ltd. and Scan were not the subject matter of the reassessment as per the reasons recorded by the Assessing Officer; and b. no addition could have been made with respect to the transactions in the said two scrips since no addition was ject matter of the reassessment as per the reasons recorded by the Assessing Briefly stated, the facts of the case are that the assessee filed its return of income for the year under consideration i.e. AY 2012-13 on -. Subsequently, the assessment was reopened by way of issue of notice u/s 148 of the Act dated 23.03.2019. During the reassessment proceedings, the assessee was asked regarding scrip namely M/s NivyaAfter considering the submission of the assessee, the return of income was accepted by the Assessing Officer in reassessment order dated 23.12.2019 passed u/s 147 r.w.s. 143 of the Act. Thereafter, the Ld. PCIT called for record and reopened in view of assessee in following F.Y. Name of the ‘penny scrip’2011-12 Nivyah Infrastructure & Telecom Services Ltd.2011-12 Exelon Infrastructure Ltd.2011-12 Scan Steels Ltd.2.1 But the Assessing Offiscrip namely M/s Nivyah Infrastructure &Therefore, he held that the assessment order passed by the Assessing Officer is erroneous in so far as prejudicial to the interest M/s Globalworth Securities Ltd. the assessment was reopened by way of issue of notice u/s 148 of the Act dated 23.03.2019. During the reassessment proceedings, the assessee was asked regarding genuineness of share transaction of M/s Nivyah Infrastructure & Telecom Services Ltd. After considering the submission of the assessee, the return of income was accepted by the Assessing Officer in reassessment order dated 23.12.2019 passed u/s 147 r.w.s. 143 of the Act. Thereafter, ed for record and noticed that assessment was reopened in view of in genuineness of trading investment assessee in following three scrips: Name of the ‘penny scrip’ Amount of transactionNivyah Infrastructure & Telecom Services Ltd. ₹49,90,870/Exelon Infrastructure Ltd. ₹60,31,839/Scan Steels Ltd. ₹1,98,000/-But the Assessing Officer only examined the trading onscrip namely M/s Nivyah Infrastructure & Telecom Services Ltd. Therefore, he held that the assessment order passed by the Assessing Officer is erroneous in so far as prejudicial to the interest M/s Globalworth Securities Ltd. ITA No. 620/M/2022 3 the assessment was reopened by way of issue of notice u/s 148 of the Act dated 23.03.2019. During the reassessment proceedings, the share transaction of h Infrastructure & Telecom Services Ltd. After considering the submission of the assessee, the return of income was accepted by the Assessing Officer in reassessment order dated 23.12.2019 passed u/s 147 r.w.s. 143 of the Act. Thereafter, that assessment was investment by the Amount of transaction 49,90,870/- 60,31,839/- - cer only examined the trading on one Telecom Services Ltd. Therefore, he held that the assessment order passed by the Assessing Officer is erroneous in so far as prejudicial to the interest of the Revenue. He accordingly set aside the order of the Assessing Officer and directed to examine transaction in other two scrip also. The relevant finding of the Ld. PCIT is reproduced as under :“5. The submissions of the assessee are perused however the same is not acceptable for the following reasons:5.1 The assessment for tthe basis of information received from the lnvestigation wing in respect of transactions by the assessee in respect of the following penny scrips: F.Y. Name of the ‘penny scrip’2011-12 Nivyah Infrastructure & Telecom Services Ltd.2011-12 Exelon Infrastructure Ltd.2011-12 Scan Steels Ltd.The reasons recorded for reopening had the approval of the erstwhile Pr. Commissioner of Income Taxthree penny scrips.5.2 It is seen that the re23/12/2019 was completed without making enquiries in respect of other 2 penny scrips i.e.F.Y. Name of the ‘penny scrip’2011-12 Exelon Infrastructure Ltd.2011-12 Scan Steels Ltd.M/s Globalworth Securities Ltd. of the Revenue. He accordingly set aside the order of the Assessing Officer and directed to examine genuineness of transaction in other two scrip also. The relevant finding of the Ld. PCIT is reproduced as under : The submissions of the assessee are perused however the same is not acceptable for the following reasons: 5.1 The assessment for the assessment year 2012-13 was reopened on the basis of information received from the lnvestigation wing in respect of transactions by the assessee in respect of the following penny scrips: Name of the ‘penny scrip’ Amount of transactionNivyah Infrastructure & Telecom Services Ltd. ₹49,90,870/Exelon Infrastructure Ltd. ₹60,31,839/Scan Steels Ltd. ₹1,98,000/- The reasons recorded for reopening had the approval of the erstwhile Pr. Commissioner of Income Tax-16, Mumbai in respect of all the above three penny scrips. 