M/s Peeti Real Estate Pvt. Ltd., Hyderabad V. The Income Tax Officer, Ward-16(2), Hyderabad

ITA 844/HYD/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1325 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 09-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RAVINDRA SAI
• Keywords: Capital asset; Principle of natural justice; Additional evidence
• Section: 143(3); 80IB; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 844/HYD/2011 ASSESSMENT YEAR 2006-07 M/S. PEETI REAL ESTATE PVT. LTD., HYDERABAD PAN: AACCP3605M VS. THE INCOME TAX OFFICER WARD-16(2) HYDERABAD APPELLANT RESPONDENT ASSESSEE BY: SRI Y. RATNAKAR REVENUE BY: SRI M. RAVINDRA SAI DATE OF HEARING: 11.02.2013 DATE OF PRONOUNCEMENT: 22.02.2013 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT-IV, HYDERABAD PASSED U/S. 263 OF THE ACT DATED 23.3.2011 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEES GRIEVANCE IN THIS APPEAL IS WITH REG ARD TO INVOKING THE PROVISIONS OF SECTION 263 BY THE CIT A ND DIRECTION OF THE CIT TO ASSESSING OFFICER TO WITHDRAW THE DED UCTION GRANTED IN THE ASSESSMENT U/S. 80IB OF THE ACT AT R S. 14,16,372. 3. BRIEF FACTS OF THE CASE ARE THAT THE ORIGINAL ASSES SMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 12.12.2008 GRANTING DEDUCTION U/S. 80IB OF THE ACT. ON EXAMINATION OF RECORD THE CIT OBSERVED THAT THE ASSESSEE IS ENGAGED IN THE BU SINESS OF DEVELOPING A RESIDENTIAL PROJECT AT VIZAG. FOR CLAI MING THE EXEMPTION U/S. 80IB(10), ONE OF THE REQUIREMENTS IS THAT THE SIZE OF THE PLOT OF LAND SHOULD BE MINIMUM OF 1 ACR E. BUT, IN IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 2 THE INSTANT CASE, IT IS OBSERVED THAT THE ASSESSEE HAS ENCLOSED THREE DOCUMENTS, THE DETAILS OF WHICH ARE AS FOLLOW S: SL. NO. NAME OF THE FIRST PARTY NAME OF THE SECOND PARTY DATE SQ. YARDS NO. OF REGN. DOCUMENT 1. V.V. RATNA KUMARI & V.V. BABJI RAO M/S. PEETI REAL ESTATES PVT. LTD. 05.06.02 436 17623 590325 2. -DO- -DO- -DO- 3520 17623 590325 3. V. VENKAT RAO -DO- -DO- 1210 17624 590325 4. IT IS NOTICED THAT THE DOCUMENT AT SL. NO. L IS ESS ENTIALLY A COPY OF THE DOCUMENT AT SL. NO. 2 WITH HANDWRITTEN INTER- POLATIONS I.E. ONLY FIGURES WERE CHANGED I.E. WITH REFERENCE TO 439 YARDS. FURTHER, ON THE DATE OF TRANSFER I.E., ON 05.06.2002, THE FIRST PARTY WAS NOT IN THE POSSESSION OF LAND ( I.E., 436 SQ. YARDS) TO BE ABLE TO TRANSFER IT IN THE NAME OF THE ASSESSEE THAT WAS TRANSFERRED LATER ON 12.07.2002 TO THE FIRST PA RTY OF AGREEMENT. BUT ON SUBSEQUENT DATE THERE WAS NO TRAN SFER OF LAND TO THE ASSESSEE FROM FIRST PARTY. THESE FACTS WOULD INDICATE THAT THE LAND POSSESSED BY THE ASSESSEE WAS ONLY 35 20 SQ. YARDS PLUS 1210 SQ. YARDS. I.E. 4730 SQ. YARDS. WHI CH WAS NOT AN ACRE, AS ONE ACRE CONTAINS 4840 SQ. YARDS. HENCE, T HE DEDUCTION CLAIMED BY THE ASSESSEE U/S. 80IB(10) WAS NOT IN OR DER. HOWEVER, THE ASSESSING OFFICER HAS ALLOWED THE CLAI M OF THE ASSESSEE WITHOUT EXAMINING IT AT ALL. THE ASSESSIN G OFFICER HAD OMITTED TO EXAMINE THESE MATERIAL POINTS AND ALLOWE D THE ASSESSEE'S CLAIM WITHOUT APPLICATION OF MIND. 5. ACCORDINGLY, THE CIT ISSUED NOTICE U/S. 263 OF THE ACT CALLING FOR OBJECTIONS FROM THE ASSESSEE. ON RECEI PT OF THE OBJECTION FROM THE ASSESSEE, THE CIT OBSERVED THAT TO AVAIL DEDUCTION U/S. 80IB OF THE ACT, THE PROJECT SHOULD BE BUILT ON LAND OF MINIMUM ONE ACRE. IN OTHER WORDS, IT SHOUL D BE IN AN AREA OF 4840 SQ. YARDS. THE ASSESSEE PLEADED BEFOR E THE CIT THAT THE AREA OF THE LAND ON WHICH THE PROJECT IS B UILT IN AN AREA IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 3 OF LAND MEASURING 5166 SQ. YARDS. IN SUPPORT OF TH IS THE ASSESSEE SUBMITTED COPIES OF THREE DOCUMENTS WHICH ARE MENTIONED IN TABULAR FORM. ACCORDING TO THE CIT: (I) THE DOCUMENT RELATING TO 436 SQ. YARDS AND THE DOCUMENT RELATING TO 3520 SQ. YARDS ARE NOT INDEPENDENT/SEPARATE DOCUMENTS. THE DOCUMENT RELATING TO 436 SQ. YARDS IS EVIDENTLY A DUPLICATE OF THE DOCUMENT RELATING TO 3520 SQ. YARDS. BOTH THE DOCUMENTS CARRY THE SAME NUMBER OF REGISTRATION I.E., 17623/590325. AS THE TWO DOCUMENTS APPARENTLY DEAL WITH TWO DIFFERENT PIECES OF LAND, IT IS INCONCEIVABLE THAT TWO SUCH ALLEGED TRANSACTIONS WOULD BE EXECUTED ON STAMP PAPER CARRYING THE SAME REGISTRATION NO. I.E., 17623/590325. (II) ON PAGE NO. '2' OF THE DOCUMENT RELATING TO 436 SQ. YARDS, IT IS EVIDENT THAT THE FIGURE OF 436 HAS BEE N INTERPOLATED IN INK AND IN HANDWRITING I.E., AFTER STRIKING OFF IN INK, THE FIGURE OF 3520 AND THERE A RE FURTHER INTERPOLATION IN THE CORRESPONDING FIGURE O F SQ. METERS AND THE FIRST PARA IS STRANGELY FOLLOWED BY THE FULL SIGNATURE OF V.V. RATNA KUMARI AS WELL AS V.V. BABJI RAO. 6. FURTHER HE