Sambit Resorts Pvt. Ltd, Bhubaneswar V. CIT, Bhubaneswar

ITA 76/CTK/2014

• Counselvise Citation: 7622114 RSA 2014
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K AJAY KUMAR
• Assessee Lawyers: G NAIK; R K KAR
• Keywords: Opportunity of being heard; Period of limitation; Reason to believe
• Section: 143(3); 194C; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 76/CTK/2014 : (ASST. YEAR : 2009 - 10) SAMBIT RESORTS PVT. LTD., PLOT NO. 339 (P) GAUTAM NAGAR, BMC - MAUSIMA ROAD, BHUBANESWAR 751014 (APPELLANT) PAN : AAHCS9285P VS. COMMISSIONER OF INCOME TAX, AAYAKAR BHAWAN, RAJASWA VIHAR, BHUBANESWAR. (RESPONDENT) ASSESSEE BY : G. NAIK & R.K. KAR REVENUE BY : K. AJAY KUMAR, DR DATE OF HEARING : 25/04/2014 DATE OF PRONOUNCEMENT : 23 /05/2014 O R D E R PER BENCH : 1. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT PASSED U/S 263 ON THE GROUND THAT THE CIT DOES NOT HAVE ANY JURISDICTION TO PASS THE ORDER U/S 263. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE REGULAR ASSESSMENT U/S 143(3) WAS COMPLETE D ON 4.11.2011 DETERMINING THE TOTAL INCOME AT RS.37,32,600/ - . CIT SUBSEQUENTLY INVOKING JURISDICTION U/S 263 ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE FOR THE FOLLOWING REASONS : (I) THE WORK - IN - PROGRESS INCREASED BY RS.49,41,096/ - DURING THE RELEVANT PR EVIOUS YEAR. THOUGH SUCH INCREASE AMOUNT OF WORK - IN - PROGRESS WAS LIABLE TO BE CONSIDERED AS INCOME OF THE RELEVANT YEAR, THE AO WHILE COMPLETING THE ASSESSMENT DID NOT CONSIDER THE SAME AS SUCH. (II) THE LABOUR CHARGES OF RS.90,000/ - WAS PAID ON 14.6.200 8 AND RS.4,50,120/ - ON 31.3.2009 TO ONE SHRI PRASANNA PRADHAN. THOUGH SUCH PAYMENTS ARE SUBJECT TO TDS, NO TDS WAS MADE BY THE ASSESSEE WHILE MAKING SUCH PAYMENTS. 2 ITA NO. 76/CKT/2014 (ASST. YEAR : 2009 - 10) HENCE, THE SAME IS NOT ALLOWABLE U/S. 40(A)(IA) OF THE ACT. WHILE COMPLETING THE ASSESSME NT THE AO FAILED TO EXAMINE THE SAME. (III) THE PROVISIONS FOR SALARY MADE AT RS.42,600/ - WHICH WAS CLAIMED AS DEDUCTION WAS NOT ALLOWABLE AS IT WAS NOT AN ACCRUED OR ASCERTAINED LIABILITY. HOWEVER, THE AO WHILE COMPLETING THE ASSESSMENT DID NOT DO SO. IN VIEW OF THESE REASONS THE CIT WAS OF THE VIEW THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN REPLY THERETO, THE ASSESSEE STATED THAT THERE IS NO UNDERSTATEMENT OF THE INCOME BY THE ASSESSEE ON AC COUNT OF INCREASE IN THE WORK IN PROGRESS, THE ASSESSEE WAS NOT LIABLE TO DEDUCT TDS U/S 194C ON THE FACTS OF THE CASE AND ALSO THAT THE UNPAID SALARY FOR THE MONTH OF MARCH, 2009 WAS PAID IN THE MONTH OF APRIL, 2009. THEREFORE, THE ORDER PASSED BY THE AO WAS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE CIT DID NOT AGREE BUT CANCELLED THE ASSESSMENT AND RESTORED IT BACK TO THE FILE OF THE AO WITH THE DIRECTION TO RE - DO THE ASSESSMENT IN ACCORDANCE WITH THE LAW AFTER DUE VERIFICATION O F THE ISSUES RAISED IN THE COURSE OF THE PROCEEDINGS U/S 263. 3. THE LD. AR BEFORE US CONTENDED THAT THE ORDER PASSED U/S 263 IS ILLEGAL AND LIABLE TO BE CANCELLED. THERE IS NO ERROR IN THE ORDER OF THE AO. THE AO HAS DULY APPLIED HIS MIND ON ALL THE T HREE POINTS. FOR THIS, ATTENTION WAS DRAWN TOWARDS THE LETTER DT. 21.10.2011 BY WHICH THE ASSESSEE HAS SUBMITTED HIS REPLY IN RESPONSE TO AOS LETTER DT. 25.7.2011. IT WAS POINTED OUT THAT THE ASSESSEE IS A BUILDER OF HOUSING PROJECTS AND FOLLOWS PROJECT COMPLETION METHOD OF ACCOUNTING. WORK IN PROGRESS RELATING TO THE HOUSING PROJECT IS DULY CREDITED TO THE PROFIT & LOSS ACCOUNT. THIS FACT WAS DULY EXPLAINED TO THE AO. FOR THIS, ATTENTION WAS DRAWN TOWARD S PG. 19 & 25 OF THE PAPER BOOK. I N RESPECT OF VARIATION IN STOCK CHARGED TO PROFIT & LOSS ACCOUNT, ATTENTION WAS DRAWN TO PG. 14 OF THE PAPER BOOK. IN RESPECT OF LABOUR CHARGES, IT WAS POINTED OUT THAT THE ASSESSEE HAS DULY SUPPLIED THE DETAILS OF LABOUR CHARGES INCURRED FOR THE HOUSING PROJECT, A C OPY OF WHICH IS AVAILABLE AT PG. 42 - 44 OF THE PAPER BOOK. IN 3 ITA NO. 76/CKT/2014 (ASST. YEAR : 2009 - 10) RESPECT OF PROVISION FOR SALARY, IT WAS STATED THAT THE ASSESSEE HAS DULY FILED DETAILS OF SALARY AS DESIRED BY THE AO DURING THE COURSE OF THE HEARING. FOR THIS, ATTENTION WAS DRAWN TOWARDS PG . 48 OF THE PAPER BOOK. THE PAYMENT OF THE SALARY UNPAID WAS MADE IN THE MONTH OF APRIL. IT IS NOT A CASE WHERE THE AO HAS NOT EXAMINED THE ISSUE. THE AO HAS DULY VERIFIED AND PASSED THE ORDER. RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS : I. CIT VS. LE ISURE WEAR EXPORTS LTD., 341 ITR 166 (DEL) II. DIT VS. JYOTI FOUNDATION, 357 ITR 388 (DEL) 4. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER OF THE CIT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE HAVE ALSO GONE THROUGH THE ORDER OF THE TAX AUTHORITIES BELOW AS WELL AS THE ORDER OF THE CIT PASSED U/S 263 ALONGWITH THE CASE LAWS CITED BEFORE US. BEFORE DECIDING THE ISSUE IT IS NECESSARY TO REFER TO THE PROVISIONS OF SEC. 263 WHICH IS BEING REPRODUCED HEREUNDER : 263. (1) THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSIN G OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE C IRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. EXPLANATION. - FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT, FOR THE PURPOSES OF THIS SUB - SEC TION, - (A) AN ORDER PASSED ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988 BY THE ASSESSING OFFICER SHALL INCLUDE - (I) AN ORDER OF ASSESSMENT MADE BY THE ASSISTANT COMMISSIONER OR DEPUTY DIRECTOR OR THE INCOME - TAX OFFICER ON THE BASIS OF THE DIRECTIONS ISSUED BY THE JOINT COMMISSIONER UNDER SECTION 144A; (II) AN ORDER MADE BY THE JOINT COMMISSIONER IN EXERCISE OF THE POWER OR IN THE PERFORMANCE OF THE FUNCTIONS OF AN ASSESSING 4 ITA NO. 76/CKT/2014 (ASST. YEAR : 2009 - 10) OFFICER CONFERRED ON, OR ASSIGNED TO, HIM UNDER THE ORDERS OR DIRECTIONS ISSUED BY THE BOARD OR BY THE CHIEF COMMISSIONER OR DIRECTOR GENERAL OR COMMISSIONER AUTHORISED BY THE BOARD IN THIS BEHALF UNDER SECTION 120; (B) 'RECORD' SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT AVAILABLE AT THE TIME OF EXAMINATION BY THE