5.2 It is seen that the re-assessment order u/s 143(3) r.w.s 147 dated 23/12/2019 was completed without making enquiries in respect of other 2 penny scrips i.e. Name of the ‘penny scrip’ Trade/Sale transaction (Exelon Infrastructure Ltd. ₹60,31,839/Scan Steels Ltd. ₹1,98,000/- M/s Globalworth Securities Ltd. ITA No. 620/M/2022 4 of the Revenue. He accordingly set aside the order of the Assessing nuineness of the share transaction in other two scrip also. The relevant finding of the Ld. The submissions of the assessee are perused however the same is 13 was reopened on the basis of information received from the lnvestigation wing in respect of transactions by the assessee in respect of the following penny scrips: Amount of transaction 49,90,870/- 60,31,839/- The reasons recorded for reopening had the approval of the erstwhile i in respect of all the above assessment order u/s 143(3) r.w.s 147 dated 23/12/2019 was completed without making enquiries in respect of Trade/Sale Value of transaction (₹) 60,31,839/- 5.3 The AO shared the reasons recorded with the assessee for reonly in respect of penny scrip of Nivyah Infrastructure & Telecom Services Ltd. of Rs.49.90,870/with other 2 penny scrips rendering the order us 143(3) r.w.s 147 dated 23/12/2019 as erroneous in so far it is prejudicia" to the interest ofrevenue 5.4. The various case law relied by the vs Jet Airways (1) Ltd. (2011) 331 ITR 236 (Bom) is not applicable in the instant case as the facts are distinguishable. In the instant the case was reopened by recording reasons which were approved in respect of all 3 penny scrips. The AO during the redealt with the transactions in respect of penny scrip of M/s. Nivyah Infrastructure & Telecom Services Ltd of Rs. 49,90870/has glaringly omitted to deal with the transactiopenny scrips namely M/s. Exelon Infrastructure Ltd. and Ms.Ltd although information in respect of these 2 scrips formed part of the reasons recorded for reby the AO is erroneous a5.5 As per clause (a) to Explanation to Section 263 (amended by Finance Act, 2015 withOfficer shall be deemed to be erroneous in so far as it is prejudicithe interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner, the order is passed without making enquiries or verification which should have been made. In the instant case, as mentioned in the preceding paragraph, itpassed the assessment order without making inquiries and verification which were required in facts and circumstances of the case. This nonM/s Globalworth Securities Ltd. 5.3 The AO shared the reasons recorded with the assessee for reonly in respect of penny scrip of Nivyah Infrastructure & Telecom ces Ltd. of Rs.49.90,870/-Hence the AO glaringly omitted to deal with other 2 penny scrips rendering the order us 143(3) r.w.s 147 dated 23/12/2019 as erroneous in so far it is prejudicia" to the interest of5.4. The various case law relied by the assessee including the case of CIT Airways (1) Ltd. (2011) 331 ITR 236 (Bom) is not applicable in the instant case as the facts are distinguishable. In the instant the case was reopened by recording reasons which were approved in respect of all 3 nny scrips. The AO during the re-assessment proceedings has only dealt with the transactions in respect of penny scrip of M/s. Nivyah Infrastructure & Telecom Services Ltd of Rs. 49,90870/-, Further, the AO has glaringly omitted to deal with the transactions in remaining 2 penny scrips namely M/s. Exelon Infrastructure Ltd. and Ms.Ltd although information in respect of these 2 scrips formed part of the reasons recorded for re-opening. Thus the re-assessment order passed by the AO is erroneous and prejudicial to the interest of revenue.As per clause (a) to Explanation to Section 263 (amended by Finance Act, 2015 with effect from 01.06.2015), an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicithe interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner, the order is passed without making enquiries or verification which should have been made. In the instant case, as mentioned in the preceding paragraph, it is found that the A.O passed the assessment order without making inquiries and verification which were required in facts and circumstances of the case. This nonM/s Globalworth Securities Ltd. ITA No. 620/M/2022 5 5.3 The AO shared the reasons recorded with the assessee for re-opening only in respect of penny scrip of Nivyah Infrastructure & Telecom Hence the AO glaringly omitted to deal with other 2 penny scrips rendering the order us 143(3) r.w.s 147 dated 23/12/2019 as erroneous in so far it is prejudicia" to the interest of assessee including the case of CIT Airways (1) Ltd. (2011) 331 ITR 236 (Bom) is not applicable in the instant case as the facts are distinguishable. In the instant the case was reopened by recording reasons which were approved in respect of all 3 assessment proceedings has only dealt with the transactions in respect of penny scrip of M/s. Nivyah , Further, the AO ns in remaining 2 penny scrips namely M/s. Exelon Infrastructure Ltd. and Ms. Scan Steels Ltd although information in respect of these 2 scrips formed part of the assessment order passed nd prejudicial to the interest of revenue. As per clause (a) to Explanation to Section 263 (amended by Finance effect from 01.06.2015), an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner, the order is passed without making enquiries or verification which should have been made. In the instant is found that the A.O passed the assessment order without making inquiries and verification which were required in facts and circumstances of the case. This non- verification which was required in the facts and circumstances of the case and consequent losserroneous in so far it is prejudicial to the interest of revenue.regard, the judgment of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Limited v. CIT (2000] 243 ITR 83 (SC) may be referred to wherein the Hon'ble Court heldThe scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Rovenue. If due to an erroneous order of the Incomethe revenue is losing cortainly be prejudicial to the interests of the revenue. The phrase prejudicial to the interests of the revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer."It was further held by the Apex Court that the assessment orders was erroneous if the assessing officer passed the assessment order without applying his mind to the case in all perspective. In view of the aforesaid judgment of the Apex Court, if assessment has been madapplication of mind in all perspective and there is consequential loss of revenue the order becomes erroneous in so far it is prejudicial to the interest of revenue.6. In view of the facts mentioned in the preceding paragraphs, the assessment orconsidered erroneous in so far it isTherefore, the assessment order u/s. 143(3) r.w.s 147 dated 23.12.2019 is set aside and restored to the file of Assessing Offii.e. to examine share transactions in other 2 penny scrips namely M/s. M/s Globalworth Securities Ltd. verification which was required in the facts and circumstances of the case and consequent loss of revenue has rendered the assessment order erroneous in so far it is prejudicial to the interest of revenue.regard, the judgment of the Hon'ble Supreme Court in the case of Industrial Co. Limited v. CIT (2000] 243 ITR 83 (SC) may be erred to wherein the Hon'ble Court held The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Rovenue. If due to an erroneous order of the Incomethe revenue is losing tax lawfully payable by a person, it will cortainly be prejudicial to the interests of the revenue. The phrase prejudicial to the interests of the revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer." r held by the Apex Court that the assessment orders was erroneous if the assessing officer passed the assessment order without applying his mind to the case in all perspective. In view of the aforesaid judgment of the Apex Court, if assessment has been madapplication of mind in all perspective and there is consequential loss of revenue the order becomes erroneous in so far it is prejudicial to the interest of revenue. 6. In view of the facts mentioned in the preceding paragraphs, the assessment order passed u/s. 143(3) r.w.s 147 dated 23.12.2019 is considered erroneous in so far it is prejudicial to the interest of revenue. Therefore, the assessment order u/s. 143(3) r.w.s 147 dated 23.12.2019 is set aside and restored to the file of Assessing Officer on the above issue i.e. to examine share transactions in other 2 penny scrips namely M/s. M/s Globalworth Securities Ltd. ITA No. 620/M/2022 6 verification which was required in the facts and circumstances of the of revenue has rendered the assessment order erroneous in so far it is prejudicial to the interest of revenue. In this regard, the judgment of the Hon'ble Supreme Court in the case of Industrial Co. Limited v. CIT (2000] 243 ITR 83 (SC) may be The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Rovenue. If due to an erroneous order of the Income-tax Officer, tax lawfully payable by a person, it will cortainly be prejudicial to the interests of the revenue. The phrase prejudicial to the interests of the revenue has to be read in conjunction with an erroneous order passed by the Assessing r held by the Apex Court that the assessment orders was erroneous if the assessing officer passed the assessment order without applying his mind to the case in all perspective. In view of the aforesaid judgment of the Apex Court, if assessment has been made without application of mind in all perspective and there is consequential loss of revenue the order becomes erroneous in so far it is prejudicial to the 6. In view of the facts mentioned in the preceding paragraphs, the der passed u/s. 143(3) r.w.s 147 dated 23.12.2019 is prejudicial to the interest of revenue. Therefore, the assessment order u/s. 143(3) r.w.s 147 dated 23.12.2019 cer on the above issue i.e. to examine share transactions in other 2 penny scrips namely M/s. Exelon Infrastructure Ltd. and Ms. Scan Steels Ltd., and the AO is directed to pass a fresh assessment order after giving due opportunity to the assessee. The AO concomitant that arises out of the same in his order.3. Before us, the Ld. Counsel of the assessee filed a paperbook containing pages 1 to 11 and copy of the case laws relied upon by him. 4. We have heard rival submdispute and perused the relevant material available on record. Before us, the Ld. Departmental Representative (DR) submitted that initially the assessment was reopened in view of share transaction for one scrip namely M/s Nivyah Infrastructure & Telecom Services Ltd. amounting to information in respect of trading namely “Exelon Infrastructure Ltd. (Ltd. (₹1,98,000/-)” was received and therefore, recorded another reasons to believe that income escaped in relation M/s Globalworth Securities Ltd. Exelon Infrastructure Ltd. and Ms. Scan Steels Ltd., and the AO is directed to pass a fresh assessment order after giving due opportunity to the assessee. The AO may also examine and incorporate such concomitant that arises out of the same in his order.” Before us, the Ld. Counsel of the assessee filed a paperbook to 11 and copy of the case laws relied upon by We have heard rival submission of the parties on the issueand perused the relevant material available on record. Before us, the Ld. Departmental Representative (DR) submitted that initially the assessment was reopened in view of information of r one scrip namely M/s Nivyah Infrastructure & Telecom Services Ltd. amounting to ₹49,90,870/-information in respect of trading by the assessee in other two scrip Exelon Infrastructure Ltd. (₹60,31,839/-)” and was received and therefore, the Assessing Officeranother reasons to believe that income escaped in relation M/s Globalworth Securities Ltd. ITA No. 620/M/2022 7 Exelon Infrastructure Ltd. and Ms. Scan Steels Ltd., and the AO is directed to pass a fresh assessment order after giving due opportunity to may also examine and incorporate such Before us, the Ld. Counsel of the assessee filed a paperbook to 11 and copy of the case laws relied upon by ission of the parties on the issue-in-and perused the relevant material available on record. Before us, the Ld. Departmental Representative (DR) submitted that information of the r one scrip namely M/s Nivyah Infrastructure & -. Subsequently, in other two scrip and “Scan Steels the Assessing Officer another reasons to believe that income escaped in relation to transaction in above three scrips. These reasons were duly approved by the appropriate authorities. However, the Assessing Officer shared the reasons recorded with the assessee for reopening only in respect of the scrips of M/s Nivyah Infrastructure & Telecom Services Ltd. This fact has been duly recorded by the Ld. PCIT also in his para 5.3 reproduced above. We find that the Lnowhere pointed out lack of inquiry or any inadequate inquiry in respect of the scrip namely M/s Nivyah Infrastructure & Telecom Services Ltd. The Ld. PCIT has only pointed out that the Assessing Officer has not carried out the inquiry in respenamely Exelon Infrastructure Ltd. and Scan Steels Ltd. The issuethus arise in this case isby the Assessing Officer to the assessee. If the Assessing Officer has only supplied set of reasons recorded consisting only one scrip M/s Nivyah Infrastructure & Telecom Services Ltd. or he has supplied the reasons recorded consisting of three scrips which were duly M/s Globalworth Securities Ltd. above three scrips. These reasons were duly approved by the appropriate authorities. However, the Assessing fficer shared the reasons recorded with the assessee for reopening only in respect of the scrips of M/s Nivyah Infrastructure & Telecom Services Ltd. This fact has been duly recorded by the Ld. PCIT also in his para 5.3 reproduced above. We find that the Lnowhere pointed out lack of inquiry or any inadequate inquiry in respect of the scrip namely M/s Nivyah Infrastructure & Telecom Services Ltd. The Ld. PCIT has only pointed out that the Assessing Officer has not carried out the inquiry in respect of other two scrips namely Exelon Infrastructure Ltd. and Scan Steels Ltd. The issuethus arise in this case is, which reasons recorded have been supplied by the Assessing Officer to the assessee. If the Assessing Officer has only supplied set of reasons recorded consisting only one scrip M/s Nivyah Infrastructure & Telecom Services Ltd. or he has supplied ns recorded consisting of three scrips which were duly M/s Globalworth Securities Ltd. ITA No. 620/M/2022 8 above three scrips. These reasons were duly approved by the appropriate authorities. However, the Assessing fficer shared the reasons recorded with the assessee for reopening only in respect of the scrips of M/s Nivyah Infrastructure & Telecom Services Ltd. This fact has been duly recorded by the Ld. PCIT also in his para 5.3 reproduced above. We find that the Ld. PCIT has nowhere pointed out lack of inquiry or any inadequate inquiry in respect of the scrip namely M/s Nivyah Infrastructure & Telecom Services Ltd. The Ld. PCIT has only pointed out that the Assessing ct of other two scrips namely Exelon Infrastructure Ltd. and Scan Steels Ltd. The issue, which reasons recorded have been supplied by the Assessing Officer to the assessee. If the Assessing Officer has only supplied set of reasons recorded consisting only one scrip M/s Nivyah Infrastructure & Telecom Services Ltd. or he has supplied ns recorded consisting of three scrips which were duly approved by the appropriate authorities. The Ld. DR was accordingly asked to file a report the reasons recorded which were duly approved by the appropriate authorities were supplied to the assessee. Despite providing sufficient opportunity of being heard, substantiate whether the reasons which appropriate authority,beyond doubt that the assessee was which were in relation to only one scrip namely M/s Nivyah Infrastructure & Telecom Services Ltd. Obviously, this reason believe which was supplied to the assessee by the appropriate authority. Further, the scrip referred into the reasons recorded which the Assessing Officer has supplied to the assessee, the AO has made no addition in the reassessment order. In such circumstances, in view of decision of the Hon’ble Bombay High Court in the case of CIT v. Jet Airways (I) Ltd. (2011) 331 ITR 236 M/s Globalworth Securities Ltd. approved by the appropriate authorities. The Ld. DR was accordingly asked to file a report from the Assessing Officer whether the reasons recorded which were duly approved by the appropriate es were supplied to the assessee. Despite providing sufficient opportunity of being heard, the Ld. DRsubstantiate whether the reasons which were duly approveappropriate authority, were supplied to the assessee. Thus it is hat the assessee was supplied with the reasonswhich were in relation to only one scrip namely M/s Nivyah Infrastructure & Telecom Services Ltd. Obviously, this reason supplied to the assessee was not duly approved authority. Further, the scrip referred into the reasons recorded which the Assessing Officer has supplied to the has made no addition in the reassessment order. In such circumstances, in view of decision of the Hon’ble Bombay High CIT v. Jet Airways (I) Ltd. (2011) 331 ITR 236 M/s Globalworth Securities Ltd. ITA No. 620/M/2022 9 approved by the appropriate authorities. The Ld. DR was the Assessing Officer whether the reasons recorded which were duly approved by the appropriate es were supplied to the assessee. Despite providing the Ld. DR could not were duly approved by the were supplied to the assessee. Thus it is with the reasons, which were in relation to only one scrip namely M/s Nivyah Infrastructure & Telecom Services Ltd. Obviously, this reason to not duly approved authority. Further, the scrip referred into the reasons recorded which the Assessing Officer has supplied to the has made no addition in the reassessment order. In such circumstances, in view of decision of the Hon’ble Bombay High CIT v. Jet Airways (I) Ltd. (2011) 331 ITR 236 (Bom), the Assessing Officer is precluded from making addition in respect of issues other than the issue onreopened. It is settled law in view of decision of the Hon’ble Supreme Court in the case of (2003) 259 ITR 19 (SC)provide copy of the reasons recorded duly approved three scrips) whereas the Assessing Officer has supplied reasons (i.e. containing one scripcompleted, is not in accordance order itself deserved to be quashed and the Ld. PCIT cannot revive order which itself is illegal. The Hon’ble Delhi High Court in the case of Commissioner of Income21 taxmann.com 155 (Delhiwhere assessment was reopened on the issue of investment and FDR whereas the Ld. PCIT invoked proceedings u/s 263 of the Act M/s Globalworth Securities Ltd. he Assessing Officer is precluded from making addition in f issues other than the issue on which the assessment was reopened. It is settled law in view of decision of the Hon’ble Supreme Court in the case of GKN Driveshaft (India) Ltd. v. ITO (2003) 259 ITR 19 (SC), the Assessing Officer wasprovide copy of the reasons recorded duly approved whereas the Assessing Officer has supplied containing one scrip) and therefore, assessment in accordance with the law. The reassessment order itself deserved to be quashed and the Ld. PCIT cannot revive order which itself is illegal. The Hon’ble Delhi High Court in the case Commissioner of Income-tax v. Software Consultants [2012] 21 taxmann.com 155 (Delhi) set aside the revision proceedings where assessment was reopened on the issue of investment and FDR whereas the Ld. PCIT invoked proceedings u/s 263 of the Act M/s Globalworth Securities Ltd. ITA No. 620/M/2022 10 he Assessing Officer is precluded from making addition in which the assessment was reopened. It is settled law in view of decision of the Hon’ble GKN Driveshaft (India) Ltd. v. ITO was required to provide copy of the reasons recorded duly approved (i.e. containing whereas the Assessing Officer has supplied incorrect and therefore, assessment with the law. The reassessment order itself deserved to be quashed and the Ld. PCIT cannot revive order which itself is illegal. The Hon’ble Delhi High Court in the case tax v. Software Consultants [2012] set aside the revision proceedings where assessment was reopened on the issue of investment and FDR whereas the Ld. PCIT invoked proceedings u/s 263 of the Act for non-verification of receipt of share application money. The relevant finding of the “14. For exercise of power under Section 263 of the Act, it is mandatory that the order passed by the Assessing Officer should be erroneous and prejudicial to the interest of the Revenue. In the present case, the Assessing Officthe time of issue of notice under Section 148 of the Act. This position is not disputed and disturbed by the Commissioner of Income Tax in his order under Section 263 of the Act. Sequitur is that thecould not have made an addition on account of share application money in the assessment proceedings under Section 147/148. Accordingly, the assessment order is not erroneous. Thus, the Commissioner of Income Tax could not have exercised 4.1 Further, the Tribunal in the case of Aishwarya Rai Bachchan v. PCIT [2022] 135 taxmann.com 225 (Mumbaiillegal order cannot be subject matter u/s 263 proceedings. The relevant finding of the Tribunal is reproduced as under:“4.1. One more excruciating fact that needs to be addressed in the instant case is that the ld. PCIT herein is only seeking to revise the order passed by the ld. AO u/s.143(3) r.w.s. 147 of the Act dated 12/12/2018. In the said re-assessment proceedings, the ld. AO had not even made any addition despite the fact that he had reason to believe that income of M/s Globalworth Securities Ltd. verification of receipt of share application money. The relevant finding of the decision is reproduced as under :14. For exercise of power under Section 263 of the Act, it is mandatory that the order passed by the Assessing Officer should be erroneous and prejudicial to the interest of the Revenue. In the present case, the Assessing Officer did not make any addition for the reasons recorded at the time of issue of notice under Section 148 of the Act. This position is not disputed and disturbed by the Commissioner of Income Tax in his order under Section 263 of the Act. Sequitur is that the Assessing Officer could not have made an addition on account of share application money in the assessment proceedings under Section 147/148. Accordingly, the assessment order is not erroneous. Thus, the Commissioner of Income Tax could not have exercised jurisdiction under Section 263 of the Act.Further, the Tribunal in the case of Aishwarya Rai Bachchan v. PCIT [2022] 135 taxmann.com 225 (Mumbai-Trib.) has held that illegal order cannot be subject matter u/s 263 proceedings. The the Tribunal is reproduced as under:4.1. One more excruciating fact that needs to be addressed in the instant case is that the ld. PCIT herein is only seeking to revise the order passed by the ld. AO u/s.143(3) r.w.s. 147 of the Act dated 12/12/2018. assessment proceedings, the ld. AO had not even made any addition despite the fact that he had reason to believe that income of M/s Globalworth Securities Ltd. ITA No. 620/M/2022 11 verification of receipt of share application money. The on is reproduced as under : 14. For exercise of power under Section 263 of the Act, it is mandatory that the order passed by the Assessing Officer should be erroneous and prejudicial to the interest of the Revenue. In the present case, the er did not make any addition for the reasons recorded at the time of issue of notice under Section 148 of the Act. This position is not disputed and disturbed by the Commissioner of Income Tax in his Assessing Officer could not have made an addition on account of share application money in the assessment proceedings under Section 147/148. Accordingly, the assessment order is not erroneous. Thus, the Commissioner of Income jurisdiction under Section 263 of the Act.” Further, the Tribunal in the case of Aishwarya Rai Bachchan v. Trib.) has held that illegal order cannot be subject matter u/s 263 proceedings. The the Tribunal is reproduced as under: 4.1. One more excruciating fact that needs to be addressed in the instant case is that the ld. PCIT herein is only seeking to revise the order passed by the ld. AO u/s.143(3) r.w.s. 147 of the Act dated 12/12/2018. assessment proceedings, the ld. AO had not even made any addition despite the fact that he had reason to believe that income of Rs.11,55,330/-which was sought to be taxed u/s.56 of the Act asrecorded. Hence, when the very basis of reasons recorded by the ld. AO was ultimately not added by the ld. AO in the rethen the primary reason to believe that income of the assessee had escaped assessment fails andvalid order in the eyes of law. The same is to be declared as void ab initio. Reliance in this regard was rightly placed on the decision of the Hon‟ble Jurisdictional High Court in the case of Jet Airways reported331 ITR 236. When an assessment framed by the ld. AO is unsustainable in the eyes of law, the said invalid and illegal order cannot be subject matter of section 263 proceedings. On this count also, the revision order passed by the ld. PCIT u/s.263 of t4.2 In view of aforesaid discussion, we quashrevision order passed by the Ld. PCIT. Accordingly, the grounds raised by the assessee are allowed. 5. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court in Sd/- (SANDEEP SINGH KARHAILJUDICIAL MEMBERMumbai; Dated: 14/10/2022 Dragon Legal/Rahul Sharma, Sr. P.S. M/s Globalworth Securities Ltd. - had escaped assessment in the hands of the assessee which was sought to be taxed u/s.56 of the Act as per the reasons recorded. Hence, when the very basis of reasons recorded by the ld. AO was ultimately not added by the ld. AO in the re-assessment proceedings, then the primary reason to believe that income of the assessee had escaped assessment fails and such re-assessment cannot be treated as a valid order in the eyes of law. The same is to be declared as void ab initio. Reliance in this regard was rightly placed on the decision of the ‟ble Jurisdictional High Court in the case of Jet Airways reported331 ITR 236. When an assessment framed by the ld. AO is unsustainable in the eyes of law, the said invalid and illegal order cannot be subject matter of section 263 proceedings. On this count also, the revision order passed by the ld. PCIT u/s.263 of the Act deserves to be quashed.aforesaid discussion, we quash revision order passed by the Ld. PCIT. Accordingly, the grounds raised by the assessee are allowed. In the result, the appeal filed by the assessee is allowed. nounced in the open Court in 14/10/2022. Sd/-SANDEEP SINGH KARHAIL) (OM PRAKASH KANTJUDICIAL MEMBER ACCOUNTANT MEMBER M/s Globalworth Securities Ltd. ITA No. 620/M/2022 12 had escaped assessment in the hands of the assessee per the reasons recorded. Hence, when the very basis of reasons recorded by the ld. AO assessment proceedings, then the primary reason to believe that income of the assessee had assessment cannot be treated as a valid order in the eyes of law. The same is to be declared as void ab initio. Reliance in this regard was rightly placed on the decision of the ‟ble Jurisdictional High Court in the case of Jet Airways reported in 331 ITR 236. When an assessment framed by the ld. AO is unsustainable in the eyes of law, the said invalid and illegal order cannot be subject matter of section 263 proceedings. On this count also, the revision order he Act deserves to be quashed.” the impugned revision order passed by the Ld. PCIT. Accordingly, the grounds In the result, the appeal filed by the assessee is allowed. /10/2022. - OM PRAKASH KANT) ACCOUNTANT MEMBER Copy of the Order forwarded to1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// M/s Globalworth Securities Ltd. Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary) ITAT, MumbaiM/s Globalworth Securities Ltd. ITA No. 620/M/2022 13 BY ORDER, (Sr. Private Secretary) ITAT, Mumbai