OBSERVED THAT IN THE DOCUMENT RELATING T O 3520 SQ. YARDS, IS THAT OF FIGURES OF 436 SQ. YARDS HAS BEEN INTERPOLATED BY HANDWRITING IN ORDER TO CONVEY AN I MPRESSION OF TWO SEPARATE DOCUMENTS RELATING TO TWO DIFFERENT TR ANSACTIONS I.E., 3520 SQ. YARDS AND 436 SQ. YARDS. FURTHER HE OBSERVED THAT ON FURTHER EXAMINATION OF THE ORIGINALS OF REL EVANT DOCUMENTS SUCH AS THE PLAN OF THE PROJECT APPROVED BY THE MUNICIPAL AUTHORITIES AS WELL AS THE LETTER OF PERM ISSION FOR THE CONSTRUCTION OF THE PROJECT ISSUED BY THE TOWN PLAN NING SECTION, IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 4 IT IS SEEN THAT, M THE PERMISSION LETTER DATED 04.0 8.2004, I.E. IN THE ORIGINAL, THERE IS EVIDENCE OF ERASURE OF ORIGI NAL WRITING BY APPLICATION OF WHITE INK AND ON SUCH WHITE INK, ANO THER FIGURE HAS BEEN SUPER IMPOSED IN INK TO READ AS 4249.34 SQ .MTS. THIS TAMPERING BY INTERPOLATION WAS POINTED OUT TO THE A UTHORISED REPRESENTATIVE IN THE COURSE OF HEARING AND ON THE XEROX COPY WHICH WAS TAKEN ON RECORD. THE CIT RECORDED HIS OB SERVATION, COMMENTS ON THE ORIGINAL AND SIGNED THE SAME. SIMI LARLY, ON INSPECTING THE ORIGINAL OF THE PLAN APPROVED BY THE MUNICIPAL AUTHORITIES, IT IS SEEN THAT THE TYPED FIGURE OF 42 49.34 SQ.MTS I.E. SITE AREA HAS BEEN CIRCLED IN PENCIL AND THE 4 152.55 SQ. YARDS HAS BEEN RECORDED BY PENCIL BY ITS SIDE. ALL SUCH OBSERVATIONS HAVE BEEN RECORDED IN THE ORDER SHEET NOTE DATED 24.02.2011 AND THE SAME HAS BEEN AUTHENTICATED BY T HE AUTHORISED REPRESENTATIVE. 7. FURTHER, THE DATE OF TRANSFER IS 05.06.2002. ON THI S DATE, THE FIRST PARTY I.E., V.V. RATNA KUMARI WAS NOT IN POSSESSION OF LAND AD MEASURING 436 SQ. YARDS TO BE ABLE TO TRAN SFER IT TO THE ASSESSEE COMPANY ADMITTEDLY THE TRANSFER TO THE FIR ST PARTY OCCURRED LATER I.E. ON 12.07.2002 AND AFTER THIS DA TE, THERE WAS NO TRANSFER OF LAND FROM THE ASSESSEE TO THE FIRST PARTY. IN OTHER WORDS, ON ACCOUNT OF EVIDENT TAMPERING, ERASURE, IN TERPOLATIONS AND MANIPULATED FIGURES, THE DOCUMENT PRODUCED BY T HE ASSESSEE RELATING TO 436 SQ. YARDS AS WELL AS THE L ETTER OF PERMISSION OF THE CONCERNED MUNICIPAL AUTHORITY LOS E EVIDENTIARY VALUE. IT IS EVIDENT THAT THE ASSESSEE RESORTED TO SUCH INTERPOLATIONS, AND MANIPULATIONS TO FOIST AN ERRONEOUS CLAIM OF POSSESSION OF PLOT OF LAND I.E. MORE THAN AN ACRE IN ORDER TO BE ABLE TO GET THE UNDUE DEDUCTION UNDER S ECTION 80IB. BUT THE EVIDENCE ON RECORD CLEARLY ESTABLISHES THAT THE EXTENT OF LAND IN POSSESSION OF THE ASSESSEE WAS ADMEASURING ONLY 4730 SQ. YARDS (3520+ 1210 SQ. YARDS) WHICH IS, NEEDLESS TO SAY, IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 5 MUCH LESS THAN THE REQUIRED AREA OF PLOT OF 4840 SQ . YARDS. FROM THE AVAILABLE EVIDENCE, THE INFERENCE IRRESIST IBLY FOLLOWS THAT THE ASSESSEE IS NOT AT ALL ENTITLED TO THE BEN EFIT OF SECTION 80IB. BUT IN COMPLETING THE ORIGINAL ASSESSMENT, T HE ASSESSING OFFICER HAD NEITHER ENQUIRED INTO THIS CLAIM NOR HA D HE APPLIED HIS MIND TO ANY OF THE EVIDENT ASPECTS IN ASSESSEE' S DOCUMENTS SUCH AS TWO SEPARATE DOCUMENTS CARRYING SAME REGIST RATION NUMBER, INTERPOLATIONS, ERASURE ETC. WHEN AN ASSESS EE MAKES A CLAIM FOR DEDUCTION U/S. 80IB, IT WAS INCUMBENT UPO N THE ASSESSING OFFICER TO EXAMINE SUCH CLAIM IN DEPTH AN D BY MAKING PROPER ENQUIRIES. IN THE LIGHT OF THE DECISI ON OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF GEE VEE ENT ERPRISES VS ADDL.CIT AND OTHERS 99 ITR 375(DELHI) AS WELL AS IN THE LIGHT OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F MALABAR INDUSTRIAL COMPANY LTD. VS. CIT (109 TAXMAN 66), TH E ORIGINAL ASSESSMENT ORDER HAS BEEN RENDERED NOT ONLY ERRONEO US BUT ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. IT IS IN PLACE TO EXTRACT THE RELEVANT PORTION OF THE LAND MARK JUDGMENT OF H ON'BLE APEX COURT AS UNDER: ' AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. XXXX THE SCHEME OF THE ACT IS TO LEVY AND COLLECT TAX IR I ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THIS TASK IS ENTRUSTED TO THE REVENUE. IF DUE TO AN ERRONEOUS ORDER OF THE INCOME TAX OFFICER, THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO THE INTERESTS O F THE REVENUE.' 8. THE CIT DIRECTED THE ASSESSING OFFICER TO WITHDRAW 80IB DEDUCTION FROM THE ASSESSEE WHICH HAS BEEN GRANTED BY HIM IN THE ORIGINAL ASSESSMENT I.E., 14,16,372/-. HE IS D IRECTED TO BRING THE SAID AMOUNT TO TAX. IN VIEW OF THE AFORES AID, THE CIT HELD THAT THE ASSESSMENT COMPLETED BY THE INCOME TA X OFFICER, IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 6 WARD -16(2), HYDERABAD IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE, THEREFORE. SET ASIDE THE SAID ASSESSMENT ORDER WITH THE DIRECTION TO RE-DO THE SA ME IN THE LIGHT OF THE AFOREMENTIONED FINDINGS, OBSERVATIONS AND DIRECTION. ACCORDINGLY, HE WITHDREW THE DEDUCTION U/S. 80IB OF THE ACT. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 9. THE ASSESSEE FILED A PETITION FOR ADMISSION OF ADDI TIONAL EVIDENCE SEEKING ADMISSION OF TWO DOCUMENTS SIGNED BY THE ZONAL COMMISSIONER OBTAINED FROM GREATER VISAKHAPAT NAM MUNICIPAL CORPORATION AFTER FILING THE APPEAL BEFOR E THE TRIBUNAL. (A) CERTIFIED COPY OF LETTER BEARING B.A . NO. 2002-BA- 11742/ACP-II/G3 DATED 4.8.2004 AND (B) CERTIFIED CO PY OF SANCTION PLAN ISSUED BY THE GVMC. 10. THE LEARNED AR SUBMITTED THAT THESE ARE ADDITIONAL EVIDENCES WHICH ARE IMPORTANT FOR DECIDING THE ASSE SSEES APPEAL AND PRAYED TO ADMIT THE SAME. 11. WE HAVE GONE THROUGH THE ABOVE ADDITIONAL EVIDENCES . IN OUR OPINION,, AFTER HEARING BOTH THE PARTIES, THESE DOCUMENTS ARE TO BE CONSIDERED FOR PROPER ADJUDICATION OF THE ISSUE. ACCORDINGLY, WE ADMIT THE SAME AS ADDITIONAL EVIDEN CES. 12. THE LEARNED AR SUBMITTED THAT THE LEARNED COMMISSIO NER OF INCOME TAX BY HIS ORDER DT. 23-3-2011 DIRECTED T HE ASSESSING OFFICER TO WITHDRAW THE DEDUCTION U/S 80IB OF THE I T ACT WHICH WAS ALLOWED AT RS. 14,60,372. THE AR CONTENDED THAT THE ORDER PASSED U/S 263 OF THE IT ACT DIRECTING THE WITHDRAW AL OF THE SAID DEDUCTION IS ERRONEOUS AND UNTENABLE. 13. THE AR SUBMITTED THAT THE ASSESSEE IS A PROPERTY DEVELOPER. ACCORDING TO THE COMMISSIONER OF INCOME TAX, OUT OF THE TOTAL AREA OF 5166 SQ. YARDS GIVEN FOR DEVELOPM ENT TO THE IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 7 ASSESSEE, 436 SQ.YDS. SHOULD NOT BE CONSIDERED BECA USE OF THE FOLLOWING REASONS: (A) THE DOCUMENT (PAGES 10 TO 15 OF THE PAPER BOOK) RELATING TO 436 SQ.YDS. IS A DUPLICATE OF DOCUMENT RELATING TO 3520 SQ.YDS. BOTH THESE DOCUMENTS CARRY THE SAME REGISTRATION NUMBER. (PARA 3.1(I)). (B) 436 SQ.YDS. AT PAGE-2 OF THE DOCUMENT APPEARS TO BE INTERPOLATION. (PARA 3.1 (I ) (C) ON 5-6-2002 WHICH IS THE DATE OF ENTERING INTO THE DEVELOPMENT AGREEMENT, THE FIRST PARTY VIZ. SMT. V. V . RATNA KUMARI WAS NOT IN POSSESSION OF THE LAND ADMEASURING 436 SQ.YDS. THEREFORE, SHE COULD NOT HA VE TRANSFERRED 436 SQ.YDS. OF LAND TO THE ASSESSEE COMPANY ON 5-6-2002; (PARA 3.4) (D) IF THE 436 SQ.YDS. IS IGNORED THE LAND AREA WILL BE LESS THAN ONE ACRE (VIZ. 4840 SQ.YDS.) AND SECTION 80IB OF THE IT ACT WILL BE INAPPLICABLE AS THE AREA IS LESS THAN 1 ACRE. 14. THE AR SUBMITTED THAT THE CIT COMPLETELY MISUNDERST OOD THE FACTUAL POSITION. HE HAS NOT UNDERSTOOD THE DEV ELOPMENT AGREEMENT DT. 5-6-2002. THIS AGREEMENT DT. 5-6-2002 IS AN UNREGISTERED DOCUMENT WHICH RELATES TO TWO PIECES O F LAND VIZ. LAND ADMEASURING ABOUT 3520 SQ.YDS. BELONGING TO SM T. V.V.RATNA KUMARI, AND B) LAND ADMEASURING ABOUT 436 SQ.YDS. WHICH BELONGED TO 9 DIFFERENT OWNERS WHO ARE ALL RE PRESENTED BY THEIR POWER OF ATTORNEY SHRI V.V. BABJI RAO. THEREF ORE, THE DEVELOPMENT AGREEMENT IS IN RELATION TO TWO DIFFERE NT PIECES OF LAND WHICH ARE CONTIGUOUS AND BELONGING TO TWO DIFF ERENT PARTIES. IN THE VERY SAME DOCUMENT, SCHEDULE-A LAND IS THE LAND IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 8 ADMEASURING 3520 SQ.YDS. AND SCHEDULE -B LAND IS TH E LAND ADMEASURING 436 SQ.YDS. THE BODY OF THE DOCUMENT RE FERS TO BOTH SCHEDULE-A AND SCHEDULE-B LANDS BEING GIVEN FO R DEVELOPMENT. IN THE RECITALS WHILE TYPING SCHEDULE- B LAND, THERE WAS A PRINTING ERROR IN REPEATING THE SAME AREA OF LAND AS IN SCHEDULE-A AND WHEN THIS WAS NOTICED, IT WAS CORREC TED FROM 3520 SQ.YDS. TO READ AS 436 SQ.YDS. BARRING THIS C ORRECTION, EVERY WHERE SCHEDULE-A AND SCHEDULE-B LAND IS SHOWN SEPARATELY. 15. THE AR SUBMITTED THAT CIT MISUNDERSTOOD THAT THE DOCUMENT IS A DUPLICATE DOCUMENT. IT IS NOT KNOWN F ROM WHERE HE GATHERED THAT THIS DOCUMENT IS A DUPLICATE DOCUM ENT. HE ALSO CRITICIZES THAT THE TWO DOCUMENTS DEAL WITH TW O DIFFERENT PIECES OF LAND, THEY CANNOT CARRY THE SAME NUMBER F OR THE STAMP PAPER. IT IS SUBMITTED THAT ALL THIS IS IMAGI NARY. THE DOCUMENT IS ONLY ONE AND THERE ARE NO TWO DIFFERENT DOCUMENTS. THE DEVELOPMENT AGREEMENT REFERS TO TWO DIFFERENT P ARTIES AND TWO DIFFERENT PIECES OF LAND. BOTH THESE PARTIES HA VE GIVEN THEIR LANDS FOR DEVELOPMENT TO THE ASSESSEE WHO IS THE DE VELOPER. THE DOCUMENT CONTAINS THE DESCRIPTION OF SCHEDULE -A PR OPERTY ADMEASURING 3520 SQ.YDS. AND SCHEDULE-B PROPERTY AD - MEASURING 436 SQ.YDS. IT APPEARS THAT THE LEARNED COMMISSIONER OF INCOME TAX MADE UP HIS MIND TO DISA LLOW THE DEDUCTION AND WANTED TO FIND SOME LAME EXCUSE FOR S O DOING. IT IS RESPECTFULLY SUBMITTED THAT THERE IS NOTHING WRO NG WITH THE DOCUMENT, WHEREIN TWO PARTIES HAVE JOINTLY GIVEN TH EIR LANDS WHICH ARE CONTIGUOUS FOR DEVELOPMENT TO THE ASSESSE E WHO IS A DEVELOPER. 16. THE AR SUBMITTED THAT THE 436 SQ.YDS. OF LAND GIVEN FOR DEVELOPMENT UNDER THE DEVELOPMENT AGREEMENT DT. 5-6 -2002 WAS SIGNED BY THE G.P.A HOLDER ON BEHALF OF 9 DIFFE RENT OWNERS AND THIS G.P.A IS A REGISTERED G.P.A DT. 26-1-1983. THE POWER OF IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 9 ATTORNEY GIVES THE G.P.A HOLDER THE POWER TO SELL 4 36 SQ.YDS. OF LAND OR ENTER INTO ANY AGREEMENT WITH IT ON BEHALF OF ITS OWNERS. ACCORDINGLY, THE G.P.A HOLDER SHRI V.V. BABJI RAO S IGNED THE DEVELOPMENT AGREEMENT GIVING THE ABOVE PROPERTY FOR DEVELOPMENT TO THE DEVELOPER. THE POSSESSION OF PRO PERTY WAS GIVEN BY THE G.P.A HOLDER TO THE ASSESSEE. THEREFOR E, THE QUESTION OF EXCLUDING 436 SQ.YDS. OF LAND FROM 5166 SQ.YDS. WILL NOT ARISE FOR CONSIDERATION. THE ATTEMPT ON THE PAR T OF THE LEARNED COMMISSIONER OF INCOME TAX TO BRING DOWN TH E EXTENT OF AREA TO LESS THAN 4840 SQ.YDS. (1 ACRE) BY EXCLUDIN G THE 436 SQ.YDS. IS ERRONEOUS AND UNCALLED FOR. 17. THE AR SUBMITTED THAT THIS 436 SQ.YDS. OF LAND WAS LATER SOLD BY THE G.P.A. HOLDER TO SMT.V.V.RATNA KUMARI B Y REGISTERED SALE DEED DT. 12-7-2012. THE SUBSEQUENT SALE OF PROPERTY TO SMT.V.V.RATNA KUMARI AMOUNTS TO TRANSFE RRING TO HER ALL RIGHTS WHICH THE 9 OWNERS WERE ENTITLED TO, IN RESPECT OF 436 SQ.YDS OF LAND UNDER THE DEVELOPMENT AGREEMENT DT. 5-6- 2002. ACCORDING TO THE LEARNED COMMISSIONER OF INC OME TAX, SINCE THE SALE IN FAVOUR OF SMT.V.V RATNA KUMARI OC CURRED LATER, THE DEVELOPMENT AGREEMENT LOSES ITS VALUE AS SHE DI D NOT TRANSFER THE LAND ONCE AGAIN ONCE AGAIN FOR DEVELOP MENT TO THE ASSESSEE. THIS ANALYSIS OF THE FACTUAL POSITION IS WHOLLY WRONG. THE DEVELOPMENT AGREEMENT WAS SIGNED BY THE G.P.A H OLDER ON BEHALF OF 9 JOINT OWNERS. THEREFORE, THE ACT OF GIV ING THE PROPERTY ON DEVELOPMENT BY THE OWNERS OF THE PROPERTY TO THE ASSESSEE WAS COMPLETE ON 5-6-2002. THE ERROR ON THE PART OF THE COMMISSIONER OF INCOME TAX WAS IN PRESUMING THAT ON 5-6-2002 THE 436 SQ.YDS. OF LAND WAS GIVEN FOR DEVELOPMENT B Y SMT. V.V. RATNA KUMARI WITHOUT BEING ITS OWNER. HE OMITTED TO NOTE THAT THIS PROPERTY WAS GIVEN FOR DEVELOPMENT BY SHRI V. V. BABJI RAO REPRESENTING THE 9 OWNERS AND NOT BY SMT. V.V. RATN A KUMARI. IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 10 THEREFORE, THE ENTIRE ANALYSIS MADE BY THE CIT TO I GNORE 436 SQ.YDS. OF LAND IS ERRONEOUS. 18. THE AR SUBMITTED THAT WITHOUT PREJUDICE TO THE ABOV E, IT IS FURTHER SUBMITTED THAT CLAUSE(B) TO SUB SECTION (10) TO SECTION 80LB OF THE L.T ACT READS AS UNDER: '(B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND W HICH HAS A MINIMUM AREA OF ONE ACRE' 19. THE PROJECT WAS CONSTRUCTED ON A LAND IN EXCESS OF ONE ACRE. SUB SECTION (10) DOES NOT STATE THAT ONE ACRE SHOULD BELONG TO THE ASSESSEE COMPANY OR IT MUST HAVE CLEA R OWNERSHIP OR TITLE TO THE LAND. IT CAN CONSTRUCT EVEN BY A LI CENSE OR CONSENT GIVEN BY THE OWNER OF LAND FOR THE CONSTRUCTION. AL L THAT THE CLAUSE REQUIRES IS THAT THE PROJECT SHOULD BE ON A SIZE OF PLOT WHICH HAS A MINIMUM AREA OF ONE ACRE. IN THE PRESEN T CASE, THE PROJECT IS ON AN AREA OF MORE THAN ONE ACRE. THE OT HER REQUIREMENT THAT BEFORE THE WORK IS COMMENCED, THE ASSESSEE SHOULD BECOME THE OWNER OF THE PROPERTY OR THAT THE DOCUMENTATION OF TITLE SHOULD BE COMPLETE IN ALL RE SPECTS ETC. ARE NOT SET OUT IN SECTION 80IB OF THE IT ACT AS CONDIT IONS PRECEDENT. IN ANY EVENT, THESE CONSIDERATIONS ARE NOT RELEVANT FOR THE PURPOSE OF CONSIDERING WHETHER THE PROJECT IS ON TH E SIZE OF PLOT LAND WHICH HAS A MINIMUM AREA OF ONE ACRE. 20. THE AR SUBMITTED THAT IN THE SHOW CAUSE NOTICE THE ABOVE OBJECTION WAS THE ONLY REASON ON THE BASIS OF WHICH REVISION U/S. 263 WAS PROPOSED. HOWEVER, IN THE FINAL ORDER THE CIT HAS STATED ADDITIONAL REASONS. ACCORDING TO HIM THE ORI GINAL SANCTION LETTER OF VISAKHAPATNAM MUNICIPAL CORPORAT ION AVAILABLE WITH THE ASSESSEE CONTAINED CORRECTIONS I N WHITE INK AND THEREFORE HE CONCLUDED THAT THIS AMOUNTS TO TAM PERING. HE ALSO STATED THAT THE APPROVED PLAN ALSO CONTAINED S OME ENDORSEMENT IN PENCIL AND HE THEREFORE HELD THAT TH EY HAVE NO IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 11 EVIDENTIARY VALUE. HE REFUSED TO CONSIDER THAT THE MUNICIPAL SANCTION OBTAINED FOR CONSTRUCTION IS ON THE SIZE O F PLOT WHICH IS IN EXCESS OF ONE ACRE AS EVIDENCE IN SUPPORT OF THE CLAIM U/S 80IB OF THE IT ACT. THE RELEVANT PORTIONS OF THE OR DER ON THIS ASPECT IS AVAILABLE AT PARA 3.2, 3.3 AND 3.4 OF THE ORDER. THE ASSESSEE PLACES BEFORE THE HON'BLE TRIBUNAL THE FOL LOWING FACTUAL POSITION. 21. THE AR SUBMITTED THAT THE ASSESSEE STATED BEFORE TH E LEARNED COMMISSIONER THAT THE AREA TAKEN FOR DEVELO PMENT IS 5166 SQ.YDS (OR 4319.43 SQ.MTS.) THE ASSESSEE FURTH ER STATED THAT THE SANCTION FOR CONSTRUCTION OF THE PROJECT I S ON AN AREA OF 4249.34 SQ. MTS (EQUAL TO 5082.16 SQ.YDS ). THE COR RECTION IN WHITE INK ON THE SANCTION LETTER DT.4-8-2004 IS DON E BY THE VISAKHAPATNAM MUNICIPAL CORPORATION AND IS NOT A TA MPERING MADE BY THE ASSESSEE. THE ASSESSEE FURTHER STATED T HAT THE CORRECTION WILL ALSO BE SEEN IN THE ORIGINAL RECORD S OF VISAKHAPATNAM MUNICIPAL CORPORATION IF THE SAME IS CALLED FOR AND VERIFIED. 22. THE AR SUBMITTED THAT LIKEWISE THE ASSESSEE SUBMITT ED THAT IN THE ORIGINAL APPROVED PLAN, THE AREA MENTIO NED IS 4249.34 SQ.MTS. (OR 5082.16 SQ.YDS.) THE AR FURTHER STATED THAT THE CIRCLING OF THIS FIGURE AND THE PENCIL ENDORSEM ENT OF 4152.55 SQ.MTS. (OR 4966.40 SQ.YDS.) (WRONGLY READ BY THE C IT AS SQ.YDS.) DOES NOT AMOUNT IN TAMPERING BY THE ASSESSEE AND TH E SAME SHOULD ALSO BE AVAILABLE IN THE RECORDS OF THE VISA KHAPATNAM MUNICIPAL CORPORATION. IN ANY EVENT WHATEVER FIGURE IS TAKEN THE AREA IS MORE THAN 4840 SQ.YDS. WHICH IS THE REQ UIREMENT OF SEC. 80IB OF THE I.T ACT. 23. THE AR SUBMITTED THAT THE ASSESSEE REQUESTED THE LE ARNED COMMISSIONER OF INCOME TAX THAT IF HE HAS DOUBTS, H E SHOULD SUMMON THE RECORDS AND VERIFY FROM THE ORIGINAL AVA ILABLE IN THE IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 12 FILES OF THE GREATER VISAKHAPATNAM MUNICIPAL CORPOR ATION BEFORE DRAWING ANY ADVERSE INFERENCE. THE ASSESSEE SUBMITTED THAT THE CORRECTIONS WERE CARRIED OUT BY THE GREATE R VISAKHAPATNAM MUNICIPAL CORPORATION AND IS NOT ANY TAMPERING ON ITS PART. THE LEARNED COMMISSIONER OF INCOME TAX ARBITRARILY PROCEEDED AS IF THERE WAS TAMPERING DON E BECAUSE OF THE CORRECTIONS APPEARING ON THE DOCUMENTS WITHOUT VERIFYING FROM THE ORIGINAL DOCUMENTS WITH THE MUNICIPAL CORP ORATION. 24. THE ASSESSEE HAS SINCE APPLIED FOR CERTIFIED COPIES OF SANCTION LETTER AS WELL AS THE APPROVED SANCTION PL AN FROM THE GREATER VISAKHAPATNAM MUNICIPAL CORPORATION AND BOT H THESE DOCUMENTS WERE FURNISHED UNDER THE SIGNATURE OF THE ZONAL COMMISSIONER-I, GREATER VISAKHAPATNAM MUNICIPAL COR PORATION DT. 31-7-2012. THESE DOCUMENTS ARE FILED ALONG WITH PETITION UNDER RULE 29 OF THE APPELLATE TRIBUNAL RULES FOR A DMISSION OF THESE DOCUMENTS AS ADDITIONAL EVIDENCE. THESE DOCUM ENTS WERE ISSUED BY THE GREATER VISAKHAPATNAM MUNICIPAL CORPO RATION ONLY AFTER THE DISPOSAL OF THE REVISION PROCEEDINGS U/S 263 OF THE I.T ACT BY THE LEARNED COMMISSIONER OF INCOME TAX. THE AR PRAYED TO ADMIT THE SAID DOCUMENTS. IF THESE DOCUME NTS ARE VERIFIED IT WOULD BE AT ONCE CLEAR THAT THE CORRECT IONS WERE DONE BY THE GREATER VISAKHAPATNAM MUNICIPAL CORPORATION AND IS NOT ANY TAMPERING BY THE ASSESSEE. THE LEARNED COMM ISSIONER OF INCOME TAX WAS VERY UNCHARITABLE IN PASSING ADVE RSE COMMENTS AGAINST THE ASSESSEE WITHOUT KNOWING THE T RUE POSITION. 25. THE AR FURTHER SUBMITTED THAT ALL THE AREAS ARE IN EXCESS OF ONE ACRE. THE GROUNDS ON WHICH THE LEARNED COMMI SSIONER OF INCOME TAX DIRECTED WITHDRAWAL OF DEDUCTION U/S 80I B OF THE IT ACT ARE VERY ARBITRARY, UNJUST AND ARE UNWARRANTED. HE ACCORDINGLY PRAYED THAT THE TRIBUNAL MAY BE PLEASED TO SET ASIDE THE ORDERS OF THE COMMISSIONER OF INCOME TAX PASSED U/S IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 13 263 OF THE IT ACT DT. 23-3-2011 AND RESTORE THE ASS ESSMENT ORDER PASSED U/S 143(3) DT. 12-12-2008. 26. THE LEARNED DR RELIED ON THE ORDER OF THE CIT. 27. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATERIAL ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE EARLIER ORDER OF THE ASSESSING OFFICER PASSED U/S. 143(3) OF THE ACT DATED 12.12.2008. THERE IS NO WHISPER REGARDING THE IMPU GNED ISSUE IN THE ASSESSMENT ORDER. THE ORDER PASSED BY THE ASSESSING OFFICER IS VERY CRYPTIC AND IT CANNOT BE SAID THAT THE ASSESSING OFFICER APPLIED HIS MIND. THE ORDER SOUGHT TO BE REVISED CONTAINS ERROR OF REASONING AND IT IS ON INCORRECT ASSUMPTION OF FACTS AS WELL AS INCORRECT APPLICATION OF LAW. THERE IS NO APPLICATION OF MIN D BY THE ASSESSING OFFICER. THE ORDER PASSED BY THE ASSESSI NG OFFICER IS A STEREOTYPE ORDER WHICH SIMPLY ACCEPTED WHAT THE ASSESSEE HAS STATED IN ITS RETURN OF INCOME AND HE IS FAILED TO EXAMINE THE GENUINENESS OF THE CLAIM OF T HE ASSESSEE. 28. SECTION 263 OF THE INCOME-TAX ACT SEEKS TO REMOVE T HE PREJUDICE CAUSED TO THE REVENUE BY THE ERRONEOUS OR DER PASSED BY THE ASSESSING OFFICER. IT EMPOWERS THE COMMISSIO NER TO INITIATE SUO MOTO PROCEEDINGS EITHER WHERE THE ASSESSING OFFICER TAKES A WRONG DECISION WITHOUT CONSIDERING THE MATE RIALS AVAILABLE ON RECORD OR HE TAKES A DECISION WITHOUT MAKING AN ENQUIRY INTO THE MATTERS, WHERE SUCH INQUIRY WAS PR IMA FACIE WARRANTED. THE COMMISSIONER WILL BE WELL WITHIN HIS POWERS TO REGARD AN ORDER AS ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER SH OULD HAVE MADE FURTHER INQUIRIES BEFORE ACCEPTING THE CLAIM M ADE BY THE ASSESSEE IN HIS RETURN. THE REASON IS OBVIOUS. UNLI KE THE CIVIL COURT WHICH IS NEUTRAL IN GIVING A DECISION ON THE BASIS OF IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 14 EVIDENCE PRODUCED BEFORE IT, THE ROLE OF AN ASSESSI NG OFFICER UNDER THE INCOME-TAX ACT IS NOT ONLY THAT OF AN ADJ UDICATOR BUT ALSO OF AN INVESTIGATOR. HE CANNOT REMAIN PASSIVE I N THE FACE OF A RETURN, WHICH IS APPARENTLY IN ORDER BUT CALLS FOR FURTHER ENQUIRY. HE MUST DISCHARGE BOTH THE ROLES EFFECTIVE LY. IN OTHER WORDS, HE MUST CARRY OUT INVESTIGATION WHERE THE FA CTS OF THE CASE SO REQUIRE AND ALSO DECIDE THE MATTER JUDICIOU SLY ON THE BASIS OF MATERIALS COLLECTED BY HIM AS ALSO THOSE P RODUCED BY THE ASSESSEE BEFORE HIM. THE SCHEME OF ASSESSMENT H AS UNDERGONE RADICAL CHANGES IN RECENT YEARS. IT DESER VES TO BE NOTED THAT THE PRESENT ASSESSMENT WAS MADE UNDER SE CTION 143(3) OF THE INCOME-TAX ACT. IN OTHER WORDS, THE A SSESSING OFFICER WAS STATUTORILY REQUIRED TO MAKE THE ASSESS MENT UNDER SECTION 143(3) AFTER SCRUTINY AND NOT IN A SUMMARY MANNER AS CONTEMPLATED BY SUB-SECTION (1) OF SECTION 143. BUL K OF THE RETURNS FILED BY THE ASSESSEES ACROSS THE COUNTRY I S ACCEPTED BY THE DEPARTMENT UNDER SECTION 143(1) WITHOUT ANY SCR UTINY. ONLY A FEW CASES ARE PICKED UP FOR SCRUTINY. THE AS SESSING OFFICER IS THEREFORE, REQUIRED TO ACT FAIRLY WHILE ACCEPTING OR REJECTING THE CLAIM OF THE ASSESSEE IN CASES OF SCR UTINY ASSESSMENTS. HE SHOULD BE FAIR NOT ONLY TO THE ASSE SSEE BUT ALSO TO THE PUBLIC EXCHEQUER. THE ASSESSING OFFICER HAS GOT TO PROTECT, ON ONE HAND, THE INTEREST OF THE ASSESSEE IN THE SENSE THAT HE IS NOT SUBJECTED TO ANY AMOUNT OF TAX IN EX CESS OF WHAT IS LEGITIMATELY DUE FROM HIM, AND ON THE OTHER HAND , HE HAS A DUTY TO PROTECT THE INTERESTS OF THE REVENUE AND TO SEE THAT NO ONE DODGED THE REVENUE AND ESCAPED WITHOUT PAYING T HE LEGITIMATE TAX. THE ASSESSING OFFICER IS NOT EXPECT ED TO PUT BLINKERS ON HIS EYES AND MECHANICALLY ACCEPT WHAT T HE ASSESSEE CLAIMS BEFORE HIM. IT IS HIS DUTY TO ASCERTAIN THE TRUTH OF THE FACTS STATED AND THE GENUINENESS OF THE CLAIMS MADE IN THE RETURN WHEN THE CIRCUMSTANCES OF THE CASE ARE SUCH AS TO PROVOKE INQUIRY. ARBITRARINESS IN EITHER ACCEPTING OR REJECTING IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 15 THE CLAIM HAS NO PLACE. THE ORDER PASSED BY THE ASS ESSING OFFICER BECOMES ERRONEOUS BECAUSE AN ENQUIRY HAS NO T BEEN MADE OR GENUINENESS OF THE CLAIM HAS NOT BEEN EXAMI NED WHERE THE INQUIRIES OUGHT TO HAVE BEEN MADE AND THE GENUI NENESS OF THE CLAIM OUGHT TO HAVE BEEN EXAMINED AND NOT BECAU SE THERE IS ANYTHING WRONG WITH HIS ORDER IF ALL THE FACTS STAT ED OR CLAIM MADE THEREIN ARE ASSUMED TO BE CORRECT. THE COMMISS IONER MAY CONSIDER AN ORDER OF THE ASSESSING OFFICER TO BE ER RONEOUS NOT ONLY WHEN IT CONTAINS SOME APPARENT ERROR OF REASON ING OR OF LAW OR OF FACT ON THE FACE OF IT BUT ALSO WHEN IT IS A STEREO-TYPED ORDER WHICH SIMPLY ACCEPTS WHAT THE ASSESSEE HAS ST ATED IN HIS RETURN AND FAILS TO MAKE ENQUIRIES OR EXAMINE THE G ENUINENESS OF THE CLAIM WHICH ARE CALLED FOR IN THE CIRCUMSTAN CES OF THE CASE. IN TAKING THE AFORESAID VIEW, WE ARE SUPPORTE D BY THE DECISIONS OF THE HON'BLE SUPREME COURT IN RAMPYARI DEVI SARAOGI V. CIT (67 ITR 84) (SC), SMT. TARA DEVI A GGARWAL V. CIT (88 ITR 323) (SC), AND MALABAR INDUSTRIAL CO. LTD'S CASE ( 243 ITR 83) (SC). 29. IN MALABAR INDUSTRIAL CO. LTD. CASE THE HON'BLE CO URT HAS HELD AS UNDER: THERE CAN BE NO DOUBT THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE O R ERROR COMMITTED BY THE ASSESSING OFFICER, IT IS ONL Y WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL THE ORDERS PASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE OR WITHO UT APPLICATION OF MIND.' 30. SIMILAR VIEW WAS EARLIER TAKEN BY THE HON'BLE SUPRE ME COURT IN SIEMENS ENGG. & MFG. CO. LTD. V. UNION OF INDIA AIR 1976 SC 1785. IT IS SETTLED LAW THAT WHILE MAKING A SSESSMENT ON ASSESSEE, THE ITO ACTS IN A QUASI-JUDICIAL CAPAC ITY. AN IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 16 ASSESSMENT ORDER IS AMENABLE TO APPEAL BY THE ASSES SEE AND TO REVISION BY THE COMMISSIONER UNDER SECTIONS 263 AND 264. THEREFORE, A REASONED ORDER ON A SUBSTANTIAL ISSUE IS LEGALLY NECESSARY. THE JUDGMENTS ON WHICH RELIANCE WAS PLAC ED BY THE LEARNED COUNSEL FOR THE ASSESSEE ALSO POINTS TO THE SAME DIRECTION. THEY HAVE HELD THAT ORDERS, WHICH ARE SU BVERSIVE OF THE ADMINISTRATION OF REVENUE, MUST BE REGARDED AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF THE ASSESSING OFFICERS ARE ALLOWED TO MAKE ASSESSMENTS IN AN ARBI TRARY MANNER, AS HAS BEEN DONE IN THE CASE BEFORE US, THE ADMINISTRATION OF REVENUE IS BOUND TO SUFFER. IF WI THOUT DISCUSSING THE NATURE OF THE TRANSACTION AND MATERI ALS ON RECORD, THE ASSESSING OFFICER HAD MADE CERTAIN ADDI TION TO THE INCOME OF THE ASSESSEE, THE SAME WOULD HAVE BEEN CO NSIDERED ERRONEOUS BY ANY APPELLATE AUTHORITY AS BEING VIOLA TIVE OF THE PRINCIPLES OF NATURAL JUSTICE WHICH REQUIRE THAT TH E AUTHORITY MUST INDICATE THE REASONS FOR AN ADVERSE ORDER. WE FIND NO REASON WHY THE SAME VIEW SHOULD NOT BE TAKEN WHEN A N ORDER IS AGAINST THE INTERESTS OF THE REVENUE. AS A MATTER O F FACT SUCH ORDERS ARE PREJUDICIAL TO THE INTERESTS OF BOTH THE PARTIES, BECAUSE EVEN THE ASSESSEE IS DEPRIVED OF THE BENEFI T OF A POSITIVE FINDING IN HIS FAVOUR, THOUGH HE MAY HAVE SUFFICIEN TLY ESTABLISHED HIS CASE. 31. IN VIEW OF THE FOREGOING, IT CAN SAFELY BE SAID THA T AN ORDER PASSED BY THE ASSESSING OFFICER BECOMES ERRONEOUS A ND PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNDER S ECTION 263 IN THE FOLLOWING CASES: (I) THE ORDER SOUGHT TO BE REVISED CONTAINS ERROR OF REASONING OR OF LAW OR OF FACT ON THE FACE OF IT. (II) THE ORDER SOUGHT TO BE REVISED PROCEEDS ON INCORRECT ASSUMPTION OF FACTS OR INCORRECT APPLICATION OF LAW. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PRINCIPLES IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 17 OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. (III) THE ORDER PASSED BY THE ASSESSING OFFICER IS A STEREOTYPE ORDER WHICH SIMPLY ACCEPTS WHAT THE ASSESSEE HAS STATED IN HIS RETURN OR WHERE HE FAILS TO MAKE THE REQUISITE ENQUIRIES OR EXAMINE THE GENUINENESS OF THE CLAIM WHICH IS CALLED FOR IN THE CIRCUMSTANCES OF THE CASE. 32. WE SHALL NOW TURN TO THE FACTS OF THE CASE TO SEE W HETHER THE CASE BEFORE US IS COVERED BY THE AFORESAID PRIN CIPLES. PERUSAL OF THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFF ICER DOES NOT SHOW ANY APPLICATION OF MIND ON HIS PART. HE SI MPLY ACCEPTED THE INCOME DECLARED BY THE ASSESSEE EXCEPT ADDING RS. 16,103/- TOWARDS INTEREST INCOME. THIS IS A CASE W HERE THE ASSESSING OFFICER MECHANICALLY ACCEPTED WHAT THE AS SESSEE WANTED HIM TO ACCEPT WITHOUT ANY APPLICATION OF MIN D OR ENQUIRY. THE EVIDENCE AVAILABLE ON RECORD IS NOT E NOUGH TO HOLD THAT THE RETURN OF THE ASSESSEE WAS OBJECTIVELY EXA MINED OR CONSIDERED BY THE ASSESSING OFFICER. IT IS BECAUSE OF SUCH NON- CONSIDERATION OF THE ISSUES ON THE PART OF THE ASSE SSING OFFICER THAT THE RETURN FILED BY THE ASSESSEE STOOD AUTOMAT ICALLY ACCEPTED WITHOUT ANY PROPER SCRUTINY. THE ASSESSMEN T ORDER PLACED BEFORE US IS CLEARLY ERRONEOUS AS IT WAS PAS SED WITHOUT PROPER EXAMINATION OR ENQUIRY OR VERIFICATION OR OB JECTIVE CONSIDERATION OF THE CLAIM MADE BY THE ASSESSEE. TH E ASSESSING OFFICER HAS COMPLETELY OMITTED TO EXAMINE THE ISSUE S IN QUESTION FROM CONSIDERATION AND MADE THE ASSESSMENT IN AN AR BITRARY MANNER. HIS ORDER IS A COMPLETELY NON-SPEAKING ORDE R. IN OUR VIEW, IT WAS A FIT CASE FOR THE LEARNED COMMISSIONE R TO EXERCISE HIS REVISIONAL JURISDICTION UNDER SECTION 263 WHICH HE RIGHTLY EXERCISED BY CANCELLING THE ASSESSMENT ORDER AND DI RECTING THE ASSESSING OFFICER TO PASS A FRESH ORDER CONSIDERIN G THE ISSUES RAISED BY THE CIT. IN OUR VIEW, THE ASSESSEE SHOULD HAVE NO IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 18 GRIEVANCE IN THE ACTION OF LEARNED COMMISSIONER IN EXERCISING THE JURISDICTION U/S. 263 OF THE IT ACT. 33. IT WAS HOWEVER CONTENDED BY THE LEARNED COUNSEL THA T THE ASSESSING OFFICER HAD TAKEN A POSSIBLE VIEW IN ACCE PTING THE RETURN OF THE ASSESSEE WITH REFERENCE TO EXPENDITU RE AND HENCE, THE COMMISSIONER WAS NOT JUSTIFIED IN ASSUMI NG THE REVISIONAL JURISDICTION UNDER SECTION 263. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE AFORESAID SUBMISSIO NS. AS ALREADY STATED EARLIER, AN ORDER BECOMES ERRONEOUS BECAUSE INQUIRIES, WHICH OUGHT TO HAVE BEEN MADE ON THE FAC TS OF THE CASE, WERE NOT MADE AND NOT BECAUSE THERE IS ANYTHI NG WRONG WITH THE ORDER IF ALL THE FACTS STATED OR THE CLAIM S MADE IN THE RETURN ARE ASSUMED TO BE CORRECT. THUS, IT IS MERE FAILURE ON THE PART OF THE ASSESSING OFFICER TO MAKE THE NECESSARY INQUIRIES OR TO EXAMINE THE CLAIM MADE BY THE ASSESSEE IN ACCORD ANCE WITH LAW, WHICH RENDERS THE RESULTANT ORDER ERRONEOUS AN D PREJUDICIAL TO THE INTEREST OF THE REVENUE. NOTHING MORE IS REQUIRED TO BE ESTABLISHED IN SUCH A CASE. ONE WOUL D NOT KNOW AS TO WHAT WOULD HAVE HAPPENED IF THE ASSESSING OFF ICER HAD MADE THE REQUISITE INQUIRIES OR EXAMINED THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW. HE COULD HAVE ACCE PTED THE ASSESSEE'S CLAIM. EQUALLY, HE COULD HAVE ALSO REJEC TED THE ASSESSEE'S CLAIM DEPENDING UPON THE RESULTS OF HIS ENQUIRY OR EXAMINATION INTO THE CLAIM OF THE ASSESSEE. THUS, T HE FORMATION OF ANY VIEW BY THE ASSESSING OFFICER WOULD NECESSAR ILY DEPEND UPON THE RESULTS OF HIS INQUIRY AND CONSCIOUS, AND NOT PASSIVE, EXAMINATION INTO THE CLAIM OF THE ASSESSEE. IF THE ASSESSING OFFICER PASSES AN ORDER MECHANICALLY WITHOUT MAKING THE REQUISITE INQUIRIES OR EXAMINING THE CLAIM OF THE A SSESSEE IN ACCORDANCE WITH LAW, SUCH AN ORDER WILL CLEARLY BE ERRONEOUS IN LAW AS IT WOULD NOT BE BASED ON OBJECTIVE CONSIDERA TION OF THE RELEVANT MATERIALS. IT IS THEREFORE, THE MERE FAILU RE ON THE PART OF IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 19 THE ASSESSING OFFICER IN NOT MAKING THE INQUIRIES O R NOT EXAMINING THE CLAIM OF THE ASSESSEE IN ACCORDANCE W ITH LAW THAT PER SE RENDERS THE RESULTANT ORDER ERRONEOUS AND PREJUDIC IAL TO THE INTEREST OF THE REVENUE. NOTHING ELSE IS REQUIR ED TO BE ESTABLISHED IN SUCH A CASE TO SHOW THAT THE ORDER S OUGHT TO BE REVISED IS ERRONEOUS AND PREJUDICIAL TO THE INTERES TS OF THE REVENUE. 34. WE ARE UNABLE TO ACCEPT THE SUBMISSION OF THE LEARN ED COUNSEL FOR TWO OTHER REASONS ALSO. FIRST REASON IS THAT THE VIEW SO TAKEN BY THE ASSESSING OFFICER WITHOUT MAKING TH E REQUISITE INQUIRIES OR EXAMINING THE CLAIM OF THE ASSESSEE WI LL PER SE BE AN ERRONEOUS VIEW AND HENCE WILL BE AMENABLE TO REV ISIONAL JURISDICTION UNDER SECTION 263. SECOND REASON IS TH AT IT IS NOT TAKING OF ANY VIEW ON THE IMPUGNED ISSUE THAT WILL TAKE THE MATTER UNDER THE SCOPE OF SECTION 263. THE VIEW TAK EN BY THE ASSESSING OFFICER SHOULD NOT BE A MERE VIEW IN VACU UM BUT A JUDICIAL VIEW. IT IS WELL ESTABLISHED THAT THE ASSE SSING OFFICER BEING A QUASI-JUDICIAL AUTHORITY CANNOT TAKE A VIEW , EITHER AGAINST OR IN FAVOUR OF THE ASSESSEE / REVENUE, WIT HOUT MAKING PROPER INQUIRIES AND WITHOUT PROPER EXAMINATION OF THE CLAIM MADE BY THE ASSESSEE IN THE LIGHT OF THE APPLICABLE LAW. AS ALREADY STATED EARLIER, WE ARE NOT ABLE TO APPRECIA TE ON WHAT MATERIAL WAS PLACED BEFORE THE ASSESSING OFFICER AT THE ASSESSMENT STAGE TO TAKE SUCH A VIEW. THE ASSESSEE HAS ALSO NOT BEEN ABLE TO LEAD ENOUGH EVIDENCE TO SHOW TO US THA T ANY INQUIRY WAS MADE BY THE ASSESSING OFFICER IN THIS R EGARD. THEREFORE MERE ALLEGATION THAT THE ASSESSING OFFICE R HAS TAKEN A VIEW IN THE MATTER WILL NOT PUT THE MATTER BEYOND T HE PURVIEW OF SECTION 263 UNLESS THE VIEW SO TAKEN BY THE ASSESSI NG OFFICER IS A JUDICIAL VIEW CONSCIOUSLY BASED UPON PROPER INQUI RIES AND APPRECIATION OF ALL THE RELEVANT FACTUAL AND LEGAL ASPECTS OF THE CASE. THE JUDICIAL VIEW TAKEN BY THE ASSESSING OFFI CER MAY IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 20 PERHAPS PLACE THE MATTER OUTSIDE THE PURVIEW OF SEC TION 263 UNLESS IT IS SHOWN THAT THE VIEW SO TAKEN BY THE AS SESSING OFFICER CONTAINS SOME APPARENT ERROR OF REASONING O R OF LAW OR OF FACT ON THE FACE OF IT. 35. BEING SO, THE ORDER OF THE ASSESSING OFFICER IS VER Y CRYPTIC IN NATURE. THERE IS NO DISCUSSION ON THE ISSUE RAI SED BY THE CIT. THE ASSESSING OFFICER ABSOLUTELY CLOSED HIS E YES ON THE IMPUGNED ISSUE AND COMPLETED THE ASSESSMENT WITHOUT MAKING PROPER ENQUIRY. BEING SO, THE CIT IS JUSTIFIED IN INVOKING THE JURISDICTION U/S. 263 OF THE ACT. HOWEVER, INSTEAD OF HIMSELF WITHDRAWING THE DEDUCTION U/S. 80IB OF THE ACT WHIC H WAS ORIGINALLY GRANTED TO THE ASSESSEE ON THE REASON TH AT THE CLAIM OF THE ASSESSEE IS WRONG, HE SHOULD HAVE DIRECTED T HE ASSESSING OFFICER FOR DETAILED ENQUIRY REGARDING THE DISCREPA NCY NOTICED BY HIM. THERE WAS NO PROPER ENQUIRY BY THE ASSESSING O FFICER. THE ISSUE REQUIRES IN-DEPTH ENQUIRY FROM THE END OF THE ASSESSING OFFICER. BEING SO, WE FEEL IT PROPER TO DIRECT THE ASSESSING OFFICER TO CAUSE DETAILED INVESTIGATION ON THE ISSU ES AS NOTICED BY THE CIT AND TO COME TO A FAIR CONCLUSION ON THE ISSUE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER. 36. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND FEBRUARY, 2013. SD/- (SAKTIJIT DEY) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 22 ND FEBRUARY, 2013 TPRAO IT A NO. 844/HYD/2011 M/S. PEETI REAL ESTATE PVT. LTD. ====================== 21 COPY FORWARDED TO: 1. M/S. PEETI REAL ESTATES PVT. LTD., 4 - 1 - 969/7, SURABHI SARDA BLOCK, AHUJA ESTATE, ABIDS, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD - 16(2), HYDERABAD. 3. THE CIT - I V , HYDERABAD. 4. THE J CIT , RANGE - 16 , HYDERABAD. 5. THE DR A BENCH, ITAT, HYDERABAD.