Munirabanu Imtiyazbhai Mahida, Kamrej, Surat V. Pr. Commissioner of Income Tax, Surat

ITA 73/SRT/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8768 (ITAT-SURAT)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-09-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 31-03-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Revision of order; Rectification of order; Opportunity of being heard; Cost of acquisition; Fair market value; Difference of opinion; Prejudicial to interest; Reason to believe; Change of opinion; Set aside; Capital Gains
• Section: 148; 263; 154; 143(3); 142(1); 55A; 43; 22

Judgement Text

आयकर अपीलȣय अͬधकरण, स ु रत Ûयायपीठ, स ु रत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND Dr ARJUN LAL SAINI, ACCOUNTANT MEMBER आ.अ.सं./ITA No.73/SRT/2022 (AY 2012-13) (Hearing in Physical Court) Munirabanu Imtiyazbhai Mahida, 316, Patel Wadi, At and Post Valak Kamrej, Surat-395002 PAN : ANKPM 2960 L Vs Principal Commissioner of Income-tax, Room No. 123, 1 st Floor, Aayakar Bhawan, Majura Gate, Surat-395002 अपीलाथȸ/Appellant Ĥ×यथȸ /Respondent Ǔनधा[ǐरती कȧ ओर से /Assessee by Shri P.M. Jagasheth, CA राजèव कȧ ओर से /Revenue by Shri H.P. Meena, CIT-DR सुनवाई की तारीख/Date of hearing 14.09.2022 उɮघोषणा कȧ तारȣख/Date of pronouncement 09.11.2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of learned Principal Commissioner of Income Tax-Surat-1 [for short to as ‘Ld. PCIT’] passed under section 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 22.03.2022 for assessment year (AY) 2012-13. The assessee has raised the following grounds of appeal:- “1. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax has grievously erred in initiating the proceedings u/s 263 of the Act, 1961. ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 2 2. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax has grievously erred in assuming jurisdiction u/s 263 of the Act, 1961. 3. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax has erred in violating the principles of natural justice by not the mentioning the grounds for initiating action u/s 263 of Income Tax Act, 1961 in the show cause notice issued. As such the order passed u/s 263 is void ab-initio. The action of the Ld. CIT was wholly unreasonable, uncalled for the bad in law. 4. On the facts and in the circumstances of the case as well as law on the subject, that the order of u/s 263 is merely ‘change in opinion’. The assessment order u/s 143(3) rws.147 of the Income Tax Act as well as order u/s 154 of the Act passed by the Ld. AO does not in any way represent erroneous order. Hence, the action of the Ld. CIT was wholly unreasonable, uncalled for and bad in law. 5. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax has grievously erred I assuming that the details and explanation in respect of land sold by the assessee was not duly verified and the Assessing Officer had not made inquiries during the course of proceedings and without application of mind finalized the order u/s 143(3) rws. 147 of I.T Act and order passed/s 154 of the Act is contrary to the fact of the case. 6. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax has grievously erred I directing to the Ld. AO to pass fresh assessment order. 7. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of entire proceedings are bad-in-law and invalid as assessment order u/s 143(3) of the Act as well as order u/s 154 of the Act for the same year were framed, wherein due inquiry was made. ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 3 8. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax has grievously erred in setting aside the assessment order framed u/s 143(3) rws.147 of the I.T. Act as well as order u/s 154 of the Act without pointing out as to how the order is erroneous and prejudicial to interest of revenue. 9. It is therefore prayed that the above proposed proceedings may please be revoked as learned members of the Tribunal may deem it proper. 10. Appellant craves liberty to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.” 2. Brief facts of the case are that no return of income was filed by assessee for the year under consideration 2012-13. The case of assessee was reopened under section 147 and notice under section 148 issued on 25.03.2019 was served upon the assessee. The case of assessee was reopened on the basis of information that the assessee had sold agriculture land situated at Block No.63/A, R.S. No.59, 71, 71, 73, Khata No. 199, Village Valak, Surat vide sale deed executed on 29.02.2012 and registered on 31.03.2012. The assessee has shown value of asset in the registered sale deed at Rs.95 lakhs. The purchaser paid stamp duty of Rs.17,02,000/- for the purpose of registration of document. The Sub-Registrar, Kamrej valued the sale transaction of land at Rs.3,47,25,000/- on the basis of jantri rate applicable at the relevant time. The transaction of sale of land was reported ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 4 to the Income Tax Department as per the provision of Income Tax Act by Sub-Registrar Officer, Kamrej. On verification of record by assessing officer, it was noted that assessee has not filed her return of income for impugned assessment year. In order to examine the information reported by Sub-Registrar concerned, notice under section133(6) dated 01.02.2019 was issued to the assessee. The Assessing Officer recorded that no information in response to notice said notice was reported. The Assessing Officer after recording reasons of reopening that the income of assessee escape assessment, obtained approval of higher authorities and issued notice under section 148 dated 25.03.2019. The assessee, in response to the notice under section 148, filed her return of income for assessment year 2012-13 on 22.06.2019 declaring income of Rs. 82,360/-. In the computation of income has shown Long Term Capital Loss of Rs.2,32,10,950/-. The assessee furnished copy of return of income (ROI), computation of income and copy of sale deed. The assessee was served notice under section 142(1) dated 20.09.2019 to explain as to why return should not be treated as invalid as it was filed beyond the time given in notice under section 148 of the Act. The assessing officer ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 5 recorded that reasons recorded was provided to the assessee. The assessee filed objection against the re-opening. The objection of assessee was rejected by a speaking order dated 07.10.2019. After rejecting the objection filed by assessee, the Assessing Officer proceeded for re-assessment. During the assessment, Assessing Officer recorded that assessee per information, the assessee sold land situated at Block No.63, Moje Valak, Taluka Kamrej, District Surat and shown sale consideration of land at Rs.95 lakhs. The stamp duty authority determined the fair market value of property at Rs.3,47,25,000/-. Thus, the difference of Rs.2,52,25,000/- (Rs.3,47,25,000 – 95,00,000), is liable to tax under section 50C. The Assessing Officer further noted that property/ land was acquired by the assessee prior to April 1981. The assessee adopted the value of property as on 01.04.1981 @ Rs. 300/- per square meter on the basis of Government registered valuer report. On further examination of working of capital gains, it was noted by the Assessing Officer that by valuing at higher rate, the assessee has shown Long Term Capital Loss on sale of land. ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 6 3. On the basis of aforesaid observation, the Assessing Officer issued detailed show cause notice as to why an amount of Rs.2,52,25,000/- should not be treated as undisclosed capital gains and added to the income of assessee. In response to notice dated 21.10.2019, the assessee filed her reply. After considering the reply of assessee, the Assessing Officer referred the matter to District Valuation Officer (DVO) on 21.10.2019 to determine the value of asset as on 29.03.2012, as on the date of execution of sale deed (as mentioned in reference under section 142A, PB 29- 30). The report of DVO was not received till passing the assessment order. Accordingly, the Assessing Officer made addition of undisclosed income of Rs.2,52,25,000/- to the income of assessee, subject to rectification of the order under section 154, on receipt of report of DVO. 4. Subsequently, the report of DVO was received by Assessing Officer and accordingly rectification order under section 154 of the Act was passed on 27.01.2020. In the rectification order, the Assessing Officer noted that during the assessment reference was made to the DVO, till passing the assessment order though the report of DVO was not received, the assessment order as was ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 7 getting time barred. And at the time of passing the assessment order, it was directed that necessary rectification will be made in the assessment order on the basis of report of DVO. On the basis of report DVO, the Assessing Officer noted that DVO has determined the value of property as on 31.03.2012 at Rs.2,61,96,500/-. Accordingly, the Assessing Officer worked out the Long Term Capital Loss at (-) Rs.65,14,450/- in the following manner: - Sr.No. Particulars Full value 1 Full value sale consideration as per sale deed 95,00,000 2 FMV estimated by the DVO as on date of sale 2,61,96,500 3 Index cost of acquisition 785/100 x 41,67,000/- 3,27,10,950 4 Capital loss (2-3) (-) 65,14,450 5 Deduction claim u/s 54/54F NIL 6 Net Long Term Capital Loss (-)65,14,450 5. The assessment order dated 24.12.2019 as well as rectification order dated 27.01.2020 was revised by Ld. PCIT by exercising his jurisdictional power under section 263 of the Act. Before revised the assessment order, Ld. PCIT vide his order dated 22.03.2022 under section 263 of the Act. The ld PCIT issued show cause notice dated 05.03.202 to the assessee. In the show cause notice, the Ld. PCIT recorded that Assessing Officer passed assessment order dated 24.12.2019 under section 143(3) r.w.s. 147 in allowing deduction of Rs.95 lakhs which should have been made ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 8 in respect to the cost of acquisition as on 01.04.1981 and without application of mind, which makes the assessment order dated 24.12.2019 as erroneous and in so far as prejudicial to the interest of revenue, which required revision of the order under section 263 of the Act. The Assessing Officer allowed the deduction of Rs. 3.27 crores in the rectification order which was not allowed in the original assessment order, hence the rectification order dated 27.01.2020 is also erroneous in so far as prejudicial to the interest of revenue. The assessee was allowed opportunity of hearing for explaining the fact and to adduce evidence /documents, if any, against such proposal and to file the reply on e-filing portal on or before 14.03.2022. 6. In response to show cause notice, the assessee filed her reply dated. The reply of assessee is recorded in para-4 of the order of Ld. PCIT. In reply, the assessee submitted that in contents of show cause notice dated 05.03.2022 it is mentioned that Assessing Officer has not make inquiries during assessment proceedings, which is contrary to the facts of the case. The twin conditions for revising the assessment order must be satisfied, in this case, none of these conditions are satisfied. During the ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 9 course of assessment proceedings, all details called for by Assessing Officer, has been duly submitted and was accepted by Assessing Officer. During the course of assessment proceedings, complete details and explanation in respect of land sold by assessee, is furnished. The details were duly verified by Assessing Officer before finalizing the assessment order. The Assessing Officer arrived at conclusion after making due inquiries and verification, on the basis of which, Assessing Officer has taken a plausible view. Hence, question having to contrary view against one of the legal, and fully dealt with one issue by Assessing Officer does not arise. 7. The reply of assessee was not accepted by Ld. PCIT. The Ld. PCIT held that during the assessment, Assessing Officer while making the addition on provision of 50C, the Assessing Officer allowed deduction of Rs.95 lakhs and on one hand has not accepted the value declared @ Rs. 300/- per square metre as on 01.04.1981 and on the other hand, he allowed the deduction of Rs.95 lakhs being document value of sale which was not correct. Further, the Assessing Officer on receiving the DVO’s report, has rectified assessment order dated 24.12.2019 by passing a rectification ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 10 order under section 154 on 27.01.2020, wherein the sale consideration has been adopted at Rs.2,61,96,500/- as estimated by DVO and deduction of Rs.3,27,10,950/- has been allowed on account of index cost of acquisition to assess the capital loss. The Assessing Officer erred in allowing deduction of index loss of land, when the same was not accepted during the assessment proceedings. Thus, the deduction of Rs.3,27,10,950/- was allowed without there being any apparent mistake on record. The Assessing Officer allowed deduction of Rs.95 lakhs without making any inquiry which should have been made with respect to cost of acquisition as on 01.04.1981 without application of mind. Thus, the assessment order as well as rectification order under section 154 are erroneous in so far as it is prejudicial to the interest of revenue. The Ld. PCIT by referring certain case law held that Explanation-2 to Section 263 is clearly applicable on the facts of this case as Assessing Officer had passed the assessment order without making inquiry or verification, which should have been made in respect of issues and allowed excess relief to the assessee. The Ld. PCIT set aside the assessment order under section 143(3) r.w.s. 147 dated 24.12.2019 as well as rectification ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 11 order under section 154 dated 27.03.2020 with the direction the Assessing Officer to pass afresh assessment order taking into consideration to the issues which may have been already considered together with the concerned issues by him after giving reasonable and sufficient opportunity of being heard to assessee. Aggrieved by the order of Ld. PCIT, the assessee has filed present appeal before the Tribunal. 8. We have heard the Ld. Authorized Representative (AR) for the assessee and Ld. Commissioner of Income-Tax-Departmental Representative (CIT-DR) for the Revenue. With their assistance, we have also gone through the contents of orders of lower authorities. The ld AR for the assessee submits that assessment order passed by the assessing officer is not erroneous and cannot be a subject matter of revision under section 263. The assessing officer during the assessment made all requisite investigation and examined all the facts of the case. The ld AR for the assessee submits that the assessee sold her asset / land and executed sale deed on 29/02/2012, which was registered on by Sub-registrar on 31/03/2012. The asset was acquired prior to 01.04.1981. The assessee adopted the value of asset as on 01.04.1981 on the basis ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 12 of Government registered valuer, for the purpose of computation of capital gain. The amended provision of section 55A, which was amended by Finance Act 2012, w.e.f. 01.07.2012 is not applicable on the facts of the case. The assessing officer examined the fact on the issue of the value adopted by the assessee as on 01.04.1981 is less than the fair market value. The assessee explained that the transaction of land was made prior to the amendment in section 55A. The ld AR for the assessee submits that the language of section 55A as stood prior to 01.07.2012 that a reference could be made to departmental valuation officer (DVO) only when the value adopted by the assessee was less than the fair market value. The assessing officer was fully convinced and after considering the facts and the law applicable at the relevant period took a reasonable, plausible and legally sustainable view. The view adopted by the assessing officer cannot be termed as erroneous in view of the decision of Hon’ble Jurisdictional High Court in CIT Vs Gaurangiben S Shodhan ((2014) 367 ITR 238 (Gujarat) and Bombay High Court in CIT Vs Pooja Prints (2014) 360 ITR 697 (Bom). ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 13 9. The ld AR for the assessee further submits that the case of assessee was reopened under section 147, on the basis of information with the assessing officer that the assessee had sold agriculture land situated at Village Valak, Surat vide sale deed executed on 29.02.2012 and registered on 31.03.2012, wherein the assessee has shown value of asset in the registered sale deed at Rs.95 lakhs. The purchaser paid stamp duty of Rs.17,02,000/- for the purpose of registration of document. The Sub-Registrar, Kamrej valued the sale transaction of land at Rs.3,47,25,000/- on the basis of jantri rate applicable at the relevant time. The assessing officer on the basis of information examined the fact and passed the assessment order. At the time of passing the assessment order the report of DVO was not received. On receipt of report of DVO, the assessing officer passed rectification order under section 154 transaction. The assessing officer while passing the rectification order accepted the value of asset as on the date of sale as suggested by DVO and computed the capital gain as per the decision of Gujarat High Court in PCIT Vs Ravjibhai Naginbhai Thesia (2016) 388 ITR 358 (Gujarat). The assessment order, which was rectified later is not at all erroneous ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 14 or prejudicial to the interest of revenue. The ld AR for assessee in his without prejudice submissions submits that even, if it is presumed that the order is prejudicial to the interest of revenue, the twin condition of section 263 is not fulfilled as the assessment order is in consonance with the view taken by Jurisdictional High Court. The ld AR for the assessee submits that the order passed by the ld PCIT in nothing but change of opinion, thus, the revision order passed by him is liable to be set-aside in accepting the appeal. 10. To support all his submissions, the ld AR for the assessee relied on the following case laws;  Malabar Industrial Company Vs CIT (2000) 243 ITR 83-SC/ 109 TAXMAN 66-SC,  CIT Vs G.M. Mittal Stainless Steel (P) Ltd (2003) 130 Taxman 67-SC,  CIT Vs Gabriel India Ltd (1993) 71 Taxman585 (Bom),  CIT Vs Fine Jewellery (India) Ltd (2015) 55 taxmann.com 514 (Bom),  Harshadbhai Patel Vs PCIT (ITA No.29 /SRT/2021),  Sopan Developers Vs PCIT ( ITA No. 96/ RJT/2022),  CIT Vs Gaurangiben S Shodhan (2014) 45 taxmann.com 356 (Gujarat),  CIT Vs Puja Prints (2014) 43 taxmann.com247 (Bom),  Virender Natwarlal Jariwala Vs DCIT 131 taxmann.com 156 (surat-Trib),  Ranchhodbhai Patel VS ITO (2021) 123 taxmann.com 156 (Surat-Trib),  Suresh Bhai Balubhai Patel Vs ITO (ITA No. 3636/Ahd/2015) and  Mahadevbhai Mohanbhai Naik Vs ITO (ITA 820/Ahd/2016. ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 15 11. On the other hand, the learned Commissioner of income tax- departmental representative (ld CIT-DR) for the revenue supported the order of the ld PCIT. The ld CIT-DR for the revenue further submits that assessing officer erred while allowing deduction of Rs.95 lakhs without application of mind, which makes the assessment order dated 24.12.2019 as erroneous and in so far as prejudicial to the interest of revenue, which required revision of the order under section 263 of the Act. The Assessing Officer further allowed the deduction of Rs. 3.27 crores in the rectification order which was not allowed in the original assessment order, hence the rectification order dated 27.01.2020 is also erroneous in so far as prejudicial to the interest of revenue. Thus, the twin conditions of section 263 is fully satisfied in the present case. Further, the assessing officer has not made requisite inquires, which should have been made with regard to the adoption of cost of acquisition of asset as on 01.04.1981. the ld CIT-DR for revenue prayed to uphold the order of ld PCIT. 12. We have considered the rival submissions of the parties and have gone through the order of the lower authorities. We have perused the assessment order and the order passed by ld PCIT. We have ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 16 also deliberated on the documentary evidences and also on the various case laws relied by the Ld. AR for the assessee. We find that the case of the assessee for the year under consideration was reopened on the basis of information received by assessing officer from sub-registrar concerned that the assessee has sold her land during the relevant financial year. The transaction of such land was registered on 31.03.2012. No return of income was filed by the assessee, thus, the assessing officer has reason to believe that income of the assessee escaped assessment. We find that during the assessment proceedings, the assessing officer directed the assessee to furnish copy of return of income, computation of income, and sale deed of the land. The assessee furnished all such required details before assessing officer. On examination of such details, the assessing officer find that assessee has shown sale consideration of Rs. 95.00 lacs and has shown long term capital loss of Rs. 2.32 Crore. The assessee acquired such asset prior to 01.04.1981, therefore, the assessee adopted its value as on 01.04.1981 for the purpose of computation of capital gain. The assessee on the basis of Government approved valuer adopted the rate of land (asset) at Rs. 300/- per square meter. The area of ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 17 land was 13890 square metre. The assessee worked out the cost of acquisition of asset at Rs. 41,67,000/-. The assessing officer was of the view that the assessee has shown the cost of acquisition on higher side to reduce the capital gain. The assessing officer made a reference to DVO under section 55A for estimation of value of the land as on 01.04.1981. (as recorded in para-11 of assessment order). As report of DVO was not received and the period for passing assessment order was likely to expire on 31.12.2019, the assessing officer passed the assessment order by making the addition of Rs. 2.52 Crore on account of undisclosed income in the assessment order dated 26.12.2019. 13. Subsequently, the DVO furnished its report on 08.01.2020. The DVO estimated the value of the property as on the date of sale at Rs. 2.61 Crore. On receipt of report of DVO, the assessing officer rectified the assessment order and accepted the value of land as on the date of sale at Rs. 2.61 Crore and computed the loss at Rs. (-) 65,14,450/- against the loss declared by assessee at Rs. 2.32 Crore. On careful perusal of reference dated 21.10.2019 sent by assessing officer to DVO for estimation of value of asset, we find that the assessing officer sought the estimation of value on the ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 18 date of sale, though in para-11 of assessment order it is mentioned “as on 01.04.1981”. 14. Before us, the ld AR for the assesse vehemently argued that they made submissions before assessing officer that the amended provision of section 55A, as amended from 01.07.2012 is not applicable on the case of assessee as the transaction of sale of asset took place prior to amendment made by Finance Act 2012 in section 55A. We find convincing force in the submissions of ld AR for the assessee that such submissions are seems to have been accepted by assessing officer. We are conscious of the fact that there is no such assertion recorded by assessing officer either in the assessment order or in rectification order passed on receipt of the report of DVO. However, there is no dispute that assessing officer examined the facts of the case very extensively and passed assessment order. We further find that the assessment order coupled with rectification order passed by assessing officer is in consonance with decision of Jurisdiction High Court in CIT Vs Gaurangiben S Shodhan (supra) and Bombay High Court in CIT Vs Pooja Prints (supra). ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 19 15. Further, Hon’ble 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 ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 20 law, or upon erroneous application of legal principles. The Hon’ble High Court also held that from the 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 ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 21 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 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 ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 22 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 no authority to initiate proceedings for revision. Exercise of power of suo-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 ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 23 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. 16. 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. In CIT Vs Nirma Chemical Works (P) Ltd (supra), the Hon’ble High Court also held that when assessing officer after making due inquiries had adopted one of the view and granted partial relief, merely because Commissioner took a different view of the matter, it would not be sufficient to permit commissioner to exercise his powers under section 263. The Hon’ble Court in para 22 of its order on the objection of the revenue that there is no discussion of the issue in the assessment order held that the contention on behalf of the revenue that the ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 24 assessment order does not reflect any application of mind as to the eligibility or otherwise under section 80-I of the Act requires to be noted to be rejected. An assessment order cannot incorporate reasons for making/granting a claim of deduction. If it does so, an assessment order would cease to be an order and become an epic some. The reasons are not far to seek. Firstly, it would cast an almost impossible burden on the Assessing Officer, considering the workload that he carries and the period of limitation within which an order is required to be made; and, secondly, the order is an appealable order. An appeal lies, would be filed, only against disallowances which an assessee feels aggrieved with. 17. The Supreme Court in case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 832 (SC), held that the prerequisite for the exercise of jurisdiction by the Commissioner suo-motu is that the order of the Income-tax Officer is erroneous in so far 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 revenue. If one of them is absent ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 25 - 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. It can be exercised only when an order is erroneous, the section 263 will be attracted. 18. Now again adverting to the facts of the present case, we find that the assessing officer while passing the assessment order which was rectified on receipt of DVO’s report is a reasonable, plausible and legally sustainable, which cannot be branded as erroneous. Since, the assessing officer has accepted the explanation of assessee, which was coupled with evidence; the assessing officer may not have thought to pass detailed order on the issue examined by her. In our view, once the contention of the assessee on a particular issue is accepted by assessing officer, the order is not appealable order and no appeal would be filed, against such accepted position as an assessee will not feel aggrieved with it, it is not necessary to give reasons of acceptance of such pleas. So far as the observation of ld PCIT that the assessing officer did nothing to sort out the enquiry to verify the assertion of the assessee and there was failure on the part of Assessing Officer to ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 26 bring on record the even correct facts or non-conduct of enquiry verification of facts, is concerned, we find that the assessing officer made requisite investigation before allowing relief to the assessee. The investigation conducted and the view adopted by the assessing officer in the present case, if not accepted by the Ld. PCIT, in nothing but change of opinion. It is settled position in law that no revision of assessment order is permissible on mere change of opinion. 19. Therefore, in view of the above discussions, we are of the view that on the basis of material before the assessing officer, she took reasonable, plausible and legally sustainable view, which cannot be branded as erroneous. There is no doubt that while accepting the claim in the assessment, there may be some loss of revenue, tax can be levied only with the authority of law, and 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 unless the view adopted by assessing permissible in law. Once the assessing 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 ITA No.73/SRT/2022 (A.Y 12-13) Munirabanu I Mahida 27 the view taken by the assessing officer is unsustainable in law. Hence, the grounds of appeal raised by the assessee are allowed. 20. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 09/11/2022. Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) [लेखा सद᭭य/ACCOUNTANT MEMBER] [᭠याियक सद᭭य JUDICIAL MEMBER] Surat, Dated: 09/11/2022 Dkp. Out Sourcing Sr.P.S Copy to: 1. Appellant- 2. Respondent- 3. CIT(A)- 4. CIT 5. DR 6. Guard File True copy/ By order // True Copy // Sr.P.S./Assistant Registrar, ITAT, Surat