Smt. Usha Devi Modi, Kolkata V. I.T.O.,Ward-10(4), Kolkata

ITA 874/KOL/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8613 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-12-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 22-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S M SURANA
• Assessee Lawyers: IMOKABA JAMIR
• Keywords: Gift; Audit objection; Principle of natural justice; Earning of tax free income; Right to appeal; Revenue expenditure; Rule 8D; Set aside
• Section: 143(3); 142(1); 80HHC; 14A; 43; 13; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA A BENCH, KOLKATA (VIRTUAL COURT) (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S. S.GODARA, JUDICIAL MEMBER) I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI................................ ................................................... ..................APPELLANT [PAN: ADTPM 5364 K] VS. ITO, WARD-10(4), KOLKATA.................... ............................................RESPOND ENT APPEARANCES BY: SHRI S. M. SURANA, ADVOCATE, APPEARED ON BEHALF OF THE REVENUE. SH. IMOKABA JAMIR, CIT(DR), APPEARED ON BEHALF OF THE ASSESSEE. DATE OF CONCLUDING THE HEARING : DECEMBER 10 TH , 2020 DATE OF PRONOUNCING THE ORDER : JANUARY 12 TH , 2021 ORDER PER J. SUDHAKAR REDDY, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED A GAINST THE ORDER OF LD. PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKATA-4, KOLKATA (HER EINAFTER REFERRED TO AS THE PCIT) U/S 263 OF THE INCOME TAX ACT, 1961 (THE ACT), DA TED 12.02.2019, REVISING THE ASSESSMENT ORDER PASSED BY THE AO U/S 143(3) OF THE ACT DATED 16.11.2016 FOR THE ASSESSMENT YEAR 2014-15. 2. THE LD. PCIT ISSUED A SHOW CAUSE NOTICE U/S 263 OF THE ACT DATED 23.01.2019 PROPOSING TO REVISE THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT ON 16.11.2016. THE GROUND FOR REVISION READ AS FOLLOWS: DURING THE YEAR UNDER OBSERVATION THE ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN AMOUNTING TO RS. 20,49,788/- ON TRANSFER (SALE) OF EQUITY SHARES OF M/S SURABHI CHEMICALS AND INVESTMENTS LTD. SINCE, THE TRANSACTION WAS MAD E THROUGH THE BOMBAY STOCK EXCHANGE AND SECURITY TRANSACTION TAX (STT) HAS BEEN PAID ON SAID TRANSACTION, THE ASSESSEE CLAIMED THE LONG TERM CAPITAL GAIN FROM THE SAID TR ANSACTION AS EXEMPTED INCOME U/S 10(38) OF THE INCOME TAX ACT, 1961. BUT AS PER THE REPORT OF THE DIT(INV)., KOLKATA NOTE NO. F. NO. 75A/12015-161257 DATED 27.04.2015 THE IM PUGNED SCRIP HAS BEEN REPORTED TO BE A PENNY STOCK. MOREOVER, THE CBDT BY ISSUING AN ORDER NO. F. NO. 287/30-2014- 2 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI IT(INV.II)-VOL-III DATED 16.03.2016 DEBARRED FROM A LLOWING THE CAPITAL GAIN/LOSS AROUSING FROM SUCH TRANSACTION. THE ASSESSEE REPLIED THE SHOW CAUSE NOTICE THAT THE PURCHASE OF SHARE WAS MADE AT THE PREVAILING MARKET PRICE AND THAT THE PAYMENT MAD E BY ACCOUNT PAYEE CHEQUE AND THESE ARE REFLECTED IN THE BOOKS OF ACCOUNTS AND TH AT THE SHARES WERE ALSO SOLD THROUGH THE RECOGNISED STOCK BROKER THROUGH STOCK EXCHANGE AT THE PREVAILING MARKET RATE ON WHICH STT WAS CHARGED AND PAYMENT OF SALE PROCEED O F SHARES WAS RECEIVED THROUGH BANK TRANSFERS AND THAT THE SHARES WERE SOLD IN DEM AT FORM. 2.1. HE FURTHER SUBMITTED THAT THE AO ARE CALLED FO R AN EXAMINATION ALL THE DETAILS OF THE TRANSACTION AND ONLY AFTER BEING SATISFIED HAD ACCEPTED THE CLAIM OF THE ASSESSEE. HE SUBMITTED THAT THE LD. PCIT HAS NOT POINTED OUT AS TO WHAT WAS THE ERROR IN THE ORDER OF AO INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. 2.2. THE LD. PCIT PASSED AN ORDER U/S 263 OF THE AC T BY HOLDING AS FOLLOWS: A) THE AO HAS NOT EXAMINED / VERIFIED ALL THE DETAI LS OF THIS TRANSACTION. B) IT IS VERY CLEAR THAT THE LD. PR. DIT(INV)S REP ORT WAS NOT AVAILABLE ON RECORD OF THE AO AND THAT THE SAID COMPANY M/S SURABHI CHEMICALS AND INVESTMENT LTD. IS STATED TO BE A PENNY STOCK COMPANY AND ITS SHARE PRICE WAS SAID TO BE MANIPULATED. C) THE AO HAS FAILED ON THIS ISSUE AND HENCE THE O RDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. D) THIS IS A CASE OF LACK OF ENQUIRY. HE THEN DISCUSSED THE LEGAL POSITION AND THEREAFTER CONCLUDED AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSION MADE ON BEHALF OF THE ASSESSEE AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND FOUND THAT THE ISSUE POINTED OUT IN THE SHOW CAUSE NEEDS VERIFICATION AND THE AO FAILED TO EXAMINE THE ABOVE REFERRED ISSUE. AFTER HAVING CONSIDERED THE POSITION OF LAW AND FACTS AND CIRCUM STANCES OF THE INSTANT CASE, I AM OF THE CONSIDERED OPINION THAT THE ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE IN ACCORDANC E WITH THE EXPLANATION 2(C ) BELOW SECTION 263(1) OF THE ACT. ACCORDINGLY, THE ISSUE I S SET ASIDE TO THE TABLE OF AO ON SPECIFIC POINT MENTIONED IN PARA 2 ABOVE. THE AO IS DIRECTED TO PROVIDE REASONABLE OPPORTUNITY TO RELY UPON FOR SUBSTANTIATING ITS OWN CLAIM. THEREAF TER A FRESH ASSESSMENT ORDER MAY BE PASSED IN ACCORDANCE WITH THE RELEVANT PROVISIONS O F LAW. 3 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI 3. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON HIS S UBMISSION MADE BEFORE THE LD. PCIT DURING THE COURSE OF REPLY TO THE SHOW CAUSE N OTICE ISSUED U/S 263 OF THE ACT AND ALSO THE ARGUMENTS MADE BEFORE THE LD. PCIT. THE SUM & SUBSTANCE OF HIS ARGUMENTS ARE THE AO HAS CALLED FOR AND EXAMINED OF ALL THE D OCUMENTS AND EVIDENCES ON THE ABOVE TRANSACTION AND HAS COME TO A PLAUSIBLE CONCLUSION. SUCH CONCLUSION OF THE AO IS SUPPORTED BY NUMBER OF JUDICIAL DECISIONS INCLUDING THAT OF THE ITAT. HE RELIED ON THE DECISION OF CO-ORDINATION BENCH OF ITAT, KOLKATA IN THE CASE OF M/S GITSH TIKMANI, HUF & ORS. IN ITA NOS. 01 TO 04/KOL/2019, ITA NO. 05/KO L/2019 & ITA NOS. 13 TO 15/KOL/2019 DATED 20.09.2019 FOR AY 2014-15 AND THE DECISION OF CO-ORDINATE BENCH OF ITAT , KOLKATA IN THE CASE OF KAUSHAL KISHORE BI HANI IN ITA NO. 690/KOL/2019 DATED 19.10.2020 FOR AY 2014-15 AND SUBMITTED THAT THE ISS UE IS SQUARELY COVERED IN THE ASSESSEES FAVOUR. HE FILED A COPY OF ORDER OF THIS TRIBUNAL IN THE CASE OF SHASHI BALA BAJAJ VS. ITO, WARD-36(2), KOLKATA IN ITA NO. 1547/ KOL/2018 DATED 16.11.2018 FOR AY 2014-15 FOR THE PROPOSITION THAT THE PROFITS ON PU RCHASE AND SALE OF M/S SURBHI CHEMICALS AND INVESTMENT LTD. ARE ELIGIBLE FOR EXEM PTION U/S 10(38) OF THE ACT. 4. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF LD. PCIT AND SUBMITTED THAT THE ENTIRE LONG TERM CAPITAL GAIN DECLARED BY THE A SSESSEE WAS A BOGUS TRANSACTION AND HENCE THE REVISION HAS TO BE UPHELD. HE SUBMITTED T HAT LARGE SCALE RIGGING HAS TAKEN PLACE, WHERE, FAKE TRANSACTIONS WERE DECLARED, BOGU S TRANSACTION WERE SHOWN AND EXEMPTION CLAIMED U/S 10(38) OF THE ACT. HE SUBMITT ED THAT THE AO HAS NOT EXAMINED THE CASE FROM THIS ANGLE AND UNDER SUCH CIRCUMSTANC ES, THE ORDER OF THE AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF RE VENUE. HE PRAYED THAT THE ORDER OF THE PCIT PASSED U/S 263 OF THE ACT BE UPHELD. 5. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERA TION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD AND THE CASE LAW CITED, WE HOLD AS FOLLOWS. 6. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDI NGS HAS CALLED FOR THE FOLLOWING DETAILS ON THE ABOVE TRANSACTION OF SALE AND PURCHA SE OF SHARE OF M/S SURBHI CHEMICALS AND INVESTMENT LTD. DETAILS OF INVESTMENT IN EQUITY SHARES DURING THE YEAR UNDER CONSIDERATION 4 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI I) NAME & ADDRESS OF THE COMPANY IN WHICH INVESTMEN T IS MADE II) COPY OF ALLOTMENT LETTER III) COPY OF CONTRACT NOTE IN RESPECT OF QUOTED S HARES IV) DATE OF ALLOTMENT OF SHARES V) NO. OF SHARES VI) VALUE OF SHARES VII) SOURCE OF PAYMENT MADE FOR OBTAINING SHARES VIII) IN THIS REGARD, YOU ARE ALSO REQUESTED TO FUR NISH THE EVIDENCE OF MODE OF SUCH PAYMENT ALONGWITH THE DETAILS OF CHEQUE NUMBERS AND THE COPY OF BANK STATEMENT (FY2013- 14) HIGHLIGHTING THE RELEVANT ENTRIES THEREIN SHOWI NG THE TRANSACTION. 7. PLEASE FURNISH THE FOLLOWING DETAILS IN RESPECT OF LONG TERM CAPITAL GAIN I) NAME OF SCRIP II) DATE OF PURCHASE III) QUANTITY IV) RATE V) MODE OF PAYMENT VI) DATE OF SALE VII) QUANTITY SOLD VIII) RATE IX) DATE OF SALE X) AMOUNT OF DIVIDEND XI) STT PAID XII) L. T. CAPITAL GAIN XIII) COPY OF BROKERS CONTRACT NOTE IN THIS REGARD, YOU ARE ALSO REQUESTED TO FURNISH T HE EVIDENCE OF MODE OF SUCH PAYMENT ALONG WITH THE DETAILS OF CHEQUE NUMBERS AND THE CO PY OF BANK STATEMENT (FY 2013-14) HIGHLIGHTING THE RELEVANT ENTRIES THEREIN SHOWING T HE TRANSACTION. THE ASSESSEE HAS FURNISHED ALL THESE DOCUMENTS CALL ED FOR AND AFTER CONSIDERING THE SAME THE AO ACCEPTED THE CLAIM OF THE ASSESSEE EXEM PTION U/S 10(38) OF THE ACT AS THE PROFITS EARNED FROM PURCHASE AND SALE OF TRANSFER. NOTHING ADVERSE WAS FOUND BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. EVEN THE LD. PCIT, EXCEPT THE ALLEGED REPORT OF DIT(INV), KOLKATA NO FRESH EVIDENCE WAS R EFERRED TO. THIS REPORT OF DIT(INV), KOLKATA VIDE NOTE NO. 75A/12015-161257 DATED 27.04. 2015 IS NOT BROUGHT ON RECORD. THE PCIT SIMILARLY STATES THAT THERE IS A REPORT OF THE DIT(INV) KOLKATA AND HENCE THE ASSESSMENT ORDER IS ERRONEROUS. THE ISSUE IS WHETHE R THE ASSESSMENT ORDER SO PASSED IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTE REST OF REVENUE. THIS IS NOT THE CASE OF LACK OF ENQUIRY AS ALLEGED LD. PCIT. IN FACT ENQUI RY WAS CONDUCTED BY THE O AFTER OBTAINING ALL REQUIRED DETAILS. THE LD. PCIT HIMSEL F SAID THAT REPORT OF DIT(INV), KOLKATA WAS NOT BEFORE THE AO. THUS, THE ORDER PASSED BY THE AO BY TAKING INTO ACCOUNT A DOCUMENT OR INFORMATION WHICH IS NOT BEFORE HIM AND BASED ON THE ENQUIRY AND 5 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI DOCUMENTS BEFORE HIM IN A POSSIBLE VIEW AND THE ASS ESSMENT ORDER AND CANNOT BE HELD TO BE ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 7, RELYING ON THE DECISION OF M/S GITSH TIKMANI(HUF ) & ORS. SUPRA UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE ITAT WAS HELD AS FOLLO WS: 8. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO R IVAL CONTENTIONS. THE SOLE ISSUE THAT ARISES FOR OUR APT ADJUDICATION IN FACTS OF INSTANT CASE IS AS TO WHETHER THE PCIT HAS RIGHTLY EXERCISED HIS REVISION JURISDICTION VESTED U/S 263 OR NOT. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER ACCEPTED THE ASSESSEES LTCG AS G ENUINE AS PER HIS DISCUSSION IN THE ASSESSMENT ORDER THAT HE HAD VERIFIED ALL NECESSARY FACTS DURING THE COURSE OF SCRUTINY. SUFFICE TO SAY, THE SAME FACT VERY MUCH EMERGES NOT ONLY FROM ASSESSEES DET AILED PAPER BOOK RUNNING INTO 98 PAGES BUT ALSO FROM THE RELEVA NT ASSESSMENT NOTINGS FORMING PART OF RECORD (SUPRA). THIS TRIBUNALS CO-ORDINATE BENCHS DECISION IN CASE OF M/S SAREGAMA INDIA LTD. VS. CIT-1, KOLKATA ITA NO.1254/KOL/2014 DECIDE D ON 20.09.2017 HAS REITERATED THE FOLLOWING SETTLED PRINCIPLES IN CASE OF SEC. 263 RE VISION JURISDICTION:- 11. NOW WE SHALL DISCUSS THE PROPOSITIONS OF LAW A S LAID DOWN BY VARIOUS COURTS ON THE ISSUE OF REVISIONARY JURISDICTION OF THE COMMIS SIONER OF INCOME TAX U/S 263 OF THE ACT. THE HONEBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SPECTRA SHARES AND SCRIPS PVT. LTD. V CIT (AP) 354 ITR 35 HAD CONSIDER ED A NUMBER OF JUDGMENTS ON THIS ISSUE OF EXERCISE OF JURISDICITON U/S 263 OF THE AC T BY THE PRINCIPAL COMMISSIONER OF INCOME TAX AND CULLED OUT THE PRINCIPLES LAID DOWN IN THE JUDGMENTS AS BELOW: 24. IN MALABAR INDUSTRIAL CO.LTD. ( 2 SUPRA), THE S UPREME COURT HELD THAT A BARE READING OF SEC.263 MAKES IT CLEAR THAT THE PREREQUI SITE FOR THE EXERCISE OF JURISDICTION BY THE COMMISSIONER SUO MOTU UNDER IT, IS THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS 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 ORDER 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 TO THE INTERESTS OF THE RE VENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE A SSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSI NG OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EX AMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND I T 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 BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. IT HAS BEEN HELD B Y THIS COURT THAT WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HIS HAN DS 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. RAMPYA RIDEVI SARAOGI V. CIT (1968) 67 ITR 84 (SC) AND IN SMT. TARA DEVI AGGARWAL V. CIT (1973 ) 88 ITR 323 (SC)'. 6 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI 25. IN MAX INDIA LTD. (3 SUPRA), REITERATED THE VIE W IN MALABAR INDUSTRIAL 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 INTERESTS OF THE REVENUE. FOR EXAMPLE, WHEN AN INCOME TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE; OR WHERE TW O VIEWS ARE POSSIBLE AND THE INCOME TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH TH E COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDIC IAL 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 INT ERPRETED BY THE ASSESSING 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 CORRE CT IN INVOKING SEC.263. BUT THE SUPREME COURT REJECTED THE SAID CONTENTION AND HELD THAT WHEN THE COMMISSIONER PASSED HIS ORDER DISAGREEING WITH THE VIEW OF THE A SSESSING OFFICER, THERE WERE TWO VIEWS ON THE WORD 'PROFITS' IN THAT SECTION; THAT T HE SAID SECTION WAS AMENDED ELEVEN TIMES; THAT DIFFERENT 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 THEREF ORE, THE SUBSEQUENT AMENDMENT IN 2005 EVEN THOUGH RETROSPECTIVE WILL NOT ATTRACT THE PROVISION OF SEC.263. 26. IN VIKAS POLYMERS (4 SUPRA), THE DELHI HIGH COURT HELD THAT THE POWER OF SUO MOTU REVISION EXERCISABLE BY THE COMMISSIONER UNDER THE PROVISIONS OF SEC.263 IS SUPERVISORY IN NATURE; THAT AN 'ERRONEOUS JUDGMENT' 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 BRAN DED AS 'ERRONEOUS' BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN DIFFERENTLY OR MORE ELABORATELY; THAT THE SECTION D OES NOT VISUALIZE THE SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE IN COME TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISION IS NOT IN ACCORDANCE WITH THE LAW; THAT TO INVOKE SUO MOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESS MENT UNDER SEC.263, THE COMMISSIONER MUST GIVE REASONS; THAT A BARE REITERA TION 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 ENHANCEMENT OR MODIFICATION OF THE ASSESSMENT OR CA NCELLATION OF THE ASSESSMENT OR DIRECTIONS ISSUED FOR A FRESH ASSESSMENT WERE CALLE D FOR, AND MUST IRRESISTIBLY LEAD TO THE CONCLUSION THAT THE ORDER OF THE INCOME TAX OFF ICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. TH US, WHILE THE INCOME TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVI NG DETAILED REASONS IN RESPECT OF EACH AND EVERY DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLE SS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE ASSESSING OFFICER, WHICH WAS ANSWERED TO THE SATISF ACTION 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. 27. IN 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 WHETHE R 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 G IVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE 7 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI 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 T AX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, AC CORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY; THERE MU ST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT THE TAX WHICH WAS LAWFULLY E XIGIBLE 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, HA S 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 O FFICER THAT EXPENDITURE ON TOOLS AND DIES BY THE ASSESSEE, A MANUFACTURER OF CAR PAR TS, IS REVENUE EXPENDITURE WHERE THE SAID CLAIM WAS ALLOWED BY THE LATTER ON BEING S ATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND WHERE THE SAME ACCOUNTING PRACTICE FOLLOWED BY THE ASSESSEE FOR NUMBER OF YEARS WITH THE APPROVAL 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 ELABORATE DISCUSSION IN T HAT REGARD, HIS ORDER CANNOT BE TERMED AS ERRONEOUS. THE OPINION OF THE ASSESSING O FFICER IS ONE OF THE POSSIBLE VIEWS AND THERE WAS NO MATERIAL BEFORE THE COMMISSIONER T O VARY THAT OPINION AND ASK FOR FRESH INQUIRY. 28. IN GABRIEL INDIA LTD. (6 SUPRA), THE BOMBAY HIG H COURT HELD THAT A CONSIDERATION OF THE COMMISSIONER AS TO WHETHER AN ORDER IS ERRON EOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, MUST BE BASED ON M ATERIALS ON THE RECORD OF THE PROCEEDINGS CALLED FOR BY HIM. IF THERE ARE NO MATE RIALS ON RECORD ON THE BASIS OF WHICH IT CAN BE SAID THAT THE COMMISSIONER ACTING I N A REASONABLE MANNER COULD HAVE COME TO SUCH A CONCLUSION, THE VERY INITIATION OF PROCEEDINGS BY HIM WILL BE ILLEGAL AND WITHOUT JURISDICTION. 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 CA NNOT BE PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF NEW VIEWS THEY ENTERTAI N 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 INGENUITY IS EX HAUSTED; THAT TO DO SO IS TO DIVIDE ONE ARGUMENT INTO TWO AND MULTIPLY THE LITIG ATION. IT HELD THAT CASES MAY BE VISUALIZED WHERE THE INCOME TAX OFFICER WHILE MAKIN G 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 CONCE RNED WAS ON THE LOWER SIDE AND LEFT TO THE COMMISSIONER HE WOULD HAVE ESTIMATED TH E INCOME AT A FIGURE HIGHER THAN THE ONE DETERMINED BY THE INCOME TAX OFFICER; BUT T HAT WOULD NOT VEST THE COMMISSIONER WITH POWER TO REEXAMINE THE ACCOUNTS A ND DETERMINE THE INCOME HIMSELF 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. OTHERW ISE, IT WOULD AMOUNT TO GIVING UNBRIDLED AND ARBITRARY POWER TO THE REVISING AUTHO RITY TO INITIATE PROCEEDINGS FOR REVISION IN EVERY CASE AND START RE-EXAMINATION AND FRESH INQUIRY IN MATTERS WHICH HAVE ALREADY BEEN CONCLUDED UNDER LAW. 29. IN M.S. RAJU (15 SUPRA), THIS COURT HAS HELD TH AT THE POWER OF THE COMMISSIONER UNDER SEC.263(1) IS NOT LIMITED ONLY TO THE MATERIA L WHICH WAS AVAILABLE BEFORE THE 8 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI ASSESSING OFFICER AND, IN ORDER TO PROTECT THE INTE RESTS OF THE REVENUE, THE COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECOR DS WHICH ARE AVAILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDE RATION EVEN THOSE EVENTS WHICH AROSE SUBSEQUENT TO THE ORDER OF ASSESSMENT. 30. IN RAMPYARI DEVI SARAOGI (21 SUPRA), THE COMMIS SIONER IN EXERCISE OF REVISIONAL POWERS CANCELLED ASSESSEES ASSESSMENT FOR THE YEAR S 1952-1953 TO 1960-61 BECAUSE HE FOUND THAT THE INCOME TAX OFFICER WAS NOT JUSTIF IED 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 IN COME TAX OFFICER TO DO FRESH ASSESSMENT AFTER MAKING PROPER ENQUIRY AND INVESTIG ATION IN REGARD TO THE JURISDICTION. THE ASSESSEE COMPLAINED BEFORE THE SUP REME COURT THAT NO FAIR OR REASONABLE OPPORTUNITY WAS GIVEN TO HER. SUPREME CO URT HELD THAT THERE WAS AMPLE MATERIAL TO SHOW THAT THE INCOME TAX OFFICER MADE T HE 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 -JUDICIAL TO THE INTEREST OF THE REVENUE; AND NO PREJUDICE WAS CAUSED TO THE ASSESSE E 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 OF FICER WHETHER HE HAD JURISDICTION OR NOT AND WHETHER THE INCOME TAX ASSESSED IN THE A SSESSMENT YEARS WHICH WERE ORIGINALLY PASSED WERE CORRECT OR NOT' 31. FROM THE ABOVE DECISIONS, THE FOLLOWING PRINCIP LES AS TO EXERCISE OF JURISDICTION BY THE COMMISSIONER U/S.263 OF THE ACT CAN BE CULLED O UT: A) THE COMMISSIONER HAS TO BE SATISFIED OF TWIN CON DITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRON EOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ERRONEOUS BUT IS NOT P REJUDICIAL 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 ORD ER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. FOR EXAMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMI SSIBLE 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 BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. C) TO INVOKE SUO MOTU 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 THE REVENUE, WILL NOT SUFFICE; THAT TH E REASONS MUST BE SUCH AS TO SHOW THAT THE AND MUST IRRESISTIBLY LEAD TO THE CONCLUSI ON 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 UP ON TO WRITE AN ELABORATE JUDGMENT GIVING DETAILED REASONS IN RESPECT OF EACH AND EVER Y DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE 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 9 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT B Y ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED FOR INTER FERENCE AND REVISION. E) THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WIT H A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALR EADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIG ATION BECAUSE OF NEW VIEWS THEY ENTERTAIN ON FACTS OR NEW CIRCUMSTANCE; THAT IF THI S IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTE D F) WHETHER THERE WAS APPLICATION OF MIND BEFORE AL LOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN INQUI RY, 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; T HAT 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 ERRO NEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY; THERE MUST BE SOME PRIMA FACIE MATERIA L 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 INTE RPRETATION, 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 WH ICH AROSE SUBSEQUENT TO THE ORDER OF ASSESSMENT. WE NOW EXAMINE THE FOLLOWING J UDGMENTS ON THIS ISSUE:- DIRECTOR OF INCOME TAX VS. JYOTI FOUNDATION 357 ITR 388 (DELHI HIGH COURT) IT WAS HELD THAT REVISIONARY POWER U/S 263 IS CONFERRE D ON THE COMMISSIONER/DIRECTOR OF INCOME TAX WHEN AN ORDER PASSED BY THE LOWER AUT HORITY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ORDERS WHICH ARE PASSED WITHOUT INQUIRY OR INVESTIGATION ARE TREATED AS ERRONEOUS AND PREJUDIC IAL TO THE INTEREST OF THE REVENUE, BUT ORDERS WHICH ARE PASSED AFTER INQUIRY/INVESTIGA TION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED AS ERRONEOUS AND PREJUDI CIAL TO THE INTEREST OF THE REVENUE BECAUSE THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUIRED OR DEEPER OR FURTHER SCRUTINY SHOULD B E UNDERTAKEN. INCOME TAX OFFICER VS. DG HOUSING PROJECTS LTD343 ITR 329 (DELHI) REVENUE DOES NOT HAVE ANY RIGHT TO APPEAL TO THE FIRST APPE LLATE AUTHORITY AGAINST AN ORDER PASSED BY THE ASSESSING OFFICER. S. 263 HAS BEEN EN ACTED TO EMPOWER THE CIT TO EXERCISE POWER OF REVISION AND REVISE ANY ORDER PAS SED BY THE ASSESSING OFFICER, IF TWO CUMULATIVE CONDITIONS ARE SATISFIED. FIRSTLY, T HE 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 TERM 'ERRON EOUS' MEANS A WRONG/INCORRECT DECISION DEVIATING FROM LAW. THIS EXPRESSION POSTUL ATES AN ERROR WHICH MAKES AN ORDER UNSUSTAINABLE IN LAW. THE ASSESSING OFFICER I S BOTH AN INVESTIGATOR AND AN ADJUDICATOR. IF THE ASSESSING OFFICER AS AN ADJUDIC ATOR 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 REQUIRED TO BE EXAMINED AND VERIFIED TO COMPUTE THE TAXABLE INCOME. IF THE ASSE SSING OFFICER FAILS TO CONDUCT THE SAID INVESTIGATION, HE COMMITS AN ERROR AND THE WOR D 'ERRONEOUS' INCLUDES FAILURE TO 10 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI MAKE THE ENQUIRY. IN SUCH CASES, THE ORDER BECOMES ERRONEOUS BECAUSE ENQUIRY OR VERIFICATION HAS NOT BEEN MADE AND NOT BECAUSE A WR ONG 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 CONDUCTING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY, BEFOR E THE ORDER UNDER S. 263 IS PASSED. IN SUCH CASES, THE ORDER OF THE ASSESSING OFFICER W ILL BE ERRONEOUS BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW AND THE SAID FINDI NG MUST BE RECORDED. CIT CANNOT REMAND THE MATTER TO THE ASSESSING OFFICER TO DECID E WHETHER THE FINDINGS RECORDED ARE ERRONEOUS. IN CASES WHERE THERE IS INADEQUATE E NQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT T HE ORDER/INQUIRY MADE IS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFI CATION IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTA KE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASE S POSSIBLY THOUGH RARELY, THE CIT CAN ALSO SHOW AND ESTABLISH THAT THE FACTS ON RECOR D OR INFERENCES DRAWN FROM FACTS ON RECORD PER SE JUSTIFIED AND MANDATED FURTHER ENQ UIRY OR INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN TH E SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, UNAMBIGUOUS AND NOT DEBATABL E. THE MATTER CANNOT BE REMITTED FOR A FRESH DECISION TO THE ASSESSING OFFI CER TO CONDUCT FURTHER ENQUIRIES WITHOUT A FINDING THAT THE ORDER IS ERRONEOUS. FIND ING THAT THE ORDER IS ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFIED FO R EXERCISE OF JURISDICTION UNDER S. 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATT ER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY AND MEAN THE CIT HAS NOT EXAMINED AND D ECIDED WHETHER OR NOT THE ORDER IS ERRONEOUS BUT HAS DIRECTED THE ASSESSING O FFICER TO DECIDE THE ASPECT/QUESTION. THIS DISTINCTION MUST BE KEPT IN M IND BY THE CIT WHILE EXERCISING JURISDICTION UNDER S. 263 OF THE ACT AND IN THE ABS ENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E, EXERCISE OF JURISDICTION UNDER THE SAID SECTION IS NOT SUSTAINABLE. IN MOST CASES OF ALLEGED 'INADEQUATE INVESTIGATION', IT WILL BE DIFFICULT TO HOLD THAT T HE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTI GATOR, IS ERRONEOUS, WITHOUT CIT CONDUCTING VERIFICATION/INQUIRY. THE ORDER OF THE A SSESSING 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 ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS R EASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECOME ERRONEOUS BECAUSE ON REMIT, T HE ASSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFT ER 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 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 TIM E 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 (INDI A) LTD. 366 ITR AS REGARD THE SUBMISSION ON BEHALF OF THE REVENUE THAT POWER UNDER SECTION 263 OF THE ACT CAN BE EXERCISED EVEN IN A CASE WHERE THE ISSUE IS DEBA TABLE, 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 O F THE ACT EVEN IN A CASE WERE THE ISSUE IS DEBATABLE WAS A MERE PASSING REMARK WH ICH IS AGAIN CONTRARY TO THE VIEW 11 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI TAKEN BY THE APEX COURT IN THE CASE OF MALABAR INDU STRIAL 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 ASSE SSING OFFICER IN THAT CASE CAN BE SET ASIDE IN REVISION. IT HAS TO BE SHOWN UNMISTAKA BLY THAT THE ORDER OF THE ASSESSING OFFICER IS UNSUSTAINABLE. ANYTHING SHORT OF THAT WO ULD 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. RAISO N INDUSTRIES LTD. REPORTED IN 288 ITR 322 (SC), NOT APPLICABLE; MALABAR INDUSTRIAL CO . LTD. V. CIT REPORTED IN 243 ITR 83, RELIED ON. (PARA 72) AS REGARD THE THIRD QUESTION A S TO WHETHER THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICA TION OF MIND, IT WAS HELD THAT THE COURT HAS TO START WITH THE PRESUMPTION THAT THE AS SESSMENT ORDER WAS REGULARLY PASSED. THERE IS EVIDENCE TO SHOW THAT THE ASSESSIN G OFFICER HAD REQUIRED THE ASSESSEE TO ANSWER 17 QUESTIONS AND TO FILE DOCUMEN TS IN REGARD THERETO. IT IS DIFFICULT TO PROCEED ON THE BASIS THAT THE 17 QUESTIONS RAISE D BY HIM DID NOT REQUIRE APPLICATION OF MIND. WITHOUT APPLICATION OF MIND TH E 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 R ETURN FILED BY THE ASSESSEE IN ORDER TO ASCERTAIN HIS INCOME AND TO LEVY APPROPRIA TE TAX ON THAT BASIS. WHEN THE ASSESSING OFFICER WAS SATISFIED THAT THE RETURN, FI LED 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 OFFICER BY HIS ORDER DATED 28TH MARCH, 2008 DID NOT ADVERSELY AFFECT ANY RIGHT OF THE ASSE SSEE NOR WAS ANY CIVIL RIGHT OF THE ASSESSEE PREJUDICED. HE WAS AS SUCH UNDER NO OBLIGA TION IN LAW TO GIVE REASONS. THE FACT, THAT ALL REQUISITE PAPERS WERE SUMMONED AND T HEREAFTER THE MATTER WAS HEARD FROM TIME TO TIME COUPLED WITH THE FACT THAT THE VI EW 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 PRESUMPTI ON 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 PR OOF OF THE FACT THAT THE ORDER WAS PASSED BY THE ASSESSING OFFICER AFTER DUE APPLICATI ON 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 O F INDIA, AIR 1990 SC 1984; A. A. DOSHI VS. JCIT, 256 ITR 685; HINDUSTHAN TIN WORKS L TD. VS. CIT, 275 ITR 43 (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 T HAT JURISDICTION THEREUNDER CAN BE EXERCISED IF THE CIT FINDS THAT THE ORDER OF THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. MERE AUDIT OBJECTION AND M ERELY BECAUSE A DIFFERENT VIEW COULD BE TAKEN, WERE NOT ENOUGH TO SAY THAT THE ORD ER OF THE AO WAS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE JUR ISDICTION COULD BE EXERCISED IF THE CIT WAS SATISFIED THAT THE BASIS FOR EXERCISE OF JU RISDICTION EXISTED. NO RIGID RULE COULD BE LAID DOWN ABOUT THE SITUATION WHEN THE JURISDICT ION 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 SA LE 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 INVOKI NG JURISDICTION UNDER S. 263. COMMISSIONER OF INCOME TAX VS. LEISURE WEAR EXPORTS LTD. 341 ITR 166 (DEL) THE PREREQUISITE TO THE EXERCISE OF SUO MOTU JURISD ICTION UNDER S. 263 BY THE CIT IS 12 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI THAT THE ORDER OF THE AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. TWO CONDITIONS ARE TO BE SATISFIED, NAMELY , (I) THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) THE ERROR COMMITT ED BY THE AO IN THE ORDER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. BOTH TH ESE CONDITIONS ARE TO BE SATISFIED SIMULTANEOUSLY. IT IS ALSO WELL-SETTLED PRINCIPLE T HAT PROVISIONS OF S. 263 WOULD NOT BE INVOKED MERELY TO CORRECT A MISTAKE OR ERROR COMMIT TED BY THE AO UNLESS IT HAS CAUSED PREJUDICE TO THE INTEREST OF THE REVENUE. IF AN ORDER IS BASED ON INCORRECT ASSUMPTION OF FACTS OR ON INCORRECT APPLICATION OF LAW OR WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE AND WITHOUT APPLICATI ON OF MIND, IT WOULD BE TREATED AS ERRONEOUS. LIKEWISE, THE EXPRESSION 'PREJUDICIAL TO THE INTEREST OF THE REVENUE' IS OF WIDE IMPORT AND IS NOT CONFINED TO LOSS OF TAX. IF DUE TO AN ERRONEOUS ORDER OF THE AO THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PER SON, IT WOULD BE CERTAINLY PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE POW ER OF REVISION IS NOT MEANT TO BE EXERCISED FOR THE PURPOSE OF DIRECTING THE AO TO HO LD ANOTHER INVESTIGATION WITHOUT DESCRIBING AS TO HOW THE ORDER OF THE AO IS ERRONEO US. FROM THIS IT ALSO FOLLOWS THAT WHERE THE ASSESSMENT ORDER HAS BEEN PASSED BY THE A O AFTER TAKING INTO ACCOUNT THE ASSESSEE'S SUBMISSIONS AND DOCUMENTS FURNISHED BY H IM AND NO MATERIAL WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE CIT WHICH SHOWED THAT THERE WAS ANY DISCREPANCY OR FALSITY IN EVIDENCES FURNISHED BY THE ASSESSEE, THE ORDER OF THE AO CANNOT BE SET ASIDE FOR MAKING DEEP INQUIRY ONLY ON THE PRESUMPTI ON AND ASSUMPTION THAT SOMETHING NEW MAY COME OUT. FOR MAKING A VALID ORDE R UNDER S. 263 IT IS ESSENTIAL THAT THE CIT HAS TO RECORD AN EXPRESS FINDING TO TH E EFFECT THAT ORDER PASSED BY THE AO IS ERRONEOUS WHICH HAS CAUSED LOSS TO THE REVENU E. FURTHERMORE, WHERE ACTING IN ACCORDANCE WITH LAW THE AO FRAMES CERTAIN ASSESSMEN T ORDER, SAME CANNOT BE BRANDED AS ERRONEOUS SIMPLY BECAUSE ACCORDING TO TH E CIT, THE ORDER SHOULD BE WRITTEN MORE ELABORATELY.MALABAR INDUSTRIAL CO. LT D. VS. CIT (2000) 159 CTR (SC) 1 : (2000) 243 ITR 83 (SC), GEE VEE ENTERPRISES VS. ADD L. CIT 1975 CTR (DEL) 61 : (1975) 99 ITR 375 (DEL), CIT VS. SESHASAYEE PAPER & BOARDS LTD. (2000) 242 ITR 490 (MAD), CWT VS. PRITHVI RAJ & CO. (1991) 98 CTR (DEL) 216 : (1993) 199 ITR 424 (DEL) AND J.P. SRIVASTAVA& SONS (KANPUR) LTD. VS. CIT (1978) 111 I TR 326 (ALL) RELIED ON. (PARAS 6 & 7) IN THE ENTIRE ORDER EMPHASIS LAID BY THE CIT IS THAT IN RESPECT OF FOUR ISSUES MENTIONED BY HIM, NO QUERIES WERE RAISED BY THE AO. ON THIS PREMISE, THOUGH IT IS OBSERVED THAT THERE WAS NO APPLICATION OF MIN D ON THE PART OF THE AO AND THE AO HAS NOT RECORDED ANY REASONS TO JUSTIFY THE OMISSIO N TO CONSIDER THE SAID FACTS, THE CIT DOES NOT TAKE THE SAID ORDER TO ITS LOGICAL CON CLUSION WHICH WAS THE PRIME DUTY OF THE CIT IN ORDER TO JUSTIFY EXERCISE OF POWER UNDER S. 263. THERE IS NOT EVEN A WHISPER THAT THE ORDER IS ERRONEOUS. EVEN IF IT IS INFERRED THAT NON-CONSIDERATION OF THE ISSUES POINTED OUT BY THE CIT WOULD AMOUNT TO AN ERRONEOUS ORDER, IT IS NOT STATED AS TO HOW THIS ORDER IS PREJUDICIAL TO THE INTEREST OF TH E REVENUE. THE PENULTIMATE PARAS OF THE ORDER, AT BEST, CONTAIN THE OBSERVATIONS THAT T HE AO WAS SATISFIED WITH MAKING FLIMSY ADDITIONS WHICH WERE DELETED BY THE CIT(A). THERE IS NOT A WHISPER AS TO HOW THIS ORDER WAS PREJUDICIAL TO THE INTEREST OF THE R EVENUE. THAT APART, THE APPROACH OF THE TRIBUNAL IN DISCARDING THE OBSERVATION OF THE C IT ABOUT NOT MAKING PROPER INQUIRIES IN RESPECT OF THE SAID FOUR ISSUES IS ALS O JUSTIFIED AND WITHOUT BLEMISH. (PARAS 12 TO 14) FIRST COMMENT OF THE CIT WAS IN R ESPECT OF FINISHED GOODS IN THE CLOSING STOCK. THE CIT FOUND THAT THESE WERE TO THE TUNE OF RS. 5.28 CRORES. ACCORDING TO THE CIT, WHEN THE TOTAL TURNOVER OF THE ASSESSEE WAS RS. 6.13 CRORES, THE AO SHOULD HAVE SATISFIED HIMSELF BY CALLING FOR MORE DETAILS AS TO HOW THERE WAS CLOSING STOCK OF SUCH A MAGNITUDE OF RS. 5.28 CRORES. THUS, THE CIT HAS NOT DOUBTED THE STATEMENT OF 13 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI FINISHED GOODS IN THE CLOSING STOCK FURNISHED BY TH E ASSESSEE. HE HAS ONLY REMARKED THAT THERE SHOULD HAVE BEEN A DEEPER PROBE BY CALLI NG FOR MORE DETAILS. THIS IS NEITHER HERE NOR THERE, WHEN ONE KEEPS IN VIEW THE INGREDIENTS OF S. 263. (PARA 15) INSOFAR AS THE INSURANCE CLAIM IS CONCERN ED, THE CIT OBSERVED THAT THE ASSESSEE HAD SHOWN RECEIVABLE ON THIS ACCOUNT TO TH E TUNE OF RS. 1.21 CRORES BUT NO DETAILS HAD BEEN FURNISHED. THE AO HAD ALSO NOT MAD E ANY INQUIRIES. IN THE DETAILED DISCUSSION ON THIS ASPECT, THE TRIBUNAL HAS OBSERVE D THAT INSURANCE CLAIM WAS LODGED FOR THE GOODS LOST IN TRANSIT. THE ASSESSEE AT THAT TIME HAD MERELY FILED A CLAIM WITH THE INSURANCE COMPANY. THIS CLAIM HAD NOT BEEN APPR OVED AS THE INSURANCE COMPANY HAD NEITHER ACCEPTED THE SAME NOR GIVEN ANY ASSURAN CE FOR MAKING PAYMENT. THEREFORE, NO INCOME HAD 'ACCRUED' WHICH COULD BE T AXED. THE TRIBUNAL RIGHTLY HELD THAT ORDINARILY THE INCOME IS SAID TO HAVE ACCRUED TO A PERSON WHEN HE ACQUIRES THE RIGHT TO INCOME AND THIS SHOULD BE ENFORCEABLE RIGH T, THOUGH ACTUAL QUANTIFICATION OR RECEIPT MAY FOLLOW IN DUE COURSE. THE MERE CLAIM TO INCOME WITHOUT ANY ENFORCEABLE RIGHT CANNOT BE REGARDED AS AN ACCRUED INCOME FOR T HE PURPOSE OF IT ACT. (PARA 16) COMING TO THE CLAIM UNDER S. 80HHC, IT W AS TOTALLY UNCALLED FOR ON THE PART OF THE CIT TO SAY THAT THE AO DID NOT MAKE REQUISIT E INQUIRIES BECAUSE OF THE SIMPLE REASON THAT THE AO HAD, IN FACT, DECLINED AND REJEC TED THIS CLAIM OF THE ASSESSEE. IF THE AO HIMSELF DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE ON THIS ACCOUNT UNDER S. 80HHC, ONE FAILS TO UNDERSTAND WHAT FURTHE R INQUIRIES WERE NEEDED BY THE AO. (PARA 17) LASTLY, THE OBSERVATIONS OF THE CIT ARE IN RESPECT OF THE INCOME OF RS. 1.61 CRORES SHOWN BY THE ASSESSEE ON ACCOUNT OF VARIATIO N IN EXCHANGE RATE. THE CIT HAS ONLY OBSERVED THAT IN THE IMMEDIATE PREVIOUS YEAR N O SUCH GAIN WAS SHOWN AND THEREFORE, IT NEEDED EXAMINATION BY THE AO. HOWEVER , THE MOOT QUESTION WOULD BE EXAMINATION FOR WHAT PURPOSE ? IT IS AN INCOME SHOW N BY THE ASSESSEE. WHETHER THE CIT WAS OF THE OPINION THAT THERE WAS NO SUCH INCOM E OR HE WAS NURTURING AN IMPRESSION THAT INCOME ON THIS ACCOUNT AS SHOWN WAS LESSER ? THERE IS NO SUCH INDICATION IN THE ORDER. THE CIT ALSO DOES NOT AT A LL STATE AS TO WHAT WAS THE REASON FOR DOUBTING THE INCOME OFFERED BY THE ASSESSEE. EV EN IF IT IS FOUND THAT PART OF SUCH INCOME WAS CLAIMED AS DEDUCTION UNDER S. 80HHC, NO BENEFIT ENURED TO THE ASSESSEE ON THIS ACCOUNT AS CLAIM UNDER S. 80HHC WAS FULLY D ISALLOWED BY THE AO. IT IS NOT AT ALL OBSERVED AS TO HOW THE ORDER OF THE AO ON THIS ACCOUNT WAS ERRONEOUS AND FURTHER AS TO HOW IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THUS, ORDER OF THE CIT WAS RIGHTLY SET ASIDE BY THE TRIBUNAL. IN THE CASE ON H AND THE LD. CIT FINDS FAULT WITH THE AO FOR NOT INVOKING RULE 8D WHILE MAKING DISALLOWAN CE U/S 14A. THE HONBLE DELHI HIGH COURT IN THE CASE OF MAXOP INVESTMENTS LTD. VS CIT (SUPRA) HELD THAT THE AO CANNOT PROCEED TO DETERMINE THE AMOUNT OF EXPENDITU RE INCURRED IN RELATION TO EXEMPT INCOME WITHOUT RECORDING A FINDING THAT HE I S NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE. THIS IS A CONDITION PRECEDENT WHILE REJECTING THE CLAIM OF THE ASSESSEE, WITH REGARD TO INCURRING OF EXPENDITURE OR NO EXPENDITURE IN RELATION TO EXEMPT INCOME. THE AO WILL HAVE TO I NDICATE COGENT REASONS FOR THE SAME AND RULE 8D COMES INTO PLAY ONLY WHEN THE AO R ECORDS A FINDING THAT HE IS NOT SATISFIED WITH THE ASSESSEES METHOD. IN THE CASE I N HAND THE AO HAS NOT MADE ANY SUCH RECORDING OF SATISFACTION AND HAS ACCEPTED THE DISALLOWANCE MADE U/S 14A BY THE ASSESSEE. IN SUCH CIRCUMSTANCES IT IS NOT OPEN FOR THE LD. CIT TO COME TO A CONCLUSION THAT THE AO SHOULD HAVE INVOKED RULE 8D, WITHOUT HIMSELF RECORDING THE SATISFACTION THAT THE CALCULATION GIVEN BY THE ASSE SSEE IN ITS DISALLOWANCE MADE SUO 14 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI MOTO U/S 14A IS NOT CORRECT. COMING TO THE OTHER EX PENSES CLAIMED, THE LD. CIT HAS SIMPLY COLLECTED INFORMATION AFTER RAISING QUERIES AND HAS NOT GIVEN ANY FINDING WHATSOEVER THAT THERE IS AN ERROR MADE BY THE AO OR THAT THE CIRCUMSTANCES WAS SUCH THAT WOULD REQUIRE AND WARRANT FURTHER INQUIRY OR INVESTIGATION. NO ERROR IN THE ASSESSMENT ORDER HAS BEEN POINTED OUT AND IT IS NOT STATED AS TO HOW PREJUDICE WAS CAUSED TO THE REVENUE. THE FINDING THAT THE AO HAD FAILED TO PROPERLY SCRUTINISE THE ABOVE ASPECTS DOES NOT GIVE POWERS TO THE LD. CIT T O REVISE THE ASSESSMENT U/S 263 OF THE ACT. MAKING ROWING ENQUIRIES IS NOT A FINDING O F AN ERROR. ASSESSMENTS CANNOT BE SET ASIDE FOR FRESH ENQUIRIES UNLESS A SPECIFIC ERR OR IS POINTED OUT AT NOT MAKING PROPER ENQUIRY CANNOT BE EQUATED WITH NO ENQUIRY. I N VIEW OF THE ABOVE WE QUASH THE ORDER PASSED U/S 263 OF THE ACT AND ALLOW THE A PPEAL OF THE ASSESSEE. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED KEEPING IN MIND THE FOREGOING DETAILED DISCUSSION T HAT AN ASSESSMENT HAS TO BE BOTH ERRONEOUS AS WELL AS PREJUDICIAL IN INTEREST OF THE REVENUE SIMULTANEOUSLY BEFORE THE SAME IS SOUGHT TO BE REVISED AND IT IS NOT PERMISSI BLE FOR THE CIT OR THE PCIT TO EXERCISE HIS REVISION JURISDICTION IN CASE THE ASSE SSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEW, WE PROCEED TO DEAL WITH THE RELEVANT FACTS OF THE CASE. IT HAS COME ON RECORD THAT THE ASSESSING OFFICER HAD ISSUED SEC. 1 33(6) LETTER / NOTICE TO THE M/S SHCL DURING THE COURSE OF SCRUTINY WHICH STOOD ADEQ UATELY REPLIED IN ASSESSEES FAVOUR. COUPLED WITH THIS, ALL THE RELEVANT FACTUAL DETAILS IN SUPPORT OF THE ASSESSEES SHARE PURCHASE DOCUMENT, CONTRACT NOTES, BANK STATE MENT, (SUPRA) ALREADY IN THE CASE RECORDS. COUPLED WITH THIS, LEARNED CIT-DR FAI LS TO REBUT THE CLINCHING FACT THAT ALTHOUGH THE PCITS DETAILED DISCUSSION EXTRACTED I N THE PRECEDING PARAGRAPHS HAS SOUGHT TO MAKE OUT A CASE OF ARTIFICIAL PRICE RIGGI NG BETWEEN THE ASSESSEE, PROMOTERS ENTRY OPERATORS OF THE ENTITY IN LIGHT OF MINISTRY OF FINANCES LETTER DATED 24.07.2015 FIGURES, THERE IS NOT EVEN AN IOTA OF MATERIAL QUOT ED AGAINST THE ASSESSEE TO HAVE BEEN ENGAGED IN ALL THE FOREGOING ARTIFICIAL PRICE RIGGING. WE ARE OBSERVING IN VIEW OF ALL THESE FACTS THAT THE ASSESSING OFFICER HAD RIGH TLY ACCEPTED THE ASSESSEES LTCG KEEPING IN MAKING THE OVERWHELMING EVIDENCE FORMING PART OF RECORDS. THIS TRIBUNALS CO-ORDINATE BENCH DECISION (SUPRA) AS WE LL AS HON'BLE JURISDICTIONAL HIGH COURTS DECISIONS CIT VS. RATAN ITA NO.105/2016, M/ S CLASSIC GROWERS LTD VS. CIT ITA 129/2012, CIT VS. LAKSHMARGARH ESTATE & TRADING CO. LTD. (2013) 40 TAXMAN 439 (CAL), CIT VS. SMT. SHREYASHI GANGULY ITA 196/2012, CIT VS. BHAGWATI PRASAD AGARWAL (2009/ TMI 34738/CAL IN 22/2009 29.04.2009 HAVE ACC EPTED GENUINENESS OF SIMILAR LTCG. SINCE THE ISSUE IS COVERED BY ALL THE FOREGOI NG DECISIONS OF HON'BLE JURISDICTIONAL HIGH COURT, WE OBSERVE THAT THE ASSESSING OFFICER H AD RIGHTLY TREATED THE ASSESSEES FOREGOING LTCG DERIVED FROM SALE OF SHARES TO BE GE NUINE. THAT BEING THE CASE, WE HOLD THAT PCITS EXERCISE OF REVISION JURISDICTION MERELY ON SUSPICIOUS CIRCUMSTANCES BY INVOKING IN SEC. 263 EXPLANATION (SUPRA) WITH EF FECT FROM 01.06.2015 IS NOT SUSTAINING. WE THEREFORE REVERSE THE PCITS ORDER U NDER CHALLENGE AND RESTORE THE IMPUGNED ASSESSMENT FRAMED BY THE ASSESSING OFFICER ON 29.07.2016. IT IS MADE CLEAR THAT WE HAVE DEALT WITH AN INSTANCE OF ASSESS ING OFFICER HIMSELF HAVING ACCEPTED ASSESSEES LTCG AFTER EXAMINING ALL THE RE LEVANT FACTS OF THE CASE. WE THEREFORE DO NOT DEEM IT APPROPRIATE TO RESTORE THE VERY ISSUE BACK TO HIM FOR YET ANOTHER ROUND OF ASSESSMENT. THE ASSESSES SOLE SUB STANTIVE GRIEVANCE AS WELL AS THIS LEAD APPEAL ITA NO.01/KOL/2019 IS ACCEPTED THEREF ORE. 9. SAME ORDER TO FOLLOW IN ALL REMAINING CASES ITA NO.02-05/KOL/2019 AND 13- 15/KOL/2019 IN CASE OF SEVEN OTHER ASSESSEES SINCE IT HAS COME ON RECORD THAT THEY 15 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI HAD ALSO FILED ALL THE RELEVANT EVIDENCE IN SUPPORT OF THEIR RESPECTIVE LTCG DURING THE COURSE OF ASSESSMENT / WHICH STOOD ACCEPTED BY THE ASSESSING OFFICER. 10. ALL THESE EIGHT ASSESSEES AS MANY APPEALS ARE ALLOWED IN ABOVE TERMS. 8. WE RESPECTFULLY APPLY THE PROPOSITION OF LAW LA ID DOWN IN THE ABOVE CASE TO THE CASE ON HAND AND HOLD THAT THE ORDER PASSED U/S 263 OF THE ACT IS BAD IN LAW. THE CO- ORDINATE BENCH OF ITAT, KOLKATA IN THE CASE OF SHAS HI BALA BAJAJ (SUPRA) APPLIED TO THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. BHAGWATI PRASAD AGARWAL JUDGMENT DATED 29.04.2009 AND HELD THAT THE LONG TE RM PROFITS AND GAINS RECEIVED ON, THE PURCHASE AND SALE OF SHARES OF M/S SURBHI CHEM ICALS AND INVESTMENT LTD. THOUGH THE STOCK EXCHANGE IS EXEMPTED FROM TAX U/S 10(38) OF THE ACT. THUS, THE VIEW TAKEN BY THE AO IS PLAUSIBLE VIEW WHICH IS SUPPORTED BY JUD ICIAL DECISIONS ON THIS GROUNDS ALSO THE ORDER U/S 263 FAILS. 9. THUS, RESPECTFULLY FOLLOWING THE DECISION OF THE GITSH TIKMANI HUF & ORS (SUPRA) WE HOLD THAT THE IMPUGNED ORDER PASSED U/S 263 OF T HE ACT DATED 12.02.2019 IS BAD IN LAW AND QUASH THE SAME. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. KOLKATA, THE 12 TH JANUARY, 2021. SD/- SD/- [S. S.GODARA] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12.01.2021 SB, SR. PS 16 I.T.A. NO. 874/KOL/2019 ASSESSMENT YEAR: 2014-15 SMT. USHA DEVI MODI COPY OF THE ORDER FORWARDED TO: 1. SMT. USHA DEVI MODI, SDF-1, A501 & A502, CANAL SOUT H ROAD, PARIDHAN GARMENT PARK, KOLKATA-700015 2. ITO, WARD-10(4), KOLKATA 3. CIT(A)- , KOLKATA. (SENT THROUGH MAIL) 4. CIT- 5. CIT(DR), KOLKATA BENCHES, KOLKATA. (SENT THROUGH MA IL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES