Radhika Infrastructure, Surat V. PCIT (Central), Circle, Surat

ITA 66/SRT/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3017 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 20-05-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Unexplained expenditure; Business income; Income from undisclosed sources; Document seized; Principle of natural justice; Period of limitation; Initiation of penalty proceedings; Time period of passing order; Bogus loan; Documents seized; TDS; Bogus
• Section: 263; 28; 40A(3); 139; 143(3); 142(1); 133A; 195; 271D; 271E; 143(2); 207; 192; 139(1); 43; 40a(ia); 72; 13; 22; 153C; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA NOS.66, 67 & 68/SRT/2021 A.Y: 2015-16 TO 2017-18 (H EARING IN VIRTUAL COURT) M/S. RADHIKA INFRASTRUCTURE, FINAL PLOT 42, TPS NO. 42, RADHIKA OPTIMA, YAMUNA CHOWK, MOTA VARACHHA, SURAT. PAN: AASFR 3294 F VS. THE PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL, SURAT. APPLICANT /ASSESSEE RESPONDENT/ REVENUE ASSESSEE BY SHRI RASESH SHAH CA REVENUE BY SHRI RITESH MISHRA CIT-DR DATE OF HEARING 15.09.2021 DATE OF PRONOUNCEMENT 11.10.2021 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER : 1. THESE THREE APPEALS BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. PRINCIPAL COMMISSIONER OF INCOME TAX [LD. PR.CIT, CENTRAL, SURAT PASSED UNDER SECTION 263 OF THE ACT DATED 26.03.2021 FOR THE ASSESSMENT YEAR (AY) 2015-16 AND DATED 30.03.2021 FOR AY 2017-18. IN ALL APPEALS, THE ASSESSEE HAS RAISED COMMON GROUNDS OF APPEAL, THE LD PCIT REVISED ASSESSMENT ORDER ON CERTAIN COMMON ISSUES EXCEPT VARIATIONS OF FIGURES, THEREFORE, WITH THE CONSENT OF PARTIES, ALL APPEALS WERE CLUBBED, HEARD AND ARE DECIDED BY A CONSOLIDATED ORDER TO AVOID THE CONFLICTING DECISION. THE ASSESSEE IN ALL APPEALS HAVE RAISED FOLLOWING GROUNDS OF APPEAL (IDENTICAL IN ALL SUBJECT ASSESSMENT YEARS): RADHIKA INFRASTRUCTURE, SURAT 2 1.ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED PR.CIT HAS ERRED IN PASSING THE ORDER U/S. 263, ALTHOUGH THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S 153C OF THE I. T. ACT, 1961 WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2. IT IS THEREFORE PRAYED THAT ABOVE ORDER PASSED BY PR. CIT U/S. 263 MAY PLEASE BE QUASHED OR MODIFIED AS YOUR HONOURS DEEM IT PROPER. 3. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM. THE ASSESSEE IS ENGAGED IN THE CONSTRUCTION AND DEVELOPMENT ACTIVITIES. A SURVEY ACTION UNDER SECTION 133A OF THE ACT WAS CARRIED OUT ON ASSESSEES BUSINESS PREMISES. A SURVEY ACTION WAS CARRIED OUT IN SRK GROUP, SURAT ON 19.07.2016. THE ASSESSEE IS PART OF SRK GROUP. DURING THE COURSE OF SEARCH AND SURVEY PROCEEDINGS CERTAIN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. DURING THE SEARCH, CERTAIN ENTRIES PERTAINING TO THE ASSESSEE WERE ALSO FOUND. CONSEQUENT UPON, NOTICE UNDER SECTION 153C DATED 29.11.2018 WAS ISSUED ON ASSESSEE FIRM FOR VARIOUS ASSESSMENT YEARS INCLUDING FOR THE SUBJECT ASSESSMENT YEAR. IN RESPONSE TO NOTICE UNDER SECTION 153C OF THE ACT, THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE A.Y. 2015-16 & 2016-17 ON 07.12.2018. THE ASSESSING OFFICER (AO) RECORDED THAT NOTICE UNDER SECTION 142(1) ALONG WITH DETAILED QUESTIONNAIRES WERE ISSUED TO ASSESSEE ON 13.12.2018 WHICH WAS DULY SERVED UPON THE ASSESSEE. IN RESPONSE THERETO, THE ASSESSEE FILED DETAILED RADHIKA INFRASTRUCTURE, SURAT 3 REPLY. THE ASSESSEE ALSO FURNISHED RELEVANT DETAILS AND INFORMATION AS REQUIRED BY THE AO. THE AO AFTER PROVIDING ADEQUATE OPPORTUNITY AND HEARING THE SUBMISSION OF THE ASSESSEE ACCEPTED THE RETURN OF INCOME FILED BY ASSESSEE. THE AO PASSED THE ASSESSMENT ORDER UNDER SECTION 143(3) R.W.S 143C OF THE ACT AFTER OBTAINING PRIOR APPROVAL OF JOINT COMMISSIONER OF INCOME TAX (LD. JCIT) CENTRAL RANGE PASSED THE ASSESSMENT ORDER ACCORDINGLY ON 29.12.2018. 3. SO FAR AS AY 2017-18, IS CONCERNED THE ASSESSEE FILED RETURN OF INCOME UNDER SECTION 139(1) ON 14.12.2018 DECLARING NIL INCOME. THE CASE WAS SELECTED FOR SCRUTINY. THE AO RECORDED THAT NOTICE UNDER SECTION 143(2) AND 142(1) WAS SERVED ON THE ASSESSEE. THE ASSESSEE ALSO FURNISHED RELEVANT DETAILS AND INFORMATION AS REQUIRED BY THE AO. THE AO AFTER PROVIDING ADEQUATE OPPORTUNITY AND HEARING THE SUBMISSION OF THE ASSESSEE ACCEPTED THE RETURN OF INCOME FILED BY ASSESSEE. THE AO PASSED THE ASSESSMENT ORDER UNDER SECTION 143(3). 4. SUBSEQUENTLY, THE ASSESSMENT ORDER IN ALL THREE ASSESSMENT YEARS WERE REVISED BY LD. PR.CIT BY EXERCISING IT POWER UNDER SECTION 263 VIDE ORDER DATED 26.03.2021. THE LD. PCIT BEFORE PASSING THE ORDER UNDER SECTION 263 OF THE ACT, ISSUED SEPARATE SHOW CAUSE NOTICES UNDER SECTION 263 OF THE ACT DATED 08.03.2021. IN THE SHOW CAUSE NOTICE, THE LD. PCIT IDENTIFIED FOLLOWING COMMON ISSUES; RADHIKA INFRASTRUCTURE, SURAT 4 UNDERSTATEMENT OF INCOME OF THE PROJECT ( IN AY 2015-16, 2016-17 & 2017-18), NON-VERIFICATION OF CASH LOAN OF RS.12.16 CRORE ( IN AY 2015-16, 2016- 17 & 2017-18), UNACCOUNTED CASH PAYMENT FOR PURCHASE OF LOAN ( IN AY 2015-16, 2016- 17), NON-DISALLOWANCE UNDER SECTION 40A(3) ( IN AY 2015-16, 2016-17 & 2017-18), NON-INITIATION OF PENALTY UNDER SECTION 271D OF THE ACT ( IN AY 2015-16, 2016-17 & 2017-18), NON-MENTIONING REFERENCE OF SEIZED DOCUMENT/EVIDENCE IN THE SATISFACTION NOTE UNDER SECTION 153C OF THE ACT (IN AY 2015-16, 2016-17), VALIDITY OF DISCLOSURE MADE UNDER INCOME TAX DISCLOSURE SCHEME (IDS) ( IN AY 2015-16, 2016-17 & 2017-18), NON VERIFICATION OF UNSECURED LOAN ( IN AY 2017-18 ONLY) AND NON VERIFICATION OF INVESTMENT IN IMMOVABLE PROPERTY (IN AY 2017- 18 ONLY). 5. THE ASSESSEE FILED ITS SEPARATE REPLIES DATED 24.03.2021 IN ALL CASES. IN THE REPLY, THE ASSESSEE BESIDES MAKING REPLY ON VARIOUS ISSUES IDENTIFIED BY LD. PCIT, THE ASSESSEE EXPLAINED THAT THEY ARE ENGAGED IN THE ACTIVITY OF CONSTRUCTION, DEVELOPMENT, SALE OF PROJECT, RADHIKA OPTIMA AS FP NO.42, TP NO.24, YAMUNA CHOWK, MOTA VARACHHA, SURAT. THE ASSESSEE FILED ITS RETURN OF INCOME UNDER SECTION 139 OF THE ACT FOR SUBJECT ASSESSMENT YEAR 2015-16 AND 2016-17 IN TIME DECLARING NIL INCOME. A SURVEY WAS CARRIED OUT ON THE ASSESSEE GROUP ALONG WITH A SEARCH IN CASE OF SRK GROUP. THERE WAS ONLY SURVEY ACTION ON THE ASSESSEE. DESPITE RADHIKA INFRASTRUCTURE, SURAT 5 CARRYING OUT THE SURVEY ACTION, THE AO ISSUED NOTICE UNDER SECTION 153C OF THE ACT ON 29.11.2018 FOR AY 2015-16 & 2016-17. THE ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2015-16 & 2016-17 ON 07.12.2018 DECLARING NIL INCOME. THE ASSESSEE FURTHER STATED THAT BEFORE ISSUING NOTICE UNDER SECTION 153C FOR AY 2015-16 & 2016-17 THEY HAVE FILED DECLARATION UNDER IDS DECLARING UNDISCLOSED INCOME OF RS.1.70 CRORE AND RS.1.80 CRORE RESPECTIVELY. ACCORDINGLY, THE ASSESSEE MADE A TOTAL DISCLOSURE OF RS.3.50 CRORE UNDER IDS. THE CERTIFICATE OF ACCEPTANCE OF DISCLOSURE MADE BY ASSESSEE WAS ALSO FURNISHED. THE ASSESSEE FURTHER STATED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED COMPLETE BOOKS OF ACCOUNTS OF UNACCOUNTED TRANSACTION BASED ON MATERIAL IMPOUNDED DURING THE COURSE OF SURVEY. AS PER THE IMPOUNDED MATERIAL, PROFIT OF RS.1.69 CRORE FOR THE A.Y. 2015-16 AND RS.1.66 CRORE FOR THE A.Y. 2016- 17 WAS COMPUTED, ACCORDINGLY, THE ASSESSEE MADE A DECLARATION OF IDS CONSIDERING THESE FIGURES OF PROFIT. DURING THE ASSESSMENT, THE AO ISSUED NOTICE UNDER SECTION 142(1) ON 03.12.2018. THE ASSESSEE FILED DETAILED EXPLANATION VIDE TWO DIFFERENT LETTERS IN THE COURSE OF ASSESSMENT PROCEEDINGS. ALL DETAILS WERE VERIFIED BY AO AFTER DISCUSSING WITH THE REPRESENTATIVE OF ASSESSEE. SUCH OBSERVATION ABOUT VERIFICATION OF DETAILS WAS MADE BY AO IN THE ASSESSMENT ORDER ITSELF. ACCORDINGLY, AN ASSESSMENT ORDER WAS FRAMED ON 29.12.2018 DETERMINED TOTAL INCOME AT NIL INCOME AFTER OBTAINING APPROVAL OF LD. JOINT COMMISSIONER OF INCOME RADHIKA INFRASTRUCTURE, SURAT 6 TAX (JCIT). THE ASSESSEE FURTHER STATED THAT SURVEY ACTION WAS CONDUCTED IN THE YEAR RELEVANT FOR A.Y. 2017-18, THE ASSESSEE FILED DECLARATION UNDER IDS ON 30.09.2016 DISCLOSING OF INCOME OF RS.3.50 CRORE FOR THE A.Y. 2015-16 & 2016-17. THE IDS WAS ACCEPTED BY DESIGNATED AUTHORITY I.E. LD. PCIT ON 14.10.2017. THE AO INITIATED THE ASSESSMENT PROCEEDINGS WHILE ISSUING QUESTIONNAIRE ON 03.12.2018, WHICH WAS DULY COMPLIED BY ASSESSEE. THE INCOME ON THE BASIS OF IMPOUNDED MATERIAL WAS QUANTIFIED LESS THAN THE INCOME DECLARED UNDER IDS. THE INCOME DECLARED UNDER IDS DOES NOT FORM PART OF TOTAL INCOME AS PER SECTION 188 OF THE FINANCE ACT, 2016 AND THEREFORE, THE ASSESSEE REQUESTED THE AO TO DROP THE ASSESSMENT PROCEEDINGS. THE AO DID NOT ACCEPT THE CONTENTION OF ASSESSEE AND CARRIED OUT FULL SCRUTINY AFTER VERIFYING THE FACT THAT DISCLOSURE MADE UNDER IDS WAS MUCH HIGHER THAN THE INCOME REFLECTED IN THE IMPOUNDED MATERIAL, THE AO PASSED THE ASSESSMENT ORDER. 6. ON THE ISSUE OF APPLICABILITY OF SECTION 40A(3) / 40A (IA), SECTION 68/69 OF THE ACT, THE ASSESSEE SUBMITTED THAT INCOME DISCLOSED UNDER IDS DOES NOT FORM PART OF TOTAL INCOME AS PER SECTION 188 OF THE FINANCE ACT, 2016. FURTHER, SECTION 195 OF FINANCE ACT, 2016 HAS LAID DOWN THE PROVISION OF SECTION 119, SECTION 138 AND 189 SHALL BE APPLICABLE IN CASE OF DECLARATION UNDER IDS ACCORDINGLY, AND OTHER PROVISIONS ARE NOT APPLICABLE. ON THE OBSERVATION OF LD. PCIT THAT AO FAILED TO CARRIED OUT PROPER ENQUIRY ON CERTAIN ISSUES, THE ASSESSEE STATED THAT DURING THE COURSE OF ASSESSMENT RADHIKA INFRASTRUCTURE, SURAT 7 PROCEEDINGS CERTAIN ISSUES WAS RAISED WHICH HAS BEEN CONSIDERED BY AO WHICH WERE REPRODUCED IN THE REPLY OF ASSESSEE. THE ASSESSEE ALSO STATED THAT ASSESSEE ON THE APPLICABILITY OF SECTION 40A(3), WHICH WAS IDENTIFIED BY LD. PCIT THAT IT HAS NOT BEEN CONSIDERED IN RESPECT OF VARIOUS CONTRACTUAL PAYMENT MADE BY ASSESSEE WHICH ARE UNACCOUNTED, THE ASSESSEE EXPLAINED THAT ALL ACCOUNTED RECEIPTS AND PAYMENTS AS REFLECTED IN THE IMPOUNDED MATERIAL STANDS COVERED BY THE INCOME DISCLOSED BY ASSESSEE FIRM UNDER IDS AND THE PROVISION OF SECTION 40A(3) ARE NOT APPLICABLE IN RESPECT OF INCOME DISCLOSED UNDER IDS. THE ASSESSEE IN ITS REPLY ALSO REPRODUCED THE CONTENTS OF THE REPLY FILED BEFORE THE AO ON VARIOUS ISSUES RAISED IN PARA -5 OF SHOW CAUSE NOTICE BY LD PCIT. 7. ON THE APPLICABILITY OF SECTION 269SS OF THE ACT IN RESPECT OF CASH MONEY RECEIVED BY THE FIRM AND NON-INITIATION OF PENALTY UNDER SECTION 271D OF THE ACT, THE ASSESSEE EXPLAINED THAT CASH MONEY RECEIVED BY ASSESSEE FIRM ON ACCOUNT OF BOOKING AND SECTION 269SS OF THE ACT ARE NOT APPLICABLE. 8. ON THE ISSUE OF NON-REFERENCE OF SEIZED DOCUMENTS IN SATISFACTION NOTE UNDER SECTION 153C OF THE ACT THE ASSESSEE EXPLAINED THAT WHEN LD. PCIT HIMSELF IS HOLDING THE NOTICE AS WELL AS ORDER UNDER SECTION 153C OF THE ACT AS BEING ISSUED/PASSED WITHOUT THERE BEING ANY SEIZED DOCUMENT AND THUS BEING ILLEGAL, THERE IS NO QUESTION OF EXERCISING POWER OF 263 OF THE ACT. PROCEEDINGS UNDER SECTION 153C CAN BE TAKEN ONLY WHEN MATERIAL RADHIKA INFRASTRUCTURE, SURAT 8 RELATING TO OR PERTAINING TO OR BELONGING TO ASSESSEE ARE FOUND IN THE COURSE OF SEARCH OF OTHER PERSONS. 9. ON THE ISSUE OF CO-RELATION WITH THE DISCLOSURE MADE IN IDS AS MENTIONED IN PARA 7 OF THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED BY ASSESSEE FIRM BEFORE THE AO AND THUS, THE ALLEGATION THAT AO HAS NOT VERIFIED THE CO-RELATION OF THE IMPOUNDED MATERIAL WITH THE DISCLOSURE MADE IS ABSOLUTELY BASELESS. THE ASSESSEE CONTENDED THAT THE AO AFTER VERIFYING THAT THE INCOME DISCLOSED UNDER IDS IN ACCESS OF THE INCOME REFLECTED IN THE IMPOUNDED MATERIAL, THE AO PASSING THE ASSESSMENT ORDER AND THUS, THERE IS NO VIOLATION ON THE PART OF AO TO CARRY OUT NECESSARY ENQUIRY. 10. ON THE ISSUE OF NON-VERIFICATION OF UNSECURED LOAN AND INVESTMENT IN IMMOVABLE PROPERTY (ISSUE IN AY 2017-18 ONLY), THE ASSESSEE SUBMITTED THAT DETAILS OF UNSECURED LOAN BY PROVIDING NAMES, ADDRESS, PAN AND AMOUNT WAS FURNISHED TO THE AO IN TAX AUDIT REPORT. FURTHER THE DETAILS OF LOAN AND ADVANCES GIVEN HAVE BEEN FURNISHED TO THE AO IN RESPONSE TO THE NOTICE UNDER SECTION 142(1). FURTHER COPY OF THE PURCHASE DEED OF LAND SHOWING CONSIDERATION OF RS. 2.34 CRORE WAS ALSO FURNISHED TO THE AO. 11. THE ASSESSEE IN ITS REPLY FURTHER EXPLAINED THAT TWIN CONDITION THAT ASSESSMENT ORDER SHOULD BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE SHOULD BE SATISFIED CUMULATIVELY. NONE OF THESE CONDITIONS ARE SATISFIED IN THIS CASE. THE REVISION PROCEEDINGS CAN BE EXERCISED ONLY IN CASE OF LACK OF ENQUIRY AND NOT IN INADEQUATE ENQUIRY. THE ASSESSEE RELIED RADHIKA INFRASTRUCTURE, SURAT 9 UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN CIT VS. GABRIEL INDIA LTD 203 ITR 108 (BOMBAY) ON THE POINT OF DISTINCTION ON LACK OF ENQUIRY AND INADEQUATE ENQUIRY AND HAD SUBMITTED THAT LD. PCIT CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING ENQUIRIES WHICH ARE ALREADY CONCLUDED. THE ASSESSEE ALSO RELIED ON VARIOUS CASE LAWS. 12. THE LD. PCIT RECORDED THAT ASSESSEE FILED WRITTEN SUBMISSION ALONG WITH POINT WISE EXPLANATION THROUGH ITBP PORTAL VIDE LETTER DATED 24.03.2021 [PARA 3 OF THE REVISION ORDER]. THE SOME OF THE CONTENTS OF REPLY OF THE ASSESSEE IS RECORDED IN PARA 4 OF THE ORDER OF LD. PCIT. THE LD. PCIT AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD THAT ASSESSEE SIMPLY CONSIDERED THE NET FIGURE OF UNDISCLOSED RECEIPT AND EXPENSES WITHOUT COMPUTING UNDISCLOSED INCOME CHARGEABLE TAX AS PER PROVISIONS OF IDS- 2016. THE LD. PCIT HELD THAT THIS WOULD HAVE ENTAILED COMPUTING THE BUSINESS INCOME AFTER MAKING VARIOUS DISALLOWANCES AS PER PROVISION OF SECTION 28 TO 43 AND THE ADDITION UNDER SECTION 68/69 OF THE ACT. THE SURVEY WAS CARRIED OUT ON 19.07.2016 AND DECLARATION OF IDS WAS MADE ON 30.09.2016, THUS, THE AO FAILED TO EXAMINE THE IMPLICATION OF CASH TRANSACTION ON THE TAX LIABILITY AND PENAL CONSEQUENCES OF ASSESSMENT YEAR UNDER CONSIDERATION. EVEN THE ASSESSEE DELIBERATELY NOT COVERED THE ABOVE ANOMALIES IN THE PETITION OF IDS AND THEREBY AVOIDED TO PAY THE LEGITIMATE TAX LIABILITIES. THE CONTENTION OF ASSESSEE THAT THERE WAS RADHIKA INFRASTRUCTURE, SURAT 10 COMPLETE APPLICATION OF MIND BY INVESTIGATION WING, AO AND RANGE HEAD WHILE PASSING THE ASSESSMENT ORDER. THIS CONTENTION OF ASSESSEE IS NOT TENABLE, AS THE INVESTIGATION WING ONLY GIVES THE FACTUAL REPORT BASED ON THE EVIDENCES GATHERED AT THE TIME OF SURVEY PROCEEDINGS AND NO CONCLUSIVE FINDINGS IS GIVEN BY INVESTIGATION WING AND THE SAME IS LEFT TO THE DISCRETION OF AO CONCERNED. ON THE SUBMISSION OF ASSESSEE THAT ORDER WAS PASSED WITH THE PRIOR APPROVAL OF LD. JCIT AND IF IS IS HELD THAT THERE IS NON-APPLICATION OF MIND BY LD. JCIT, THEN IT CANNOT BE SAID TO BE PROPER APPROVAL AND ASSESSMENT ORDER, ITSELF WOULD BECOME ILLEGAL AND CANNOT BE REVISED UNDER SECTION 263 OF THE ACT. THE LD. PCIT OBSERVED THAT NON- APPLICATION OF MIND BY LD. JCIT WHILE APPROVING THE DRAFT ASSESSMENT WILL RENDER THE ORDER ERRONEOUS, BUT SO LONG AS APPROVAL HAS BEEN GRANTED UNDER SECTION 153D OF THE ACT, IT CANNOT BE SAID TO BE ILLEGAL OR VOID-AB- INITIO AS CONTENDED BY ASSESSEE. THE LD. PCIT FURTHER HELD THAT ASSESSEE DELIBERATELY FAILED TO GIVE EMPHASIS ON THE WORD CERTAIN USED IN SHOW CAUSE NOTICE, IN THE SHOW CAUSE NOTICE IT WAS MENTIONED ON DETAILED QUESTIONNAIRE WAS ISSUED INCORPORATING THE ISSUES ARISING FROM THE SURVEY PROCEEDINGS AND RETURN OF INCOME AND THE ASSESSEE MADE CERTAIN SUBMISSION BEFORE THE AO. ASSESSEE NOWHERE MENTIONED THAT IT HAS FULLY COMPLIED WITH THE DETAILS CALLED FOR. ON THE REPLY OF DROPPING OF THE PROCEEDINGS IN VIEW OF THE SECTION 188 OF FINANCE ACT, 2016. THE LD. PCIT HELD THAT QUANTUM OF UNDISCLOSED INCOME AND UNEXPLAINED INCOME RADHIKA INFRASTRUCTURE, SURAT 11 WOULD BE MUCH MORE THAN WHAT HAD BEEN DISCLOSED BY THE ASSESSEE UNDER IDS. ON THE REPLY OF PARA 7 OF SHOW CAUSE NOTICE, WHEREIN THE ASSESSEE MADE RELIANCE ON SECTION 195, 119, 138 AND 189 OF FINANCE ACT, 2016 THAT ONCE DISCLOSURE MADE UNDER IDS, THE VIOLATION OF PROVISION OF SECTION 40A(3) / 40A(IA) AND SECTION 68/69 SEIZED TO EXIST. THE LD. PCIT HELD THAT CONTENTION OF ASSESSEE CORRECT TO THE EXTENT UNACCOUNTED INCOME, BUT IT CANNOT BE APPLIED AS THUMB RULE BY MISREPRESENTATION OR SUPPRESSION OF FACT OR INFORMATION AS CAN BE EVIDENT IN CASE OF ASSESSEE THAT QUANTUM OF UNACCOUNTED AND UNEXPLAINED INCOME BASED ON IMPOUNDED MATERIAL IS MUCH MORE THAN THE DISCLOSURE MADE UNDER IDS. THE LD. PCIT AFTER CONSIDERING THE OTHER SUBMISSION HELD THAT ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE IS PROVED BY FACT THAT ISSUE OF CASH LOAN, CASH PAYMENTS FOR PURCHASE OF LAND, ON MONEY RECEIPTS HAVE NOT BEEN VERIFIED AND INQUIRED BY AO AS IT SHOULD HAVE BEEN DONE. THE AO PASSED ASSESSMENT ORDER WITHOUT MAKING ENQUIRY OR VERIFICATION WHICH SHOULD HAVE BEEN MADE. THE LD. PCIT AFTER EXAMINING THE ADVANCE BOOKING, PURCHASE OF MOVABLE PROPERTY HELD THAT IT ATTRACT THE PENALTY UNDER SECTION 271D OF THE ACT, SIMILARLY CASH EXPENSES ABOVE WOULD BE IN VIOLATION OF PROVISION OF SECTION 40A(3) OF THE ACT AND REQUIRED APPROPRIATE DISALLOWANCE. CASH EXPENSES PAYMENT TO CONTRACTOR WITHOUT DEDUCTING TDS WOULD ATTRACT DISALLOWANCE UNDER SECTION 40A(IA) OF THE ACT, THE ASSESSEE SUBMITTED UNSIGNED UNACCOUNTED RADHIKA INFRASTRUCTURE, SURAT 12 PROFIT AND LOSS ACCOUNT WHICH SO DIRECT AND INDIRECT EXPENSES OF RS.10.66 CRORE IN VIOLATION OF 4A(3) /40A(IA) OF THE ACT. FURTHER, CASH RECEIPT ON ACCOUNT OF BOOKING IN A.Y. 2015-16 TO 2017-18 WERE AVAILABLE ON RECORD. THE AO FAILED TO MAKE NECESSARY ENQUIRY AND VERIFICATION WHILE COMPUTING INCOME AND FAILED TO MAKE PROPER REFERENCE FOR LEVY OF PENALTY UNDER SECTION 271D OF THE ACT, THUS, THE ASSESSMENT ORDER IS ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. PCIT ALSO HELD THAT AO WHILE RECORDING SATISFACTION FOR INITIATING ASSESSMENT PROCEEDINGS SHOWN NO REFERENCE OF SEIZED DOCUMENT/EVIDENCE. ALL THE DOCUMENTS REFERRED TO AO WERE IMPOUNDED DURING THE COURSE OF SURVEY PROCEEDINGS, THUS, THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S 153C SUFFER FROM LACK OF APPLICATION OF MIND AND VOID-AB-INITIO DESERVED TO BE ANNULLED. THE LD.PCIT HELD THAT ASSESSMENT ORDER TO BE ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY ANNULLED THE SAME DIRECTING THE AO TO TAKE NECESSARY ACTION FOR FRESH ASSESSMENT KEEPING IN VIEW THE ISSUE OF LIMITATION. 13. AGGRIEVED BY THE ORDER OF THE LD. PCIT, THE ASSESSEE HAS AVAILED PRESENT APPEAL BEFORE THIS TRIBUNAL. 14. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED AUTHORISED REPRESENTATIVE (LD.AR) OF THE ASSESSEE AND LEARNED COMMISSIONER OF INCOME TAX - DEPARTMENTAL REPRESENTATIVE (CIT-DR) FOR THE REVENUE AND HAVE GONE RADHIKA INFRASTRUCTURE, SURAT 13 THROUGH THE REVISIONS ORDER PASSED BY LD PCIT AND THE ASSESSMENT ORDERS PASSED BY AO IN ALL THREE ASSESSMENT YEARS. THE LD AR FOR THE ASSESSEE SUBMITS THAT ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CONSTRUCTION AND DEVELOPMENT OF HOUSING PROJECT. A SEARCH AND SURVEY ACTION WAS CARRIED OUT BY THE REVENUE ON ASSESSEE AND ITS GROUP ON 19.07.2016. ON THE BUSINESS PREMISES OF ASSESSEE, ONLY SURVEY TOOK PLACE. DURING THE COURSE OF SEARCH PROCEEDINGS IN ASSESSEE GROUP, CERTAIN INCRIMINATING MATERIAL IN THE FORM OF PAPERS AND DOCUMENTS WERE FOUND. THE ASSESSEE AND ITS GROUP I.E. RADHIKA CONSTRUCTION, RADHIKA CORPORATION, RADHIKA INFRASTRUCTURE, AMRUT SAROVAR AND SHYAM TEXTILE PARK ALL ARE ENGAGED IN CONSTRUCTION AND DEVELOPMENT OF VARIOUS PROJECTS. ON THE BASIS OF MATERIAL FOUND IN THE COURSE OF SEARCH AND SURVEY ACTION, THE ASSESSEE PREPARED BOOKS OF ACCOUNTS. THE BOOKS OF ACCOUNTS SO PREPARED WERE PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. BEFORE ISSUING THE NOTICE UNDER SECTION 153C OF THE ACT, THE ASSESSEE MADE DISCLOSURE UNDER INCOME DISCLOSURE SCHEME (IDS) 2016. THE LD AR FOR THE ASSESSEE FILED THE FOLLOWING BIFURCATION OF AMOUNT DISCLOSED IN IDS; NAME OF FIRMS DISCLOSER AMOUNT AYS RADHIKA CONSTRUCTION RS. 3.50 CRORE 2015-16 RS. 53 LAKHS 2016-17 TOTAL (1) RS. 4.03 CRORE AMRUT SAROVAR RS. 2.05 CRORE 2014-15 RS. 1.55 CRORE 2015-16 RADHIKA INFRASTRUCTURE, SURAT 14 RS. 1.90 CRORE 2016-17 TOTAL (2) RS. 5.50 CRORE SATYAM TEXTILE PARK RS. 5.00 CRORE 2016-17 TOTAL (3) RS. 5.00 CRORE RADHIKA CORPORATION RS. 1.00 CRORE 2016-17 TOTAL (4) RS. 1.00 CRORE RADHIKA INFRASTRUCTURE RS. 1.70 CRORE 2015-16 RS. 1.80 CRORE 2016-17 TOTAL (5) RS. 3.50 CRORE VALLABHAI B. PAGHDAL RS. 60 LAKHS 2012-13 TOTAL (6) RS. 1.20 CRORE TOTAL (1+2+3+4+5+6) RS. 19.63 CRORE 15. IN THE IDS, THE ASSESSEE DECLARED INCOME OF RS.1.70 CRORE FOR THE A.Y. 2015-16 AND RS.1.80 CRORE FOR THE A.Y. 2016-17. THUS, THE ASSESSEE DECLARED TOTAL INCOME OF RS.3.50 CRORE FOR THE A.Y. 2015-16 AND 2016-17. THE DISCLOSURE MADE BY ASSESSEE WAS ACCEPTED BY LD. PCIT VIDE FORM NO.4 UNDER RULE 4(5) OF IDS, VIDE RECEIPT NO. 223012610141017 DATED 14.10.2017. THE INCOME DECLARED BY ASSESSEE UNDER IDS WAS ACCEPTED WITHOUT ANY VARIATION OR OBJECTION. 16. THE LD AR FOR THE ASSESSEE SUBMITS THAT THE AO ISSUED NOTICE UNDER SECTION 153C OF THE ACT ON 29.11.2018 REQUIRING THE ASSESSEE TO FILE RETURN OF INCOME FOR THE A.Y. 2011-12 TO 2016-17 WITHIN 5 DAYS OF SERVICE OF NOTICE. IN RESPONSE TO NOTICE UNDER SECTION 153C OF THE ACT, THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE A.Y. 2015-16 & 206-17 ON DECLARING NIL INCOME. THE AO THEREAFTER ISSUED NOTICE UNDER SECTION 142(1) OF THE ACT. IN THE NOTICE UNDER SECTION 142(1) DATED 03.12.2018, RADHIKA INFRASTRUCTURE, SURAT 15 THE AO REQUIRED VARIOUS DETAILS ON VARIOUS ISSUES. THE LD.AR SUBMITS THAT COPY OF NOTICE UNDER SECTION 142(1) IS FILED ON RECORD. THE ASSESSEE FILED ITS DETAILED REPLY. THE COPY OF DETAILED REPLY FILED BY THE ASSESSEE BEFORE AO IS ALSO PLACED ON RECORD. THE AO AFTER CONSIDERING THE VARIOUS SUBMISSIONS AND EVIDENCE FURNISHED BY THE ASSESSEE PASSED THE ASSESSMENT ORDER AND ACCEPTED THE RETURNED INCOME. THE AO PASSED THE ASSESSMENT ORDER AFTER PROPER APPROVAL OF LD. JCIT AS REQUIRED UNDER SECTION 153D OF THE ACT. THESE FACTS ARE CLEARLY ASCERTAINABLE BY THE CONTENTS OF PARA 6 OF THE ASSESSMENT ORDER DATED PASSED UNDER SECTION 143(3) RWS 153C DATED 19.12.2018 OF AY 2015-16 & 2016-17. SIMILARLY FOR AY 2017-18, THE AO PASSED ASSESSMENT ORDER AFTER COMPLETE VERIFICATION OF RECORD AND THE EVIDENCES. 17. THE LD AR FOR THE ASSESSEE FURTHER SUBMITS THAT LD. PCIT AT THE FAG END OF LIMITATION PERIOD EXERCISED ITS POWER UNDER SECTION 263 OF THE ACT AND ISSUED SHOW CAUSE NOTICE. THE COPY OF SHOW CAUSE NOTICE IS ALSO PLACED ON RECORD. IN THE SHOW CAUSE NOTICE FOR AY 2015-16, THE LD. PCIT BASICALLY IDENTIFIED SEVEN ISSUES. 18. ON FIRST ISSUE IDENTIFIED BY LD. PCIT, WHICH RELATES TO UNDERSTATEMENT OF INCOME OF THE PROJECT. THE LD. PR.CIT NOTED THAT THE COST OF PROJECT WORKED OUT AT RS.70.75 CRORE WHICH WAS NOT VERIFIED AND THAT CERTAIN EVIDENCE WAS FOUND INDICATING RECEIPT BY RECEIVING CASH WITH THE NAME OF PERSON WHO HAVE MADE BOOKING. THE LD.AR OF THE ASSESSEE SUBMITS THAT RADHIKA INFRASTRUCTURE, SURAT 16 AO RAISED A SPECIFIC QUERY IN THE ANNEXURE-A1 ATTACHED WITH NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT. THE ASSESSEE IN ITS REPLY TO A SPECIFIC QUERY OF THE AO STATED THAT ASSESSEE HAS ALREADY MADE DECLARATION UNDER IDS OF RS.3.50 CRORE, WHICH IS MORE THAN THE ACTUAL PROFIT OF RS.3.36 CRORE ON THE BASIS OF IMPOUNDED /SEIZED MATERIAL. AS PER THE SEIZED MATERIAL, THE NET PROFIT FOR THE A.Y. 2015-16 WAS RS.1.69 CRORE AND FOR THE A.Y. 2016-17, IT WAS RS.1.66 CRORE, THUS, TOTAL OF RS.3.36 CRORE. HOWEVER, THE ASSESSEE HAS ALREADY DECLARED MORE PROFIT IN IDS OF RS.3.50 CRORE. THE LD.AR OF THE ASSESSEE INVITED OUR ATTENTION ON PAGE 72 TO 74 OF THE PAPER BOOK, WHICH IS COPY OF IDS, FILED BEFORE THE AO. THE LD.AR ALSO SHOWN US THE COPY OF FORM NO.4 ISSUED BY LD. PCIT IN ACCEPTING THE DISCLOSURE MADE BY ASSESSEE. THE LD.AR SUBMITS THAT DURING THE ASSESSMENT, THE ASSESSEE FURNISHED THE BRAKE-UP OF INCOME ASSESSED ON THE BASIS OF SEIZED MATERIAL, UNACCOUNTED BOOKING ADVANCE AND RATIO OF NET PROFIT ON THE BASIS OF SEIZED MATERIAL. NET PROFIT PERCENTAGE WISE ON UNACCOUNTED BOOKING ADVANCE AS WELL AS NET PROFIT DERIVED ON PER SQUARE FEET ON COMMERCIAL PROPERTIES. SUCH WORKING IS ALSO PLACED ON RECORD AT PAGE NO. 86 OF PAPER BOOK (PB). SR NO. PARTICULARS AY 2015-16 AY 2016-17 TOTAL A INCOME AS PER SEIZED MATERIAL NET PROFIT RS. 16944330/- RS. 16669236/- RS. 33613566/- B ASSET AS PER SEIZED MATERIAL -CASH RS.12193830/- RS.15565589/- RS.27759419/- RADHIKA INFRASTRUCTURE, SURAT 17 -RECEIVABLE/ SUNDRY DEBTOR -FLAT AT C-412, MATAWADI -WITHDRAWAL BY PARTNER -MOBILE LESS: CURRENT LIABILITY RS.298900/- RS.4430000/- RS. 21,600/- ------- ------- ------ ----- RS. 1699097/- RS. 4550/- (RS. 600000/-) RS. 298900/- RS. 4430000/- RS. 1720697/- RS.4550/- (RS. 600000/-) RS. 16944330/- RS. 16669236/- RS. 33613566/- C NET PROFIT % UNACCOUNTED BOOKING ADVANCES NET PROFIT @ 15% RS. 108097600/- RS. 16214640/- RS.1233345737/- RS.18501861/- RS.231443337/- RS. 34716501/- D NET PROFIT COMMERCIAL 100567SQ FT X RS.200/- PER SQ FEET RS. 20113400/- HIGHER OF ABC&D RS. 34716501/- INCOME DISCLOSED IN IDS RS. 35000000/- 19. THE LD.AR SUBMITS THAT ASSESSEE MADE DECLARATION ON ESTIMATED BASIS OF RS.3.50 CRORE BY TAKING 15% ESTIMATED UNACCOUNTED BOOKING ADVANCE FOR ENTIRE PROJECT, THOUGH THE INCOME AS PER SEIZED MATERIAL WAS COMPUTED AT RS.3.36 CRORE ONLY. THE LD.AR FOR THE ASSESSEE FURTHER SUBMITS THAT THE HONBLE JURISDICTIONAL HIGH COURT IN VARIOUS DECISIONS HELD THAT ONLY NET PROFIT OF SUPPRESSED RECEIPT IS REQUIRED TO BE AS ESTIMATED AS INCOME AND NOT THE ENTIRE RECEIPT. THE RATE OF 15% IS MOST REASONABLE IN THE CONSTRUCTION PROJECT, PARTICULARLY WHEN IN THE COURSE OF SEARCH AND SURVEY ACTION, NO UNEXPLAINED EXPENDITURE WAS DEDUCTED. TO SUPPORT HIS SUBMISSION, THE LD.AR RELIED UPON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE ABHISHEK CORPORATION (ITR 15 OF 2003) DATED 07.11.2014. THE LD.AR FINALLY SUBMITS THAT ASSESSEE HAS PAID MORE TAX MORE THAN NORMAL RATE UNDER IDS, SO EVEN A NORMAL ASSESSMENT, THE INCOME ASSESSED WOULD HAVE BEEN LESS THAN THE DECLARATION MADE UNDER IDS. THEREFORE, RADHIKA INFRASTRUCTURE, SURAT 18 THE ASSESSMENT ON THIS ISSUE IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. 20. ON SECOND ISSUE WHICH RELATES TO NON-VERIFICATION OF CASH LOAN OF RS.1.26 CRORE AS IDENTIFIED LD. PCIT. THE LD.AR OF THE ASSESSEE SUBMITS THAT AO RAISED ISSUE ABOUT CASH LOAN OF RS.1.26 CRORE REFLECTED IN THE IMPOUNDED MATERIAL AT ANNEXURE A-1, THE AO RAISED SPECIFIC QUERY. THE ASSESSEE FILED DETAILED SUBMISSION, COPY OF WHICH IS FILED AT PAGE 63 TO 68 OF PAPER BOOK. THE ASSESSEE EXPLAINED THAT AMOUNT OF RS.1.26 CRORE ARE THE BOOING ADVANCES RECEIVED IN THE FINANCIAL YEAR RELEVANT TO 2016-17 AND 2017-18. EVEN THE AO IN THE NOTICE UNDER SECTION 142(1) MENTIONED THAT AMOUNT OF RS.1.26 CRORE INCLUDING AMOUNT OF RS.37,89,000/- ACCEPTED IN THE A.Y. 2016-17 AND RS.88,20,500/- ACCEPTED IN THE A.Y. 2017-18. THE AO THOROUGHLY EXAMINED THE ISSUE AND AFTER EXAMINATION, THE AO ACCEPTED THE EXPLANATION FURNISHED BY ASSESSEE, THEREFORE, THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE AO WHILE ACCEPTING THE REPLY OF THE ASSESSEE HAS TOOK A LEGAL REASONABLE AND PLAUSIBLE VIEW. 21. ON THE THIRD ISSUE WHICH RELATES TO UNACCOUNTED CASH PAYMENT OF PURCHASE OF LAND, THE LD.AR FOR THE ASSESSEE SUBMITS THAT AO IN ITS SHOW CAUSE NOTICED ISSUED UNDER SECTION 142(1) OF THE ACT HAS RAISED THIS QUERY. BEFORE THE LD. PCIT, THE ASSESSEE SUBMITTED THAT THERE WAS NO SUCH EVIDENCES IN THE IMPOUNDED MATERIAL THAT ASSESSEE PAID ON MONEY FOR RADHIKA INFRASTRUCTURE, SURAT 19 PURCHASE OF LAND. IT WAS ALSO SUBMITTED IN WITHOUT PURCHASE SUBMISSION THAT IT IS COVERED BY THE TOTAL ON MONEY RECEIPT OF RS.23.14 CRORE DISCLOSED UNDER IDS. THE TRANSACTION REFLECTED IN THE IMPOUNDED MATERIAL WAS DULY ACCOUNTED ON DAY TO DAY BASIS BY PREPARING BOOKS OF ACCOUNTS AND PROFIT AND LOSS ACCOUNT. COMPLETE DETAILS OF PROFIT AND LOSS ACCOUNT, BALANCE SHEET AND LEDGERS WERE FILED BEFORE THE AO. ENTIRE IMPOUNDED MATERIAL WAS EXPLAINED AND NO ADVERSE COGNIZANCE CAN BE TAKEN IN RESPECT THEREOF AS THE ASSESSEE HAS ALREADY OFFERED RS.3.50 CRORE, WHICH IS MUCH MORE THAN THE INCOME REFLECTED IN THE IMPOUNDED MATERIAL. ACCORDINGLY, THE LD.AR OF THE ASSESSEE SUBMITS THAT THE AO AFTER CONSIDERING THE CONTENTION/SUBMISSION/DOCUMENTARY EVIDENCE ACCEPTED THE SUBMISSION OF ASSESSEE AND TOOK REASONABLE AND PLAUSIBLE VIEW, THUS, THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. 22. ON THE FOURTH ISSUE WHICH RELATES TO DISALLOWANCE UNDER SECTION 40A(3) OF RS.29,61,000/-, THE LD.AR SUBMITS THAT WHEN THE INCOME IS ESTIMATED THE PROVISION REGARDING APPLICABILITY OF 40A(3) ARE NOT APPLICABLE. TO SUPPORT HIS SUBMISSION, THE LD.AR RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN PR.CIT VS. JUNED B. MEMON [2018] 95 TAXMANN.COM 20(GUJ). THE LD.AR FOR ASSESSEE FURTHER SUBMITS THAT ONCE INCOME IS DECLARED UNDER IDS, THE PROVISION OF INCOME TAX IS NOT REQUIRED TO BE CONSIDERED AS PER SECTION 195 OF FINANCE ACT, 2016, EXCEPT RADHIKA INFRASTRUCTURE, SURAT 20 PROVISION OF CHAPTER XV, SECTION 119, 158 AND 189 OF INCOME TAX ACT. THE LD.AR FOR THE ASSESSEE ACCORDINGLY SUBMITS THAT IDENTIFICATION OF THIS ISSUE IS MISPLACED. THUS, THE ASSESSMENT ORDER CANNOT BE GRANTED AS ERRONEOUS AND INSOFAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 23. ON THE FIFTH ISSUE WHICH RELATES TO NON-INITIATION OF PENALTY UNDER SECTION 271D OF THE ACT. THE LD.AR FOR THE ASSESSEE SUBMITS THAT ASSESSEE MADE DECLARATION UNDER IDS, THE PROVISION OF SECTION 271D OF THE ACT ARE NOT APPLICABLE. ON MERIT OF THE ISSUE, THE LD.AR SUBMITS THAT ASSESSEE DID NOT TAKE ANY LOAN AND THEREFORE, THE PROVISIONS OF SECTION 271D OF THE ACT ARE NOT ATTRACTED OR APPLICABLE. THE AMOUNT INVOLVED WAS BOOKING ADVANCE AND NOT LOAN. THE LD.AR FOR THE ASSESSEE SUBMITS THAT NON-INITIATION OF PENALTY PROCEEDINGS, THE REVISION PROCEEDINGS UNDER SECTION 263 OF THE ACT CANNOT BE REVOKED. TO SUPPORT HIS SUBMISSIONS, THE LD.AR RELIED UPON THE DECISION OF HONBLE GUJARAT HIGH COURT IN CIT VS. DR.SURESH G.SHAH[2007] 289 ITR 110 (GUJ) AND CIT VS. PARMANAND N PATEL 287 ITR 3 (GUJ). THUS, THE LD.AR SUBMITS THAT THIS ISSUE OF NON-INITIATION IS OUTSIDE THE SCOPE OF SECTION 263 OF THE INCOME TAX ACT. 24. ON THE SIXTH ISSUE WHICH RELATES TO NON-REFERENCE OF SEIZED DOCUMENTS/EVIDENCE IN THE SATISFACTION NOTE UNDER SECTION 153C OF THE ACT, THE LD.AR OF THE ASSESSEE SUBMITS THAT EVEN WHEN NO REFERENCE WAS MADE, THE AO VERIFIED ALL THE SEIZED MATERIAL AND AFTER CONSIDERING THE SAME, THE ASSESSMENT ORDER UNDER SECTION 153C OF THE ACT WAS FRAMED RADHIKA INFRASTRUCTURE, SURAT 21 UNDER THE SUPERVISION OF LD. JCIT. IN WITHOUT PREJUDICE AND ALTERNATIVE SUBMISSION, THE LD.AR FOR ASSESSEE SUBMITS THAT IF IT BE SO, THE ASSESSMENT FRAMED IS ITSELF INVALID BEING VOID-AB-INITIO. AND IF THE ASSESSMENT IS INVALID AND VOID-AB-INITIO, THE LD. PCIT CANNOT GIVE NEW LEASE OF LIFE TO SUCH ASSESSMENT ORDER, ACCORDINGLY, THE REVISION ORDER PASSED BY LD. PCIT WILL NOT SURVIVE. 25. ON THE VALIDITY OF DISCLOSURE UNDER IDS, (SEVENTH ISSUE) THE LD.AR SUBMITS THAT WHEN THE IDS DECLARATION WAS MADE, NOTICE UNDER SECTION 153C OF THE ACT WAS NOT ISSUED AND THEREFORE, PROCEEDINGS WERE NOT PENDING. THE IDS DECLARATION WAS ACCEPTED BY LD. PCIT AND THEREFORE, THE AO OR SUPERVISION LD. JCIT COULD NOT REJECT THE IDS DECLARATION. THE IDS DECLARATION WAS NOT MADE BY MISREPRESENTATIVE OF FACT AND THEREFORE, IT WAS PERFECTLY INVALID. THE CERTIFICATE ISSUED BY THE LD. PCIT WAS NOT REVOKED AND THE TAX PAID UNDER IDS WAS NOT REFUNDED. HENCE, IDS CANNOT BE QUESTIONED AT THIS STAGE, WHICH IS OTHERWISE VALID. THE ASSESSEE DECLARED MORE INCOME IN IDS AND PAID MORE TAX THAN THE TAX PAYABLE UNDER NORMAL PROVISION OF THE ACT. 26. THE LD AR FOR THE ASSESSEE SUBMITS THAT IN AY 2016-17, SIX ISSUES ARE COMMON. THE LD. PCIT RAISED ONE DIFFERENT ISSUE WHICH RELATES TO UNACCOUNTED CASH PAYMENTS FOR PURCHASE OF LAND. THE LD AR FOR THE ASSESSEE SUBMITS THAT BEFORE THE LD PCIT THAT THERE WAS NO SUCH EVIDENCE IN THE IMPOUNDED MATERIAL THAT ASSESSEE PAID ON MONEY FOR PURCHASE OF RADHIKA INFRASTRUCTURE, SURAT 22 THE LAND. IT WAS ALSO SUBMITTED WITHOUT PREJUDICE THAT IT IS COVERED BY THE TOTAL ON MONEY RECEIPTS OF RS. 23,14,43,333/- DISCLOSED UNDER IDS. THE LD AR FOR THE ASSESSEE SUBMITS THAT THE TRANSACTION REFLECTED IN IMPOUNDED MATERIAL WERE DULY ACCOUNTED ON DAY TO DAY BASIS BY PREPARING BOOKS OF ACCOUNTS AND THE P&L ACCOUNT AND BALANCE SHEET AND ALL LEDGERS WERE FILED BEFORE THE ASSESSING OFFICER. IT IS SUBMITTED THAT THE ENTIRE IMPOUNDED MATERIAL STANDS EXPLAINED AND NO ADVERSE COGNIZANCE CAN BE TAKEN IN RESPECT THEREOF SINCE AN INCOME OF RS. 3,50,00,000/- STANDS OFFERED UNDER IDS WHICH IS MUCH ABOVE THE INCOME REFLECTED IN THE IMPOUNDED MATERIAL. 27. THE LD AR FOR THE ASSESSEE FURTHER SUBMITS THAT IN AY 2017-18, THE LD PCIT RAISED SOME ADDITIONAL ISSUES IN ADDITION TO COMMON ISSUES IN TWO EARLIER AYS. ISSUE NO. 2 IN AY 2017-18 RELATES TO NON-VERIFICATION OF CASH LOAN. THE LD AR FOR THE ASSESSEE SUBMITS THAT THE AO RAISED THE QUERY IN THE NOTICE ISSUED U/S. 142(1) THAT CASH LOANS OF RS. 88,20,500/- REFLECTED IN THE IMPOUNDED MATERIALS AT ANNEXURE A 22 WERE NOT VERIFIED. THE AMOUNT OF RS. 88,20,500/- IS A PART OF THE AMOUNT OF RS. 1,26,10,000/- AS MENTIONED BY AO IN HIS SHOW CAUSE NOTICE. THE ASSESSEE FILED A DETAILED SUBMISSION ALONG WITH ANNEXURE EXPLAINING ALLEGED CASH LOAN OF RS. 1.26 CRORE. THE ASSESSEE STATED THAT THE AMOUNT OF RS. 1.26 CRORE IS THE BOOKING ADVANCE RECEIVED IN F.Y. RELEVANT TO A.Y. 2017-18 AND A.Y. 2016-17. THE ASSESSEE FILED COMPLETE LIST AT ANNEXURE-A OF THE RADHIKA INFRASTRUCTURE, SURAT 23 SUBMISSION. ACCORDINGLY THIS ISSUE WAS VERIFIED BY THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT AND THE AO HAS TAKEN A REASONABLE AND PLAUSIBLE VIEW ON THIS ISSUE, THUS, THE ASSESSMENT ORDER IS NOT ERRONEOUS. 28. ON THE ISSUE OF UNDER STATEMENT OF INCOME OF PROJECT (ISSUE NO.3 IN AY 2017-18), THE LD AR FOR THE ASSESSEE SUBMITS THAT THE ASSESSEE DID NOT FILE THE RETURN OF INCOME PREVIOUSLY AS IT WAS CURRENT YEAR OF THE SEARCH AND SURVEY ACTION. ACCORDINGLY, ALL THE MATERIALS FOUND IN THE COURSE OF SEARCH / SURVEY ACTION CONDUCTED IN CASES OF THE GROUP WERE INCORPORATED IN THE AUDITED ACCOUNTS. THE AO DID NOT FIND ANY DEFECTS IN THE BOOKS OF ACCOUNTS PRODUCED BEFORE HIM. EVEN LD PCIT ALSO DID NOT POINT OUT ANY IRREGULARITY IN THE AUDITED ACCOUNTS FILED IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE TAX AUDIT REPORT ALONG WITH FINANCIALS IS FILED ON RECORD. THE IMPOUNDED MATERIALS REFERRED BY THE LD PCIT RELATE TO PRECEDING YEARS FOR WHICH ASSESSEE HAS FILED THE EXPLANATION IN DETAIL FOR A.Y. 2015- 16, THUS, THE ASSESSMENT ORDER IS NOT ERRONEOUS AS THE AO HAS PASSED THE ORDER AFTER CONSIDERING THE RELEVANT MATERIAL AND TOOK A REASONABLE AND LEGALLY PLAUSIBLE VIEW. 29. ON THE ISSUES OF NON-VERIFICATION OF UNSECURED LOAN OF RS. 5.44 CRORE (ISSUE NO. 5 IN AY 2017-18), THE LD AR FOR THE ASSESSEE SUBMITS THAT IT WAS EXPLAINED BY THE ASSESSEE IN ITS SUBMISSION THAT IT HAD ALREADY FURNISHED THE DETAILS OF UNSECURED LOANS GIVING NAMES, ADDRESS, PAN, AMOUNT IN THE TAX AUDIT REPORT FILED WITH THE RETURN OF INCOME FOR A.Y. RADHIKA INFRASTRUCTURE, SURAT 24 2017-18 AND ALSO DURING THE COURSE OF SURVEY, CASH BOOK OF THE FIRM SHOWING ALL THE UNACCOUNTED TRANSACTIONS WERE FOUND AND IMPOUNDED AND IN THESE TRANSACTIONS, THERE WAS NO EVIDENCE OF ANY NON GENUINE UNSECURED LOAN AVAILED BY THE FIRM. FURTHER THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH THE DETAILS OF UNSECURED LOANS IN THE NOTICE ISSUED U/S. 142(1) ON 03.12.2018. THE ASSESSEE IN IT SUBMISSION STATED THAT THE DETAILS OF THE UNSECURED LOANS WERE UNDER COMPILATION AND WOULD BE SUBMITTED SHORTLY. THE DETAILS WERE THEREAFTER FILED WITH THE ASSESSING OFFICER. THE FINDING OF THE LD PCIT THAT ASSESSING OFFICER HAS NOT CALLED FOR SUCH DETAILS / CONFIRMATION AND NOR THE AR HAS SUBMITTED THE SAME IS WRONG. FURTHER IT IS SUBMITTED THAT IN THE COURSE OF SEARCH AND SURVEY ACTION CONDUCTED IN VARIOUS CASES OF THE GROUP ASSESSEE, NO EVIDENCES WERE FOUND INDICATING THAT ASSESSEE RECEIVED ANY BOGUS LOAN OR ACCOMMODATION ENTRY. THUS, THE AO ACCEPTED THE CONTENTION OF THE ASSESSEE AFTER MAKING COMPLETE INQUIRY AND PASSED A REASONABLE AND PLAUSIBLE ORDER ON THE ISSUE. 30. ON THE ISSUE OF NON-VERIFICATION OF INVESTMENT IN IMMOVABLE PROPERTY OF RS. 2.34 CRORE (ISSUE NO. 6 IN AY 2017-18), THE LD AR FOR THE ASSESSEE SUBMITS THAT THE AO RAISED THE ISSUE IN NOTICE UNDER SECTION 142(1) ISSUED ON 03.12.2018. THE ASSESSEE FILED THE LEDGER ACCOUNT ALONG WITH REGISTERED PURCHASE DEED OF THE LAND AT ANNEXURE 7, WITH THE ASSESSEES SUBMISSION FILED IN THE COURSE OF ASSESSMENT PROCEEDINGS. (PAGE 76 OF THE RADHIKA INFRASTRUCTURE, SURAT 25 PAPER BOOK). THUS, THE AO FULLY EXAMINED THE FACTS AND PASSED THE ASSESSMENT ORDER AFTER CONSIDERING THE MATERIAL EVIDENCE. THUS, THE ORDER IS NOT ERRONEOUS. 31. THE LD.AR FOR THE ASSESSEE SUBMITS THAT ASSESSMENT IN AY 2015-16 & 2016-17 CASE IS COMPLETED UNDER SECTION 143(3) R.W.S 153C OF THE ACT AFTER TAKING PRIOR APPROVAL OF LD. JCIT AND NO REVISION OF SUCH ORDER IS PERMISSIBLE AS HAS BEEN HELD BY VARIOUS TRIBUNALS AND HIGHER COURTS. TO SUPPORT HIS SUBMISSION, THE LD.AR RELIED UPON THE DECISION OF TRIBUNAL IN RASIKLAL M. DHARIWAL (HUF) VS. CIT IN ITA NO.1102 TO 1104/PUN/2014DATED 28.12.2016 IN B.U. BHANDARI SCHEMES VS. PCIT IN ITA NO.637 TO 641/PUN/2018 DATED 14.11.2018, VISHWA INFRAWAYS PVT. LTD., VS. CIT IN ITA NO.596, 597 AND 599/PUN/2015 DATED 28.11.2018 AND DECISION OF HONBLE ALLAHABAD HIGH COURT IN CIT VS DR. ASHOK KUMAR IN ITA NO. 192 OF 2000 DATED 06.08.2012. 32. THE LD.AR FOR THE ASSESSEE FURTHER SUBMITS THAT IF THE AO DURING THE COURSE OF ASSESSMENT MADE DETAILED ENQUIRY, THE ASSESSEE GIVEN DETAILED EXPLANATION IN WRITING, ALL THE QUESTIONS AND ANSWERS FURNISHED BY THE ASSESSEE ARE PART ON RECORD OF THE CASE AND CLAIMS OF ASSESSEE ARE ALLOWED BY AO BEING SATISFIED WITH THE EXPLANATION OF ASSESSEE. SUCH ORDER OF THE AO CANNOT BE HELD TO BE ERRONEOUS, SIMPLY BECAUSE IN HIS ORDER, THE AO DID NOT MAKE ELABORATE DISCUSSION. THE LD. PCIT HIMSELF EVEN AFTER INITIATING THE PROCEEDINGS AND CONSIDERING THE SUBMISSION OF ASSESSEE RADHIKA INFRASTRUCTURE, SURAT 26 HAVE NOT GIVEN ANY FINDING AS TO HOW THE CLAIMS ARE NOT ALLOWABLE. THE LD. PCIT HAS NOT GIVEN ANY FINDING AS TO WHAT OTHER ENQUIRY WAS REQUIRED TO BE MADE BY THE AO. IF THE ASSESSMENT ORDER IS REVISED IN SUCH AN APPROACH, THERE WOULD NO END FOR SUCH ENQUIRIES. THE LD.AR OF THE ASSESSEE FURTHER SUBMITTED THAT ASSESSEE MADE DECLARATION UNDER IDS WHICH IS MORE THAN THE INCOME THAT CAN BE ACCESSED ON THE BASIS OF IMPOUNDED / SEIZED MATERIALS. THE ASSESSEE WAS ELIGIBLE TO MAKE DECLARATION UNDER IDS AS DECLARATION WAS FILED BEFORE ISSUE OF NOTICE U/S. 153C. BY DECLARING THE INCOME UNDER IDS, THE ASSESSEE IN FACT PAID MORE TAX THAN THE TAX PAYABLE AS PER NORMAL PROVISION. THE ASSESSING OFFICER IS NOT COMPETENT TO DISREGARD THE IDS DECLARATION WHICH WAS ACCEPTED BY THE PCIT. IT IS NOT THE CASE OF PCIT THAT ASSESSEE HAS MADE ANY MISREPRESENTATION OF ANY FACTS IN IDS DECLARATION. THE DECLARATION UNDER IDS WAS NEITHER REVOKED NOR THE TAX PAID BY THE ASSESSEE, WAS REFUNDED TO IT. IT IS WELL SETTLED THAT THE WHOLE SUPPRESSED GROSS RECEIPTS CANNOT BE TAXED, ONLY PROFIT ELEMENT EMBEDDED IN SUCH RECEIPTS CAN BE ESTIMATED. ASSESSEE'S DECLARATION AT 15% OF THE GROSS RECEIPTS WAS MOST REASONABLE WHICH WAS ACCEPTED BY THE ASSESSING OFFICER CONSIDERING THE NATURE OF BUSINESS OF THE ASSESSEE. ALTHOUGH AS PER CIRCULAR NO 25 OF 2016 ISSUED BY CBDT, ASSESSEE IS NOT REQUIRED TO GIVE INFORMATION REGARDING THE SOURCE OF INCOME, ASSESSEE DISCLOSED THE SOURCE OF INCOME AT THE TIME OF ASSESSMENT BY INCORPORATION ALL THE ENTRIES OF IMPOUNDED / SEIZED RADHIKA INFRASTRUCTURE, SURAT 27 MATERIALS IN THE BOOKS OF ACCOUNTS. THE ASSESSEE ALSO FILED THE CALCULATION IN SUPPORT OF DECLARATION FILED UNDER IDS AT THE TIME OF FILING THE DECLARATION AS WELL AS IN THE COURSE OF ASSESSMENT PROCEEDING. THE SURVEY AND SEARCH ACTIONS IS ULTIMATE WEAPON WITH THE DEPARTMENT TO UNEARTH THE BLACK MONEY. IN THIS CASE, THE SURVEY ACTIONS WERE CONDUCTED IN CASE OF FIRMS AND SEARCH ACTIONS WERE CONDUCTED IN THE CASE OF THE PARTNERS OF THE FIRMS. EVEN AFTER THESE ACTIONS, THE DISCRETE INQUIRY WAS MADE BY THE ASSESSING OFFICER AND THE ASSESSMENTS WERE MADE IN THE GROUP CASES ON THE BASIS OF INCRIMINATING MATERIALS IMPOUNDED / SEIZED IN COURSE OF SEARCH / SURVEY ACTION. IN THE COURSE OF THESE ACTIONS, NO UNEXPLAINED VALUABLES WERE FOUND. ACCORDINGLY, ASSESSMENTS WERE FRAMED CONSIDERING ALL THESE FACTS AND CIRCUMSTANCES OF THE CASE AND THEREFORE, THEY ARE NOT LIABLE FOR REVISION. ACCORDINGLY, IT IS A CASE OF SUFFICIENT AND PROPER INQUIRY MADE BY THE ASSESSING OFFICER. THE LD PCIT DID NOT MAKE ANY INQUIRY ALTHOUGH IN HIS OPINION, THE INQUIRY WAS INSUFFICIENT. ACCORDINGLY, THE PCIT ARRIVED AT SUBJECTIVE SATISFACTION. NEEDLESS TO SAY THE SATISFACTION MUST BE ONE WHICH IS OBJECTIVELY JUSTIFIABLE AND CANNOT BE THE MERE IPSE DIXIT OF THE PCIT. THE ASSESSEE HAS PLACED FOLLOWING DOCUMENTS ON RECORD. NOTICE ISSUED U/S. 153C DATED 29.11.2018, FINANCIAL STATEMENTS AND DETAILS OF EXPENSES FOR AY 2015-16TO 2017-18, NOTICE ISSUED U/S. 142(1) DATED 03.12.2018 WITH ITS ANNEXURE, REPLY FILED IN RESPONSE TO NOTICE U/S.142(1) FOR AY 2015-16 TO 2017-18, ALONG WITH ANNEXURE, RADHIKA INFRASTRUCTURE, SURAT 28 EXHIBIT SHOWING CALCULATIONS UNDER IDS SCHEME, COPY OF FORM 4 IDS, 2016 FOR AY 2015-16 AND 2016-17, NOTICE ISSUED U/S.263 FOR AY 2015-16 , 2016-17 & 2017-18 AND COPIES OF REPLY FILED IN RESPONSE TO NOTICE U/S. 263 FOR AY 2015-16 TO 2017- 18. 33. TO BUTTRESS HIS ALL SUBMISSIONS, THE LD.AR OF THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS: SR.NO. PARTICULARS 1. CIT VS. MAX INDIA LTD. [295 ITR 0282 (SC)] 2. MALABAR INDUSTRIES CO. LTD. VS CIT [ 243 ITR 0083] (SC) 3. CIT VS M. MITTAI STAINLESS STEEL PVT LTD [263 ITR 0255] (SC) 4. CIT VS AMIT CORPORATION [81 CCH 0069] (GUJ HC) 5. CIT VS ARVIND JEWELLERS [259 ITR 05021 (GUJ HC) 6. BILAG INDUSTRIES PVT. LTD. VS. CIT(A) [SCA NO. 24128 OF 2005] (GUJ HC) 7. CIT VS. R K CONSTRUCTION CO. [313 ITR 0065] (GUJ HC) 8. CIT VS. NIRMA CHEMICALS WORKS. PVT. LTD. [309 STR 0067] (GUJ HC) 9. RAYON SILK MILLS VS. CIT(A) [221 ITR 0155] (GUJ HC) 10. PCIT VS. SHREEJI PRINTS PVT. LTD. [TAX APPEAL NO. 828 OF 2019] (GUJ) 11. CIT VS. NIRAV MODI [390 ITR 0292 (BOM. HC)] 12. CIT VS GABRIEL INDIA LTD. [203 ITR 108(BOM) 13. MOIL LTD. VS CIT [ 81 TAXMANN.COM 420 (BOM. HC)] 14. CIT VS. FINE JEWELLERY INDIA LTD. [55 TEXMANN.COM 514 ] (BOM HC) 15. ANILKUMAR SHARMA [335 ITR 0083] (DELHI HC) 16. ITO VS. DG HOUSING PROJECTS LIMITED [343 ITR 329](DEI HC)] 17. CIT VS. SUNBEAM AUTO LTD. [189 TAXMAN 0436 (DEL.)] 18. PCIT VS. DELHI AIRPORT METRO EXPRESS PVT. LTD. [ITA NO. 705/2017(DEL 19. CIT V/S. VIKA POLYMERS [341 ITR 537] (DELHI HC) 20. CIT VS GANPAT RAM BISHNOI [296 ITR 0292] (RAJ HC) 21. CIT VS. JAIN CONSTRUCTIONS CO [257 ITR 0336] (RAJ HC) 22. CIT VS. KELVINATOR OF INDIA LTD. [ 256 ITR 1 ](DEI. HC) RADHIKA INFRASTRUCTURE, SURAT 29 23. CIT VS. SR. SURESH G. SHAH [ 289ITR 110 ]( GUJ. HC ) 24. CIT VS. PARMANAND M. PATEL [ 278 ITR 3 ]( GUJ. HC ) 25. CIT VS. ABHISHEK CORPORATION [ IT REF. NO. 15 OF 2003 ] ( GUJ. HC ) 26. R.SRINIVASAN VS. DCIT [ 29 TAXMANN.COM 279 ]( MAD. HC) 27. VISHWA INFRAWAYS PVT. LTD VS. CIT [ ITA 596,597 & 599/PUN/2015 ] 28. SREEALANKAR VS. PCIT [ ITA NO. 108/CTK/2018 ] ( CTK TRIH.) 29. JRD TATA TRUST T VS. DCST [ 122 TAXMANN.COM 275 ] (MUM. TRIB.) 30. NARAYAN TATU RANE V/S ITO [2016] 70 TAXMANN.COM 227 (MUM) (TRIB) 31. INDUS BEST HOSPITALITY & REALTORS PVT LTD. VS. PCIT [ITA NO. 3125/MUM/2017] (MUM TRIB) 32. SHANTI KRUPA ESTATE PVT. LTD. VS. AC IT - [1252/AHD/2015] (AHDTRIB) 33. PLASTIC CONCERN VS. ACIT (1998) 61 TTJ 0087 (KOL. TRIB.) 34 ACIT VS. SUBHODH MENON [2019] 103 TAXMANN.COM 15 (MUM TRIB.) 34. ON THE OTHER HAND, THE LD. CIT-DR FOR THE REVENUE SUPPORTED THE ORDER OF LD. PCIT. THE LD. CIT-DR SUBMITS THAT IN THE SHOW CAUSE NOTICE UNDER SECTION 263 OF THE ACT, THE LD. PCIT HAS ELABORATELY DISCUSSED THE NON- EXAMINATION OF VARIOUS ISSUES. IN PARA 5 OF THIS SHOW CAUSE NOTICE, THE LD. PCIT CLEARLY HELD THAT INSPITE OF HAVING RELEVANT EVIDENCE ON RECORD AND CALLING FOR EXPLANATION IN DETAILED QUESTIONNAIRE, THE AO HAS NOT MADE ANY FURTHER EFFORT TO VERIFY THE SAME OR CARRIED OUT NECESSARY ENQUIRIES THEREOF AND ACCEPTED THE SUBMISSION ON THE ISSUES IDENTIFIED BY LD. PCIT. THE AO ACCEPTED THE EXPLANATION OF ASSESSEE ELABORATELY DISCUSSING THE ISSUE. FAILURE ON THE PART OF AO TO CARRY OUT PROPER VERIFICATION ON THE VARIOUS ISSUES, WHICH WERE TAKEN FOR ENQUIRIES AT THE INITIAL STAGE BY AO HIMSELF, SHOWN LACK OF APPLICATION OF MIND OR PROPER APPRECIATION OF FACTS. IT WAS THE DUTY OF THE AO TO ASCERTAIN ALL THE FACTS RADHIKA INFRASTRUCTURE, SURAT 30 ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE AO IN NOT CARRYING OUT FURTHER VERIFICATION OR ENQUIRIES TO ASSESS TOTAL INCOME OF THE ASSESSEE AS EVIDENT FROM THE INCRIMINATING MATERIAL AND TO VERIFY IF IT HAS ANY CO- RELATION WITH THE DISCLOSURE MADE IN THE IDS AS CLAIMED BY ASSESSEE. FAILURE ON THE PART OF AO TO CARRY OUT SUCH ENQUIRIES AS DISCUSSED SHOWN THAT ASSESSMENT ORDER PASSED BY AO IS ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. CIT-DR FOR THE REVENUE SUBMITS THAT THE TWIN CONDITION AS ENUNCIATED IN SECTION 263 ARE FULFILLED IN THE PRESENT CASE. THE LD. CIT-DR FOR THE REVENUE PRAYED FOR UPHOLDING THE ORDER OF LD. PCIT. 35. IN REJOINDER SUBMISSION, THE LD.AR OF THE ASSESSEE SUBMITS THAT ON CAREFUL PERUSAL OF SHOW CAUSE NOTICE UNDER SECTION 263 OF THE ACT ISSUED BY THE LD. PCIT, IT IS CLEARLY DISCERNIBLE THAT THE LD. PCIT IDENTIFIED ISSUES ONLY ON THE BASIS NOTICE ISSUED BY AO UNDER SECTION 142(1) OF THE ACT. NO NEW ISSUES ARE IDENTIFIED BY LD. PCIT. THE LD. PCIT HAS NOT MADE ANY ENQUIRY OF HIS OWN BEFORE HOLDING THAT ASSESSMENT ORDER IS ERRONEOUS OR ERRONEOUS AND INSOFAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE ON ANY OF THE ISSUE. THE LD. PCIT HAS NOT SPECIFIED AS TO WHAT KIND OF INFORMATION OR FURTHER DETAILS OR QUESTIONNAIRE OR EFFORT WAS REQUIRED TO BE MADE BY AO. THE AO BEFORE ACCEPTING THE SUBMISSION OF ASSESSEE OBTAINED PRIOR APPROVAL OF RANGE HEAD. THE APPROVAL GRANTED BY RANGE HEAD IS IN ACCORDANCE WITH LAW. NO DEFICIENCY IS POINTED OUT BY LD.PCIT RADHIKA INFRASTRUCTURE, SURAT 31 IN THE APPROVAL GRANTED BY RANGE HEAD. IN ABSENCE OF ANY FINDING AS TO HOW THE ORDER ON PARTICULAR ISSUE IS ERRONEOUS, THE REVISION ORDER UNDER SECTION 263 OF THE ACT IS NOT ALLOWABLE. THE LD.AR OF THE ASSESSEE REITERATED THAT IF THE VALIDITY OF APPROVAL GRANTED BY RANGE HEAD IS NOT DISPUTED BY LD. PCIT, THEN IT WOULD NOT BE JUSTIFIED IN INTERFERING IN THE APPROVAL GRANTED BY RANGE HEAD FOR FRAMING ASSESSMENT ORDER; THEREFORE, THERE IS NO REASON FOR SETTING ASIDE THE ASSESSMENT ORDER FOR THE SUBJECT ASSESSMENT YEARS. 36. WE HAVE CONSIDERED RIVAL SUBMISSION OF THE PARTIES AND HAVE GONE THROUGH THE ORDER OF AUTHORITIES BELOW. WE HAVE ALSO PERUSED THE DOCUMENTS FILED BY THE ASSESSEE ON RECORD. FURTHER WE HAVE DELIBERATED ON THE VARIOUS CASE LAWS FILED ON BEHALF OF THE ASSESSEE. BEFORE ADVERTING TO THE FACTS OF THE CASE LET US REFERRED CERTAIN LEADING CASE LAWS ON THE SCOPE OF REVISIONARY JURISDICTION OF LD. PCIT. 37. THE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. V. CIT [2000] 243 ITR 832 HELD THAT A BARE READING OF SECTION 263 OF THE INCOME-TAX ACT, 1961, MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF THE JURISDICTION BY THE COMMISSIONER SUO MOTU UNDER IT, IS THAT THE ORDER OF THE INCOME-TAX OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, ( I ) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND ( II ) IT IS PREJUDICIAL TO THE INTERESTS OF THE RADHIKA INFRASTRUCTURE, SURAT 32 REVENUE. IF ONE OF THEM IS ABSENT - IF THE ORDER OF THE INCOME-TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUE - RECOURSE CANNOT BE HAD TO SECTION 263(1) OF THE ACT. * 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 WILL BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' IS NOT AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT. UNDERSTOOD IN ITS ORDINARY MEANING IT IS OF WIDE IMPORT AND IS NOT CONFINED TO LOSS OF TAX. 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 REVENUE. IF DUE TO AN ERRONEOUS ORDER OF THE INCOME-TAX OFFICER, THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CERTAINLY 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. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER, CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN INCOME- TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE RADHIKA INFRASTRUCTURE, SURAT 33 INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. (* UNDERLINE BY US) 38. THE HONBLE BOMBAY HIGH COURT IN CIT VS GABRIEL INDIA LTD (233 ITR 108 BOM /71 TAXMAN 585) HELD THAT THE POWER OF SUO MOTU REVISION UNDER SUB-SECTION (1) OF SECTION 263 IS IN THE NATURE OF SUPERVISORY JURISDICTION AND THE SAME CAN BE EXERCISED ONLY IF THE CIRCUMSTANCES SPECIFIED THEREIN EXIST. TWO CIRCUMSTANCES MUST EXIST TO ENABLE THE COMMISSIONER TO EXERCISE POWER OF REVISION UNDER THIS SUB-SECTION, VIZ., (I) THE ORDER IS ERRONEOUS; AND (II) BY VIRTUE OF THE ORDER BEING ERRONEOUS PREJUDICE HAS BEEN CAUSED TO THE INTERESTS OF THE REVENUE. IT HAS, THEREFORE, TO BE CONSIDERED FIRSTLY AS TO WHEN AN ORDER CAN BE SAID TO BE ERRONEOUS. ONE FINDS THAT THE EXPRESSIONS 'ERRONEOUS', 'ERRONEOUS ASSESSMENT' AND 'ERRONEOUS JUDGMENT' HAVE BEEN DEFINED IN BLACK'S LAW DICTIONARY. ACCORDING TO THE DEFINITION, 'ERRONEOUS' MEANS 'INVOLVING ERROR; DEVIATING FROM THE LAW'. 'ERRONEOUS ASSESSMENT' REFERS TO AN ASSESSMENT THAT DEVIATES FROM THE LAW AND IS, THEREFORE, INVALID, AND IS A DEFECT THAT IS JURISDICTIONAL IN ITS NATURE, AND DOES NOT REFER TO THE JUDGMENT OF THE ASSESSING OFFICER IN FIXING THE AMOUNT OF VALUATION OF THE PROPERTY. SIMILARLY, 'ERRONEOUS JUDGMENT' MEANS 'ONE RENDERED ACCORDING TO COURSE AND PRACTICE OF COURT, BUT CONTRARY TO LAW, UPON MISTAKEN VIEW OF LAW, OR RADHIKA INFRASTRUCTURE, SURAT 34 UPON ERRONEOUS APPLICATION OF LEGAL PRINCIPLES. THE HONBLE COURT FURTHER HELD THAT FROM THE ABOVE SAID DEFINITIONS IT IS CLEAR THAT AN ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF AN ASSESSING OFFICER ACTING 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 BEEN WRITTEN MORE ELABORATELY. THIS SECTION DOES NOT VISUALIZE A CASE OF SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE ITO, WHO PASSED THE ORDER, UNLESS THE DECISION IS HELD TO BE ERRONEOUS. CASES MAY BE VISUALIZED WHERE THE ITO 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 ACCEPTING 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 ESTIMATED THE INCOME AT A FIGURE HIGHER THAN THE ONE DETERMINED BY THE ITO. THAT WOULD NOT VEST THE COMMISSIONER WITH POWER TO RE-EXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIMSELF AT A HIGHER FIGURE. IT IS BECAUSE THE ITO HAS EXERCISED THE QUASI-JUDICIAL POWER VESTED IN HIM IN ACCORDANCE WITH LAW AND ARRIVED AT A CONCLUSION AND SUCH A CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE CONCLUSION. IT MAY BE SAID RADHIKA INFRASTRUCTURE, SURAT 35 IN SUCH A CASE THAT IN THE OPINION OF THE COMMISSIONER THE ORDER IN QUESTION IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. BUT THAT BY ITSELF WILL NOT BE ENOUGH TO VEST THE COMMISSIONER WITH THE POWER OF SUO MOTU REVISION BECAUSE THE FIRST REQUIREMENT, VIZ., THAT THE ORDER IS ERRONEOUS, IS ABSENT. SIMILARLY, IF AN ORDER IS ERRONEOUS BUT NOT PREJUDICIAL TO THE INTERESTS OF THE REVENUE, THEN ALSO THE POWER OF SUO MOTU REVISION CANNOT BE EXERCISED. ANY AND EVERY ERRONEOUS ORDER CANNOT BE THE SUBJECT-MATTER OF REVISION BECAUSE THE SECOND REQUIREMENT ALSO MUST BE FULFILLED. THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATION A LESSER TAX THAN WHAT WAS JUST HAS BEEN IMPOSED. THEREFORE, IN ORDER TO EXERCISE POWER UNDER SECTION 263(1) THERE MUST BE MATERIAL BEFORE THE COMMISSIONER TO CONSIDER THAT THE ORDER PASSED BY THE ITO WAS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND THAT IT MUST BE AN ORDER WHICH IS NOT IN ACCORDANCE WITH THE LAW OR WHICH HAS BEEN PASSED BY THE ITO WITHOUT MAKING ANY ENQUIRY IN UNDUE HASTE. AN ORDER CAN BE SAID TO BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE IF IT IS NOT IN ACCORDANCE WITH THE LAW IN CONSEQUENCE WHEREOF THE LAWFUL REVENUE DUE TO THE STATE HAS NOT BEEN REALIZED OR CANNOT BE REALIZED. THERE MUST BE MATERIAL AVAILABLE ON THE RECORD CALLED FOR BY THE COMMISSIONER TO SATISFY HIM PRIMA FACIE THAT THE AFORESAID TWO REQUISITES ARE PRESENT. IF NOT, HE HAS RADHIKA INFRASTRUCTURE, SURAT 36 NO AUTHORITY TO INITIATE PROCEEDINGS FOR REVISION. EXERCISE OF POWER OF SU MOTU REVISION UNDER SUCH CIRCUMSTANCES WILL AMOUNT TO ARBITRARY EXERCISE OF POWER. IT IS WELL-SETTLED THAT WHEN EXERCISE OF STATUTORY POWER IS DEPENDENT UPON THE EXISTENCE OF CERTAIN OBJECTIVE FACTS, THE AUTHORITY BEFORE EXERCISING SUCH POWER MUST HAVE MATERIALS ON RECORD TO SATISFY IT IN THAT REGARD. IF THE ACTION OF THE AUTHORITY IS CHALLENGED BEFORE THE COURT, IT WOULD BE OPEN TO THE COURTS TO EXAMINE WHETHER THE RELEVANT OBJECTIVES WERE AVAILABLE FROM THE RECORDS CALLED FOR AND EXAMINED BY SUCH AUTHORITY. THE DECISION OF THE ITO COULD NOT BE HELD TO BE 'ERRONEOUS' SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. MOREOVER, THE COMMISSIONER HIMSELF, EVEN AFTER INITIATING PROCEEDINGS FOR REVISION AND HEARING THE ASSESSEE, COULD NOT SAY THAT THE ALLOWANCE OF THE CLAIM OF THE ASSESSEE WAS ERRONEOUS, HE SIMPLY ASKED THE ITO TO RE-EXAMINE THE MATTER, WHICH WAS NOT PERMISSIBLE. 39. THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS ARVIND JEWELLERS (259 ITR 502), WHILE RELYING ON THE DECISION OF HONBLE APEX COURT HAS TAKEN A VIEW THAT THE PROVISIONS OF SECTION 263 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 SECTION WILL BE ATTRACTED AND INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. THE SUPREME COURT HAS ALSO MADE IT CLEAR THAT THE PHRASE 'PREJUDICIAL TO THE RADHIKA INFRASTRUCTURE, SURAT 37 INTERESTS OF THE REVENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER AND THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IT WAS FURTHER EMPHATICALLY STATED THAT WHEN AN ITO ADOPTS ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW. 40. THE HON'BLE JURISDICTIONAL HIGH COURT IN ARYAN ARCADE LTD., VS PCIT (2019) 412 ITR 277 (GUJARAT) HELD THAT MERELY BECAUSE COMMISSIONER HELD A DIFFERENT BELIEF THAT WOULD NOT PERMIT HIM TO TAKE THE ORDER IN REVISION, IT IF FURTHER HELD THAT WHEN ASSESSING OFFICER MADE FULL ENQUIRY, HE MADE UP HIS MIND, THE NOTICE OF REVISION IS NOT VALID. ( EMPHASIS ADDED BY US ). FURTHER, HON'BLE MADRAS HIGH COURT IN CIT VS MEPCO INDUSTRIES LTD., (2007) 207 CTR 462 (MADRAS) HELD THAT WHEN TWO VIEWS ARE POSSIBLE ON AN ISSUE AND IT IS NOT THE CASE OF THE COMMISSIONER THAT THE VIEW TAKEN BY ASSESSING OFFICER IS NOT PERMISSIBLE IN LAW, COMMISSIONER CANNOT INVOKE HIS JURISDICTION UNDER SECTION 263 OF THE ACT. ( EMPHASIS ADDED BY US) 16. THE HONBLE DELHI HIGH COURT IN CIT VS VIKAS POLYMERS (341 ITR 537 DELHI) HELD THAT IT IS A PRE-REQUISITE THAT THE COMMISSIONER MUST GIVE RADHIKA INFRASTRUCTURE, SURAT 38 REASONS TO JUSTIFY THE EXERCISE OF SUO MOTU REVISIONAL POWERS BY HIM TO REOPEN A CONCLUDED ASSESSMENT. A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME-TAX OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE WILL NOT SUFFICE. THE EXERCISE OF THE POWER BEING QUASI-JUDICIAL IN NATURE, THE REASONS MUST BE SUCH AS TO SHOW THAT THE ENHANCEMENT OR MODIFICATION OF THE ASSESSMENT OR CANCELLATION OF THE ASSESSMENT OR DIRECTIONS ISSUED FOR A FRESH ASSESSMENT WERE CALLED FOR, AND MUST IRRESISTIBLY LEAD TO THE CONCLUSION THAT THE ORDER OF THE INCOME- TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THUS, WHILE THE INCOME-TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVING DETAILED REASONS IN RESPECT OF EACH AND EVERY DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO*. IT WAS FURTHER HELD THAT APPLYING THE AFORESAID LAW TO THE FACTS OF THE PRESENT CASE, WE ARE OF THE VIEW THAT THE EXERCISE OF REVISIONAL POWER BY THE COMMISSIONER IN THE INSTANT CASE WAS UNCALLED FOR AND UNJUSTIFIED. IT WAS MORE IN THE NATURE OF ROVING AND FISHING ENQUIRY. THE COMMISSIONER HAS PROCEEDED ON THE ASSUMPTION THAT NO SUCH INFORMATION, AS WAS FURNISHED TO HIM, WAS FURNISHED AT THE TIME OF ASSESSMENT. THE COMMISSIONER HAS MENTIONED THAT THE INCOME-TAX OFFICER HAS NOT EXAMINED THE CASH CREDITS OF THE PARTNERS OR DEPOSITS OF CHIT FUND. ASSUMING THIS TO BE SO (THOUGH THERE RADHIKA INFRASTRUCTURE, SURAT 39 DOES NOT APPEAR TO BE ANY JUSTIFICATION FOR THE AFORESAID OBSERVATION), THIS MAY MAKE THE ORDER ERRONEOUS, BUT HOW IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE HAS NOT BEEN STATED BY THE COMMISSIONER AS HE DID NOT DEAL WITH THE EXPLANATION GIVEN BY THE ASSESSEE IN THE COURSE OF SECTION 263 PROCEEDINGS. (*UNDERLINE BY US) 41. NOW ADVERTING TO THE FACTS OF THE PRESENT CASE. WE FIND THE THERE IS NO DISPUTE THAT THE AO WHILE PASSING THE ASSESSMENT ORDER ACCEPTED THE CLAIMS OF THE ASSESSEE IN NON- SPEAKING ORDER. IT IS NOT THE CASE OF LD PCIT THAT THE AO IS NOT AUTHORISED (EMPOWERED) TO ACCEPTED THE RETURN OF INCOME IN NON-SPEAKING ORDER. WE HAVE SEEN THAT THE AO WHILE PASSING THE ASSESSMENT ORDER IN PARA 4 RECORDED THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE VIDE VARIOUS ORDER SHEET ENTRIES HAVE FURNISHED THE RELEVANT DETAILS AND INFORMATION CALLED FOR. AFTER AFFORDING AMPLE AND ADEQUATE OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE, ASSESSMENT PROCEEDINGS HAVE BEEN COMPLETED ON THE BASIS OF THE SUBMISSIONS AND DETAILS COLLECTED AND IN CONSEQUENCE UPON THE CONCLUSION OF PROCEEDING AND HEARING OF EVIDENCES, ASSESSMENT IS MADE BY THIS ORDER. A PERUSAL OF SHOW CAUSE NOTICE UNDER SECTION 263 DATED 08.03.2021, CLEARLY DEMONSTRATE THAT THE LD PCIT IDENTIFIED ALL THE ISSUES WHICH WERE THE SUBJECT MATTER OF THE NOTICE UNDER SECTION 142(1) AND THE QUESTIONNAIRE ATTACHED THERETO, EXCEPT THE ISSUE OF INITIATION OF PENALTY RADHIKA INFRASTRUCTURE, SURAT 40 271D AND VALIDITY OF IDS. THE LD PCIT IN HIS SHOW CAUSE NOTICE (SCN) UNDER SECTION 263 HAS ACCEPTED THAT THE AO MADE DETAILED QUESTIONNAIRE (PARA -5) DATED 03.12.2018. AND ON PERUSAL RECORD AND DETAILS /EVIDENCES AVAILABLE ON RECORD, THE PCIT NOTED THAT AO HAS NOT MADE FURTHER INQUIRY. THUS, THE LD. PCIT HAS NOT MADE A CASE THAT THERE WAS NO ENQUIRY OR LACK OF INQUIRY RATHER RECORDED THAT THE AO CALLED DETAILED INQUIRY. WE FIND THAT THE LD. PCIT HAS NOT SPECIFIED THAT WHAT KIND OF FURTHER INQUIRY WAS REQUIRED, WHEN THE INCOME DISCLOSED IN IDS WAS DULY ACCEPTED BY HIGHER AUTHORITY. AND THE ACCEPTANCE OF IDS WAS NEVER QUESTIONED BY BOARD OR OTHER SUPERIOR AUTHORITY THEN PCIT. IT IS THE AO WHO HAS TO TAKE A CONSCIOUS DECISION IF ANY FURTHER INQUIRY IS REQUIRED OR NOT. FURTHERMORE, THE ASSESSMENT ORDER WAS DULY APPROVED BY THE LD JCIT. THERE IN NOT FINDING OF LD PCIT THAT THE APPROVAL GRANTED BY THE JCIT IS NOT PROPER OR NON-APPLICATION OF PROPER PROCEDURE. 42. WE FIND THAT IN THE CASE IN HAND THE AO HAS MADE REQUIRED INQUIRY AND CAME TO A POSSIBLE CONCLUSION IN ALLOWING THE CLAIMS TO THE ASSESSEE. SO FAR AS NON INITIATION OF PENALTY UNDER SECTION 271D/ 271E IS CONCERNED, WE FIND THAT HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS SURESH G. SHAH [289 ITR 110 (GUJ)] AND CIT VS PARMANAND M. PATEL [287 ITR 3 (GUJ)] IT WAS HELD THAT CIT CANNOT EXERCISE HIS JURISDICTION UNDER SECTION 263 FOR THE PURPOSE OF INITIATION OF PENALTY PROCEEDINGS. OTHER ALSO WE FIND THAT THE ASSESSEE HAS SPECIFICALLY IN ITS REPLY TO THE SCN TO THE LD RADHIKA INFRASTRUCTURE, SURAT 41 PCIT HAS STATED THAT THE CASH WAS RECEIVED ONLY AGAINST THE BOOKING AND NO LOAN OR SUCH TRANSACTION WAS UNDERTAKEN BY THEM. THE LD PCIT FAILED TO SPECIFY THE TRANSACTION ON WHICH INITIATION OF PENALTY EITHER UNDER SECTION 271D OR 271E WAS WARRANTED. AND ON THE ISSUES OF VALIDITY OF DISCLOSER IN IDS, THE LD PCIT HAS NOT SPECIFIED THAT WHILE MAKING DECLARATION THE ASSESSEE MADE ANY MISREPRESENTATION OF ANY FACTS. ONCE THE IDS IN ALL CASES WERE ACCEPTED BY LD. PCIT, THE AO OR THE RANGE HEAD NO AUTHORITY TO RELOOK OR POWER TO REVOKE OR TO EXAMINE ITS VALIDITY. WE FURTHER FIND THAT THE LD PCIT WHILE DIRECTING THE AO HAS NOT HIMSELF REVOKED THE IDS NOR DIRECTED TO REFUND THE PAYMENT OF TAX TO THE ASSESSEE. FURTHER, WE FIND THAT IN THE IDS THE ASSESSEE HAS PAID MORE TAX TO THE REVENUE THEN THE RATE OF NORMAL TAX. 43. WE FURTHER FIND THAT THE AO WHILE PASSING THE ASSESSMENT ORDER IN ALL YEARS HAVE MADE INQUIRY AND TOOK REASONABLE, PLAUSIBLE AND LEGALLY SUSTAINABLE VIEW. THE HONBLE DELHI HIGH COURT IN CIT VS KELVINATOR OF INDIA LTD (SUPRA) HELD THAT IF THE AO HAS ADOPTED ONE OF THE COURSE PERMISSIBLE IN LAW, WHICH RESULTED IN LOSS OF REVENUE OR WHERE TWO VIEW IS POSSIBLE AND THE AO HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF REVENUE UNLESS VIEW TAKEN BY THE AO IS NOT SUSTAINABLE IN LAW. AT THE COST OF REPETITION, WE MAY NOTE THAT THE LD PCIT NEITHER IN HIS SHOW CAUSE RADHIKA INFRASTRUCTURE, SURAT 42 NOTICE NOR IN ULTIMATE / FINAL ORDER HAS HELD THAT THE ORDER PASSED BY THE AO IS UNSUSTAINABLE IN LAW. 44. IN VIEW OF THE AFORESAID DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT THE LD PCIT WAS NOT JUSTIFIED IN SUBJECTING THE ASSESSMENT ORDER FOR ALL THREE YEARS TO REVISION PROCEEDINGS BY TAKING VIEW THAT THE AO HAS NOT MADE FURTHER INQUIRY , THEREFORE WE QUASH THE REVISION ORDER (S) IN ALL THREE ASSESSMENT YEARS. IN THE RESULT THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ALL THREE ASSESSMENT YEARS ARE ALLOWED. 45. IN THE RESULT THE APPEAL FOR AY 2015-16, 2016-17 & 2017-18 ARE ALLOWED. NO ORDER AS TO COST. ORDER ANNOUNCED ON 11 OCTOBER R 2021AT THE TIME OF HEARING IN VIRTUAL COURT HEARING. SD/- SD/- (DR ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED: 11/09/2021 / SGR* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR 6. GUARD FILE BY ORDER / / TRUE COPY / / SR. PVT. SECRETARY, ITAT, SURAT