COMMISSIONER; (C) WHERE ANY ORDER REFERRED TO IN THIS SUB - SECTION AND PASSED BY THE ASSESSING OFFICER HAD BEEN THE SUBJECT MATT ER OF ANY APPEAL FILED ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988, THE POWERS OF THE COMMISSIONER UNDER THIS SUB - SECTION SHALL EXTEND AND SHALL BE DEEMED ALWAYS TO HAVE EXTENDED TO SUCH MATTERS AS HAD NOT BEEN CONSIDERED AND DECIDED IN SUCH APPEAL. (2 ) NO ORDER SHALL BE MADE UNDER SUB - SECTION (1) AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED. (3) NOTWITHSTANDING ANYTHING CONTAINED IN SUB - SECTION (2), AN ORDER IN REVISION UNDER THIS SECTION MAY BE PASSED AT ANY TIME IN THE CASE OF AN ORDER WHICH HAS BEEN PASSED IN CONSEQUENCE OF OR TO GIVE EFFECT TO, ANY FINDING OR DIRECTION CONTAINED IN AN ORDER OF THE APPELLATE TRIBUNAL, THE HIGH COURT OR THE SUPREME COURT. EXPLANATION. - IN COMPUTING THE PERIOD OF LIMITATION FOR THE PURPOSES OF SUB - SECTION (2), THE TIME TAKEN IN GIVING AN OPPORTUNITY TO THE ASSESSEE TO BE REHEARD UNDER THE PROVISO TO SECTION 129 AND ANY PERIOD DURING WHICH ANY PROCEEDING UNDER THIS SECTION IS STAYED BY AN ORDER OR INJ UNCTION OF ANY COURT SHALL BE EXCLUDED. 6. FROM THE PERUSAL OF THE AFORESAID SECTION, IT IS APPARENT THAT THERE ARE FOUR MAIN FEATURES OF THE POWER OF REVISION TO BE EXERCISED U/S 263 BY THE COMMISSIONER OF INCOME - TAX. FIRSTLY, THE COMMISSIONER MAY CALL F OR AND EXAMINE THE RECORDS OF ANY PROCEEDINGS UNDER THE ACT AND FOR THIS PURPOSE HE NEED NOT TO SHOW ANY REASON OR RECORD ANY REASON TO BELIEVE. IT IS A PART OF HIS ADMINISTRATIVE POWER TO CALL FOR THE RECORD AND EXAMINE THEM RELATING TO ANY ASSESSEE. SEC ONDLY HE MAY CONSIDER ANY ORDER PASSED BY THE ASSESSING OFFICER AS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THIS CONSIDERATION HAVING REGARD TO THE LANGUAGE OF SECTION 263 APPARENTLY IS A CONSIDERATION WHICH HE EXERCISES BY CALLING FOR AND EXAMINING THE RECORD AVAILABLE AT THIS STAGE. THERE IS NO QUESTION OF THE ASSESSEE TO APPEAR AND MAKE SUBMISSION. THIRDLY, IF AFTER CALLING FOR AND EXAMINING THE RECORDS THE 5 ITA NO. 76/CKT/2014 (ASST. YEAR : 2009 - 10) COMMISSIONER CONSIDERS THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEO US IN SO FAR IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE IS BOUND TO GIVE AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH ENQUIRY AS HE MAY DEEM FIT, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CAS E MAY JUSTIFY INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT OR CANCELING ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. THIS EMPOWERS THE C.I.T. TO CAUSE OR MAKE SUCH ENQUIRIES AS HE DEEMS NECESSARY. FOURTHLY THE C.I.T. U/S 263 CAN ENHANCE OR MOD IFY THE ASSESSMENT. 7. IT IS A SETTLED LAW THAT FOR INVOKING THE PROVISIONS OF SECTION 263 THE CIT MUST SATISFY BOTH THE CONDITIONS THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND ALSO THAT IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IF ONE OF THE CONDITIONS IS ABSENT, THE ORDER PASSED BY THE CIT BY INVOKING THE PROVISIONS OF SECTION 263 WILL NOT BE LEGAL. THE TERM ERRONEOUS HAS NOT BEEN DEFINED UNDER THE INCOME - TAX ACT BUT IT IS WELL SETTLED THAT EACH AND EVERY TYPE OF MISTAKE OR E RROR COMMITTED BY THE ASSESSING OFFICER CANNOT BE SAID TO BE AN ERROR. AN ORDER CAN BE SAID TO BE ERRONEOUS IF THERE IS AN INCORRECT ASSUMPTION OF FACT OR INCORRECT APPLICATION OF LAW IN THE ORDER PASSED BY THE ASSESSING OFFICER. IF THE ASSESSING OFFICER A FTER MAKING THE ENQUIRIES AND EXAMINING THE RECORDS, TAKEN ONE OF THE POSSIBLE VIEWS, IT CANNOT BE SAID THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS. 8. IT IS ALSO APPARENTLY CLEAR THAT THE POWER OF THE CIT ARE THREE FOLD. ONE, PRIOR TO THE INITIATION OF THE PROCEEDINGS U/S 263. SECOND, AT THE TIME OF INITIATION OF THE PROCEEDINGS. THIRD, THE FINAL OUTCOME AFTER THE INITIATION OF THE PROCEEDING. POWER OF THE CIT PRIOR TO THE INITIATION INCLUDES CALL FOR AND EXAMINE THE RECORDS OF ANY PROCE EDINGS UNDER THIS ACT. THE WORD RECORD IS VERY IMPORTANT, BECAUSE ON THE BASIS OF THE RECORD OF THE PROCEEDINGS THE CIT WILL FORM AN OPINION THAT THE ORDER PASSED IS ERRONEOUS AS WELL AS PREJUDICIAL TO 6 ITA NO. 76/CKT/2014 (ASST. YEAR : 2009 - 10) THE INTEREST OF THE REVENUE AND ONCE HE FORMS AN OPI NION, HE HAS TO GIVE AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND AFTER MAKING OR CAUSING THE ENQUIRY HE CAN PASS AN ORDER. MOREOVER THE INQUIRY IS CONDUCTED ONCE THE CIT FORMS AN OPINION ON THE BASIS OF RECORD THAT THE ORDER PASSED IS ERRONEOUS AN D PREJUDICIAL TO THE INTEREST OF REVENUE. THE WORD RECORD HAS BEEN DEFINED UNDER EXPLANATION (B) OF SECTION 263 TO MEAN THAT THE RECORD SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT AVAI LABLE AT THE TIME OF EXAMINATION BY THE COMMISSIONER. T HE EXAMINATION OF THE RECORD IS TO BE CARRIED BY THE COMMISSIONER PRIOR TO THE FORMING AN OPINION THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF THE REVENUE. ONCE THE RECORD IS EXAMINED AND THE CIT ON THE BASIS OF EXAMINATION OF THE RECORD FORMS AN OPINION THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE IS EMPOWERED AFTER GIVING THE OPPORTUNITY TO THE ASSESSEE, TO MAKE SUCH ENQUIRY AS HE MAY DEEM NECESSARY. THEREFORE, THE ENQUIRY TO BE CONDUCTED BY THE CIT IS AN ACT ONCE THE CIT ARRIVES AT A CONCLUSION THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AFTER EXAMINING THE RECORD. THUS ENQUIRY PRECEDES TH E RECORD AND THE MATERIAL COLLECTED DURING THE COURSE OF THE ENQUIRY CANNOT BE THE PART OF THE RECORD OF THE PROCEEDINGS WHEN THE CIT FORMS AN OPINION THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENU E. 9. NOW, THEREFORE, IN THIS CASE, THE QUESTION ARISES WHAT WAS THE MATERIAL BEFORE THE CIT ON THE BASIS OF WHICH THE CIT FORMED AN OPINION THAT THE ORDER PASSED BY THE AO WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE ? WHAT WAS TH E RECORD AVAILABLE WITH THE CIT ? IN THE NOTICE, THE CIT HAS CLEARLY MENTIONED ABOUT THE WORK IN PROGRESS INCREASED DURING THE PREVIOUS YEAR. HE ALSO MENTIONED ABOUT THE LABOUR CHARGES PAID ON 14.6.2008 AND 31.2.2009 TO ONE SHRI PRASANNA PRADHAN. HE HAS ALSO NOTED PROVISION FOR SALARY 7 ITA NO. 76/CKT/2014 (ASST. YEAR : 2009 - 10) AMOUNTING TO RS.42,600/ - . ON THIS BASIS ITSELF HE TOOK THE VIEW THAT THE AO HAS NOT PASSED THE ORDER CORRECTLY AND THE ORDER PASSED IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 10 . WE NOTED THAT IT IS NOT A CASE WHERE THE AO HAS NOT EXAMINED THE ISSUES. THE AO DURING THE COURSE OF THE ASSESSMENT HAS DULY ASKED FOR THE DETAILS OF WORK IN PROGRESS, LABOUR CHARGES, SALARY ETC. THE ASSESSEE HAS DULY SUBMITTED THE DETAILS OF THE WORK IN PROGRESS AND THE WORK IN PROGRESS HAS DULY BEEN CREDITED TO THE PROFIT & LOSS ACCOUNT TO THE EXTENT THERE IS CHANGE IN THE WORK IN PROGRESS AS COMPARED TO THE OPENING WORK IN PROGRESS. IN RESPECT OF LABOUR CHARGES, SUM OF RS. 90,000/ - AND RS.4,50,120/ - WAS PAID TO SHRI PRASANN A PRADHAN, A CONTRACTOR. LABOUR CHARGES INCURRED BY THE ASSESSEE WAS RS.14,17,000/ - OUT OF WHICH RS. 7,22,000/ - WAS PAID TO SHRI PRASANNA PRADHAN ON WHICH TDS U/S 194C AMOUNTING TO RS.14,874/ - WAS DULY DEDUCTED. THIS FACT WAS SUBMITTED TO THE AO DURING T HE COURSE OF THE HEARING. SIMILARLY, IN RESPECT OF SALARY AMOUNTING TO RS.42,600/ - , DETAILS OF THE SALARY WAS GIVEN TO THE AO. ALL THESE DETAILS WERE GIVEN TO THE AO ON RECEIPT OF LETTER DT. 25.7.2011. THUS, WE NOTED THAT IT IS NOT A CASE WHERE INQUIRIE S WERE NOT MADE BY THE AO. AO HAS DULY MADE THE INQUIRY AND TAKEN A VIEW AFTER APPLYING HIS MIND . EVEN OTHERWISE ALSO, WE NOTED THAT THE INCREASE IN THE WORK IN PROGRESS IS DULY CREDITED TO THE PROFIT & LOSS ACCOUNT. SIMILARLY, TDS HAS BEEN DEDUCTED ON THE LABOUR CHARGES PAID. PROVISION FOR S ALARY HAS BEEN MADE FOR THE MONTH OF MARCH FOR WHICH PAYMENT HAS BEEN MADE IN APRIL. THUS, THERE IS NO ERROR IN THE ORDER PASSED BY THE AO. IT IS A SETTLED LAW THAT IF THE AO HAS TAKEN ONE OF THE POSSIBLE VIEWS, IT CANNOT BE SAID THAT THERE IS AN ERROR IN THE ORDER PASSED UNLESS AND UNTIL THE VIEW TAKEN BY THE AO IS UNSUSTAINABLE IN LAW. THE SAID VIEW HAS BEEN TAKEN BY THE HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT, 243 ITR 83 (SC) W HEREIN THEIR LORDSHIPS HAS HELD AS UNDER : - THE PRE - REQUISITE TO THE EXERCISE OF JURISDICTION BY THE COMMISSIONER UNDER SECTION 263 IS THAT THE ORDER OF THE AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE 8 ITA NO. 76/CKT/2014 (ASST. YEAR : 2009 - 10) 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) IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENT - IF THE ORDER OF THE ASSESSING OFFICE IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE - RECOURSE CANNOT BE HAD TO SECTION 263(1). THERE CAN BE NO DOUBT THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRO NEOUS 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 JUST ICE OR WITHOUT APPLICATION OF MIND. THE PHRASE 'PREJUDICIAL TO THE INTEREST 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 THE ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EXAMPLE, IF THE ASSESSING OFFICER HAS ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND 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 THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HIS HANDS ON HIS SO OFFERING THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME WITHOUT APPLICATION OF MIND AS SUCH WILL BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE.' 11 . WE HAVE ALSO GONE THROUGH THE DECISIONS AS HAS BEEN RELIED BY THE LD. AR IN THE CASE OF CIT VS. LEISURE WEAR EXPORTS LTD., 341 ITR 166 (DEL) ( SUPRA ). WE NOTED THAT IN THIS CASE THE HON'BLE HIGH COURT HAS CLEARLY HELD AS UNDER : T HE POWER OF REVISION IS NOT MEANT TO BE EXERCISED FOR THE PURPOSE OF DIRECTING THE AO TO HOLD ANOTHER INVESTIGATION WITHOUT DESCRIBING AS TO HOW THE ORDER OF THE AO IS ERRONEOUS. FROM THIS IT ALSO FOLLOWS THAT WHERE THE ASSESSMENT ORDER HAS BEEN PASSED BY THE AO AFTER TAKING INTO ACCOUNT THE ASSESSEES SUBMISSIONS AND DOCUMENTS FURNISHED BY HIM AND NO MATERIAL WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE CIT WHICH SHOWED THAT THERE WAS ANY DISCREPANCY OR FALSITY IN EVIDENCES FURNISHED BY THE ASSESSEE, THE ORDER OF THE AO CANNOT BE SET ASIDE FOR MAKING DEEP INQUIRY ONLY ON THE PRESUMPTION AND ASSUMPTION THAT SOMETHING NEW MAY COME OUT. FOR MAKING A VALID ORDER UNDER S. 263 IT IS ESSENTIAL THAT THE CIT HAS TO RECORD AN EXPRESS FINDING TO THE EFFECT THAT ORDE R PASSED BY THE AO IS ERRONEOUS WHICH HAS CAUSED LOSS TO THE REVENUE. FURTHERMORE, WHERE ACTING IN ACCORDANCE WITH LAW THE AO FRAMES CERTAIN ASSESSMENT ORDER, SAME CANNOT BE BRANDED AS ERRONEOUS SIMPLY BECAUSE ACCORDING TO THE CIT, THE ORDER SHOULD BE WRI TTEN MORE ELABORATELY. 9 ITA NO. 76/CKT/2014 (ASST. YEAR : 2009 - 10) 12 . IN THE CASE OF DIT VS. JYOTI FOUNDATION, 357 ITR 388 (DEL) ( SUPRA ), THE HON'BLE DELHI HIGH COURT HAS HELD AS UNDER : REVISIONARY POWER UNDER SECTION 263 IS CONFERRED BY THE ACT ON THE COMMISSIONER/DIRECTOR OF INCOME - TAX WHEN AN ORDER PASSED BY THE LOWER AUTHORITY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ORDERS WHICH ARE PASSED WITHOUT INQUIRY OR INVESTIGATION ARE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT ORDERS WHICH ARE PASS ED AFTER INQUIRY/INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUIRED OR DEEPER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN. 13 . THE ASSESSING OFFICER HAS DULY EXAMINED ALL THE ISSUES AND FORMED AN OPINION. THE OPINION FORMED BY THE ASSESSING OFFICER IS NOT ILLEGAL OR UNSUSTAINABLE IN LAW. THEREFORE , WE ARE OF THE VIEW THAT THE ORDER P ASSED BY THE ASSESSING OFFICER IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. W E , THEREFORE, QUASH THE ORDER PASSED U/S 263. 14 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 15 . ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 1963 BY PUTTING ON NOTICE BOARD OF THE BENCH AT CUTTACK ON 23 / 05 /201 4 . SD/ - (D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI DATED : 23 / 05 /2014 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER