Skan Enterprise, Kolkata V. Pr.C.I.T.-12, Kolkata

ITA 840/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2278 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 18-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Revision of order; Audit objection; Principle of natural justice; Assessment record; Right to appeal; Revenue expenditure; TDS; Set aside
• Section: 271(1)(c); 143(3); 208; 43; 13; 22; 32; 37; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA A BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI ABY T. VARKEY, JUDICIAL MEMBER) ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE...............................................APPELLANT C/O. SUBASH AGARWAL & ASSOCIATES, ADVOCATES SIDDHA GIBSON 1, GIBSON LANE SUITE 213 2 ND FLOOR KOLKATA 700 069 [PAN : AAMFS 2138 P] VS. PR. COMMISSIONER OF INCOME TAX-12, KOLKATA...........................RESPONDENT APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE. SHRI RAM BILASH MEENA, CIT, D/R, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : MARCH 3 RD , 2020 DATE OF PRONOUNCING THE ORDER : MARCH 18 TH , 2020 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED PR. COMMISSIONER OF INCOME TAX 12, KOLKATA, (HEREINAFTER THE LD.CIT(A)), PASSED U/S. 263 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 15/03/2019, FOR THE ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF WHOLESALE TRADE IN ELECTRICAL GOODS. IT IS A PARTNERSHIP FIRM. THE ASSESSEE FIRM ALSO HAS INCOME FROM COMMISSION AND INTEREST. IT FILED ITS RETURN OF INCOME ON 21/11/2014 FOR THE IMPUGNED ASSESSMENT YEAR, DECLARING TOTAL INCOME OF RS.7,34,850/-. THE ASSESSING OFFICER PASSED AN ORDER U/S 143(3) OF THE ACT ON 27/12/2016 DETERMINING THE TOTAL INCOME AT RS.48,01,970/- INTERALIA MAKING ADDITION OF RS.29,58,196/- ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE CLAIMED ON PAYMENT OF COMMISSION, ON AD-HOC BASIS AT THE RATE OF 20% OF THE TOTAL COMMISSION PAYMENTS AND RS.10,45,060/- BEING 20% OF THE ADMINISTRATIVE EXPENSES CLAIMED BY THE ASSESSEE ON AD-HOC BASIS ON THE GROUND THAT SUPPORTING DETAILS AND VOUCHERS WERE NOT PRODUCED. THE LD. PR. CIT, KOLKATA, ISSUED A NOTICE U/S 263 OF THE ACT, DT. 24/09/2018 PROPOSING TO REVISE THE ORDER PASSED BY ASSESSING OFFICER U/S 143(3) OF THE ACT, ON 15/03/2019. THE RELEVANT PART OF THE NOTICE IS EXTRACTED BELOW FOR READY REFERENCE:- ON PERUSAL OF THE ASSESSMENT RECORDS SUBSTANTIATE THE NECESSITY OF PAYMENT OF LARGE AMOUNT OF COMMISSION IN A BUSINESS OF SALE OF ELECTRIC GOODS, AS WELL AS FAILED TO PRODUCE EVIDENCE OF RENDERING SERVICE. IT ALSO TRANSPIRED FROM RECORD THAT DETAILS O PAID WERE NOT PRODUCED BY THE ASSESSEE. BECAUSE OF IRREGULAR APPEARANCE BY THE ASSESSEE/AR, 20% OF THE TOTAL COMMISSION OF RS.1,47,90,981/ PROPER VERIFICATION. APART FROM THIS, OTHER CASS R PASSING THE ORDER U/S. 143(3). ABSENCE OF THE PROPER EXAMINATION/VERIFICATION REGARDING THE ABOVE HAS RENDERED THE ASSESSMENT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WHICH DESERVES TO BE REVISED U/S. 263 OF THE I.T. ACT, 1961. 2.1. THE ASSESSEE REPLIED AS FOLLOWS: THE ASSESSEE FILED ITS RETURN FOR A.Y. 2014 ASSESSED U/S 143(3) UNDER CASS. IN THE SHOW CAUSE NOTICE ISSUE ON THE ABOVE MENTIONED ISSUE OF OF THE LD. INCOME TAX OFFICER, IT HAS BEEN ALLEGED THAT THE REVISION IS WARRANTED MAINLY BECAUSE OF THE FOLLOWING: 1. THAT THE ASSESSEE HAS FILED TO SUBSTANTIATE THE NECESSITY FOR PAYING LARGE AMOUNT OF COMMISSION IN BUSINESS OF SALE OF EVIDENCE OF RENDERING OF SERVICE. 2. PARTIES TO WHOM COMMISSION WAS PAID WERE NOT PRODUCED. 3. IRREGULAR APPEARANCE OF A/R 4. A 20% OF TOTAL COMMISSION OF RS.14790981/ VERIFICATION 5. OTHER CA SS WERE NOT FOUND TO BE VERIFIED PROPERLY, WHILE PASSING THE ORDER. AS REGARDS NECESSITY TO PAY COMMISSION, WE HUMBLY SUBMIT THAT THE ASSESS DOING BUSINESS IN CONSUMER DURABLE GOODS SEGMENT, WHICH IS VERY COMPETITIVE AND THEREFORE EVERY YEAR IT HAS TO PAY COMMISSION. IT IS NOT THAT THIS YEAR ALONE, IT HAS PAID COMMISSION. CHART SHOWING SALES VIS A VIS COMMISSION PAID IS APPENDED BELOW FIN YEAR SALES RS. IN CRORES 09-10 11.49 10-11 19.66 11-12 28.35 12-13 43.00 13-14 37.75 14-15 42.01 15-16 39.02 16-17 46.54 YOUR HONOUR WILL APPRECIATE THAT THE ASSESSING OFFICER HAS CLEARLY MENTIONED IN THE ORDER THAT THE ASSESSEE HAD SUBMITTED THE COPIES OF COMMISSION BILLS AND I T RECORDS OF 2 ON PERUSAL OF THE ASSESSMENT RECORDS , IT WAS SEEN THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE NECESSITY OF PAYMENT OF LARGE AMOUNT OF COMMISSION IN A BUSINESS OF SALE ELECTRIC GOODS, AS WELL AS FAILED TO PRODUCE EVIDENCE OF RENDERING SERVICE. IT ALSO TRANSPIRED FROM RECORD THAT DETAILS O F THE PARTIES TO WHOM COMMISSION WERE PAID WERE NOT PRODUCED BY THE ASSESSEE. BECAUSE OF IRREGULAR APPEARANCE BY THE ASSESSEE/AR, 20% OF THE TOTAL COMMISSION OF RS.1,47,90,981/ - WAS DISALLOWED, WITHOUT ANY APART FROM THIS, OTHER CASS R EASONS WERE NOT FOUND TO BE VERIFIED PROPERLY WHILE PASSING THE ORDER U/S. 143(3). ABSENCE OF THE PROPER EXAMINATION/VERIFICATION REGARDING THE ABOVE HAS RENDERED THE ASSESSMENT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WHICH DESERVES TO REVISED U/S. 263 OF THE I.T. ACT, 1961. THE ASSESSEE REPLIED AS FOLLOWS: - THE ASSESSEE FILED ITS RETURN FOR A.Y. 2014 - 15 WITHIN DUE TIME. THE CASE WAS ASSESSED U/S 143(3) UNDER CASS. IN THE SHOW CAUSE NOTICE ISSUE ON THE ABOVE MENTIONED ISSUE OF REVISION OF THE ORDER OF THE LD. INCOME TAX OFFICER, IT HAS BEEN ALLEGED THAT THE REVISION IS WARRANTED MAINLY BECAUSE OF THE FOLLOWING: - THAT THE ASSESSEE HAS FILED TO SUBSTANTIATE THE NECESSITY FOR PAYING LARGE AMOUNT OF COMMISSION IN BUSINESS OF SALE OF ELECTRIC GOODS AS WELL AS FAILED TO PRODUCE EVIDENCE OF RENDERING OF SERVICE. PARTIES TO WHOM COMMISSION WAS PAID WERE NOT PRODUCED. IRREGULAR APPEARANCE OF A/R A 20% OF TOTAL COMMISSION OF RS.14790981/ - WAS DISALLOWED WITHOUT PROPER SS WERE NOT FOUND TO BE VERIFIED PROPERLY, WHILE PASSING THE ORDER. AS REGARDS NECESSITY TO PAY COMMISSION, WE HUMBLY SUBMIT THAT THE ASSESS DOING BUSINESS IN CONSUMER DURABLE GOODS SEGMENT, WHICH IS VERY COMPETITIVE AND THEREFORE EVERY YEAR IT HAS TO PAY COMMISSION. IT IS NOT THAT THIS YEAR ALONE, IT HAS PAID COMMISSION. CHART SHOWING SALES VIS A VIS COMMISSION PAID IS APPENDED BELOW SALES COMMISSION RS. IN CRORES RS IN LACS 11.49 26.25 19.66 21.65 28.35 26.05 43.00 84.96 37.75 147.9 42.01 81.12 39.02 41.53 46.54 94.44 YOUR HONOUR WILL APPRECIATE THAT THE ASSESSING OFFICER HAS CLEARLY MENTIONED IN THE ORDER THAT THE ASSESSEE HAD SUBMITTED THE COPIES OF COMMISSION BILLS AND I T RECORDS OF ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE , IT WAS SEEN THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE NECESSITY OF PAYMENT OF LARGE AMOUNT OF COMMISSION IN A BUSINESS OF SALE ELECTRIC GOODS, AS WELL AS FAILED TO PRODUCE EVIDENCE OF RENDERING SERVICE. F THE PARTIES TO WHOM COMMISSION WERE PAID WERE NOT PRODUCED BY THE ASSESSEE. BECAUSE OF IRREGULAR APPEARANCE BY THE WAS DISALLOWED, WITHOUT ANY EASONS WERE NOT FOUND TO BE VERIFIED PROPERLY WHILE ABSENCE OF THE PROPER EXAMINATION/VERIFICATION REGARDING THE ABOVE HAS RENDERED THE ASSESSMENT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WHICH DESERVES TO 15 WITHIN DUE TIME. THE CASE WAS REVISION OF THE ORDER OF THE LD. INCOME TAX OFFICER, IT HAS BEEN ALLEGED THAT THE REVISION IS WARRANTED MAINLY THAT THE ASSESSEE HAS FILED TO SUBSTANTIATE THE NECESSITY FOR PAYING LARGE AMOUNT OF ELECTRIC GOODS AS WELL AS FAILED TO PRODUCE WAS DISALLOWED WITHOUT PROPER SS WERE NOT FOUND TO BE VERIFIED PROPERLY, WHILE PASSING THE ORDER. AS REGARDS NECESSITY TO PAY COMMISSION, WE HUMBLY SUBMIT THAT THE ASSESS EE IS DOING BUSINESS IN CONSUMER DURABLE GOODS SEGMENT, WHICH IS VERY COMPETITIVE AND THEREFORE EVERY YEAR IT HAS TO PAY COMMISSION. IT IS NOT THAT THIS YEAR ALONE, IT HAS PAID COMMISSION. CHART SHOWING SALES VIS A VIS COMMISSION PAID IS APPENDED BELOW YOUR HONOUR WILL APPRECIATE THAT THE ASSESSING OFFICER HAS CLEARLY MENTIONED IN THE ORDER THAT THE ASSESSEE HAD SUBMITTED THE COPIES OF COMMISSION BILLS AND I T RECORDS OF THE PAYEES AND A COPY OF THE SAME IN FORM OF A BOUND BOOK IS ONCE AGAIN BEEN SUBMITT ED TO YOU HEREWITH. THE ASSESSING OFFICER ON PERUSAL OF THESE DOCUMENTS AND MAY BE ON PERUSAL OF EARLIER ASSESSMENT RECORDS AS WELL DID NOT ASK FOR PRODUCTION OF ANY OF THE PAYEES HAS ALSO COMPLETED ALL COMPLIANCES. YOUR HONOUR WILL FURTHER APPRECIATE TH A O IN RESPECT OF ANY MATTER MENTIONED HERE IN ABOVE. THE ASSESSEE CAN JUST PROVIDE THE DETAILS AS CALLED FOR AND THE NATURE AND TYPE OF ENQUIRY TO BE MADE IS TOTALLY DECIDED BY THE A O. NOR WAS THE ASSESSEE M INTO OR CASS POINTS INVOLVED. IT IS FURTHER SUBMITTED THAT IN THE INSTANT CASE, AS ACCEPTED AND ADMITTED IN THE ORDER, THE A.O. AFTER MAKING PROPER INQUIRIES IN RESPECT OF COMMISSION, ALL EXPENSES, ALL BO OKS OF ACCOUNT, PURCHASE AND SALE RECORDS AND BANK BOOK AND BANK STATEMENT COMPLETED THE ASSESSMENT PROCEEDINGS BY TREATING THE SAME AS GENUINE. ..DURING THE COURSE OF SCRUTINY THE LD. INCOME TAX OFFICER WANTED DETAILS OF COMMISSION PAID TO ACHIEVE THE TU WERE PROVIDED TO THE LD INCOME TAX OFFICER. IT IS SUBMITTED THAT THE AO EXAMINED ALL THE RELEVANT DOCUMENTS AND HAD CONDUCTED A PROPER ENQUIRY. DETAILS OF COMMISSION WERE MADE AVAILABLE TO HIM AND BASED ON HIS EXPERIENCE IN EARLIER YEARS, HE WAS REASONABLY SATISFIED ABOUT THE APPROPRIATENESS OF THE AND APPROPRIATELY. IT IS ALSO HUMBLY SUBMITTED THAT SINCE THE A.O. HAD MADE PROPER ENQUIRIES IN RESPECT OF THE COMMISSION PAID ON OTHER ISSUES AS WELL, THE ORDER OF THE A.O. IS NEITHER ERRONEOUS N OR PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2.2. THEREAFTER ON 5 TH DECEMBER, 2018, THE ASSESSEE REPLIED AS FOLLOWS: SUB: WRITTEN SUBMISSION IN REPLY TO THE SHOW CAUSE NOTICE DATED 13.09.2018 ISSUED CLIENT- SKAN ENTERPRISES FOR AY 2014 IN ACCORDANCE TO THE DIRECTIONS ISSUED AND THE REQUISITION MADE IN THE EARLIER HEARING, WE MAKE THE FOLLOWING SUBMISSIONS 1. WE ARE ENCLOSING HEREWITH THE PARTY WISE CHART SHOWING COMMISS DEDUCTED QUARTER WISE, CHALLANS IN RESPECT OF TDS DEPOSITED AND ALSO COPIES OF TDS RETURNS FOR ALL THE FOUR QUARTERS. KINDLY NOTE THAT AN AMOUNT OF RS 14790981/ BEEN SUBJECTED TO THE DEDUCTION OF TAX AS AGAINST COMMISSION PAID AMOUNTING 14790981/- , WHICH MEANS TDS WAS DEDUCTED ON WHOLE OF THE COMMISSION PAID. 2. THERE ARE NO WRITTEN AGREEMENTS WITH THE AGENTS. 3. THE PRODUCTS DEALT WITH BY THE ASSESSEE DEMAND THAT THE SHOP KEEPERS IN VARIOUS AREAS KEEP ITS PRODUCTS IN STOCK AND IN SCATTERED ALL OVER WEST BENGAL , WHICH IT IS UNECONOMICAL TO SERVE KEEPING PERMANENT EMPLOYEES. THEREFORE AS A PRUDENT MARKET PRACTICE, ALL DISTRIBUTORS AND C & F AGENTS RESORT TO THE NETWORK OF AGENTS. THESE AGENT 3 THE PAYEES AND A COPY OF THE SAME IN FORM OF A BOUND BOOK IS ONCE AGAIN BEEN ED TO YOU HEREWITH. THE ASSESSING OFFICER ON PERUSAL OF THESE DOCUMENTS AND MAY BE ON PERUSAL OF EARLIER ASSESSMENT RECORDS AS WELL DID NOT ASK FOR PRODUCTION OF ANY OF THE PAYEES HAS ALSO COMPLETED ALL COMPLIANCES. YOUR HONOUR WILL FURTHER APPRECIATE TH AT THE ASSESSEE IS NO POSITION TO GUIDE THE LD A O IN RESPECT OF ANY MATTER MENTIONED HERE IN ABOVE. THE ASSESSEE CAN JUST PROVIDE THE DETAILS AS CALLED FOR AND THE NATURE AND TYPE OF ENQUIRY TO BE MADE IS TOTALLY DECIDED BY THE A O. NOR WAS THE ASSESSEE M ADE KNOWN OF THE POINTS, WHICH NEEDED TO BE LOOKED INTO OR CASS POINTS INVOLVED. IT IS FURTHER SUBMITTED THAT IN THE INSTANT CASE, AS ACCEPTED AND ADMITTED IN THE ORDER, THE A.O. AFTER MAKING PROPER INQUIRIES IN RESPECT OF COMMISSION, ALL EXPENSES, ALL OKS OF ACCOUNT, PURCHASE AND SALE RECORDS AND BANK BOOK AND BANK STATEMENT COMPLETED THE ASSESSMENT PROCEEDINGS BY TREATING THE SAME AS GENUINE. ..DURING THE COURSE OF SCRUTINY THE LD. INCOME TAX OFFICER WANTED DETAILS OF COMMISSION PAID TO ACHIEVE THE TU RNOVER. PROPER DETAILS WITH PAN NO. AND ADDRESS WERE PROVIDED TO THE LD INCOME TAX OFFICER. IT IS SUBMITTED THAT THE AO EXAMINED ALL THE RELEVANT DOCUMENTS AND HAD CONDUCTED A PROPER ENQUIRY. DETAILS OF COMMISSION WERE MADE AVAILABLE TO HIM AND BASED ON HIS EXPERIENCE IN EARLIER YEARS, HE WAS REASONABLY SATISFIED ABOUT THE APPROPRIATENESS OF THE COMMISSION PAID. OTHER MATTERS WERE LOOKED INTO ADEQUATELY IT IS ALSO HUMBLY SUBMITTED THAT SINCE THE A.O. HAD MADE PROPER ENQUIRIES IN RESPECT OF THE COMMISSION PAID ON OTHER ISSUES AS WELL, THE ORDER OF THE A.O. IS NEITHER OR PREJUDICIAL TO THE INTEREST OF THE REVENUE. DECEMBER, 2018, THE ASSESSEE REPLIED AS FOLLOWS: SUB: WRITTEN SUBMISSION IN REPLY TO THE SHOW CAUSE NOTICE DATED 13.09.2018 ISSUED ENTERPRISES FOR AY 2014 -15 FURTHER TO THE HEARING ON 29- 11 IN ACCORDANCE TO THE DIRECTIONS ISSUED AND THE REQUISITION MADE IN THE EARLIER HEARING, WE MAKE THE FOLLOWING SUBMISSIONS - 1. WE ARE ENCLOSING HEREWITH THE PARTY WISE CHART SHOWING COMMISS DEDUCTED QUARTER WISE, CHALLANS IN RESPECT OF TDS DEPOSITED AND ALSO COPIES OF TDS RETURNS FOR ALL THE FOUR QUARTERS. KINDLY NOTE THAT AN AMOUNT OF RS 14790981/ BEEN SUBJECTED TO THE DEDUCTION OF TAX AS AGAINST COMMISSION PAID AMOUNTING , WHICH MEANS TDS WAS DEDUCTED ON WHOLE OF THE COMMISSION PAID. 2. THERE ARE NO WRITTEN AGREEMENTS WITH THE AGENTS. 3. THE PRODUCTS DEALT WITH BY THE ASSESSEE DEMAND THAT THE SHOP KEEPERS IN VARIOUS AREAS KEEP ITS PRODUCTS IN STOCK AND IN DISPLAY AND THERE IS A LARGE NO OF SHOPS SCATTERED ALL OVER WEST BENGAL , WHICH IT IS UNECONOMICAL TO SERVE KEEPING PERMANENT EMPLOYEES. THEREFORE AS A PRUDENT MARKET PRACTICE, ALL DISTRIBUTORS AND C & F AGENTS RESORT TO THE NETWORK OF AGENTS. THESE AGENT S ARE MOSTLY PEOPLE ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE THE PAYEES AND A COPY OF THE SAME IN FORM OF A BOUND BOOK IS ONCE AGAIN BEEN ED TO YOU HEREWITH. THE ASSESSING OFFICER ON PERUSAL OF THESE DOCUMENTS AND MAY BE ON PERUSAL OF EARLIER ASSESSMENT RECORDS AS WELL DID NOT ASK FOR PRODUCTION OF AT THE ASSESSEE IS NO POSITION TO GUIDE THE LD A O IN RESPECT OF ANY MATTER MENTIONED HERE IN ABOVE. THE ASSESSEE CAN JUST PROVIDE THE DETAILS AS CALLED FOR AND THE NATURE AND TYPE OF ENQUIRY TO BE MADE IS TOTALLY DECIDED BY ADE KNOWN OF THE POINTS, WHICH NEEDED TO BE LOOKED IT IS FURTHER SUBMITTED THAT IN THE INSTANT CASE, AS ACCEPTED AND ADMITTED IN THE ORDER, THE A.O. AFTER MAKING PROPER INQUIRIES IN RESPECT OF COMMISSION, ALL EXPENSES, ALL OKS OF ACCOUNT, PURCHASE AND SALE RECORDS AND BANK BOOK AND BANK STATEMENT COMPLETED THE ASSESSMENT PROCEEDINGS BY TREATING THE SAME AS GENUINE. ..DURING THE COURSE OF SCRUTINY THE LD. INCOME TAX OFFICER WANTED DETAILS OF RNOVER. PROPER DETAILS WITH PAN NO. AND ADDRESS IT IS SUBMITTED THAT THE AO EXAMINED ALL THE RELEVANT DOCUMENTS AND HAD CONDUCTED A PROPER ENQUIRY. DETAILS OF COMMISSION WERE MADE AVAILABLE TO HIM AND BASED ON HIS EXPERIENCE IN EARLIER YEARS, HE WAS REASONABLY SATISFIED ABOUT THE COMMISSION PAID. OTHER MATTERS WERE LOOKED INTO ADEQUATELY IT IS ALSO HUMBLY SUBMITTED THAT SINCE THE A.O. HAD MADE PROPER ENQUIRIES IN RESPECT OF THE COMMISSION PAID ON OTHER ISSUES AS WELL, THE ORDER OF THE A.O. IS NEITHER DECEMBER, 2018, THE ASSESSEE REPLIED AS FOLLOWS: - SUB: WRITTEN SUBMISSION IN REPLY TO THE SHOW CAUSE NOTICE DATED 13.09.2018 ISSUED TO OUR 11 -2018 IN ACCORDANCE TO THE DIRECTIONS ISSUED AND THE REQUISITION MADE IN THE EARLIER HEARING, WE 1. WE ARE ENCLOSING HEREWITH THE PARTY WISE CHART SHOWING COMMISS ION PAID, TDS DEDUCTED QUARTER WISE, CHALLANS IN RESPECT OF TDS DEPOSITED AND ALSO COPIES OF TDS RETURNS FOR ALL THE FOUR QUARTERS. KINDLY NOTE THAT AN AMOUNT OF RS 14790981/ - HAS BEEN SUBJECTED TO THE DEDUCTION OF TAX AS AGAINST COMMISSION PAID AMOUNTING TO RS , WHICH MEANS TDS WAS DEDUCTED ON WHOLE OF THE COMMISSION PAID. 3. THE PRODUCTS DEALT WITH BY THE ASSESSEE DEMAND THAT THE SHOP KEEPERS IN VARIOUS DISPLAY AND THERE IS A LARGE NO OF SHOPS SCATTERED ALL OVER WEST BENGAL , WHICH IT IS UNECONOMICAL TO SERVE KEEPING PERMANENT EMPLOYEES. THEREFORE AS A PRUDENT MARKET PRACTICE, ALL DISTRIBUTORS AND S ARE MOSTLY PEOPLE HAVING CONTACTS WITH SHOPS AND THEY HAVE A GOOD FACE VALUE WHEN IT COMES TO SELLING GOODS THROUGH THAT SHOP. UNDER THESE CIRCUMSTANCES. THE ASSESSEE ALSO EN 4. THERE IS NOTHING ON RECORD THAT WHETHER THE AGENT APPRO THE ASSESSEE APPROACHED HIM. IT HAPPENS BOTH WAYS BUT NO RECORDS HAVE BEEN KEPT TO SHOW WHO WAS ENGAGED IN WHICH WAY. 5. RATE OF COMMISSION VARIED FROM CASE TO CASE DEPENDING UPON THE VARIOUS FACTORS SUCH AS QUANTUM OF OFF TAKE/SAL NEED TO SELL IN THAT AREA PAYMENT TERMS MARKET REPORT/CREDENTIAL OF THAT PARTICULAR AGENT SELLING RATE THEREFORE THERE ARE NO FIX NORMS, NOR IS THERE ANY SPECIFIC MARKET RATE BUT MOST OF THE DISTRIBUTORS FOLLOW THE SAME PATTERN AND THEREFORE IN WAY. IT THE ASSESSEE HAS FOLLOWED THE MARKET PATTERNS. 3. THE LD. PR. CIT WAS NOT SATISFIED WITH THESE REPLIES. AT PARA 5 OF HIS ORDER, HE HELD AS FOLLOWS:- 5. THE ABOVE SUBMISSIONS OF THE ASSESSEE WERE GIVEN A THOUGHTFUL CONSIDERATION BY ME. BE FORE DELVING INTO THE MERITS OF THE CASE, IT WOULD BE APPROPRIATE TO THROW SOME LIGHT ON THE FACTS WHICH CONFER JURISDICTION ON THE PRINCIPAL CIT TO ACT UNDER 263 OF THE ACT. DARING THE HEARING HELD BY THE UNDERSIGNED WITH THE ASSESSEE'S A/R, COPY OF QUAR STATEMENT, CHALLANS FOR TDS ON COMMISSION, THE DETAILS OF PARTIES TO WHOM COMMISSION WAS PAID ETC. WERE PRODUCED FOR VERIFICATION WHICH MATCHES WITH THE OBSERVATION OF THE A.O. UNDER PARA 4 OF ITS ORDER WHERE HE REMARKED.' QUOTED:- THE SUBMISSI ON OF THE ASSESSEE IS CONSIDERED BUT THE CONTENTION OF REPLY IS NOT TENABLE AS THE ASSESSEE FAILED, TO FURNISH FULL DETAILS IN SUPPORT OF COMMISSION PAID OF RS.1,47,90,981/ A/R WAS ASKED WHY THE COMMISSION WILL NOT BE DISALLOWED AS PER U/S. U/S. 37 DEARLY DEFINES IN (EXPLANATION EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO L AW BEEN INCURRED BY PURPOSE OF BUSINESS AND NO DEDUCTION OR ALLOWANCES SHALL BE MADE IN RESPECT OF SUCH EXPENDITURE. IN THE INSTANT CASE, IT IS OBSERVED THAT THE ASSESSEE PAID RS.1,47,90,981/ EXCESSIVELY HIGHER IN COMPARISON TO ASSESSEE EVIDENCES OF SUCH PAYMENTS COULD NOT BE VERIFIED FULLY DUE TO INACCURATE PARTICULARS. HENCE, 20% OF COMMISSION PAID I.E., RS.29,58,196/ PR OCEEDINGS U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 IS INITIATED SEPARATELY FOR CONCEALMENT OF INCOME BY CLAIMING OF EXCESS EXPENDITURE UNDER THIS HEAD. [ADDITION: RS.29,58,196/ UNQUOTED:- 4 HAVING CONTACTS WITH SHOPS AND THEY HAVE A GOOD FACE VALUE WHEN IT COMES TO SELLING GOODS THROUGH THAT SHOP. UNDER THESE CIRCUMSTANCES. THE ASSESSEE ALSO EN GAGED THESE AG ENTS THERE IS NOTHING ON RECORD THAT WHETHER THE AGENT APPRO ACHED THE ASSESSEE OR THE ASSESSEE APPROACHED HIM. IT HAPPENS BOTH WAYS BUT NO RECORDS HAVE BEEN KEPT TO SHOW WHO WAS ENGAGED IN WHICH WAY. RATE OF COMMISSION VARIED FROM CASE TO CASE DEPENDING UPON THE VARIOUS FACTORS QUANTUM OF OFF TAKE/SAL E NEED TO SELL IN THAT AREA MARKET REPORT/CREDENTIAL OF THAT PARTICULAR AGENT THEREFORE THERE ARE NO FIX NORMS, NOR IS THERE ANY SPECIFIC MARKET RATE BUT MOST OF THE DISTRIBUTORS FOLLOW THE SAME PATTERN AND THEREFORE IN WAY. IT THE ASSESSEE HAS FOLLOWED THE MARKET PATTERNS. THE LD. PR. CIT WAS NOT SATISFIED WITH THESE REPLIES. AT PARA 5 OF HIS ORDER, HE HELD 5. THE ABOVE SUBMISSIONS OF THE ASSESSEE WERE GIVEN A THOUGHTFUL CONSIDERATION BY ME. FORE DELVING INTO THE MERITS OF THE CASE, IT WOULD BE APPROPRIATE TO THROW SOME LIGHT ON THE FACTS WHICH CONFER JURISDICTION ON THE PRINCIPAL CIT TO ACT UNDER 263 OF THE ACT. DARING THE HEARING HELD BY THE UNDERSIGNED WITH THE ASSESSEE'S A/R, COPY OF QUAR STATEMENT, CHALLANS FOR TDS ON COMMISSION, THE DETAILS OF PARTIES TO WHOM COMMISSION WAS PAID ETC. WERE PRODUCED FOR VERIFICATION WHICH MATCHES WITH THE OBSERVATION OF THE A.O. UNDER PARA 4 OF ITS ORDER WHERE HE REMARKED.' ON OF THE ASSESSEE IS CONSIDERED BUT THE CONTENTION OF REPLY IS NOT TENABLE AS THE ASSESSEE FAILED, TO FURNISH FULL DETAILS IN SUPPORT OF COMMISSION PAID OF RS.1,47,90,981/ A/R WAS ASKED WHY THE COMMISSION WILL NOT BE DISALLOWED AS PER U/S. 37 OF THE I.T. ACT. 1961. THOUGH U/S. 37 DEARLY DEFINES IN (EXPLANATION - 1) FOR THE REMOVAL OF DOUBT. IT IS HEREBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS OFFENCE OR WHICH IS PROHIBITED BY LAW AW BEEN INCURRED BY PURPOSE OF BUSINESS AND NO DEDUCTION OR ALLOWANCES SHALL BE MADE IN RESPECT OF SUCH EXPENDITURE. IN THE INSTANT CASE, IT IS OBSERVED THAT THE ASSESSEE PAID RS.1,47,90,981/ EXCESSIVELY HIGHER IN COMPARISON TO ASSESSEE S SALES DURING THE FINANCIAL YEAR 2013 EVIDENCES OF SUCH PAYMENTS COULD NOT BE VERIFIED FULLY DUE TO INACCURATE PARTICULARS. HENCE, 20% OF COMMISSION PAID I.E., RS.29,58,196/ - IS DISALLOWED AND ADDED BACK TO ASSESSEES TOTAL INCOME. PENALTY OCEEDINGS U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 IS INITIATED SEPARATELY FOR CONCEALMENT OF INCOME BY CLAIMING OF EXCESS EXPENDITURE UNDER THIS HEAD. [ADDITION: RS.29,58,196/ ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE HAVING CONTACTS WITH SHOPS AND THEY HAVE A GOOD FACE VALUE WHEN IT COMES TO ENTS . ACHED THE ASSESSEE OR THE ASSESSEE APPROACHED HIM. IT HAPPENS BOTH WAYS BUT NO RECORDS HAVE BEEN KEPT RATE OF COMMISSION VARIED FROM CASE TO CASE DEPENDING UPON THE VARIOUS FACTORS THEREFORE THERE ARE NO FIX NORMS, NOR IS THERE ANY SPECIFIC MARKET RATE BUT MOST OF THE DISTRIBUTORS FOLLOW THE SAME PATTERN AND THEREFORE IN WAY. IT CAN BE SAID THAT THE LD. PR. CIT WAS NOT SATISFIED WITH THESE REPLIES. AT PARA 5 OF HIS ORDER, HE HELD 5. THE ABOVE SUBMISSIONS OF THE ASSESSEE WERE GIVEN A THOUGHTFUL CONSIDERATION BY ME. FORE DELVING INTO THE MERITS OF THE CASE, IT WOULD BE APPROPRIATE TO THROW SOME LIGHT ON THE FACTS WHICH CONFER JURISDICTION ON THE PRINCIPAL CIT TO ACT UNDER 263 OF THE ACT. DARING THE HEARING HELD BY THE UNDERSIGNED WITH THE ASSESSEE'S A/R, COPY OF QUAR TERLY TDS STATEMENT, CHALLANS FOR TDS ON COMMISSION, THE DETAILS OF PARTIES TO WHOM COMMISSION WAS PAID ETC. WERE PRODUCED FOR VERIFICATION WHICH MATCHES WITH THE OBSERVATION OF THE A.O. ON OF THE ASSESSEE IS CONSIDERED BUT THE CONTENTION OF REPLY IS NOT TENABLE AS THE ASSESSEE FAILED, TO FURNISH FULL DETAILS IN SUPPORT OF COMMISSION PAID OF RS.1,47,90,981/ -. HOWEVER, THE 37 OF THE I.T. ACT. 1961. THOUGH 1) FOR THE REMOVAL OF DOUBT. IT IS HEREBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS OFFENCE OR WHICH IS PROHIBITED BY LAW AW BEEN INCURRED BY PURPOSE OF BUSINESS AND NO DEDUCTION OR ALLOWANCES SHALL IN THE INSTANT CASE, IT IS OBSERVED THAT THE ASSESSEE PAID RS.1,47,90,981/ - AS COMMISSION IS S SALES DURING THE FINANCIAL YEAR 2013 -14. HOWEVER, EVIDENCES OF SUCH PAYMENTS COULD NOT BE VERIFIED FULLY DUE TO INACCURATE PARTICULARS. HENCE, 20% OF IS DISALLOWED AND ADDED BACK TO ASSESSEES TOTAL INCOME. PENALTY OCEEDINGS U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 IS INITIATED SEPARATELY FOR CONCEALMENT OF INCOME BY CLAIMING OF EXCESS EXPENDITURE UNDER THIS HEAD. [ADDITION: RS.29,58,196/ -] FROM A PLAIN AND SIMPLE READING OF THE RELEVANT PART OF THE AS ABSTRACTED ABOVE IT, IT SHALL BE CLEAR THAT ENQUIRIES WERE NOT AT ALL MADE BY THE A.O. IN RELATION TO THE GENUINENESS OF THE COMMISSIONS PAID ALLEGEDLY. THE ASSESSMENT ORDER AS WELL AS THE ASSESSMENT RECORDS BEAR TESTIMONY TO THIS FACT. E REVEALED THAT THE ASSESSING OFFICER HAD ONLY BROUGHT ON RECORD THE DOCUMENTS OF COMMISSION PAYMENTS AS AVAILABLE IN ITS RECORDS/ BOOKS OF ACCOUNTS. NO ENQUIRIES WERE MADE FROM THE THIRD PARTIES I.E. COMMISSION AGENTS TO WHOM COMM ASSESSING OFFICER. CHAPTER AND VERSE THERE WAS COMPLETE LACK OF ENQUIRY ON THIS ASPECT OF THE MATTER RENDERING THE DECISION TAKEN BY THE ASSESSING OFFICER NUGATORY. THEREFORE, THE CIRCUMSTANCES JUSTIFY SETTING ASIDE OF THE ORDER PA SECTION 143(3) ON 27/12/2016. THE A.O. IS DIRECTED TO VERIFY THE GENUINENESS OF THE COMMISSIONS PAID BY THE ASSESSEE TO THE VARIOUS COMMISSION AGENTS BY HAVING RECOURSE TO VARIOUS MEASURES OF ENQUIRIES PRESCRIBED UNDER OFFICER SHALL PASS A REASONED AND SPEAKING ORDER AFTER STRICTLY ADHERING TO THE PRINCIPLES OF NATURAL JUSTICE. THE CASE IS DISPOSED OFF IN THE ABOVE TERMS. 4. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD . COUNSEL FOR THE ASSESSEE SUBMITTED THAT, IN THE ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD RAISED QUERIES ON THIS ISSUE OF ALLOWABILITY OF COMMISSION EXPENDITURE AND THE ASSESSEE HAS FILED ALL NECESSARY DETAILS IN THIS REGARD. HE FILED A PAPER BOOK RUNNING INTO 500 PAGES, WHICH CONSISTED OF THE COPIES OF ALL THE DETAILS FILED BY THE ASSESSEE (PG. 22 TO 50), IN SUPPORT OF THE GENUINENESS OF PAYMENT OF COMMISSION, WHICH WAS FILED BEFORE THE ASSESSING OFFICER. HE SUBMITTED THAT THE LD. PR. CIT WAS WRONG IN CONCLUDING THAT THE ASSESSEE HAS NOT FILED ALL RELEVANT AND DOCUMENTS BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS NOT EXAMINED THE SAME. HE SUBMITTED THAT THIS IS FACTUALLY INCORRECT AND TOOK THIS BENCH T VARIOUS EVIDENCES FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS CLAIMS OF ALLOWABILITY ACCOUNT OF COMMISSION PAYMENT, WHICH INCLUDED: A) LEDGER ACCOUNTS OF THE PARTIES B) DETAILS OF TAX DEDUCTED AT SOURCE FROM THESE PARTIES ON PAYMENTS. C) ANNEXURES OF BILLS RAISED BY THOSE PARTIES GIVING THE ITEMS OF SALE ON WHICH A CLAIM OF COMMISSION WAS MADE. D) COPY OF THE ACCOUNT AGENTS. E) COPY OF FORM NO. 16A ETC. 5 FROM A PLAIN AND SIMPLE READING OF THE RELEVANT PART OF THE AS ABSTRACTED ABOVE IT, IT SHALL BE CLEAR THAT ENQUIRIES WERE NOT AT ALL MADE BY THE A.O. IN RELATION TO THE GENUINENESS OF THE COMMISSIONS PAID ALLEGEDLY. THE ASSESSMENT ORDER AS WELL AS THE ASSESSMENT RECORDS BEAR TESTIMONY TO THIS FACT. E VEN THE ASSESSMENT RECORDS REVEALED THAT THE ASSESSING OFFICER HAD ONLY BROUGHT ON RECORD THE DOCUMENTS OF COMMISSION PAYMENTS AS AVAILABLE IN ITS RECORDS/ BOOKS OF ACCOUNTS. NO ENQUIRIES WERE MADE FROM THE THIRD PARTIES I.E. COMMISSION AGENTS TO WHOM COMM ISSIONS WERE PAID BY THE ASSESSING OFFICER. CHAPTER AND VERSE THERE WAS COMPLETE LACK OF ENQUIRY ON THIS ASPECT OF THE MATTER RENDERING THE DECISION TAKEN BY THE ASSESSING OFFICER NUGATORY. THEREFORE, THE CIRCUMSTANCES JUSTIFY SETTING ASIDE OF THE ORDER PA SSED BY THE ASSESSING OFFICER UNDER: SECTION 143(3) ON 27/12/2016. THE A.O. IS DIRECTED TO VERIFY THE GENUINENESS OF THE COMMISSIONS PAID BY THE ASSESSEE TO THE VARIOUS COMMISSION AGENTS BY HAVING RECOURSE TO VARIOUS MEASURES OF ENQUIRIES PRESCRIBED UNDER THE INCOME TAX ACT, 1961. THE ASSESSING OFFICER SHALL PASS A REASONED AND SPEAKING ORDER AFTER STRICTLY ADHERING TO THE PRINCIPLES OF NATURAL JUSTICE. THE CASE IS DISPOSED OFF IN THE ABOVE TERMS. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. . COUNSEL FOR THE ASSESSEE SUBMITTED THAT, IN THE ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD RAISED QUERIES ON THIS ISSUE OF ALLOWABILITY OF COMMISSION EXPENDITURE AND THE ASSESSEE HAS FILED ALL NECESSARY DETAILS IN THIS REGARD. PAPER BOOK RUNNING INTO 500 PAGES, WHICH CONSISTED OF THE COPIES OF ALL THE DETAILS FILED BY THE ASSESSEE (PG. 22 TO 50), IN SUPPORT OF THE GENUINENESS OF PAYMENT OF COMMISSION, WHICH WAS FILED BEFORE THE ASSESSING OFFICER. HE SUBMITTED THAT THE LD. PR. CIT WAS WRONG IN CONCLUDING THAT THE ASSESSEE HAS NOT FILED ALL RELEVANT DOCUMENTS BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS NOT EXAMINED SAME. HE SUBMITTED THAT THIS IS FACTUALLY INCORRECT AND TOOK THIS BENCH T VARIOUS EVIDENCES FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS ACCOUNT OF COMMISSION PAYMENT, WHICH INCLUDED: LEDGER ACCOUNTS OF THE PARTIES DETAILS OF TAX DEDUCTED AT SOURCE FROM THESE PARTIES ON ANNEXURES OF BILLS RAISED BY THOSE PARTIES GIVING THE ITEMS OF SALE ON WHICH A CLAIM OF COMMISSION WAS MADE. COPY OF THE ACCOUNT OF THE ASSESSEE FIRM, IN THE BOOKS OF THE COMMISSION COPY OF FORM NO. 16A ETC. ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE FROM A PLAIN AND SIMPLE READING OF THE RELEVANT PART OF THE AS SESSMENT ORDER AS ABSTRACTED ABOVE IT, IT SHALL BE CLEAR THAT ENQUIRIES WERE NOT AT ALL MADE BY THE A.O. IN RELATION TO THE GENUINENESS OF THE COMMISSIONS PAID ALLEGEDLY. THE ASSESSMENT ORDER AS VEN THE ASSESSMENT RECORDS REVEALED THAT THE ASSESSING OFFICER HAD ONLY BROUGHT ON RECORD THE DOCUMENTS OF COMMISSION PAYMENTS AS AVAILABLE IN ITS RECORDS/ BOOKS OF ACCOUNTS. NO ENQUIRIES WERE ISSIONS WERE PAID BY THE ASSESSING OFFICER. CHAPTER AND VERSE THERE WAS COMPLETE LACK OF ENQUIRY ON THIS ASPECT OF THE MATTER RENDERING THE DECISION TAKEN BY THE ASSESSING OFFICER NUGATORY. THEREFORE, THE SSED BY THE ASSESSING OFFICER UNDER: SECTION 143(3) ON 27/12/2016. THE A.O. IS DIRECTED TO VERIFY THE GENUINENESS OF THE COMMISSIONS PAID BY THE ASSESSEE TO THE VARIOUS COMMISSION AGENTS BY HAVING RECOURSE TO THE INCOME TAX ACT, 1961. THE ASSESSING OFFICER SHALL PASS A REASONED AND SPEAKING ORDER AFTER STRICTLY ADHERING TO THE PRINCIPLES OF . COUNSEL FOR THE ASSESSEE SUBMITTED THAT, IN THE ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD RAISED QUERIES ON THIS ISSUE OF ALLOWABILITY OF COMMISSION EXPENDITURE AND THE ASSESSEE HAS FILED ALL NECESSARY DETAILS IN THIS REGARD. PAPER BOOK RUNNING INTO 500 PAGES, WHICH CONSISTED OF THE COPIES OF ALL THE DETAILS FILED BY THE ASSESSEE (PG. 22 TO 50), IN SUPPORT OF THE GENUINENESS OF THE CLAIM OF PAYMENT OF COMMISSION, WHICH WAS FILED BEFORE THE ASSESSING OFFICER. HE SUBMITTED THAT THE LD. PR. CIT WAS WRONG IN CONCLUDING THAT THE ASSESSEE HAS NOT FILED ALL RELEVANT DETAILS DOCUMENTS BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS NOT EXAMINED SAME. HE SUBMITTED THAT THIS IS FACTUALLY INCORRECT AND TOOK THIS BENCH T HROUGH THE VARIOUS EVIDENCES FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS ACCOUNT OF COMMISSION PAYMENT, WHICH INCLUDED: - DETAILS OF TAX DEDUCTED AT SOURCE FROM THESE PARTIES ON COMMISSION ANNEXURES OF BILLS RAISED BY THOSE PARTIES GIVING THE ITEMS OF SALE ON IN THE BOOKS OF THE COMMISSION 5.1. HE SUBMITTED THAT THE COMMISSION WAS CLAIMED BY THESE AGENTS ON SALE OF EACH ITEM OF ELECTRIC GOODS, THE DETAILS OF WHICH WERE FURNISHED. HE SUBMITTED THAT THE ASSESSING OFFICER HAS EXAMINED THESE DOCUMENTS AND THEREAFTER CHOSE TO DISALLOW ON ADHOC BASIS @ 20% OF THE EXPENDITURE CLAIMED THAT THE LD. PR. CIT ALLEGES THAT THE ASSESSING OFFICER HAS NOT MADE PROPER ENQUIRIES AND ARGUED THAT THE EXTENT OF ENQUIRY TO BE MADE IS TO BE DETERMINED BY THE ASSESSING OFFICER AND C ANNOT BE A GROUND OF REVISION BY THE LD. PR. CIT. HE FURTHER SUBMITTED THAT NOT MAKING ENQUIRIES FROM THIRD PARTIES BY THE ASSESSING OFFICER, CANNOT ALSO BE A GROUND FOR REVISION U/S 263 OF THE ACT AND IT CANNOT BE CLASSIFIED AS A CASE OF LACK OF ENQUIRY. HE VEHEMENTLY CONTEN U/S 263 OF THE ACT, FOR THE SOLE PURPOSE OF DIRECTING THE ASSESSING OFFICER THAT ENQUIRIES HAVE TO BE MADE ON THIS ISSUE, ONLY IN A PARTICULAR MANNER ARGUED THAT THE ASSESSING OFFICER CONDUCTED DETAILED EXAMINATION OF THE ISSUE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAS COME TO A POSSIBLE VIEW AND DISALLOWED 20% OF THE EXPENDITURE CLAIMED AS EXCESSIVE. WERE BEING MADE TO THE VERY SAME PARTIES IN THE EARLIER ASSESSMENT YEARS AS WELL AS IN THE SUBSEQUENT ASSESSMENT YEARS AND THAT THE ASSESSING OFFICER HAS ACCEPTED THE SAME IN THOSE ASSESSMENT YEARS. 5.2. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT T MATTER OF DISALLOWANCE OF 20% OF THE EXPENDITURE CLAIMED ON COMMISSION PAYMENTS BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER SAME IS PENDING DISPOSAL AND UNDER THOSE CIRCUMSTANCES, TH HIS POWERS U/S 263 OF THE ACT ON THE VERY SAME ISSUE WHICH IS BEFORE THE LD. CIT(A). HE RELIED ON THE FOLLOWING CASE LAW IN SUPPORT OF HIS CONTENTION THAT THE REOPENING IS BAD IN LAW:- SMT. RENUKA PHILIP VS. INCOME [2018] 409 ITR 567 (MADRAS) COMMISSIONER OF INCOME 295 ITR 282 (SC) 5.3. ON THE ISSUE OF ALLOWABILITY OF CLAIM RELIED ON THE FOLLOWING JUDGMENTS OF THE HONBLE JURISDICTIONAL HIGH COURT: 6 HE SUBMITTED THAT THE COMMISSION WAS CLAIMED BY THESE AGENTS ON SALE OF EACH ITEM OF ELECTRIC GOODS, THE DETAILS OF WHICH WERE FURNISHED. HE SUBMITTED THAT THE ASSESSING OFFICER HAS EXAMINED THESE DOCUMENTS AND THEREAFTER CHOSE TO DISALLOW ON 20% OF THE EXPENDITURE CLAIMED AS COMMISSION PAYMENTS. HE POINTED OUT THAT THE LD. PR. CIT ALLEGES THAT THE ASSESSING OFFICER HAS NOT MADE PROPER ENQUIRIES AND THAT THE EXTENT OF ENQUIRY TO BE MADE IS TO BE DETERMINED BY THE ASSESSING ANNOT BE A GROUND OF REVISION BY THE LD. PR. CIT. HE FURTHER SUBMITTED THAT NOT MAKING ENQUIRIES FROM THIRD PARTIES BY THE ASSESSING OFFICER, CANNOT ALSO BE A GROUND FOR REVISION U/S 263 OF THE ACT AND IT CANNOT BE CLASSIFIED AS A CASE OF LACK OF HE VEHEMENTLY CONTEN DED THAT THE LD. PR. CIT, IS WRONG IN EXERCISING HIS POWERS U/S 263 OF THE ACT, FOR THE SOLE PURPOSE OF DIRECTING THE ASSESSING OFFICER THAT ENQUIRIES HAVE TO BE MADE ON THIS ISSUE, ONLY IN A PARTICULAR MANNER AS THE LD. PR. CIT THINGS ARGUED THAT THE ASSESSING OFFICER CONDUCTED DETAILED EXAMINATION OF THE ISSUE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAS COME TO A POSSIBLE VIEW AND DISALLOWED 20% OF THE EXPENDITURE CLAIMED AS EXCESSIVE. HE POINTED OUT THAT SIMILAR PAYMEN WERE BEING MADE TO THE VERY SAME PARTIES IN THE EARLIER ASSESSMENT YEARS AS WELL AS IN THE SUBSEQUENT ASSESSMENT YEARS AND THAT THE ASSESSING OFFICER HAS ACCEPTED THE SAME THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAD CARRIED THE MATTER OF DISALLOWANCE OF 20% OF THE EXPENDITURE CLAIMED ON COMMISSION PAYMENTS BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER , IN APPEAL BEFORE THE LD. CIT(A) AND THE SAME IS PENDING DISPOSAL AND UNDER THOSE CIRCUMSTANCES, TH E LD. PR. CIT CANNOT EXERCISE HIS POWERS U/S 263 OF THE ACT ON THE VERY SAME ISSUE WHICH IS BEFORE THE LD. CIT(A). HE RELIED ON THE FOLLOWING CASE LAW IN SUPPORT OF HIS CONTENTION THAT THE REOPENING IS BAD IN SMT. RENUKA PHILIP VS. INCOME -TAX OFFICER, BUSINESS WARD- XV(2)CHENNAI [2018] 409 ITR 567 (MADRAS) COMMISSIONER OF INCOME - TAX (CENTRAL), LUDHIANA VS. MAX INDIA LTD 295 ITR 282 (SC) ON THE ISSUE OF ALLOWABILITY OF CLAIM OF EXPENDITURE ON COMMISSION PAYMENTS JUDGMENTS OF THE HONBLE JURISDICTIONAL HIGH COURT: ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE HE SUBMITTED THAT THE COMMISSION WAS CLAIMED BY THESE AGENTS ON SALE OF EACH ITEM OF ELECTRIC GOODS, THE DETAILS OF WHICH WERE FURNISHED. HE SUBMITTED THAT THE ASSESSING OFFICER HAS EXAMINED THESE DOCUMENTS AND THEREAFTER CHOSE TO DISALLOW ON COMMISSION PAYMENTS. HE POINTED OUT THAT THE LD. PR. CIT ALLEGES THAT THE ASSESSING OFFICER HAS NOT MADE PROPER ENQUIRIES AND THAT THE EXTENT OF ENQUIRY TO BE MADE IS TO BE DETERMINED BY THE ASSESSING ANNOT BE A GROUND OF REVISION BY THE LD. PR. CIT. HE FURTHER SUBMITTED THAT NOT MAKING ENQUIRIES FROM THIRD PARTIES BY THE ASSESSING OFFICER, CANNOT ALSO BE A GROUND FOR REVISION U/S 263 OF THE ACT AND IT CANNOT BE CLASSIFIED AS A CASE OF LACK OF DED THAT THE LD. PR. CIT, IS WRONG IN EXERCISING HIS POWERS U/S 263 OF THE ACT, FOR THE SOLE PURPOSE OF DIRECTING THE ASSESSING OFFICER THAT ENQUIRIES AS THE LD. PR. CIT THINGS FIT. HE ARGUED THAT THE ASSESSING OFFICER CONDUCTED DETAILED EXAMINATION OF THE ISSUE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAS COME TO A POSSIBLE VIEW AND DISALLOWED HE POINTED OUT THAT SIMILAR PAYMEN TS WERE BEING MADE TO THE VERY SAME PARTIES IN THE EARLIER ASSESSMENT YEARS AS WELL AS IN THE SUBSEQUENT ASSESSMENT YEARS AND THAT THE ASSESSING OFFICER HAS ACCEPTED THE SAME HE ASSESSEE HAD CARRIED THE MATTER OF DISALLOWANCE OF 20% OF THE EXPENDITURE CLAIMED ON COMMISSION PAYMENTS BY IN APPEAL BEFORE THE LD. CIT(A) AND THE E LD. PR. CIT CANNOT EXERCISE HIS POWERS U/S 263 OF THE ACT ON THE VERY SAME ISSUE WHICH IS BEFORE THE LD. CIT(A). HE RELIED ON THE FOLLOWING CASE LAW IN SUPPORT OF HIS CONTENTION THAT THE REOPENING IS BAD IN XV(2)CHENNAI TAX (CENTRAL), LUDHIANA VS. MAX INDIA LTD . [2007] OF EXPENDITURE ON COMMISSION PAYMENTS . HE JUDGMENTS OF THE HONBLE JURISDICTIONAL HIGH COURT: - COMMISSIONER OF INCOME 225 OF 2013, G.A. NO. 3825 OF 2013, JUDGMENT DT. 14/03/2014 CIT VS. ALPHA HYDRONICS PVT. LTD. IN ITA NO. 549 OF 2004, JUDGMENT 10/11/2014 5.4. HE PRAYED FOR RELIEF. 6. THE LD. D/R, ON THE OTHER HAND, OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSING OFFICER HAS CALLED FOR INFORMATION AND EVIDENCE BUT AFTER THE ASSESSEE SUBMITTED THE SAME, THE ASSESSING HE ARGUED THAT THE FUNDAMENTAL ASPECT, AS TO WHETHER THE SERVICES WERE RENDERED OR NOT, WAS NOT EXAMINED BY THE ASSESSING OFFICER. HE RELIED ON THE ORDER PASSED U/S 263 OF THE ACT AND SUBMITTED THAT, NO PROPER ENQUIRI RELIED ON THE ORDER PASSED U/S 263 OF THE ACT AND SUBMITTED THAT, NO PROPER ENQUIRIES WERE MADE BY THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS AS THE ASSESSING OFFICER HAD NOT EXAMINE COMMISSION CLAIMED AS PAID AND HAS NOT MADE ENQUIRIES FROM THIRD PARTIES I.E., COMMISSION AGENTS. THUS, HE SUBMITS THAT THIS IS A CASE OF LACK OF ENQUIRY WHICH MAKES THE ASSESSMENT ORDER NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO T REVENUE. HE PRAYED THAT THE ORDER PASSED U/S 263 OF THE ACT, BE UPHELD. 7. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS: 8. A PERUSAL OF THE ASSESSMENT ORDER AND THE DETAILS FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER, IN REPLY ASSESSMENT PROCEEDINGS DEMON BY THE LD. PR. CIT IN THE LAST PARAGRAPH OF HIS ORDER. THIS STATEMENT IS FACTUALLY INCORRECT. THE ASSESSING OFFICER HAS CALLED FOR INFORMATION ON THE CLAIM OF DEDUCTION OF EXPENDITURE MADE BY THE VOLUMINOUS DETAILS. PAYMENTS WERE MADE ON RECEIPT OF CLAIM BILLS THROUGH BANKING CHANNELS. TAX WAS ALSO DEDUCTED AT SOURCE FROM THESE PAYMENTS. THE BILLS RAISED BY THE COMMISSION AGENTS ALONG WITH TH 7 COMMISSIONER OF INCOME - TAX VS. M/S. INBUILT MERCHANT PVT. LTD.IN ITAT NO. 225 OF 2013, G.A. NO. 3825 OF 2013, JUDGMENT DT. 14/03/2014 CIT VS. ALPHA HYDRONICS PVT. LTD. IN ITA NO. 549 OF 2004, JUDGMENT THE LD. D/R, ON THE OTHER HAND, OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSING OFFICER HAS CALLED FOR INFORMATION AND EVIDENCE BUT AFTER THE ASSESSEE SUBMITTED THE SAME, THE ASSESSING OFFICER HAS NOT EXAMINED THESE PAPERS. HE ARGUED THAT THE FUNDAMENTAL ASPECT, AS TO WHETHER THE SERVICES WERE RENDERED OR NOT, WAS NOT EXAMINED BY THE ASSESSING OFFICER. HE RELIED ON THE ORDER PASSED U/S 263 OF THE ACT AND SUBMITTED THAT, NO PROPER ENQUIRI ES WERE MADE BY THE ASSESSING OFFICER. HE RELIED ON THE ORDER PASSED U/S 263 OF THE ACT AND SUBMITTED THAT, NO PROPER ENQUIRIES WERE MADE BY THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS AS THE ASSESSING OFFICER HAD NOT EXAMINE D THE GENUINENESS OF THE COMMISSION CLAIMED AS PAID AND HAS NOT MADE ENQUIRIES FROM THIRD PARTIES I.E., COMMISSION AGENTS. THUS, HE SUBMITS THAT THIS IS A CASE OF LACK OF ENQUIRY WHICH MAKES THE ASSESSMENT ORDER NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO T HE INTEREST OF THE REVENUE. HE PRAYED THAT THE ORDER PASSED U/S 263 OF THE ACT, BE UPHELD. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS: - A PERUSAL OF THE ASSESSMENT ORDER AND THE DETAILS FILED BY THE ASSESSEE BEFORE THE IN REPLY TO THE QUERIES RAISED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS DEMON STRATE THAT THIS IS NOT A CASE OF LACK OF ENQUIRY AS STATED BY THE LD. PR. CIT IN THE LAST PARAGRAPH OF HIS ORDER. THIS STATEMENT IS FACTUALLY INCORRECT. THE ASSESSING OFFICER HAS CALLED FOR INFORMATION ON THE CLAIM OF DEDUCTION OF EXPENDITURE MADE BY THE ASSESSEE AND IN RESPONSE THERETO, THE ASSESSEE HAS FILED PAYMENTS WERE MADE ON RECEIPT OF CLAIM BILLS THROUGH BANKING TAX WAS ALSO DEDUCTED AT SOURCE FROM THESE PAYMENTS. THE BILLS RAISED BY THE COMMISSION AGENTS ALONG WITH TH E LIST OF ELECTRIC ITEMS SOLD BY THEM BASED ON WHICH THE ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE TAX VS. M/S. INBUILT MERCHANT PVT. LTD.IN ITAT NO. 225 OF 2013, G.A. NO. 3825 OF 2013, JUDGMENT DT. 14/03/2014 CIT VS. ALPHA HYDRONICS PVT. LTD. IN ITA NO. 549 OF 2004, JUDGMENT DT. THE LD. D/R, ON THE OTHER HAND, OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSING OFFICER HAS CALLED FOR INFORMATION AND EVIDENCE BUT AFTER OFFICER HAS NOT EXAMINED THESE PAPERS. HE ARGUED THAT THE FUNDAMENTAL ASPECT, AS TO WHETHER THE SERVICES WERE RENDERED OR NOT, WAS NOT EXAMINED BY THE ASSESSING OFFICER. HE RELIED ON THE ORDER PASSED U/S 263 OF ES WERE MADE BY THE ASSESSING OFFICER. HE RELIED ON THE ORDER PASSED U/S 263 OF THE ACT AND SUBMITTED THAT, NO PROPER ENQUIRIES WERE MADE BY THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT D THE GENUINENESS OF THE COMMISSION CLAIMED AS PAID AND HAS NOT MADE ENQUIRIES FROM THIRD PARTIES I.E., COMMISSION AGENTS. THUS, HE SUBMITS THAT THIS IS A CASE OF LACK OF ENQUIRY WHICH MAKES HE INTEREST OF THE REVENUE. HE PRAYED THAT THE ORDER PASSED U/S 263 OF THE ACT, BE UPHELD. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES A PERUSAL OF THE ASSESSMENT ORDER AND THE DETAILS FILED BY THE ASSESSEE BEFORE THE TO THE QUERIES RAISED BY THE ASSESSING OFFICER DURING THE STRATE THAT THIS IS NOT A CASE OF LACK OF ENQUIRY AS STATED BY THE LD. PR. CIT IN THE LAST PARAGRAPH OF HIS ORDER. THIS STATEMENT IS FACTUALLY INCORRECT. THE ASSESSING OFFICER HAS CALLED FOR INFORMATION ON THE CLAIM OF DEDUCTION OF ASSESSEE AND IN RESPONSE THERETO, THE ASSESSEE HAS FILED PAYMENTS WERE MADE ON RECEIPT OF CLAIM BILLS THROUGH BANKING TAX WAS ALSO DEDUCTED AT SOURCE FROM THESE PAYMENTS. THE BILLS RAISED BY THE E LIST OF ELECTRIC ITEMS SOLD BY THEM BASED ON WHICH THE COMMISSION WAS CLAIMED WAS CIT. THIS IS ALSO A FACT THAT THE ASSESSEE HAS BEEN PAYING AND CLAIMING AS A DEDUCTION COMMISSION PAID TO AGENTS , SUBSEQUENT ASSESSMENT YEARS. IT IS COMMON KNOWLEDGE THAT IN THE COMPETITION IS SEVERE AND REQUIRES SPECIAL MEASURES TO BOOST SALES. THE PAYMENT OF COMMISSION HAS BEEN ACCEP TED IN THE SUBSEQUENT ASSESSMENT YEARS. 8.1. THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF M/S. INBUILT MERCHANT PVT. LTD. (SUPRA) THE VIEWS E XPRESSED BY THE ASSESSING OFFICER ARE ERRONEOUS IN LAW. THE ASSESSING OFFICER HAS OVERLOOKED THE IMPORTANCE OF THE BOOKS OF ACCOUNTS MAINTAINED IN THE ORDINARY COURSE OF BUSINESS. REFERENCE IN THIS REGARD MAY BE MADE TO SUB OF THE INDIAN EVIDENCE ACT, 1872. THE BOOKS OF ACCOUNTS MAINTAINED IN THE ORDINARY COURSE OF BUSINESS ARE RELEVANT AND THEY CANNOT BE DISCARDED IN THE ABSENCE OF APPROPRIATE REASONS. THE MERE FACT THAT RECIPIENT DID NOT REPLY IN SOME CASES OR THEY WERE NO T FOUND AT THE ADDRESS FURNISHED BY THE ASSESSEE DOES NOT IN THE LEAST PROVE THE FACT THAT THEY WERE NON EXISTENT OR THAT THE PAYMENTS SHOWN TO HAVE BEEN MADE BY THE ASSESSEE WERE IMAGINARY. WITH THE ADVANCEMENT OF TECHNOLOGY, IT HAS BECOME POSSIBLE TO SEL L GOODS THROUGHOUT THE COUNTRY THROUGH THE INTERNET. FOR THAT PURPOSE, AGENTS ARE REQUIRED THROUGHOUT THE COUNTRY. THE MECHANISM IN THAT REGARD HAS BEEN DISCLOSED BY THE ASSESSEE AND HAS BEEN RECORDED IN THE ORDER OF THE CIT (APPEALS). FOR THE PURPOSE OF C ARRYING ON ITS BUSINESS, THE ASSESSEE HAS TO RECRUIT THE AGENTS. IT MAY NOT BE POSSIBLE FOR THE ASSESSEE TO KNOW THEM PERSONALLY. WHATEVER ADDRESS WAS FURNISHED TO THE ASSESSEE, HAS BEEN DISCLOSED TO THE INCOME CHEQUE AFTER DEDUCTION OF TAX. THE TAX DEDUCTED AS SOURCE HAS DULY BEEN DEPOSITED. THE JUDGMENT IN THE CASE OF UPON BY MR. BHOWMICK DO AUTHORITY FOR THE PROPOSITION THAT MERE PAYMENT BY ACCOUNT PAYEE CHEQUE CANNOT ESTABLISH THAT THE TRANSACTION WAS GENUINE, BUT IN THE CASE BEFORE US, BESIDES THE FACT THAT PAYMENT WAS MADE BY CHEQUE, T ARE AS FOLLOWS: A) BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE IN THE ORDINARY COURSE OF BUSINESS; B) DEDUCTION OF TAX AT SOURCE; C) DEPOSIT OF THE MONEY DEDUCTED AT SOURCE; D) PARTICULARS OF THE RECIPIENT WERE DULY FURNISHED; WE ARE, AS SUCH, OF THE OPINION THAT THE VIEWS EXPRESSED BY THE LEARNED TRIBUNAL ARE UNEXCEPTIONABLE. WE, THEREFORE REFUSE TO ADMIT THE APPEAL. THE APPEAL IS THUS DISMISSED. 8.2. SIMILARLY, THE HONBLE HYDRONICS PVT. LTD. (SUPRA) , HELD AS FOLLOWS: 8 COMMISSION WAS CLAIMED WAS PLACED BEFORE THE ASSESSING OFFICER AS WELL AS THE LD. PR. CIT. THIS IS ALSO A FACT THAT THE ASSESSEE HAS BEEN PAYING AND CLAIMING AS A DEDUCTION , FOR ALL THE PREVIOUS ASSESSMENT YEARS AS WELL AS FOR THE SUBSEQUENT ASSESSMENT YEARS. IT IS COMMON KNOWLEDGE THAT IN THIS SEGMENT OF BUSINESS, IS SEVERE AND REQUIRES SPECIAL MEASURES TO BOOST SALES. THE PAYMENT OF TED AS GENUINE BY THE REVENUE IN THE EARLIER YEARS IN THE SUBSEQUENT ASSESSMENT YEARS. THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME M/S. INBUILT MERCHANT PVT. LTD. (SUPRA) HAS HELD AS FOLLOWS:- XPRESSED BY THE ASSESSING OFFICER ARE ERRONEOUS IN LAW. THE ASSESSING OFFICER HAS OVERLOOKED THE IMPORTANCE OF THE BOOKS OF ACCOUNTS MAINTAINED IN THE ORDINARY COURSE OF BUSINESS. REFERENCE IN THIS REGARD MAY BE MADE TO SUB - SECTION (2) OF OF THE INDIAN EVIDENCE ACT, 1872. THE BOOKS OF ACCOUNTS MAINTAINED IN THE ORDINARY COURSE OF BUSINESS ARE RELEVANT AND THEY CANNOT BE DISCARDED IN THE ABSENCE OF APPROPRIATE REASONS. THE MERE FACT THAT RECIPIENT DID NOT REPLY IN SOME CASES OR THEY T FOUND AT THE ADDRESS FURNISHED BY THE ASSESSEE DOES NOT IN THE LEAST PROVE THE FACT THAT THEY WERE NON EXISTENT OR THAT THE PAYMENTS SHOWN TO HAVE BEEN MADE BY THE ASSESSEE WERE IMAGINARY. WITH THE ADVANCEMENT OF TECHNOLOGY, IT HAS BECOME POSSIBLE TO L GOODS THROUGHOUT THE COUNTRY THROUGH THE INTERNET. FOR THAT PURPOSE, AGENTS ARE REQUIRED THROUGHOUT THE COUNTRY. THE MECHANISM IN THAT REGARD HAS BEEN DISCLOSED BY THE ASSESSEE AND HAS BEEN RECORDED IN THE ORDER OF THE CIT (APPEALS). FOR THE PURPOSE OF ARRYING ON ITS BUSINESS, THE ASSESSEE HAS TO RECRUIT THE AGENTS. IT MAY NOT BE POSSIBLE FOR THE ASSESSEE TO KNOW THEM PERSONALLY. WHATEVER ADDRESS WAS FURNISHED TO THE ASSESSEE, HAS BEEN DISCLOSED TO THE INCOME - TAX DEPARTMENT. PAYMENTS WERE ADMITTEDLY MADE CHEQUE AFTER DEDUCTION OF TAX. THE TAX DEDUCTED AS SOURCE HAS DULY BEEN DEPOSITED. THE JUDGMENT IN THE CASE OF CIT VS. PRECISION FINANCE PVT. LTD . REPORTED IN 208 ITR 465 RELIED UPON BY MR. BHOWMICK DO ES NOT REALLY ASSIST HIM. THE AFORESAID JUDGMENT IS AN AUTHORITY FOR THE PROPOSITION THAT MERE PAYMENT BY ACCOUNT PAYEE CHEQUE CANNOT ESTABLISH THAT THE TRANSACTION WAS GENUINE, BUT IN THE CASE BEFORE US, BESIDES THE FACT THAT PAYMENT WAS MADE BY CHEQUE, T HERE ARE OTHER PIECES OF EVIDENCE AVAILABLE WHICH A) BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE IN THE ORDINARY COURSE OF BUSINESS; B) DEDUCTION OF TAX AT SOURCE; C) DEPOSIT OF THE MONEY DEDUCTED AT SOURCE; PARTICULARS OF THE RECIPIENT WERE DULY FURNISHED; WE ARE, AS SUCH, OF THE OPINION THAT THE VIEWS EXPRESSED BY THE LEARNED TRIBUNAL ARE UNEXCEPTIONABLE. WE, THEREFORE REFUSE TO ADMIT THE APPEAL. THE APPEAL IS THUS SIMILARLY, THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF , HELD AS FOLLOWS: - ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE BEFORE THE ASSESSING OFFICER AS WELL AS THE LD. PR. CIT. THIS IS ALSO A FACT THAT THE ASSESSEE HAS BEEN PAYING AND CLAIMING AS A DEDUCTION FOR ALL THE PREVIOUS ASSESSMENT YEARS AS WELL AS FOR THE SEGMENT OF BUSINESS, IS SEVERE AND REQUIRES SPECIAL MEASURES TO BOOST SALES. THE PAYMENT OF BY THE REVENUE IN THE EARLIER YEARS AS WELL AS COMMISSIONER OF INCOME -TAX VS. XPRESSED BY THE ASSESSING OFFICER ARE ERRONEOUS IN LAW. THE ASSESSING OFFICER HAS OVERLOOKED THE IMPORTANCE OF THE BOOKS OF ACCOUNTS MAINTAINED IN THE ORDINARY SECTION (2) OF SECTION 32 OF THE INDIAN EVIDENCE ACT, 1872. THE BOOKS OF ACCOUNTS MAINTAINED IN THE ORDINARY COURSE OF BUSINESS ARE RELEVANT AND THEY CANNOT BE DISCARDED IN THE ABSENCE OF APPROPRIATE REASONS. THE MERE FACT THAT RECIPIENT DID NOT REPLY IN SOME CASES OR THEY T FOUND AT THE ADDRESS FURNISHED BY THE ASSESSEE DOES NOT IN THE LEAST PROVE THE FACT THAT THEY WERE NON EXISTENT OR THAT THE PAYMENTS SHOWN TO HAVE BEEN MADE BY THE ASSESSEE WERE IMAGINARY. WITH THE ADVANCEMENT OF TECHNOLOGY, IT HAS BECOME POSSIBLE TO L GOODS THROUGHOUT THE COUNTRY THROUGH THE INTERNET. FOR THAT PURPOSE, AGENTS ARE REQUIRED THROUGHOUT THE COUNTRY. THE MECHANISM IN THAT REGARD HAS BEEN DISCLOSED BY THE ASSESSEE AND HAS BEEN RECORDED IN THE ORDER OF THE CIT (APPEALS). FOR THE PURPOSE OF ARRYING ON ITS BUSINESS, THE ASSESSEE HAS TO RECRUIT THE AGENTS. IT MAY NOT BE POSSIBLE FOR THE ASSESSEE TO KNOW THEM PERSONALLY. WHATEVER ADDRESS WAS FURNISHED TO THE ASSESSEE, TAX DEPARTMENT. PAYMENTS WERE ADMITTEDLY MADE BY CHEQUE AFTER DEDUCTION OF TAX. THE TAX DEDUCTED AS SOURCE HAS DULY BEEN DEPOSITED. THE . REPORTED IN 208 ITR 465 RELIED ES NOT REALLY ASSIST HIM. THE AFORESAID JUDGMENT IS AN AUTHORITY FOR THE PROPOSITION THAT MERE PAYMENT BY ACCOUNT PAYEE CHEQUE CANNOT ESTABLISH THAT THE TRANSACTION WAS GENUINE, BUT IN THE CASE BEFORE US, BESIDES THE FACT HERE ARE OTHER PIECES OF EVIDENCE AVAILABLE WHICH A) BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE IN THE ORDINARY COURSE OF BUSINESS; WE ARE, AS SUCH, OF THE OPINION THAT THE VIEWS EXPRESSED BY THE LEARNED TRIBUNAL ARE UNEXCEPTIONABLE. WE, THEREFORE REFUSE TO ADMIT THE APPEAL. THE APPEAL IS THUS JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ALPHA WE FIND THAT THE TRIBUNAL WHILE ALLOWING THE APPEAL OF THE ASSESSEE AND HELD AS UNDER : 'WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT IN THE PRESENT CASE THERE IS A BINDING CONTRACT BETWEEN THE PARTIES BY WHICH THE REALISATION OF COMMISSION COMMUNICATION BETWEEN THE PARTIES THAT THE PAYMENT WAS DULY RECEIVED BY THE PARTIES AND PAID BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES. THE REVENUE HAS NOT ALLEGED THAT THE PARTIES TO THE TRANSACTIONS A PAYMENTS ARE NOT GENUJINE OR THAT THE PAYMENTS HAVING BEEN MADE BY THE ASSESSEE TO THE RECIPIENTS HAVE FOUND THEIR WAY BACK TO THE ASSESSEE SOME WAY OR THE OTHER. SUCH BEING THE CASE, WE FIND THAT THE AUTHORITIES BELOW JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE FOR PAYMENT OF COMMISSION. SINCE ALL THE INGREDIENTS NECESSARY FOR GENUINE BUSINESS TRANSACTION EXIST IN THIS CASE, WE DO NOT FIND ANY MERIT IN THE ADDITION MADE BY THE AO AND IN THE ACTION OF THE C IT(A) IN CONFIRMING THE SAME. IN REVERSING THEIR ORDERS, AND RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE CAALCUTTA HIGH COURT IN THE CASE OF MASTHER & PLANT (INDIA) LTD. (SUPRA) AND THE CASE OF THE TRIBUNAL, MUMBAI BENCH (THIRD MEMBER) DISCUSSED HER ASSESSEE.' HEARD MR. DAS, LEARNED ADVOCATE APPEARING FOR THE APPELLANT REVENUE AND MR. J. P. KHAITAN, LEARNED SENIOR ADVOCATE APPEARING FOR THE RESPONDENT ASSESSEE. BEFORE US THE REVENUE COULD NOT DEMONSTRATE EITHER T HE MONEY WAS NOT PAID OR THE MONEY WAS PAID AND ROUTED BACK TO THE ASSESSEE. IN THE CIRCUMSTANCES INTERFERENCE WITH THE ORDER OF THE TRIBUNAL IS NOT WARRANTED. NO QUESTION ARISE FOR ADJUDICATION. THE APPLICATION AND THE APPEAL ARE DISMISSED. 9. APPLYING T HE PROPOSITIONS OF LAW LAID DOWN IN THE ABOVE CASE LAW TO THE FACTS OF THIS CASE, WE COME TO THE CONCLUSION THAT THE ASSESSING OFFICER HAS TAKEN A POSSIBLE VIEW THAT THE EXPENDITURE IN QU ESTION CLAIMED BY THE ASSESSEE IN PART . THIS CANNOT BE A CASE OF LACK OF ENQUIRY WHETHER THIRD PARTY ENQUIRIES HAVE TO BE MADE THE PREROGATIVE OF THE ASSESSING OFF EXTENT OF INVESTIGATION IS THE OUR VIEW, INVOKE HIS POWER U/S 263 OF THE ACT FOR REVISING AN ORDER PASSED U/S 143(3) OF THE ACT FOR THE REASON THAT IN HIS VIEW, THE INVESTIGATION PARTICULAR MANNER OR TO A PARTICULAR EXTENT. INADEQUATE ENQUIRY REVISION. 9.1. ON FACTS, THIS IS A CASE WHERE AN ENQUIRY WAS CONDUCTED AND A POSSIBLE VIEW TAKEN BASED ON THE EXAMINATION OF THE MATERIALS AVAILABLE ON RECORD. PRADESH HIGH COURT IN THE CASE OF HAD CONSIDERED A NUMBER OF JUDGMENTS ON THIS ISSUE OF EXERCISE OF JURISDICTION U/S 263 OF THE ACT BY THE PRINCIPAL COMMISSIONER OF INCOME TAX AND CULLED THE PRINCIPLES LAID DOWN IN THE JUDGMENTS AS BELOW : 9 WE FIND THAT THE TRIBUNAL WHILE ALLOWING THE APPEAL OF THE ASSESSEE AND HELD AS UNDER : 'WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT IN THE PRESENT CASE THERE IS A BINDING CONTRACT BETWEEN THE PARTIES BY WHICH THE \ RECIPIENTS OF THE COMMISSION HAD THE RIGHT TO ENFORCE REALISATION OF COMMISSION STIPULATED BETWEEN THE PARTIES. WE ALSO FIND FROM THE COMMUNICATION BETWEEN THE PARTIES THAT THE PAYMENT WAS DULY RECEIVED BY THE PARTIES AND PAID BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES. THE REVENUE HAS NOT ALLEGED THAT THE PARTIES TO THE TRANSACTIONS A RE RELATED TO EACH OTHER OR THAT THE PAYMENTS ARE NOT GENUJINE OR THAT THE PAYMENTS HAVING BEEN MADE BY THE ASSESSEE TO THE RECIPIENTS HAVE FOUND THEIR WAY BACK TO THE ASSESSEE SOME WAY OR THE OTHER. SUCH BEING THE CASE, WE FIND THAT THE AUTHORITIES BELOW JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE FOR PAYMENT OF COMMISSION. SINCE ALL THE INGREDIENTS NECESSARY FOR GENUINE BUSINESS TRANSACTION EXIST IN THIS CASE, WE DO NOT FIND ANY MERIT IN THE ADDITION MADE BY THE AO AND IN THE ACTION OF THE IT(A) IN CONFIRMING THE SAME. IN REVERSING THEIR ORDERS, AND RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE CAALCUTTA HIGH COURT IN THE CASE OF MASTHER & PLANT (INDIA) LTD. (SUPRA) AND THE CASE OF THE TRIBUNAL, MUMBAI BENCH (THIRD MEMBER) DISCUSSED HER EIN ABOVE, WE ALLOW THE APPEAL OF THE HEARD MR. DAS, LEARNED ADVOCATE APPEARING FOR THE APPELLANT REVENUE AND MR. J. P. KHAITAN, LEARNED SENIOR ADVOCATE APPEARING FOR THE RESPONDENT ASSESSEE. BEFORE US THE REVENUE COULD NOT HE MONEY WAS NOT PAID OR THE MONEY WAS PAID AND ROUTED BACK TO THE ASSESSEE. IN THE CIRCUMSTANCES INTERFERENCE WITH THE ORDER OF THE TRIBUNAL IS NOT WARRANTED. NO QUESTION ARISE FOR ADJUDICATION. THE APPLICATION AND THE APPEAL ARE DISMISSED. HE PROPOSITIONS OF LAW LAID DOWN IN THE ABOVE CASE LAW TO THE FACTS OF THIS CASE, WE COME TO THE CONCLUSION THAT THE ASSESSING OFFICER HAS TAKEN A POSSIBLE VIEW THAT ESTION CLAIMED BY THE ASSESSEE AS COMMISSION PAYMENT, IS ALLOWABLE . THIS CANNOT BE A CASE OF LACK OF ENQUIRY OR NON- APPLICATION OF MIND WHETHER THIRD PARTY ENQUIRIES HAVE TO BE MADE OR NOT DURING THE COURSE OF INVESTIGATION, THE PREROGATIVE OF THE ASSESSING OFF ICER, AS HE IS THE INVESTIGATOR. T THE PREROGATIVE OF THE ASSESSING OFFICER . THE LD. PR. CIT, CANNOT, IN OUR VIEW, INVOKE HIS POWER U/S 263 OF THE ACT FOR REVISING AN ORDER PASSED U/S 143(3) OF THE ACT FOR THE REASON THAT IN HIS VIEW, THE INVESTIGATION /ENQUIRY SHOULD BE CONDUCTED IN A PARTICULAR MANNER OR TO A PARTICULAR EXTENT. INADEQUATE ENQUIRY CANNOT BE A GROUND OF ON FACTS, THIS IS A CASE WHERE AN ENQUIRY WAS CONDUCTED AND A POSSIBLE VIEW TAKEN BASED ON THE EXAMINATION OF THE MATERIALS AVAILABLE ON RECORD. THE HONEBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SPECTRA SHARES AND SCRIPS PVT. LTD. V CIT (AP) 354 ITR 35 HAD CONSIDERED A NUMBER OF JUDGMENTS ON THIS ISSUE OF EXERCISE OF JURISDICTION U/S 263 OF THE ACT BY THE PRINCIPAL COMMISSIONER OF INCOME TAX AND CULLED THE PRINCIPLES LAID DOWN IN ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE WE FIND THAT THE TRIBUNAL WHILE ALLOWING THE APPEAL OF THE ASSESSEE AND HELD AS UNDER : 'WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT IN THE PRESENT CASE THERE IS A BINDING CONTRACT BETWEEN THE RECIPIENTS OF THE COMMISSION HAD THE RIGHT TO ENFORCE STIPULATED BETWEEN THE PARTIES. WE ALSO FIND FROM THE COMMUNICATION BETWEEN THE PARTIES THAT THE PAYMENT WAS DULY RECEIVED BY THE PARTIES AND PAID BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES. THE REVENUE HAS NOT RE RELATED TO EACH OTHER OR THAT THE PAYMENTS ARE NOT GENUJINE OR THAT THE PAYMENTS HAVING BEEN MADE BY THE ASSESSEE TO THE RECIPIENTS HAVE FOUND THEIR WAY BACK TO THE ASSESSEE SOME WAY OR THE OTHER. SUCH BEING THE CASE, WE FIND THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE FOR PAYMENT OF COMMISSION. SINCE ALL THE INGREDIENTS NECESSARY FOR GENUINE BUSINESS TRANSACTION EXIST IN THIS CASE, WE DO NOT FIND ANY MERIT IN THE ADDITION MADE BY THE AO AND IN THE ACTION OF THE IT(A) IN CONFIRMING THE SAME. IN REVERSING THEIR ORDERS, AND RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE CAALCUTTA HIGH COURT IN THE CASE OF MASTHER & PLANT (INDIA) LTD. (SUPRA) AND THE CASE OF THE TRIBUNAL, MUMBAI EIN ABOVE, WE ALLOW THE APPEAL OF THE HEARD MR. DAS, LEARNED ADVOCATE APPEARING FOR THE APPELLANT REVENUE AND MR. J. P. KHAITAN, LEARNED SENIOR ADVOCATE APPEARING FOR THE RESPONDENT ASSESSEE. BEFORE US THE REVENUE COULD NOT HE MONEY WAS NOT PAID OR THE MONEY WAS PAID AND ROUTED BACK TO THE ASSESSEE. IN THE CIRCUMSTANCES INTERFERENCE WITH THE ORDER OF THE TRIBUNAL IS NOT WARRANTED. NO QUESTION ARISE FOR ADJUDICATION. THE APPLICATION AND THE APPEAL ARE DISMISSED. HE PROPOSITIONS OF LAW LAID DOWN IN THE ABOVE CASE LAW TO THE FACTS OF THIS CASE, WE COME TO THE CONCLUSION THAT THE ASSESSING OFFICER HAS TAKEN A POSSIBLE VIEW THAT AS COMMISSION PAYMENT, IS ALLOWABLE APPLICATION OF MIND . THE ISSUE OR NOT DURING THE COURSE OF INVESTIGATION, IS ICER, AS HE IS THE INVESTIGATOR. T HE TYPE, NATURE AND . THE LD. PR. CIT, CANNOT, IN OUR VIEW, INVOKE HIS POWER U/S 263 OF THE ACT FOR REVISING AN ORDER PASSED U/S 143(3) OF /ENQUIRY SHOULD BE CONDUCTED IN A CANNOT BE A GROUND OF ON FACTS, THIS IS A CASE WHERE AN ENQUIRY WAS CONDUCTED AND A POSSIBLE VIEW TAKEN THE HONEBLE ANDHRA SPECTRA SHARES AND SCRIPS PVT. LTD. V CIT (AP) 354 ITR 35 HAD CONSIDERED A NUMBER OF JUDGMENTS ON THIS ISSUE OF EXERCISE OF JURISDICTION U/S 263 OF THE ACT BY THE PRINCIPAL COMMISSIONER OF INCOME TAX AND CULLED THE PRINCIPLES LAID DOWN IN 24. IN MALABAR INDUSTRIAL CO.LTD. ( 2 SUPRA), BARE READING OF SEC.263 MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JURISDICTION BY THE COMMISSIONER SUOMOTU UNDER IT, IS THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTER 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 OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IT IS PREJUDICIAL TO THE REVENUE ACT. IT ALSO HELD AT PG 'THE PHRASE 'PREJUDICIAL T 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 REVE 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 INCOME ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME- TAX OFFICER IS UNSUSTAINABLE IN LAW. IT HAS BEEN HELD BY THIS COURT THAT WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HI SO OFFERING, THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME AS SUCH WILL BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. RAMPYARIDEVISARAOGI V. CIT (1968) 67 ITR 84 (SC) AND IN SMT. TARA DEVI AGGARWAL V. CIT (1973 25. IN MAX INDIA LTD. CO.LTD. (2 SUPRA) AND OBSERVED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST 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 INCOME TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES N PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME TAX OFFICER IS UNSUSTAINABLE IN LAW. ON THE FACTS OF THAT CASE, SEC.80HHC(3) AS IT THEN STOOD WAS INTERPRETED BY THE ASSES THAT IN VIEW OF THE 2005 AMENDMENT WHICH IS CLARIFICATORY AND RETROSPECTIVE IN NATURE, THE VIEW OF THE ASSESSING OFFICER WAS UNSUSTAINABLE IN LAW AND THE COMMISSIONER WAS CORRECT IN INVOKING SEC.263. BUT THE SUPREME C THE SAID CONTENTION AND HELD THAT WHEN THE COMMISSIONER PASSED HIS ORDER DISAGREEING WITH THE VIEW OF THE ASSESSING OFFICER, THERE WERE TWO VIEWS ON THE WORD 'PROFITS' IN THAT SECTION; THAT THE SAID SECTION WAS AMENDED ELEVEN TIMES; THAT DIFF ERENT VIEWS EXISTED ON THE DAY WHEN THE COMMISSIONER PASSED HIS ORDER; THAT THE MECHANICS OF THE SECTION HAD BECOME SO COMPLICATED OVER THE YEARS THAT TWO VIEWS WERE INHERENTLY POSSIBLE; AND THEREFORE, THE SUBSEQUENT AMENDMENT IN 2005 EVEN THOUGH RETROSPEC 26. IN VIKAS POLYMERS SUOMOTU REVISION EXERCISABLE BY THE COMMISSIONER UNDER THE PROVISIONS OF SEC.263 IS SUPERVISORY IN NATURE; THAT AN 'ERRONEOUS JUDG ACCORDANCE WITH LAW; THAT IF AN INCOME TAX 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 HA 10 MALABAR INDUSTRIAL CO.LTD. ( 2 SUPRA), T HE SUPREME COURT HELD THAT A BARE READING OF SEC.263 MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JURISDICTION BY THE COMMISSIONER SUOMOTU UNDER IT, IS THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTER ESTS 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 IF THE OR DER OF THE INCOME TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IT IS PREJUDICIAL TO THE REVENUE RECOURSE CANNOT BE HAD TO SEC.263 (1) OF THE ACT. IT ALSO HELD AT PG -88 AS FOLLOWS: 'THE PHRASE 'PREJUDICIAL T O 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 REVE NUE. FOR EXAMPLE, WHEN AN INCOME 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 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 TAX OFFICER IS UNSUSTAINABLE IN LAW. IT HAS BEEN HELD BY THIS COURT THAT WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HI SO OFFERING, THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME AS SUCH WILL BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. RAMPYARIDEVISARAOGI V. CIT (1968) 67 ITR 84 (SC) AND IN SMT. TARA DEVI AGGARWAL V. CIT (1973 ) 88 ITR 323 (SC)'. MAX INDIA LTD. (3 SUPRA) , REITERATED THE VIEW IN MALABAR INDUSTRIAL (2 SUPRA) AND OBSERVED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST 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 INCOME TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES N OT 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. ON THE FACTS OF THAT CASE, SEC.80HHC(3) AS IT THEN STOOD WAS INTERPRETED BY THE ASSES SING OFFICER BUT THE REVENUE CONTENDED THAT IN VIEW OF THE 2005 AMENDMENT WHICH IS CLARIFICATORY AND RETROSPECTIVE IN NATURE, THE VIEW OF THE ASSESSING OFFICER WAS UNSUSTAINABLE IN LAW AND THE COMMISSIONER WAS CORRECT IN INVOKING SEC.263. BUT THE SUPREME C THE SAID CONTENTION AND HELD THAT WHEN THE COMMISSIONER PASSED HIS ORDER DISAGREEING WITH THE VIEW OF THE ASSESSING OFFICER, THERE WERE TWO VIEWS ON THE WORD 'PROFITS' IN THAT SECTION; THAT THE SAID SECTION WAS AMENDED ELEVEN TIMES; ERENT VIEWS EXISTED ON THE DAY WHEN THE COMMISSIONER PASSED HIS ORDER; THAT THE MECHANICS OF THE SECTION HAD BECOME SO COMPLICATED OVER THE YEARS THAT TWO VIEWS WERE INHERENTLY POSSIBLE; AND THEREFORE, THE SUBSEQUENT AMENDMENT IN 2005 EVEN THOUGH RETROSPEC TIVE WILL NOT ATTRACT THE PROVISION OF SEC.263. VIKAS POLYMERS (4 SUPRA), THE DELHI HIGH COURT HELD THAT THE POWER OF SUOMOTU REVISION EXERCISABLE BY THE COMMISSIONER UNDER THE PROVISIONS OF SEC.263 IS SUPERVISORY IN NATURE; THAT AN 'ERRONEOUS JUDG MENT' MEANS ONE WHICH IS NOT IN ACCORDANCE WITH LAW; THAT IF AN INCOME TAX 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 HA ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE HE SUPREME COURT HELD THAT A BARE READING OF SEC.263 MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JURISDICTION BY THE COMMISSIONER SUOMOTU UNDER IT, IS THE ORDER OF THE INCOME TAX ESTS 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 DER OF THE INCOME TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS RECOURSE CANNOT BE HAD TO SEC.263 (1) OF THE O 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 NUE. FOR EXAMPLE, WHEN AN INCOME -TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF TAX OFFICER HAS TAKEN CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN TAX OFFICER IS UNSUSTAINABLE IN LAW. IT HAS BEEN HELD BY THIS COURT THAT WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HI S HANDS ON HIS SO OFFERING, THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME AS SUCH WILL BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. RAMPYARIDEVISARAOGI V. CIT (1968) 67 ITR 84 (SC) AND IN SMT. TARA DEVI MALABAR INDUSTRIAL (2 SUPRA) AND OBSERVED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST S 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 INCOME TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE OT 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. ON THE FACTS OF THAT CASE, SEC.80HHC(3) AS IT SING OFFICER BUT THE REVENUE CONTENDED THAT IN VIEW OF THE 2005 AMENDMENT WHICH IS CLARIFICATORY AND RETROSPECTIVE IN NATURE, THE VIEW OF THE ASSESSING OFFICER WAS UNSUSTAINABLE IN LAW AND THE COMMISSIONER WAS CORRECT IN INVOKING SEC.263. BUT THE SUPREME C OURT REJECTED THE SAID CONTENTION AND HELD THAT WHEN THE COMMISSIONER PASSED HIS ORDER DISAGREEING WITH THE VIEW OF THE ASSESSING OFFICER, THERE WERE TWO VIEWS ON THE WORD 'PROFITS' IN THAT SECTION; THAT THE SAID SECTION WAS AMENDED ELEVEN TIMES; ERENT VIEWS EXISTED ON THE DAY WHEN THE COMMISSIONER PASSED HIS ORDER; THAT THE MECHANICS OF THE SECTION HAD BECOME SO COMPLICATED OVER THE YEARS THAT TWO VIEWS WERE INHERENTLY POSSIBLE; AND THEREFORE, THE SUBSEQUENT AMENDMENT IN TIVE WILL NOT ATTRACT THE PROVISION OF SEC.263. (4 SUPRA), THE DELHI HIGH COURT HELD THAT THE POWER OF SUOMOTU REVISION EXERCISABLE BY THE COMMISSIONER UNDER THE PROVISIONS OF SEC.263 MENT' MEANS ONE WHICH IS NOT IN ACCORDANCE WITH LAW; THAT IF AN INCOME TAX 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 HA VE BEEN WRITTEN DIFFERENTLY OR MORE ELABORATELY; THAT THE SECTION DOES NOT VISUALIZE THE SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE INCOME TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISION IS NOT IN ACCORDANCE WITH THE LAW; THAT T O INVOKE SUOMOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER SEC.263, THE COMMISSIONER MUST GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF T 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 C INCOME TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS 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 A DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUOMOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE ASSESSING OFFI CER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED FOR INTERFEREN CE AND REVISION. 27. IN SUNBEAM AUTO LTD. OFFICER IN THE ASSESSMENT ORDER IS NOT REQUIRED TO GIVE A DETAILED REASON IN RESPECT OF EACH AND EVERY ITEM OF DEDUCTION, ETC.; THAT WHETHER THERE WAS APPLIC MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT IT IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD H MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT THE 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 LE JUST, HAS BEEN IMPOSED. IN THAT CASE, THE DELHI HIGH COURT HELD THAT THE COMMISSIONER IN THE EXERCISE OF REVISIONAL POWER COULD NOT HAVE OBJECTED TO THE FINDING OF THE ASSESSING OFFICER THAT EXPENDITURE ON TOOLS AND DIES BY THE ASSES A MANUFACTURER OF CAR PARTS, IS REVENUE EXPENDITURE WHERE THE SAID CLAIM WAS ALLOWED BY THE LATTER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND WHERE THE SAME ACCOUNTING PRACTICE FOLLOWED BY THE ASSESSEE FOR NUMBER OF YEARS WITH THE APP ROVAL OF THE INCOME TAX AUTHORITIES. IT HELD THAT THE ASSESSING OFFICER HAD CALLED FOR EXPLANATION ON THE VERY ITEM FROM THE ASSESSEE AND THE ASSESSEE HAD FURNISHED ITS EXPLANATION. MERELY BECAUSE THE ASSESSING OFFICER IN HIS ORDER DID NOT MAKE AN ELABORAT AS ERRONEOUS. THE OPINION OF THE ASSESSING OFFICER IS ONE OF THE POSSIBLE VIEWS AND THERE WAS NO MATERIAL BEFORE THE COMMISSIONER TO VARY THAT OPINION AND ASK FOR FRESH INQUIRY. 28. IN GABRIEL INDIA LTD. CONSIDERATION OF THE COMMISSIONER AS TO WHETHER AN ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, MUST BE BASED ON MATERIALS ON THE RECORD OF THE PROCEEDING 11 WRITTEN DIFFERENTLY OR MORE ELABORATELY; THAT THE SECTION DOES NOT VISUALIZE THE SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE INCOME TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISION IS NOT IN ACCORDANCE WITH THE O INVOKE SUOMOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER SEC.263, THE COMMISSIONER MUST GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF T HE REVENUE, WILL NOT SUFFICE; THAT 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 C ONCLUSION THAT THE ORDER OF THE INCOME TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS 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 A DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUOMOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE CER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CE AND REVISION. SUNBEAM AUTO LTD. ( 5 SUPRA), THE DELHI HIGH COURT HELD THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS NOT REQUIRED TO GIVE A DETAILED REASON IN RESPECT OF EACH AND EVERY ITEM OF DEDUCTION, ETC.; THAT WHETHER THERE WAS APPLIC MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT MATTER; THAT IT IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD H AVE BEEN WRITTEN MORE ELABORATELY; THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT THE 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 LE SSER TAX THAN WHAT WAS JUST, HAS BEEN IMPOSED. IN THAT CASE, THE DELHI HIGH COURT HELD THAT THE COMMISSIONER IN THE EXERCISE OF REVISIONAL POWER COULD NOT HAVE OBJECTED TO THE FINDING OF THE ASSESSING OFFICER THAT EXPENDITURE ON TOOLS AND DIES BY THE ASSES A MANUFACTURER OF CAR PARTS, IS REVENUE EXPENDITURE WHERE THE SAID CLAIM WAS ALLOWED BY THE LATTER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND WHERE THE SAME ACCOUNTING PRACTICE FOLLOWED BY THE ASSESSEE FOR NUMBER OF YEARS ROVAL OF THE INCOME TAX AUTHORITIES. IT HELD THAT THE ASSESSING OFFICER HAD CALLED FOR EXPLANATION ON THE VERY ITEM FROM THE ASSESSEE AND THE ASSESSEE HAD FURNISHED ITS EXPLANATION. MERELY BECAUSE THE ASSESSING OFFICER IN HIS ORDER DID NOT MAKE AN ELABORAT E DISCUSSION IN THAT REGARD, HIS ORDER CANNOT BE TERMED AS ERRONEOUS. THE OPINION OF THE ASSESSING OFFICER IS ONE OF THE POSSIBLE VIEWS AND THERE WAS NO MATERIAL BEFORE THE COMMISSIONER TO VARY THAT OPINION AND ASK FOR GABRIEL INDIA LTD. (6 SUPRA), THE BOMBAY HIGH COURT HELD THAT A CONSIDERATION OF THE COMMISSIONER AS TO WHETHER AN ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, MUST BE BASED ON MATERIALS ON THE RECORD OF THE PROCEEDING S CALLED FOR BY HIM. IF THERE ARE NO MATERIALS ON ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE WRITTEN DIFFERENTLY OR MORE ELABORATELY; THAT THE SECTION DOES NOT VISUALIZE THE SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE INCOME TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISION IS NOT IN ACCORDANCE WITH THE O INVOKE SUOMOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER SEC.263, THE COMMISSIONER MUST GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS HE REVENUE, WILL NOT SUFFICE; THAT 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 ONCLUSION THAT THE ORDER OF THE INCOME TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS 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 A ND EVERY DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUOMOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE CER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER ( 5 SUPRA), THE DELHI HIGH COURT HELD THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS NOT REQUIRED TO GIVE A DETAILED REASON IN RESPECT OF EACH AND EVERY ITEM OF DEDUCTION, ETC.; THAT WHETHER THERE WAS APPLIC ATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT MATTER; THAT IT IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, AVE BEEN WRITTEN MORE ELABORATELY; THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT THE TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT SSER TAX THAN WHAT WAS JUST, HAS BEEN IMPOSED. IN THAT CASE, THE DELHI HIGH COURT HELD THAT THE COMMISSIONER IN THE EXERCISE OF REVISIONAL POWER COULD NOT HAVE OBJECTED TO THE FINDING OF THE ASSESSING OFFICER THAT EXPENDITURE ON TOOLS AND DIES BY THE ASSES SEE, A MANUFACTURER OF CAR PARTS, IS REVENUE EXPENDITURE WHERE THE SAID CLAIM WAS ALLOWED BY THE LATTER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND WHERE THE SAME ACCOUNTING PRACTICE FOLLOWED BY THE ASSESSEE FOR NUMBER OF YEARS ROVAL OF THE INCOME TAX AUTHORITIES. IT HELD THAT THE ASSESSING OFFICER HAD CALLED FOR EXPLANATION ON THE VERY ITEM FROM THE ASSESSEE AND THE ASSESSEE HAD FURNISHED ITS EXPLANATION. MERELY BECAUSE THE ASSESSING OFFICER IN HIS ORDER E DISCUSSION IN THAT REGARD, HIS ORDER CANNOT BE TERMED AS ERRONEOUS. THE OPINION OF THE ASSESSING OFFICER IS ONE OF THE POSSIBLE VIEWS AND THERE WAS NO MATERIAL BEFORE THE COMMISSIONER TO VARY THAT OPINION AND ASK FOR (6 SUPRA), THE BOMBAY HIGH COURT HELD THAT A CONSIDERATION OF THE COMMISSIONER AS TO WHETHER AN ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, MUST BE BASED ON MATERIALS ON S CALLED FOR BY HIM. IF THERE ARE NO MATERIALS ON RECORD ON THE BASIS OF WHICH IT CAN BE SAID THAT THE COMMISSIONER ACTING IN A REASONABLE MANNER COULD HAVE COME TO SUCH A CONCLUSION, THE VERY INITIATION OF PROCEEDINGS BY HIM WILL BE ILLEGAL AND WITHOUT JU COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF NEW VIEWS ON FACTS OR NEW VERSIONS WHICH THEY PRESENT AS TO WHAT SHOULD BE THE INFERENCE OR PROPER INFERENCE EITHER OF THE FACTS DISCLOSED OR THE WEIGHT OF THE CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL IN IS EXHAUSTED; THAT TO DO SO IS TO DIVIDE ONE ARGUMENT INTO TWO AND MULTIPLY THE LITIGATION. IT HELD THAT CASES MAY BE VISUALIZED WHERE THE INCOME TAX OFFICER WHILE MAKING AN ASSESSMENT EXAMINES THE ACCOUNTS, MAKES INQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME EITHER BY ACCEPTING THE ACCOUNT OR BY MAKING SOME ESTIMATE HIMSELF; THAT THE COMMISSIONER, ON PERUSAL OF THE RECORD, MAY BE OF THE OPINION THAT THE ESTIMATE MADE BY THE OFFICER CONCERNED WAS ON HE WOULD HAVE ESTIMATED THE INCOME AT A FIGURE HIGHER THAN THE ONE DETERMINED BY THE INCOME TAX OFFICER; BUT THAT WOULD NOT VEST THE COMMISSIONER WITH POWER TO REEXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIM THERE MUST BE MATERIAL AVAILABLE ON THE RECORD CALLED FOR BY THE COMMISSIONER TO SATISFY HIM PRIMA FACIE THAT THE ORDER IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. OTHERWISE, IT WOULD AMOUNT TO GIVING UNBRIDL ARBITRARY POWER TO THE REVISING AUTHORITY TO INITIATE PROCEEDINGS FOR REVISION IN EVERY CASE AND START RE ALREADY BEEN CONCLUDED UNDER LAW. 29. IN M.S. RAJU (15 SUPRA), THIS COURT HAS HELD THAT THE COMMISSIONER UNDER SEC.263 (1) IS NOT LIMITED ONLY TO THE MATERIAL WHICH WAS AVAILABLE BEFORE THE ASSESSING OFFICER AND, IN ORDER TO PROTECT THE INTERESTS OF THE REVENUE, THE COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE AVA ILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE SUBSEQUENT TO THE ORDER OF ASSESSMENT. 30. IN RAMPYARI DEVI SARAOGI REVISIONAL POWERS CANCELLED ASSESSEES ASS 1960- 61 BECAUSE HE FOUND THAT THE INCOME TAX OFFICER WAS NOT JUSTIFIED IN ACCEPTING THE INITIAL CAPITAL, THE GIFT RECEIVED AND SALE OF JEWELLERY, THE INCOME FROM BUSINESS ETC., WITHOUT ANY ENQUIRY OR EVIDENCE WHATSOEVER . INCOME TAX OFFICER TO DO FRESH ASSESSMENT AFTER MAKING PROPER ENQUIRY AND INVESTIGATION IN REGARD TO THE JURISDICTION. THE ASSESSEE COMPLAINED BEFORE THE SUPREME COURT THAT NO FAIR OR REASONABLE OPPORTUNITY WAS GIVEN TO HER. THE SUPREME CO URT HELD THAT THERE WAS AMPLE MATERIAL TO SHOW THAT THE INCOME TAX OFFICER MADE THE ASSESSMENTS IN UNDUE HURRY; THAT HE HAD PASSED A SHORT STEREO TYPED ASSESSMENT ORDER FOR EACH ASSESSMENT YEAR; THAT ON THE FACE OF THE RECORD, THE ORDERS WERE PRE - CAUSED TO THE ASSESSEE ON ACCOUNT OF FAILURE OF THE COMMISSIONER TO INDICATE THE RESULTS OF THE ENQUIRY MADE BY HIM, AS SHE WOULD HAVE A FULL OPPORTUNITY FOR SHOWING TO THE INCOME TAX OFFICER WHETHER HE THE INCOME TAX ASSESSED IN THE ASSESSMENT YEARS WHICH WERE ORIGINALLY PASSED WERE CORRECT OR NOT' 31. FROM THE ABOVE DECISIONS, THE FOLLOWING PRINCIPLES AS TO EXERCISE OF JURISDICTION BY THE COMMISSIONER U/S.263 OF THE A 12 RECORD ON THE BASIS OF WHICH IT CAN BE SAID THAT THE COMMISSIONER ACTING IN A REASONABLE MANNER COULD HAVE COME TO SUCH A CONCLUSION, THE VERY INITIATION OF PROCEEDINGS BY HIM WILL BE ILLEGAL AND WITHOUT JU RISDICTION. IT HELD THAT THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF NEW VIEWS ON FACTS OR NEW VERSIONS WHICH THEY PRESENT AS TO WHAT SHOULD BE THE INFERENCE OR PROPER INFERENCE EITHER OF THE FACTS DISCLOSED OR THE WEIGHT OF THE CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL IN IS EXHAUSTED; THAT TO DO SO IS TO DIVIDE ONE ARGUMENT INTO TWO AND MULTIPLY THE LITIGATION. IT HELD THAT CASES MAY BE VISUALIZED WHERE THE INCOME TAX OFFICER WHILE MAKING AN ASSESSMENT EXAMINES THE ACCOUNTS, MAKES INQUIRIES, APPLIES HIS MIND FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME EITHER BY ACCEPTING THE ACCOUNT OR BY MAKING SOME ESTIMATE HIMSELF; THAT THE COMMISSIONER, ON PERUSAL OF THE RECORD, 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 INCOME TAX OFFICER; BUT THAT WOULD NOT VEST THE COMMISSIONER WITH POWER TO REEXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIM SELF AT A HIGHER FIGURE; THERE MUST BE MATERIAL AVAILABLE ON THE RECORD CALLED FOR BY THE COMMISSIONER TO SATISFY HIM PRIMA FACIE THAT THE ORDER IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. OTHERWISE, IT WOULD AMOUNT TO GIVING UNBRIDL ARBITRARY POWER TO THE REVISING AUTHORITY TO INITIATE PROCEEDINGS FOR REVISION IN EVERY CASE AND START RE - EXAMINATION AND FRESH INQUIRY IN MATTERS WHICH HAVE ALREADY BEEN CONCLUDED UNDER LAW. (15 SUPRA), THIS COURT HAS HELD THAT THE POWER OF THE COMMISSIONER UNDER SEC.263 (1) IS NOT LIMITED ONLY TO THE MATERIAL WHICH WAS AVAILABLE BEFORE THE ASSESSING OFFICER AND, IN ORDER TO PROTECT THE INTERESTS OF THE REVENUE, THE COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE ILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE SUBSEQUENT TO THE ORDER OF ASSESSMENT. RAMPYARI DEVI SARAOGI (21 SUPRA), THE COMMISSIONER IN EXERCISE OF REVISIONAL POWERS CANCELLED ASSESSEES ASS ESSMENT FOR THE YEARS 1952 61 BECAUSE HE FOUND THAT THE INCOME TAX OFFICER WAS NOT JUSTIFIED IN ACCEPTING THE INITIAL CAPITAL, THE GIFT RECEIVED AND SALE OF JEWELLERY, THE INCOME FROM BUSINESS ETC., WITHOUT ANY ENQUIRY OR EVIDENCE WHATSOEVER . HE DIRECTED THE INCOME TAX OFFICER TO DO FRESH ASSESSMENT AFTER MAKING PROPER ENQUIRY AND INVESTIGATION IN REGARD TO THE JURISDICTION. THE ASSESSEE COMPLAINED BEFORE THE SUPREME COURT THAT NO FAIR OR REASONABLE OPPORTUNITY WAS GIVEN TO HER. THE URT HELD THAT THERE WAS AMPLE MATERIAL TO SHOW THAT THE INCOME TAX OFFICER MADE THE ASSESSMENTS IN UNDUE HURRY; THAT HE HAD PASSED A SHORT STEREO TYPED ASSESSMENT ORDER FOR EACH ASSESSMENT YEAR; THAT ON THE FACE OF THE RECORD, - JUDICIAL TO THE INTEREST OF THE REVENUE; AND NO PREJUDICE WAS CAUSED TO THE ASSESSEE ON ACCOUNT OF FAILURE OF THE COMMISSIONER TO INDICATE THE RESULTS OF THE ENQUIRY MADE BY HIM, AS SHE WOULD HAVE A FULL OPPORTUNITY FOR SHOWING TO THE INCOME TAX OFFICER WHETHER HE HAD JURISDICTION OR NOT AND WHETHER THE INCOME TAX ASSESSED IN THE ASSESSMENT YEARS WHICH WERE ORIGINALLY PASSED WERE CORRECT OR NOT' 31. FROM THE ABOVE DECISIONS, THE FOLLOWING PRINCIPLES AS TO EXERCISE OF JURISDICTION BY THE COMMISSIONER U/S.263 OF THE A CT CAN BE CULLED OUT: ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE RECORD ON THE BASIS OF WHICH IT CAN BE SAID THAT THE COMMISSIONER ACTING IN A REASONABLE MANNER COULD HAVE COME TO SUCH A CONCLUSION, THE VERY INITIATION OF RISDICTION. IT HELD THAT THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT THEY ENTERTAIN ON FACTS OR NEW VERSIONS WHICH THEY PRESENT AS TO WHAT SHOULD BE THE INFERENCE OR PROPER INFERENCE EITHER OF THE FACTS DISCLOSED OR THE WEIGHT OF THE CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL IN GENUITY IS EXHAUSTED; THAT TO DO SO IS TO DIVIDE ONE ARGUMENT INTO TWO AND MULTIPLY THE LITIGATION. IT HELD THAT CASES MAY BE VISUALIZED WHERE THE INCOME TAX OFFICER WHILE MAKING AN ASSESSMENT EXAMINES THE ACCOUNTS, MAKES INQUIRIES, APPLIES HIS MIND FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME EITHER BY ACCEPTING THE ACCOUNT OR BY MAKING SOME ESTIMATE HIMSELF; THAT THE COMMISSIONER, ON PERUSAL OF THE RECORD, MAY BE OF THE OPINION THAT THE ESTIMATE THE LOWER SIDE AND LEFT TO THE COMMISSIONER HE WOULD HAVE ESTIMATED THE INCOME AT A FIGURE HIGHER THAN THE ONE DETERMINED BY THE INCOME TAX OFFICER; BUT THAT WOULD NOT VEST THE COMMISSIONER WITH POWER SELF AT A HIGHER FIGURE; THERE MUST BE MATERIAL AVAILABLE ON THE RECORD CALLED FOR BY THE COMMISSIONER TO SATISFY HIM PRIMA FACIE THAT THE ORDER IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. OTHERWISE, IT WOULD AMOUNT TO GIVING UNBRIDL ED AND ARBITRARY POWER TO THE REVISING AUTHORITY TO INITIATE PROCEEDINGS FOR REVISION IN EXAMINATION AND FRESH INQUIRY IN MATTERS WHICH HAVE POWER OF THE COMMISSIONER UNDER SEC.263 (1) IS NOT LIMITED ONLY TO THE MATERIAL WHICH WAS AVAILABLE BEFORE THE ASSESSING OFFICER AND, IN ORDER TO PROTECT THE INTERESTS OF THE REVENUE, THE COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE ILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN (21 SUPRA), THE COMMISSIONER IN EXERCISE OF ESSMENT FOR THE YEARS 1952 -1953 TO 61 BECAUSE HE FOUND THAT THE INCOME TAX OFFICER WAS NOT JUSTIFIED IN ACCEPTING THE INITIAL CAPITAL, THE GIFT RECEIVED AND SALE OF JEWELLERY, THE INCOME HE DIRECTED THE INCOME TAX OFFICER TO DO FRESH ASSESSMENT AFTER MAKING PROPER ENQUIRY AND INVESTIGATION IN REGARD TO THE JURISDICTION. THE ASSESSEE COMPLAINED BEFORE THE SUPREME COURT THAT NO FAIR OR REASONABLE OPPORTUNITY WAS GIVEN TO HER. THE URT HELD THAT THERE WAS AMPLE MATERIAL TO SHOW THAT THE INCOME TAX OFFICER MADE THE ASSESSMENTS IN UNDUE HURRY; THAT HE HAD PASSED A SHORT STEREO TYPED ASSESSMENT ORDER FOR EACH ASSESSMENT YEAR; THAT ON THE FACE OF THE RECORD, TO THE INTEREST OF THE REVENUE; AND NO PREJUDICE WAS CAUSED TO THE ASSESSEE ON ACCOUNT OF FAILURE OF THE COMMISSIONER TO INDICATE THE RESULTS OF THE ENQUIRY MADE BY HIM, AS SHE WOULD HAVE A FULL OPPORTUNITY FOR HAD JURISDICTION OR NOT AND WHETHER THE INCOME TAX ASSESSED IN THE ASSESSMENT YEARS WHICH WERE ORIGINALLY PASSED 31. FROM THE ABOVE DECISIONS, THE FOLLOWING PRINCIPLES AS TO EXERCISE OF JURISDICTION A) 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 ERRONEOUS BUT IS NOT PREJUDIC OR IF IT IS NOT ERRONEOUS BUT IT IS PREJUDICIAL TO THE REVENUE HAD TO SEC.263 (1) OF THE ACT. B) EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INT 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 INCOME TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER D CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME C) TO INVOKE SUOMOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER SE C.263, THE COMMISSIONER MUST GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WILL NOT SUFFICE; THAT THE REASONS MUST BE SUCH AS TO SHOW THAT THE AND MUST IRRESISTIBLY LEAD TO THE CONCLUSION THAT THE ORDER OF THE INCOME TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE INCOME TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVIN DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUOMOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURS ASSESSING OFFICER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE CALLED FOR INTERFERENCE AND REVISION. E) THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN THEY ENTERTAIN ON FACTS OR NEW CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED F) WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT IT IS ONLY IN CASES OF LACK OF INQU IRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY; THERE MUST BE SHOW THAT THE 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. G) THE POWER OF THE COMMISSIONER UNDER SEC.263 (1) IS NOT COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE AVAILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE SUBSEQUENT TO THE ORDER OF ASSE 9.2. NOW WE EXAMINE THE FOLLOWING JUDGEMENTS DIRECTOR OF INCOME TAX VS. JYOTI FOUNDATION 357 ITR 388 (DELHI HIGH COURT ) 13 A) 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 ERRONEOUS BUT IS NOT PREJUDIC IAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IT IS PREJUDICIAL TO THE REVENUE RECOURSE CANNOT BE HAD TO SEC.263 (1) OF THE ACT. B) EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE. FOR EXAMPLE, 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 INCOME TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER D OES 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. C) TO INVOKE SUOMOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER C.263, THE COMMISSIONER MUST GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WILL NOT SUFFICE; THAT THE REASONS MUST BE SUCH AS TO SHOW THE AND MUST IRRESISTIBLY LEAD TO THE CONCLUSION THAT THE ORDER OF THE INCOME TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE INCOME TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVIN G DETAILED REASONS IN RESPECT OF EACH AND EVERY DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUOMOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURS E OF THE SCRUTINY BY THE ASSESSING OFFICER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED FOR INTERFERENCE AND REVISION. E) THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF NEW VIEWS THEY ENTERTAIN ON FACTS OR NEW CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED F) WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT IT IS ONLY IN CASES OF IRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY; THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT THE 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. THE POWER OF THE COMMISSIONER UNDER SEC.263 (1) IS NOT COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE AVAILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE SUBSEQUENT TO THE ORDER OF ASSE SSMENT. NOW WE EXAMINE THE FOLLOWING JUDGEMENTS . :- DIRECTOR OF INCOME TAX VS. JYOTI FOUNDATION 357 ITR 388 (DELHI HIGH COURT ) ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE A) 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 IAL TO THE REVENUE RECOURSE CANNOT BE B) EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER ERESTS OF THE REVENUE. FOR EXAMPLE, 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 INCOME - OES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE TAX OFFICER IS UNSUSTAINABLE IN LAW. C) TO INVOKE SUOMOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER C.263, THE COMMISSIONER MUST GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WILL NOT SUFFICE; THAT THE REASONS MUST BE SUCH AS TO SHOW THE AND MUST IRRESISTIBLY LEAD TO THE CONCLUSION THAT THE ORDER OF THE INCOME TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE INCOME TAX OFFICER IS NOT CALLED UPON TO WRITE AN G DETAILED REASONS IN RESPECT OF EACH AND EVERY DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUOMOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR E OF THE SCRUTINY BY THE ASSESSING OFFICER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS ASSESSING OFFICER E) THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE FRESH LITIGATION BECAUSE OF NEW VIEWS THEY ENTERTAIN ON FACTS OR NEW CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION F) WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT IT IS ONLY IN CASES OF IRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT THE 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 THE POWER OF THE COMMISSIONER UNDER SEC.263 (1) IS NOT COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE AVAILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE IT WAS HELD THAT REVISIONARY POWER U/S 263 IS CONFERRED 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. TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT ORDERS WHICH ARE PASSED AFTER INQUIRY/INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAU AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUIRED OR DEEPER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN. INCOME TAX OFFICER VS. DG HOUSING PROJECTS LTD343 ITR 329 (DELHI) REVENUE DOES NOT HAVE ANY RIGHT TO APPEAL ORDER PASSED BY THE ASSESSING OFFICER. S. 263 HAS BEEN ENACTED TO EMPOWER THE CIT TO EXERCISE POWER OF REVISION AND REVISE ANY ORDER PASSED BY THE ASSESSING OFFICER, IF TWO CUMULATIVE CONDITIONS ARE SATISFIED. FI ERRONEOUS AND SECONDLY, IT SHOULD BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE EXPRESSION 'PREJUDICIAL TO THE INTEREST OF THE REVENUE' IS OF WIDE IMPORT AND IS NOT CONFINED TO MERELY LOSS OF TAX. THE TE DEVIATING FROM LAW. THIS EXPRESSION POSTULATES AN ERROR WHICH MAKES AN ORDER UNSUSTAINABLE IN LAW. THE ASSESSING OFFICER IS BOTH AN INVESTIGATOR AND AN ADJUDICATOR. IF THE ASSESSING OFFICER AS AN ADJUDICATOR DECIDES A QUESTION OR ASPECT AND MAKES A WRONG ASSESSMENT WHICH IS UNSUSTAINABLE IN LAW, IT CAN BE CORRECTED BY THE COMMISSIONER IN EXERCISE OF REVISIONARY POWER. AS AN INVESTIGATOR, IT IS INCUMBENT UPON THE ASSESSING OFFICER TO INVESTIGATE THE FACTS REQUI RED TO BE EXAMINED AND VERIFIED TO COMPUTE THE TAXABLE INCOME. IF THE ASSESSING OFFICER FAILS TO CONDUCT THE SAID INVESTIGATION, HE COMMITS AN ERROR AND THE WORD 'ERRONEOUS' INCLUDES FAILURE TO MAKE THE ENQUIRY. IN SUCH CASES, THE ORDER BECOMES ERRONEOUS B ECAUSE ENQUIRY OR VERIFICATION HAS NOT BEEN MADE AND NOT BECAUSE A WRONG ORDER HAS BEEN PASSED ON MERITS THUS, IN CASES OF WRONG OPINION OR FINDING ON MERITS, THE CIT HAS TO COME TO THE CONCLUSION AND HIMSELF DECIDE THAT THE ORDER IS ERRONEOUS, BY CONDUCT REQUIRED AND NECESSARY, BEFORE THE ORDER UNDER S. 263 IS PASSED. IN SUCH CASES, THE ORDER OF THE ASSESSING OFFICER WILL BE ERRONEOUS BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW AND THE SAID FINDING MUST BE RECORDED. CIT CAN OFFICER TO DECIDE WHETHER THE FINDINGS RECORDED ARE ERRONEOUS. INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT THE ORDER/INQUIRY MADE IS ERRONEOUS. IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTAKE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASES POSSIBLY THOUGH RARELY, THE CIT CAN ALSO S DRAWN FROM FACTS ON RECORD PER SE BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, U A FRESH DECISION TO THE ASSESSING OFFICER TO CONDUCT FURTHER ENQUIRIES WITHOUT A FINDING THAT THE ORDER IS ERRONEOUS. REQUIREMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER S. 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY AND MEAN THE CIT HAS NOT EXAMI DIRECTED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. THIS DISTINCTION MUST BE KEPT IN MIND BY THE CIT WHILE EXERCISING JURISDICTION UNDER S. 263 OF THE ACT AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, EXERCISE OF JURISDICTION UNDER THE SAID SECTION MOST CASES OF ALLEGED 'INADEQUATE INVESTIGATION', IT WILL BE DIFFICULT TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS ERRONEOUS, WITHOUT CIT CONDUCTING VERIFICATION/ MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECONSIDERATION ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. ASSESSING OFFICER TO DECIDE WHETHER THE 14 IT WAS HELD THAT REVISIONARY POWER U/S 263 IS CONFERRED 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 INVESTIGA TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT ORDERS WHICH ARE PASSED AFTER INQUIRY/INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAU SE THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUIRED OR DEEPER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN. INCOME TAX OFFICER VS. DG HOUSING PROJECTS LTD343 ITR 329 (DELHI) REVENUE DOES NOT HAVE ANY RIGHT TO APPEAL TO THE FIRST APPELLATE AUTHORITY AGAINST AN ORDER PASSED BY THE ASSESSING OFFICER. S. 263 HAS BEEN ENACTED TO EMPOWER THE CIT TO EXERCISE POWER OF REVISION AND REVISE ANY ORDER PASSED BY THE ASSESSING OFFICER, IF TWO CUMULATIVE CONDITIONS ARE SATISFIED. FI RSTLY, THE ORDER SOUGHT TO BE REVISED SHOULD BE ERRONEOUS AND SECONDLY, IT SHOULD BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE EXPRESSION 'PREJUDICIAL TO THE INTEREST OF THE REVENUE' IS OF WIDE IMPORT AND IS NOT CONFINED TO MERELY LOSS OF TAX. THE TE RM 'ERRONEOUS' MEANS A WRONG/INCORRECT DECISION DEVIATING FROM LAW. THIS EXPRESSION POSTULATES AN ERROR WHICH MAKES AN ORDER THE ASSESSING OFFICER IS BOTH AN INVESTIGATOR AND AN ADJUDICATOR. IF THE ASSESSING OFFICER AS DECIDES A QUESTION OR ASPECT AND MAKES A WRONG ASSESSMENT WHICH IS UNSUSTAINABLE IN LAW, IT CAN BE CORRECTED BY THE COMMISSIONER IN EXERCISE OF REVISIONARY POWER. AS AN INVESTIGATOR, IT IS INCUMBENT UPON THE ASSESSING OFFICER TO INVESTIGATE THE RED TO BE EXAMINED AND VERIFIED TO COMPUTE THE TAXABLE INCOME. IF THE ASSESSING OFFICER FAILS TO CONDUCT THE SAID INVESTIGATION, HE COMMITS AN ERROR AND THE WORD 'ERRONEOUS' INCLUDES FAILURE TO MAKE THE ENQUIRY. IN SUCH CASES, THE ORDER BECOMES ECAUSE ENQUIRY OR VERIFICATION HAS NOT BEEN MADE AND NOT BECAUSE A WRONG ORDER HAS BEEN PASSED ON MERITS . THUS, IN CASES OF WRONG OPINION OR FINDING ON MERITS, THE CIT HAS TO COME TO THE CONCLUSION AND HIMSELF DECIDE THAT THE ORDER IS ERRONEOUS, BY CONDUCT ING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY, BEFORE THE ORDER UNDER S. 263 IS PASSED. IN SUCH CASES, THE ORDER OF THE ASSESSING OFFICER WILL BE ERRONEOUS BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW AND THE SAID FINDING MUST BE RECORDED. CIT CAN NOT REMAND THE MATTER TO THE ASSESSING OFFICER TO DECIDE WHETHER THE FINDINGS RECORDED ARE ERRONEOUS. IN CASES WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT THE ORDER/INQUIRY MADE IS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTAKE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASES POSSIBLY THOUGH RARELY, THE CIT CAN ALSO S HOW AND ESTABLISH THAT THE FACTS ON RECORD OR INFERENCES DRAWN FROM FACTS ON RECORD PER SE JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, U NAMBIGUOUS AND NOT DEBATABLE. THE MATTER CANNOT BE REMITTED FOR A FRESH DECISION TO THE ASSESSING OFFICER TO CONDUCT FURTHER ENQUIRIES WITHOUT A FINDING THAT THE ORDER IS ERRONEOUS. FINDING THAT THE ORDER IS ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER S. 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY AND MEAN THE CIT HAS NOT EXAMI NED AND DECIDED WHETHER OR NOT THE ORDER IS ERRONEOUS BUT HAS DIRECTED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. THIS DISTINCTION MUST BE KEPT IN MIND BY THE CIT WHILE EXERCISING JURISDICTION UNDER S. 263 OF THE ACT AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, EXERCISE OF JURISDICTION UNDER THE SAID SECTION IS NOT SUSTAINABLE. MOST CASES OF ALLEGED 'INADEQUATE INVESTIGATION', IT WILL BE DIFFICULT TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS ERRONEOUS, WITHOUT CIT CONDUCTING VERIFICATION/ INQUIRY. THE ORDER OF THE ASSESSING OFFICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECONSIDERATION ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. AN ORDER OF REMIT CANNOT BE PASSED BY THE CIT TO ASK THE ASSESSING OFFICER TO DECIDE WHETHER THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE IT WAS HELD THAT REVISIONARY POWER U/S 263 IS CONFERRED ON THE COMMISSIONER/DIRECTOR OF INCOME TAX WHEN AN ORDER PASSED BY THE LOWER AUTHORITY IS ERRONEOUS AND PREJUDICIAL TO ORDERS WHICH ARE PASSED WITHOUT INQUIRY OR INVESTIGA TION ARE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT ORDERS WHICH ARE PASSED AFTER INQUIRY/INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED SE THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUIRED OR DEEPER OR TO THE FIRST APPELLATE AUTHORITY AGAINST AN ORDER PASSED BY THE ASSESSING OFFICER. S. 263 HAS BEEN ENACTED TO EMPOWER THE CIT TO EXERCISE POWER OF REVISION AND REVISE ANY ORDER PASSED BY THE ASSESSING OFFICER, IF TWO RSTLY, THE ORDER SOUGHT TO BE REVISED SHOULD BE ERRONEOUS AND SECONDLY, IT SHOULD BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE EXPRESSION 'PREJUDICIAL TO THE INTEREST OF THE REVENUE' IS OF WIDE IMPORT AND IS NOT RM 'ERRONEOUS' MEANS A WRONG/INCORRECT DECISION DEVIATING FROM LAW. THIS EXPRESSION POSTULATES AN ERROR WHICH MAKES AN ORDER THE ASSESSING OFFICER IS BOTH AN INVESTIGATOR AND AN ADJUDICATOR. IF THE ASSESSING OFFICER AS DECIDES A QUESTION OR ASPECT AND MAKES A WRONG ASSESSMENT WHICH IS UNSUSTAINABLE IN LAW, IT CAN BE CORRECTED BY THE COMMISSIONER IN EXERCISE OF REVISIONARY POWER. AS AN INVESTIGATOR, IT IS INCUMBENT UPON THE ASSESSING OFFICER TO INVESTIGATE THE RED TO BE EXAMINED AND VERIFIED TO COMPUTE THE TAXABLE INCOME. IF THE ASSESSING OFFICER FAILS TO CONDUCT THE SAID INVESTIGATION, HE COMMITS AN ERROR AND THE WORD 'ERRONEOUS' INCLUDES FAILURE TO MAKE THE ENQUIRY. IN SUCH CASES, THE ORDER BECOMES ECAUSE ENQUIRY OR VERIFICATION HAS NOT BEEN MADE AND NOT BECAUSE A WRONG THUS, IN CASES OF WRONG OPINION OR FINDING ON MERITS, THE CIT HAS TO COME TO THE CONCLUSION ING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY, BEFORE THE ORDER UNDER S. 263 IS PASSED. IN SUCH CASES, THE ORDER OF THE ASSESSING OFFICER WILL BE ERRONEOUS BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW NOT REMAND THE MATTER TO THE ASSESSING IN CASES WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTAKE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASES POSSIBLY HOW AND ESTABLISH THAT THE FACTS ON RECORD OR INFERENCES JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID THE MATTER CANNOT BE REMITTED FOR A FRESH DECISION TO THE ASSESSING OFFICER TO CONDUCT FURTHER ENQUIRIES WITHOUT A FINDING FINDING THAT THE ORDER IS ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER S. 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY AND MEAN NED AND DECIDED WHETHER OR NOT THE ORDER IS ERRONEOUS BUT HAS THIS DISTINCTION MUST BE KEPT IN MIND BY THE CIT WHILE EXERCISING JURISDICTION UNDER S. 263 OF THE ACT AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO IS NOT SUSTAINABLE. IN MOST CASES OF ALLEGED 'INADEQUATE INVESTIGATION', IT WILL BE DIFFICULT TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS INQUIRY. THE ORDER OF THE ASSESSING OFFICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECONSIDERATION ON THIS GROUND BUT ONLY AN ORDER OF REMIT CANNOT BE PASSED BY THE CIT TO ASK THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECOME ERRONEOUS BECAUSE ON REMIT, THE ASSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFO ERRONEOUS. THE JURISDICTIONAL PRECONDITION STIPULATED IS THAT THE CIT MUST COME TO THE CONCLUSION THAT THE ORDER IS ERRONEOUS AND IS UNSUSTAINABLE IN LAW. IT MAY BE NOTICED THAT THE MATERIAL WHICH THE CIT CAN RELY INCLUDES NOT ONLY THE RECORD AS IT STANDS AT THE TIME WHEN THE ORDER IN QUESTION WAS PASSED BY THE ASSESSING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATION BY THE CIT. NOTHING BARS/PROHIBITS THE CIT FROM COLLECTING AND RELYING UPON NEW/ADDITIONAL MATERIAL/EVIDENCE TO SHOW AND STATE THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS. COMMISSIONER OF INCOME TAX VS. J. L. MORRISON (INDIA) LTD. 366 ITR AS REGARD THE SUBMISSION ON BEHALF OF THE REVENUE THAT POWER UNDER S ACT CAN BE EXERCISED EVEN IN A CASE WHERE THE ISSUE IS DEBATABLE, IT WAS HELD THAT THE CASE OF CIT VS. M. M. KHAMBHATWALA WAS NOT APPLICABLE. THE OBSERVATION THAT THE COMMISSIONER CAN EXERCISE POWER UNDER SECTION 263 OF THE ACT EVEN IN A ISSUE IS DEBATABLE WAS A MERE PASSING REMARK WHICH IS AGAIN CONTRARY TO THE VIEW TAKEN BY THE APEX COURT IN THECASE OF MALABAR INDUSTRIAL COMPANY LTD. & MAX INDIA LTD. IF THE ASSESSING OFFICER HAS TAKEN A POSSIBLE VIEW, IT CANNOT BE SAID THAT ERRONEOUS NOR THE ORDER OF THE ASSESSING OFFICER IN THAT CASE CAN BE SET ASIDE IN REVISION. IT HAS TO BE SHOWN UNMISTAKABLY THAT THE ORDER OF THE ASSESSING OFFICER IS UNSUSTAINABLE. ANYTHING SHORT OF THAT WOULD NOT CLOTHE THE CIT SECTION 263 OF THE ACT. CIT VS. M. M. KHAMBHATWALA REPORTED IN 198 ITR 144; CIT VS. RALSON INDUSTRIES LTD. REPORTED IN 288 ITR 322 (SC), NOT APPLICABLE; MALABAR INDUSTRIAL CO. LTD. V. CIT REPORTED IN 243 ITR 83, RE (PARA 72) AS REGARD THE THIRD QUESTION AS TO WHETHER THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND, IT WAS HELD THAT THE COURT HAS TO START WITH THE PRESUMPTION THAT THE ASSESSMENT ORDER WAS REGULARLY PASSED. SHOW THAT THE ASSESSING OFFICER HAD REQUIRED THE ASSESSEE TO ANSWER 17 QUESTIONS AND TO FILE DOCUMENTS IN REGARD THERETO. IT IS DIFFICULT TO PROCEED ON THE BASIS THAT THE 17 QUESTIONS RAISED BY HIM DID NOT REQUIRE APPLICATION OF MIND. THE QUESTIONS RAISED BY HIM IN THE ANNEXURE TO NOTICE UNDER SECTION 142 (1) OF THE ACT COULD NOT HAVE BEEN FORMULATED. THE ASSESSING OFFICER WAS REQUIRED TO EXAMINE THE RETURN FILED BY THE ASSESSEE IN ORDER TO ASCERTAIN HIS INC BASIS. WHEN THE ASSESSING OFFICER WAS SATISFIED THAT THE RETURN, FILED BY THE ASSESSEE, WAS IN ACCORDANCE WITH LAW, HE WAS UNDER NO OBLIGATION TO JUSTIFY AS TO WHY WAS HE SATISFIED. ON THE TOP OF THAT THE ASSESSING O AFFECT ANY RIGHT OF THE ASSESSEE NOR WAS ANY CIVIL RIGHT OF THE ASSESSEE PREJUDICED. HE WAS AS SUCH UNDER NO OBLIGATION IN LAW TO GIVE REASONS. THE FACT, THAT ALL REQUISITE PAPERS WERE SUMMONED A ND THEREAFTER THE MATTER WAS HEARD FROM TIME TO TIME COUPLED WITH THE FACT THAT THE VIEW TAKEN BY HIM IS NOT SHOWN BY THE REVENUE TO BE ERRONEOUS AND WAS ALSO CONSIDERED BOTH BY THE TRIBUNAL AS ALSO BY US TO BE A POSSIBLE VIEW, STRENGTHENS THE PRESUMPTION UNDER CLAUSE (E) OF SECTION 114 OF THE EVIDENCE ACT. A PRIMA FACIE EVIDENCE, ON THE BASIS OF THE AFORESAID PRESUMPTION, IS THUS CONVERTED INTO A CONCLUSIVE PROOF OF THE FACT THAT THE ORDER WAS PASSED BY THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND. MEERUT ROLLER FLOUR MILLS PVT. LTD. VS. C.I.T., ITA NO. 116 /COCH/ 2012; CIT VS. INFOSYS TECHNOLOGIES LTD., 341 ITR 293 (KARNATAKA); S.N. MUKHERJEE VS. UNION OF INDIA, AIR 1990 SC 1984; A. A. DOSHI VS. JCIT, 256 ITR 685; HINDUSTHAN TIN WORKS LTD. VS. CIT, (DEL), DISTINGUISHED. (PARAS 90-92, 102) COMMISSIONER OF INCOME TAX VS. SOHANA WOOLLEN MILLS 296 ITR 238 (P&H HC) A REFERENCE TO THE PROVISIONS OF S. 263 SHOWS THAT JURISDICTION THEREUNDER CAN BE EXERCISED IF THE CIT FINDS THAT THE ORDER OF TH 15 ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECOME ERRONEOUS BECAUSE ON REMIT, THE ASSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFO RE CIT MUST AFTER RECORDING REASONS HOLD THAT THE ORDER IS ERRONEOUS. THE JURISDICTIONAL PRECONDITION STIPULATED IS THAT THE CIT MUST COME TO THE CONCLUSION THAT THE ORDER IS ERRONEOUS AND IS UNSUSTAINABLE IN LAW. IT MAY BE NOTICED THAT THE CIT CAN RELY INCLUDES NOT ONLY THE RECORD AS IT STANDS AT THE TIME WHEN THE ORDER IN QUESTION WAS PASSED BY THE ASSESSING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATION BY THE CIT. NOTHING BARS/PROHIBITS THE CIT FROM RELYING UPON NEW/ADDITIONAL MATERIAL/EVIDENCE TO SHOW AND STATE THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS. COMMISSIONER OF INCOME TAX VS. J. L. MORRISON (INDIA) LTD. 366 ITR AS REGARD THE SUBMISSION ON BEHALF OF THE REVENUE THAT POWER UNDER S ECTION 263 OF THE ACT CAN BE EXERCISED EVEN IN A CASE WHERE THE ISSUE IS DEBATABLE, IT WAS HELD THAT THE CASE OF CIT VS. M. M. KHAMBHATWALA WAS NOT APPLICABLE. THE OBSERVATION THAT THE COMMISSIONER CAN EXERCISE POWER UNDER SECTION 263 OF THE ACT EVEN IN A ISSUE IS DEBATABLE WAS A MERE PASSING REMARK WHICH IS AGAIN CONTRARY TO THE VIEW TAKEN BY THE APEX COURT IN THECASE OF MALABAR INDUSTRIAL COMPANY LTD. & MAX INDIA LTD. IF THE ASSESSING OFFICER HAS TAKEN A POSSIBLE VIEW, IT CANNOT BE SAID THAT THE VIEW TAKEN BY HIM IS ERRONEOUS NOR THE ORDER OF THE ASSESSING OFFICER IN THAT CASE CAN BE SET ASIDE IN REVISION. IT HAS TO BE SHOWN UNMISTAKABLY THAT THE ORDER OF THE ASSESSING OFFICER IS UNSUSTAINABLE. ANYTHING SHORT OF THAT WOULD NOT CLOTHE THE CIT WITH JURISDICTION TO EXERCISE POWER UNDER SECTION 263 OF THE ACT. CIT VS. M. M. KHAMBHATWALA REPORTED IN 198 ITR 144; CIT VS. RALSON INDUSTRIES LTD. REPORTED IN 288 ITR 322 (SC), NOT APPLICABLE; MALABAR INDUSTRIAL CO. LTD. V. CIT REPORTED IN 243 ITR 83, RE LIED ON. AS REGARD THE THIRD QUESTION AS TO WHETHER THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND, IT WAS HELD THAT THE COURT HAS TO START WITH THE PRESUMPTION THAT THE ASSESSMENT ORDER WAS REGULARLY PASSED. THERE IS EVIDENCE TO SHOW THAT THE ASSESSING OFFICER HAD REQUIRED THE ASSESSEE TO ANSWER 17 QUESTIONS AND TO FILE DOCUMENTS IN REGARD THERETO. IT IS DIFFICULT TO PROCEED ON THE BASIS THAT THE 17 QUESTIONS RAISED BY HIM DID NOT REQUIRE APPLICATION OF MIND. WITHOUT APPLICATION OF MIND THE QUESTIONS RAISED BY HIM IN THE ANNEXURE TO NOTICE UNDER SECTION 142 (1) OF THE ACT COULD NOT HAVE BEEN FORMULATED. THE ASSESSING OFFICER WAS REQUIRED TO EXAMINE THE RETURN FILED BY THE ASSESSEE IN ORDER TO ASCERTAIN HIS INC OME AND TO LEVY APPROPRIATE TAX ON THAT BASIS. WHEN THE ASSESSING OFFICER WAS SATISFIED THAT THE RETURN, FILED BY THE ASSESSEE, WAS IN ACCORDANCE WITH LAW, HE WAS UNDER NO OBLIGATION TO JUSTIFY AS TO WHY WAS HE SATISFIED. ON THE TOP OF THAT THE ASSESSING O FFICER BY HIS ORDER DATED 28 TH MARCH, 2008 DID NOT ADVERSELY AFFECT ANY RIGHT OF THE ASSESSEE NOR WAS ANY CIVIL RIGHT OF THE ASSESSEE PREJUDICED. HE WAS AS SUCH UNDER NO OBLIGATION IN LAW TO GIVE REASONS. THE FACT, THAT ALL REQUISITE PAPERS WERE ND THEREAFTER THE MATTER WAS HEARD FROM TIME TO TIME COUPLED WITH THE FACT THAT THE VIEW TAKEN BY HIM IS NOT SHOWN BY THE REVENUE TO BE ERRONEOUS AND WAS ALSO CONSIDERED BOTH BY THE TRIBUNAL AS ALSO BY US TO BE A POSSIBLE VIEW, STRENGTHENS THE UNDER CLAUSE (E) OF SECTION 114 OF THE EVIDENCE ACT. A PRIMA FACIE EVIDENCE, ON THE BASIS OF THE AFORESAID PRESUMPTION, IS THUS CONVERTED INTO A CONCLUSIVE PROOF OF THE FACT THAT THE ORDER WAS PASSED BY THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND. MEERUT ROLLER FLOUR MILLS PVT. LTD. VS. C.I.T., ITA NO. 116 /COCH/ 2012; CIT VS. INFOSYS TECHNOLOGIES LTD., 341 ITR 293 (KARNATAKA); S.N. MUKHERJEE VS. UNION OF INDIA, AIR 1990 SC 1984; A. A. DOSHI VS. JCIT, 256 ITR 685; HINDUSTHAN TIN WORKS LTD. VS. CIT, COMMISSIONER OF INCOME TAX VS. SOHANA WOOLLEN MILLS 296 ITR 238 (P&H HC) A REFERENCE TO THE PROVISIONS OF S. 263 SHOWS THAT JURISDICTION THEREUNDER CAN BE EXERCISED IF THE CIT FINDS THAT THE ORDER OF TH E AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECOME ERRONEOUS BECAUSE ON REMIT, THE ASSESSING OFFICER MAY DECIDE THAT RE CIT MUST AFTER RECORDING REASONS HOLD THAT THE ORDER IS ERRONEOUS. THE JURISDICTIONAL PRECONDITION STIPULATED IS THAT THE CIT MUST COME TO THE CONCLUSION THAT THE ORDER IS ERRONEOUS AND IS UNSUSTAINABLE IN LAW. IT MAY BE NOTICED THAT THE CIT CAN RELY INCLUDES NOT ONLY THE RECORD AS IT STANDS AT THE TIME WHEN THE ORDER IN QUESTION WAS PASSED BY THE ASSESSING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATION BY THE CIT. NOTHING BARS/PROHIBITS THE CIT FROM RELYING UPON NEW/ADDITIONAL MATERIAL/EVIDENCE TO SHOW AND STATE THAT THE ECTION 263 OF THE ACT CAN BE EXERCISED EVEN IN A CASE WHERE THE ISSUE IS DEBATABLE, IT WAS HELD THAT THE CASE OF CIT VS. M. M. KHAMBHATWALA WAS NOT APPLICABLE. THE OBSERVATION THAT THE COMMISSIONER CAN EXERCISE POWER UNDER SECTION 263 OF THE ACT EVEN IN A CASE WERE THE ISSUE IS DEBATABLE WAS A MERE PASSING REMARK WHICH IS AGAIN CONTRARY TO THE VIEW TAKEN BY THE APEX COURT IN THECASE OF MALABAR INDUSTRIAL COMPANY LTD. & MAX INDIA LTD. IF THE THE VIEW TAKEN BY HIM IS ERRONEOUS NOR THE ORDER OF THE ASSESSING OFFICER IN THAT CASE CAN BE SET ASIDE IN REVISION. IT HAS TO BE SHOWN UNMISTAKABLY THAT THE ORDER OF THE ASSESSING OFFICER IS UNSUSTAINABLE. WITH JURISDICTION TO EXERCISE POWER UNDER SECTION 263 OF THE ACT. CIT VS. M. M. KHAMBHATWALA REPORTED IN 198 ITR 144; CIT VS. RALSON INDUSTRIES LTD. REPORTED IN 288 ITR 322 (SC), NOT APPLICABLE; MALABAR INDUSTRIAL AS REGARD THE THIRD QUESTION AS TO WHETHER THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND, IT WAS HELD THAT THE COURT HAS TO START WITH THERE IS EVIDENCE TO SHOW THAT THE ASSESSING OFFICER HAD REQUIRED THE ASSESSEE TO ANSWER 17 QUESTIONS AND TO FILE DOCUMENTS IN REGARD THERETO. IT IS DIFFICULT TO PROCEED ON THE BASIS THAT THE 17 WITHOUT APPLICATION OF MIND THE QUESTIONS RAISED BY HIM IN THE ANNEXURE TO NOTICE UNDER SECTION 142 (1) OF THE ACT COULD NOT HAVE BEEN FORMULATED. THE ASSESSING OFFICER WAS REQUIRED TO EXAMINE THE RETURN OME AND TO LEVY APPROPRIATE TAX ON THAT BASIS. WHEN THE ASSESSING OFFICER WAS SATISFIED THAT THE RETURN, FILED BY THE ASSESSEE, WAS IN ACCORDANCE WITH LAW, HE WAS UNDER NO OBLIGATION TO JUSTIFY AS TO WHY WAS HE SATISFIED. ON MARCH, 2008 DID NOT ADVERSELY AFFECT ANY RIGHT OF THE ASSESSEE NOR WAS ANY CIVIL RIGHT OF THE ASSESSEE PREJUDICED. HE WAS AS SUCH UNDER NO OBLIGATION IN LAW TO GIVE REASONS. THE FACT, THAT ALL REQUISITE PAPERS WERE ND THEREAFTER THE MATTER WAS HEARD FROM TIME TO TIME COUPLED WITH THE FACT THAT THE VIEW TAKEN BY HIM IS NOT SHOWN BY THE REVENUE TO BE ERRONEOUS AND WAS ALSO CONSIDERED BOTH BY THE TRIBUNAL AS ALSO BY US TO BE A POSSIBLE VIEW, STRENGTHENS THE UNDER CLAUSE (E) OF SECTION 114 OF THE EVIDENCE ACT. A PRIMA FACIE EVIDENCE, ON THE BASIS OF THE AFORESAID PRESUMPTION, IS THUS CONVERTED INTO A CONCLUSIVE PROOF OF THE FACT THAT THE ORDER WAS PASSED BY THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND. MEERUT ROLLER FLOUR MILLS PVT. LTD. VS. C.I.T., ITA NO. 116 /COCH/ 2012; CIT VS. INFOSYS TECHNOLOGIES LTD., 341 ITR 293 (KARNATAKA); S.N. MUKHERJEE VS. UNION OF INDIA, AIR 1990 SC 1984; A. A. DOSHI VS. JCIT, 256 ITR 685; HINDUSTHAN TIN WORKS LTD. VS. CIT, 275 ITR 43 A REFERENCE TO THE PROVISIONS OF S. 263 SHOWS THAT JURISDICTION THEREUNDER CAN BE EXERCISED E AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. MERE AUDIT OBJECTION AND MERELY BECAUSE A DIFFERENT VIEW COULD BE TAKEN, WERE NOT ENOUGH TO SAY THAT THE ORDER OF THE AO WAS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE JURISDI EXERCISE OF JURISDICTION EXISTED. NO RIGID RULE COULD BE LAID DOWN ABOUT THE SITUATION WHEN THE JURISDICTION CAN BE EXERCISED. WHETHER SATISFACTION OF THE CIT FOR EXERCISING JURISDICTION WAS CALLED FOR OR NOT, HAS TO BE DECIDED HAVING REGARD TO A GIVEN FACT SITUATION. IN THE PRESENT CASE, THE TRIBUNAL HAS HELD THAT THE ASSESSEE HAD DISCLOSED THAT OUT OF SALE CONSIDERATION, A SUM OF RS. 1 LAKH WAS TO BE RECEIVED FOR SALE OF PERMIT. IF THAT SO, THERE WAS NO ERROR IN THE VIEW TAKEN BY THE AO AND NO CASE WAS MADE OUT FOR INVOKING JURISDICTION UNDER S. 263. 10. IN VIEW OF THE ABOVE DISCUSSION AND APPLYING THE PROPOSITION OF LAW LAID DOWN IN THE ABOVE CASE LAW TO THE FACTS OF THE CASE ON EXERCISE OF REVISIONARY POWER BY THE LD. PR. CIT, U/S 263 OF THE ACT, IS BAD IN LAW. HENCE WE QUASH THE SAME. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE SD/- [ABY T. VARKEY] JUDICIAL MEMBER DATED : 18.03.2020 {SC SPS} 16 REVENUE. MERE AUDIT OBJECTION AND MERELY BECAUSE A DIFFERENT VIEW COULD BE TAKEN, WERE NOT ENOUGH TO SAY THAT THE ORDER OF THE AO WAS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE JURISDI CTION COULD BE EXERCISED IF THE CIT WAS SATISFIED THAT THE BASIS FOR EXERCISE OF JURISDICTION EXISTED. NO RIGID RULE COULD BE LAID DOWN ABOUT THE SITUATION WHEN THE JURISDICTION CAN BE EXERCISED. WHETHER SATISFACTION OF THE CIT FOR EXERCISING WAS CALLED FOR OR NOT, HAS TO BE DECIDED HAVING REGARD TO A GIVEN FACT SITUATION. IN THE PRESENT CASE, THE TRIBUNAL HAS HELD THAT THE ASSESSEE HAD DISCLOSED THAT OUT OF SALE CONSIDERATION, A SUM OF RS. 1 LAKH WAS TO BE RECEIVED FOR SALE OF PERMIT. IF THAT SO, THERE WAS NO ERROR IN THE VIEW TAKEN BY THE AO AND NO CASE WAS MADE OUT FOR INVOKING JURISDICTION UNDER S. 263. IN VIEW OF THE ABOVE DISCUSSION AND APPLYING THE PROPOSITION OF LAW LAID DOWN IN THE ABOVE CASE LAW TO THE FACTS OF THE CASE ON HAND, WE HAVE TO NECESSARILY HOLD THAT THE EXERCISE OF REVISIONARY POWER BY THE LD. PR. CIT, U/S 263 OF THE ACT, IS BAD IN LAW. HENCE IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE 18 TH DAY OF MARCH, 2020 . [ J. SUDHAKAR REDDY ACCOUNTANT MEMBER ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE REVENUE. MERE AUDIT OBJECTION AND MERELY BECAUSE A DIFFERENT VIEW COULD BE TAKEN, WERE NOT ENOUGH TO SAY THAT THE ORDER OF THE AO WAS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF CTION COULD BE EXERCISED IF THE CIT WAS SATISFIED THAT THE BASIS FOR EXERCISE OF JURISDICTION EXISTED. NO RIGID RULE COULD BE LAID DOWN ABOUT THE SITUATION WHEN THE JURISDICTION CAN BE EXERCISED. WHETHER SATISFACTION OF THE CIT FOR EXERCISING WAS CALLED FOR OR NOT, HAS TO BE DECIDED HAVING REGARD TO A GIVEN FACT SITUATION. IN THE PRESENT CASE, THE TRIBUNAL HAS HELD THAT THE ASSESSEE HAD DISCLOSED THAT OUT OF SALE CONSIDERATION, A SUM OF RS. 1 LAKH WAS TO BE RECEIVED FOR SALE OF PERMIT. IF THAT IS SO, THERE WAS NO ERROR IN THE VIEW TAKEN BY THE AO AND NO CASE WAS MADE OUT FOR INVOKING IN VIEW OF THE ABOVE DISCUSSION AND APPLYING THE PROPOSITION OF LAW LAID DOWN IN HAND, WE HAVE TO NECESSARILY HOLD THAT THE EXERCISE OF REVISIONARY POWER BY THE LD. PR. CIT, U/S 263 OF THE ACT, IS BAD IN LAW. HENCE . SD/- J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER COPY OF THE ORDER FORWARDED TO: 1. SKAN ENTERPRISE C/O. SUBASH AGARWAL & ASSOCIATES, ADVOCATES SIDDHA GIBSON 1, GIBSON LANE SUITE 213 2 ND FLOOR KOLKATA 700 069 2. PR. COMMISSIONER OF INCOME TAX 3.CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 17 C/O. SUBASH AGARWAL & ASSOCIATES, ADVOCATES PR. COMMISSIONER OF INCOME TAX -12, KOLKATA ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES ITA NO. 840/KOL/2019 ASSESSMENT YEAR: 2014-15 SKAN ENTERPRISE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES