Kavadi Narsimha, New Delhi V. CIT, New Delhi

ITA 957/DEL/2011

• Counselvise Citation: 95720114 RSA 2011
• Duration Of Justice: 4 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 26-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 18-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Keywords: Gift; Depreciation; Search and seizure; Document seized; Opportunity of being heard; Additional depreciation; Period of limitation; Question of law; Assessment record; Block assessment; Right to appeal; Reason to believe; Documents seized
• Section: 143(3); 142(1); 153A; 32; 27; 37; 6; 263; 63; 132; 28; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D, DELHI BENCH ES , NEW DELHI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND S MT. DIVA SINGH , HONBLE JUDICIAL MEMBER ITA NO S . 953 TO 958 & 960 / DEL /201 1 : (ASST. YEAR S :20 0 1 - 0 2,2002 - 03,2003 - 04, 20 04 - 05, 2005 - 06,2006 - 07 & 2007 - 08 ) KAVADI NARSIMHA, 33/34, RAJPUR ROAD, NEW DELHI. PAN : ADZPK3188M. (APPELLANT) VS. COMMISSIONER OF INCOME TAX, CENTRAL - II, NEW DELHI. (RESPONDENT) A PPELLANT BY : S HRI SU DESH GARG , ADV. RE SPONDENT BY : SHRI SULEKHA VERMA , CIT, D.R. DATE OF HEARING : 26 / 02 /201 5 DATE OF PRONOUNCEMENT :26 / 03 /201 5 O R D E R PER P.K. BANSAL SINCE GROUND NOS. 1 TO 3 INVOLVED IN ALL THESE APPEALS ARE COMMON, THEREFORE, THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER. ALL THESE APPEAL S HA VE BEEN FILED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDER S OF CIT , CENTRAL - II, NEW DELHI DTD. 2 4 . 1 2 . 201 0 FOR THE ASSESSMENT YEAR S 20 0 1 - 0 2 TO 20 07 - 08 . HOWEVER, GROUND NOS. 1 TO 3 ARE COMMON IN ALL THE APPEALS WHEREAS GROUND NO.4 OF ALL THE APPEALS ARE TO SOME EXTENT DIFFERENT WHICH READ AS FOLLOWS : - 1. THE LD . CIT HAS GROS SLY ERRED ON FACTS AS WELL AS IN LAW IN INITIATING THE PROCEEDINGS U/S 263 INSPITE OF THE FACT THAT ALL THE ISSUES WERE DULY CONSIDERED BY THE AO DURING THE ASSESSMENT PROCEEDINGS. 2. THE LD. CIT HAS GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN HOLDING TH E ASSESSMENT ORDER AS PREJUDICIAL TO THE INTEREST OF REVENUE WITHOUT EVEN POINTING OUT ANY ITEM WHERE REVENUE IS LOSING TAX WHICH WAS LAWFULLY PAYABLE BY THE APPELLANT. 2 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) 3. THE LD. CIT HAS GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN SETTING ASIDE THE ASSE SSMENT ORDER U/S 263 AND IN DIRECTING THE AO TO MAKE FURTHER ENQUIRIES / INVESTIGATION AS ACCORDING TO HIM, THE ENQUIRIES / INVESTIGATION CONDUCTED BY THE AO DURING ASSESSMENT PROCEEDINGS WERE NOT ENOUGH / PROPER. 2. THE GROUND NO.4 TAKEN IN EACH OF TH E APPEALS IS REPRODUCED AS UNDER IN RESPECT OF EACH APPEAL: - ITA NO. 953 /DEL/2011 : 4. THE LD. CIT HAS GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN CONSIDERING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOW ING ISSUES : - A) AGRICULTURAL INCOME OF RS.88,185/ - WITHOUT POINTING OUT ANY DISCREPANCY IN THE CASH FLOW STATEMENT OF APPELLANTS FATHER OR THE OWNERSHIP OF AGRICULTURAL LAND IN HIS FATHERS NAME OR THE EVIDENCE OF AGRICULTURAL INCOME IN HIS FATHERS H ANDS WHO HAS GIVEN SHARE FROM AGRICULTURAL INCOME TO THE APPELLANT. B) OPENING BALANCE OF RS. 2,92,192/ - AS ON 01/04/2000 WHICH IS CARRIED FORWARD FIGURE FROM LAST YEAR. C) CASH DEPOSITED IN THE BANK ACCOUNTS WITHOUT EVEN POINTING OUT AS TO HOW MU CH CASH WAS DEPOSITED AND IN WHICH ACCOUNT DURING THIS YEAR. D) INVESTMENT IN IMMOVABLE ASSETS WITHOUT POINTING OUT AS TO WHICH INVESTMENT WAS MADE AND IN WHICH PROPERTY DURING THIS YEAR. E) NO PROPER EXAMINATION OF SEIZED MATERIAL WITHOUT POINTING O UT AS TO WHICH DOCUMENT WAS NOT AT ALL EXAMINED BY THE AO. F) CONSIDERING THE TRANSACTIONS PERTAINING TO OTHER ASSESSMENT YEARS DURING THIS YEAR. ITA NO. 954 /DEL/2011 : 4. THE LD. CIT HAS GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN CONSIDERING T HE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOWING ISSUES : - A) AGRICULTURAL INCOME OF RS.1,39,010/ - WITHOUT POINTING OUT ANY DISCREPANCY IN THE CASH FLOW STATEMENT OF APPELLANTS FATHER OR THE OWNERSHIP OF AGRI CULTURAL LAND IN HIS FATHERS NAME OR THE EVIDENCE OF 3 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) AGRICULTURAL INCOME IN HIS FATHERS HANDS WHO HAS GIVEN SHARE FROM AGRICULTURAL INCOME TO THE APPELLANT. B) CASH DEPOSITED IN THE BANK ACCOUNTS WITHOUT EVEN POINTING OUT AS TO HOW MUCH CASH WAS DE POSITED AND IN WHICH ACCOUNT DURING THIS YEAR. C) INVESTMENT IN IMMOVABLE ASSETS WITHOUT POINTING OUT AS TO WHICH INVESTMENT WAS MADE AND IN WHICH PROPERTY DURING THIS YEAR. D) NO PROPER EXAMINATION OF SEIZED MATERIAL WITHOUT POINTING OUT AS TO WHICH DOCUMENT WAS NOT AT ALL EXAMINED BY THE AO. E) CONSIDERING THE TRANSACTIONS PERTAINING TO OTHER ASSESSMENT YEARS DURING THIS YEAR. F) NON - EXAMINATION OF THE LOAN TRANSACTIONS WITHOUT REFERRING TO ANY PARTICULAR TRANSACTION WHICH WAS NOT AT ALL EXAMINED . ITA NO. 955 /DEL/2011 : 4. THE LD. CIT HAS GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN CONSIDERING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOWING ISSUES : - A) AGRICULTURAL INCOME OF RS.1, 0 9, 69 0/ - WI THOUT POINTING OUT ANY DISCREPANCY IN THE CASH FLOW STATEMENT OF APPELLANTS FATHER OR THE OWNERSHIP OF AGRICULTURAL LAND IN HIS FATHERS NAME OR THE EVIDENCE OF AGRICULTURAL INCOME IN HIS FATHERS HANDS WHO HAS GIVEN SHARE FROM AGRICULTURAL INCOME TO THE APPELLANT. B) CASH DEPOSITED IN THE BANK ACCOUNTS WITHOUT EVEN POINTING OUT AS TO HOW MUCH CASH WAS DEPOSITED AND IN WHICH ACCOUNT DURING THIS YEAR. C) INVESTMENT IN IMMOVABLE ASSETS WITHOUT POINTING OUT AS TO WHICH INVESTMENT WAS MADE AND IN WHIC H PROPERTY DURING THIS YEAR. D) NO PROPER EXAMINATION OF SEIZED MATERIAL WITHOUT POINTING OUT AS TO WHICH DOCUMENT WAS NOT AT ALL EXAMINED BY THE AO. E) CONSIDERING THE TRANSACTIONS PERTAINING TO OTHER ASSESSMENT YEARS DURING THIS YEAR. 4 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) F) NON - EXAMIN ATION OF THE LOAN TRANSACTIONS WITHOUT REFERRING TO ANY PARTICULAR TRANSACTION WHICH WAS NOT AT ALL EXAMINED . ITA NO. 956 /DEL/2011 : 4. THE LD. CIT HAS GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN CONSIDERING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOWING ISSUES : - A) AGRICULTURAL INCOME OF RS.77,804/ - WITHOUT POINTING OUT ANY DISCREPANCY IN THE CASH FLOW STATEMENT OF APPELLANTS FATHER OR THE OWNERSHIP OF AGRICULTURAL LAND IN HIS FATHERS NAME OR THE E VIDENCE OF AGRICULTURAL INCOME IN HIS FATHERS HANDS WHO HAS GIVEN SHARE FROM AGRICULTURAL INCOME TO THE APPELLANT. B) CASH DEPOSITED IN THE BANK ACCOUNTS WITHOUT EVEN POINTING OUT AS TO HOW MUCH CASH WAS DEPOSITED AND IN WHICH ACCOUNT DURING THIS YE AR. C) INVESTMENT IN IMMOVABLE ASSETS WITHOUT POINTING OUT AS TO WHICH INVESTMENT WAS MADE AND IN WHICH PROPERTY DURING THIS YEAR. D) NO PROPER EXAMINATION OF SEIZED MATERIAL WITHOUT POINTING OUT AS TO WHICH DOCUMENT WAS NOT AT ALL EXAMINED BY THE AO. E) CONSIDERING THE TRANSACTIONS PERTAINING TO OTHER ASSESSMENT YEARS DURING THIS YEAR. F) NON - EXAMINATION OF THE LOAN TRANSACTIONS WITHOUT REFERRING TO ANY PARTICULAR TRANSACTION WHICH WAS NOT AT ALL EXAMINED. G) NO PROPER EXAMINATION OF GIFTS RECEI VED FROM FATHER. ITA NO. 957 /DEL/2011 : 4. THE LD. CIT HAS GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN CONSIDERING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOWING ISSUES : - A) CASH DEPOSITED IN THE BANK ACCOUNTS WITHOUT EVEN POINTING OUT AS TO HOW MUCH CASH WAS DEPOSITED AND IN WHICH ACCOUNT DURING THIS YEAR. B) INVESTMENT IN IMMOVABLE ASSETS WITHOUT POINTING OUT AS TO WHICH INVESTMENT WAS MADE AND IN WHICH PROPERTY DURING THIS YEAR. 5 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) C) NO PROP ER EXAMINATION OF SEIZED MATERIAL WITHOUT POINTING OUT AS TO WHICH DOCUMENT WAS NOT AT ALL EXAMINED BY THE AO. D) CONSIDERING THE TRANSACTIONS PERTAINING TO OTHER ASSESSMENT YEARS DURING THIS YEAR. E) NON - EXAMINATION OF THE LOAN TRANSACTIONS WITHOUT RE FERRING TO ANY PARTICULAR TRANSACTION WHICH WAS NOT AT ALL EXAMINED. F) NO PROPER EXAMINATION OF GIFTS RECEIVED FROM FATHER. ITA NO. 958 /DEL/2011 : 4. THE LD. CIT HAS GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN CONSIDERING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOWING ISSUES : - A) CASH DEPOSITED IN THE BANK ACCOUNTS WITHOUT EVEN POINTING OUT AS TO HOW MUCH CASH WAS DEPOSITED AND IN WHICH ACCOUNT DURING THIS YEAR. B) INVESTMENT IN IMMOVABLE AS SETS WITHOUT POINTING OUT AS TO WHICH INVESTMENT WAS MADE AND IN WHICH PROPERTY DURING THIS YEAR. C) NO PROPER EXAMINATION OF SEIZED MATERIAL WITHOUT POINTING OUT AS TO WHICH DOCUMENT WAS NOT AT ALL EXAMINED BY THE AO. D) CONSIDERING THE TRANSACTIONS P ERTAINING TO OTHER ASSESSMENT YEARS DURING THIS YEAR. E) NON - EXAMINATION OF THE LOAN TRANSACTIONS WITHOUT REFERRING TO ANY PARTICULAR TRANSACTION WHICH WAS NOT AT ALL EXAMINED. F) NO PROPER EXAMINATION OF GIFTS RECEIVED FROM FATHER. ITA NO. 960 /DEL /2011 : 4. THE LD. CIT HAS GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN CONSIDERING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOWING ISSUES : - A) CASH DEPOSITED IN THE BANK ACCOUNTS WITHOUT EVEN POINTING OUT AS TO HOW MUCH CASH WAS DEPOSITED AND IN WHICH ACCOUNT DURING THIS YEAR. 6 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) B) INVESTMENT IN IMMOVABLE ASSETS WITHOUT POINTING OUT AS TO WHICH INVESTMENT WAS MADE AND IN WHICH PROPERTY DURING THIS YEAR. C) NO PROPER EXAMINATION OF SEIZED MATERIAL WI THOUT POINTING OUT AS TO WHICH DOCUMENT WAS NOT AT ALL EXAMINED BY THE AO. D) CONSIDERING THE TRANSACTIONS PERTAINING TO OTHER ASSESSMENT YEARS DURING THIS YEAR. E) NON - EXAMINATION OF THE LOAN TRANSACTIONS WITHOUT REFERRING TO ANY PARTICULAR TRANSACTIO N WHICH WAS NOT AT ALL EXAMINED. F) NO PROPER EXAMINATION OF CASH FOUND DURING SEARCH. 3. GROUND NOS. 1 TO 3 OF THESE APPEALS RELATE TO THE COMMON ISSUE CHALLENGING THE VALIDITY OF ORDER PASSED U/S 263. BOTH THE PARTIES AGREED THAT THE ISSUE REGARDI NG THE VALIDITY OF PROCEEDINGS INITIATED U/S 263 WHICH HAS BEEN CHALLENGED IN ALL THESE APPEALS BY WAY OF GROUND NOS. 1 TO 3 BE DISPOSED OF ON THE BASIS OF THE FACTS RELATING TO ASSESSMENT YEAR 2001 - 02. THE BRIEF FACTS OF THE CASE FOR THE ASSESSMENT YEAR 2 001 - 02 ARE THAT SEARCH AND SEIZURE OPERATION WAS CONDUCTED U /S 132 BY THE INVESTIGATION WING AT HYDERABAD ON 20.10.2006. THE ASSESSEE FILED THE RETURN FOR AFORESAID ASSESSMENT YEAR ON 21.08.2008 DECLARING TAXABLE IN COME OF RS.2,90,440/ - FROM SALARY AND AGRICULTURAL INCOME. ASSESSMENT U/S 153A /153B R.W.S. 143(3) WERE COMPLETED ON 31.12.2008 BY THE ASSESSING OFFICER, C ENTRAL C IRCLE - III, NEW DELHI AT THE RETURNED INCOME. ON EXAMINATION OF THE RECORD THE CIT INVOKED THE JURISDICTION U/S 263 AND ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE ON 09.07.2010 AS PER THE PROVISION OF SECTION 263. THE SAID SHOW CAUSE NOTICE READ AS UNDER : - THE RECORDS IN YOUR CASE FOR THE A.Y. 2001 - 02 WERE CALLED FOR AND EXAMINED BY THE UNDERSIGNED ON WHICH THE FOLLOWING ISSUES HAVE BEEN OBSERVED AND THE SAME ARE DISCUSSED IN AS UNDER : - 1. AGRICULTURE INCOME DECLARED : IT IS SEEN THAT DURING THE YEAR UNDER CONSIDERATION, YOU HAVE SHOWN AGRICULTURE INCOME OF RS.88,185/ - . IT IS OBSERVED THAT YOU DO NOT OWN ANY AGRICULTURE 7 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) LAND. AS PER TH E PROVISIONS OF SECTION 2(1A) OF THE INCOME TAX ACT, AGRICULTURE INCOME INCLUDES _ (A) A NY RENT OR REVENUE DERIVED FROM LAND WHICH IS SITUATED IN INDIA AND IS USED FOR AGRICULTURAL PURPOSES;] (B) A NY INCOME DERIVED FROM SUCH LAND BY _ (I) A GRICULTURE; OR (II) T HE PERFOR MANCE BY A CU LTIVATOR OR RECEIVER OF RENT - IN KIND OF ANY PROCESS ORDINARILY EMPLOYED BY A CULTIVATOR OR RECEIVER OF REN T - IN - KIND TO RENDER THE PRODUCE RAISED OR RECEIVED BY HIM FIT TO BE TAKEN TO MARKET; OR (III)THE SALE BY A CULTIVATOR OR RECEIVER OF RENT - IN - KIND OF THE PRODUCE RAISED OR RECEIVED BY HIM, IN RESPECT OF WHICH NO PROCESS HAS BEEN PERFORMED OTHER THAN A PROCESS OF THE NATURE DESCRIBED IN PARAGRAPH (II) OF THIS SUB - CLAUSE; (C) ANY INCOME DERIVED FROM ANY BUILDING OWNED AND OCCUPIED BY THE RECEIVER OF THE RENT OR REVENUE OF ANY SUCH LAND, OR OCCUPIED BY THE CULTIVATOR OR THE RECEIVER OF RENT - IN - KIND, OF ANY LAND WITH RESPECT TO WHICH, OR THE PRODUCE OF WHICH, ANY PROCESS MENTIONED IN PARAGRAPHS (II) AND (III) OF SUB - CLAUSE (B) IS CARRIED ON: HOWEVER IN YOUR CASE, YOU ARE NOT OWNING ANY SUCH LAND OR EARNING ANY SUCH INCOME. FURTHER NO EXPENSES HAVE BEEN CLAIMED BY YOU AS INCURRED TO EARN THE SAID INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, DOCUMENTARY EV IDENCE TO SUBSTANTIATE THE SAID AGRICUL TURE INCOME, LIKE KHASARA / GIRDAWARI DOCUMENT, ETC. WERE NEITHER CALLED FOR BY THE A.O. NOR WERE FILED BY YOU, EITHER ALONG WITH THE RETURN OF INCOME, OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AS SUCH, ACCEPTING THE AGRICULTURE INCOME AS DECLARED B Y YOU IN THE RETURN OF INCOME, BY THE ASSESSING OFFICER WITHOUT ANY VERIFICATION, ENQUIRY AND APPLICATION OF MIND IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2. CASH IN HAND AS ON 01/04/2000 : AS PER THE DETAILS FILED BY YOU DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, YOU HAVE SHOWN CASH IN HAND OF RS.2,92,192/ - AS ON 01/04/2000. THE SOURCE AND GENUINENESS OF THE SAID CASH AT THE BEGINNING OF THE BLOCK PERIOD WAS NEVER ENQUIRED BY THE A.O., DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FROM YOUR BANK STATEMENTS IT IS SEEN THAT YOU HAVE MADE SMALL AMOUNTS OF WITHDRAWALS FROM YOUR BANK ACCOUNT, AS AND WHEN REQUIRED FOR YOUR DAY TO DAY 8 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) EXPENDITURE. THE A.O FAILED TO ENQUIRE THE PURPOSE OF MAKING SMALL WITHDRAWALS, IF THEIR WAS SUCH HUGE CASH I N HAND LYING IN YOUR POSSESSION. THE A. ALSO FAILED TO CONFRONT YOU ABOUT THE SOURCE OF SAID CLAIM AND GENUINENESS OF THE SAID CONTENTION. AS SUCH, ACCEPTING THE CASH IN HAND AS ON 01/04/2000, WITHOUT ANY VERIFICATION, ENQUIRY AND APPLICATION OF MIND IS ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 3. CASH DEPOSITED IN THE ACCOUNTS HELD WITH THE BANKS ETC .: FROM YOUR BANK ACCOUNT, IT SEEN THAT VARIOUS CASH DEPOSITS HAVE BEEN MADE BY YOU, DURING THE YEAR UNDER CONSIDERATION. HOWEVER, THE SOURCE OF ALL THE SAID DEPOSITS WERE NEVER ENQUIRED BY THE A.O DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THUS, IT IS CLEAR THAT THE ISSUE WAS NOT PROPERLY EXAMINED, ENQUIRED AND VERIFIED BY THE A.O DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FURTHER IT IS SEEN THA T VIDE LETTER DATED 22/10/2008, YOU HAVE FURNISHED THE COPIES OF YOUR BANK STATEMENTS. HOWEVER, THE BANK STATEMENT OF ICICI BANK, S.B. A/C NO. 05601502207, 47 MISSION STREET, PONDICHERY HAD NOT BEEN FILED BY YOU, THOUGH IT IS MENTIONED IN THE COVERING LETT ER. THE A.O DID NOT POINTED OUT THIS DISCREPANCY, WHICH ALSO SHOWS THAT THE DETAILS FILED BY YOU WERE NOT EXAMINED PROPERLY. THUS IT IS APPARENT THAT THE ISSUE UNDER CONSIDERATION, WAS NOT PROPERLY INVESTIGATED AND EXAMINED BY THE ASSESSING OFFICER. HENCE, THE A.OS ACTION OF ACCEPTING THE DEPOSITS MADE BY YOU IN YOUR BANKS ACCOUNTS, WITHOUT ANY VERIFICATION, ENQUIRY AND APPLICATION OF MIND IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 4. INVESTMENTS IN IMMOVABLE ASSETS : IT IS SEEN THAT IN THE ANNU AL PROPERTY RETURN FILED WITH THE GOVERNMENT, YOU HAVE SHOWN EIGHT PROPERTIES. BESIDES PAGE 51, ANNEXURE A - 1, SEIZED FROM YOUR RESIDENCE AT DELHI IS HAND WRITTEN NOTE ABOUT CONSTRUCTION OF A HOUSE WITHIN THE BLOCK PERIOD. THIS PAPER CONTAINED DETAILS OF MO NIES RECEIVED, AMOUNTING TO RS.6,39,000/ - AND ALSO EXPENDITURE DETAILS REGARDING PURCHASE OF BUILDING FOR RS.6,66,000/ - . IT IS OBSERVED THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD NOT EXAMINED THE VARIOUS PROPERTIES HELD BY Y OU; EVIDENCE REGARDING THE DATE OF THEIR PURCHASE; SOURCE OF SAID INVESTMENTS, IF PURCHASED DURING THE BLOCK PERIOD AND THE PURPOSE FOR WHICH THE SAME WERE PUT TO USE. A LETTER WAS WRITTEN TO GOVT. OF MIZORAM BY THE INVESTIGATING WING, REGARDING THE SOURCE OF INVESTMENT, AS DECLARED BY YOU IN THE IPR OR OTHERWISE. HOWEVER, IT IS OBSERVED THAT THE A.O DID NOT 9 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) NOT MAKE ANY FURTHER CORRESPONDENCE WITH GOVT. OF MIZORAM OR INVESTIGATION WING OF THE DEPARTMENT IN THIS REGARD. AS SUCH, NON VERIFICATION OF VARIOUS INVESTMENTS MADE BY YOU, EITHER IN YOUR OWN NAME, OR NAME OF ANY OTHER PERSON AND ACCEPTING THE SAME WITHOUT ANY ENQUIRY AND APPLICATION OF MIND IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 5. NON EXAMINATION OF THE SEIZED MATERIAL : DURING THE C OURSE OF SEARCH PROCEEDINGS, A DIARY MARKET AS ANNEXURE A/RK/211/2, LAPTOP AND OTHER INCRIMINATING DOCUMENTS WERE FOUND AND THE SAME WERE SEIZED BY THE INVESTIGATION WING. IT IS SEEN THAT THE SAID DOCUMENTS WERE NOT PROPERLY EXAMINED BY THE A.O DURING THE COURSE OF ASSESSMENT PROCEEDINGS. REGARDING THE LAPTOP, THE A.O ONLY OBSERVED THAT NOTHING INCRIMINATING REGARDING ANY LAND DEAL HAS BEEN FOUND. HOWEVER, THE A.O FAILED TO EXAMINE THE OTHER FILES, IF ANY, CONTAINING IN THE SAID LAPTOP AND THEIR FINANCIAL I MPLICATION. DOCUMENTS RELATING TO CONSTRUCTION OF HOUSE WITHIN THE BLOCK PERIOD WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH PROCEEDINGS, BUT AGAIN THESE AND OTHER SEIZED MATERIALS WERE ALSO NOT PROPERLY INVESTIGATED. AS SUCH, THE NON PROPER EXAMINATIO N OF SEIZED MATERIAL BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THEREFORE, YOU ARE HEREBY REQUIRED TO SHOW CAUSE AS TO WHY THE ORDER OF A.O MAY NOT BE CONSIDERED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ON THE ABOVE ISSUES AND THE SAME MAY BE ACCORDINGLY REVISED AS PER THE PROVISIONS OF SECTION 263 OF THE ACT. YOU ARE HEREBY GIVEN AN OPPORTUNITY TO FILE SUBMISSIONS ON THE ISSUES RAISED, AS MENTIONED ABOVE, ON OR BEFORE 30.07.2010. 4 . SIMILAR TYPE OF NOTICES WERE ISSUED OF THE EVEN DATE IN EACH OF THE ASSESSMENT YEAR S . IN REPLY TO THE SHOW CAUSE NOTICE THE ASSESSEE SUBMITTED VIDE HIS LETTER DATED 03.12.2010 THAT I NITIATION OF SUBJECT PROCEEDINGS IN THE CASE OF THE ASSESSEE IS WITHOUT JURISDICT ION AS THE ASSESSMENT S IN THE CASE OF THE ASSESSEE WERE FRAMED AFTER CONDUCTING COMPREHENSIVE INQUIRIES AND DELIBERATION ON EACH OF THE POINTS AS STATED IN THE SHOW CAUSE NOTICE. IT IS A SETTLED PRINCIPLE ON THE BASIS OF THE COURT DECISION THAT AN ASSESSM ENT ORDER FRAMED AFTER CONDUCTING ENQUIRIES CANNOT BE SUBJECT TO REVISION U/S 263. THEREAFTER, THE ASSESSEE HAS 10 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) SUBMITTED DETAILED SUBMISSION S IN RESPECT OF EACH ISSUE S RAISED BY THE CIT AND IT WAS SUBMITTED THAT IT I S NOT A CASE OF NON - EXAMINATION . IT IS TOTALLY INCORRECT AND UNFAIR TO CONTENT THAT THE ASSESSING OFFICER HAD NOT UNDERTAKEN ANY INQUIRY / VERIFICATION WITH RESPECT TO SEIZED MATERIAL. IN THESE SUBMISSIONS THE ASSESSEE ALSO RELIED ON THE FOLLOWING CASE LAWS : - 1) MALABAR INDUSTRIAL CO. LTD VS CIT, 243 ITR 83 (SC). 2) CIT VS DHANPAT RAI IN ITA NO. 837/2010 DATED 13.07.2010.(DEL.) 3) CIT VS GABRIEL INDIA LTD, 203 ITR 108 (MUM). 4) CIT VS GANPAT RAM BISHNOI, 296 ITR 292 (RAJ). 5. AFTER CONSIDERING SUBMISSIONS OF THE ASSESSEE, THE CIT SET ASIDE THE ASSESSMENT AND DIRECTED THE ASSESSING OFFICER TO FRAME FRESH ASSESSMENT BY OBSERVING AS UNDER : - 1. AGRICULTURE INCOME : IT WAS SEEN THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN AGRICULTURE INCOME OF RS.88,185/ - . ON EXAMINATION OF THE ASSESSMENT RECORD, IT IS OBSERVED THAT THE ASSESSEE, DURING THIS PERIOD WAS NOT OWNING ANY AGRICULTURE LAND. AS PER THE PROVISIONS OF SECTION 2(1A) OF THE INCOME TAX ACT, AGRICULTURE INCOME INCLUDES (A) ANY RENT OR REVENUE DERIVED F ROM LAND WHICH IS SITUATED IN INDIA AND IS USED FOR AGRICULTURAL PURPOSES;] (B) ANY INCOME DERIVED FROM SUCH LAND BY _ (I) AGRICULTURE ; OR (II) THE PERFORMANCE BY A CULTIVATOR OR RECEIVER OF RENT - IN - KIND OF ANY PROCESS ORDINARILY EMPLOYED BY A CULTIVATOR OR REC EIVER OF RENT - IN - KIND TO RENDER THE PRODUCE RAISED OR RECEIVED BY HIM FIT TO BE TAKEN TO MARKET; OR (III) THE SALE BY A CULTIVATOR OR RECEIVER OF RENT - IN - KIND OF THE PRODUCE RAISED OR RECEIVED BY HIM, IN RESPECT OF WHICH NO PROCESS HAS BEEN PERFORMED OTHER THA N A PROCESS OF THE NATURE DESCRIBED IN PARAGRAPH (II) OF THIS SUB - CLAUSE; (C) ANY INCOME DERIVED FROM ANY BUILDING OWNED AND OCCUPIED BY THE RECEIVER OF THE RENT OR REVENUE OF ANY SUCH LAND, OR 11 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) OCCUPIED BY THE CULTIVATOR OR THE RECEIVER OF RENT - IN - KIND, OF ANY LAND WITH RESPECT TO WHICH, OR THE PRODUCE OF WHICH, ANY PROCESS MENTIONED IN PARAGRAPHS (II) AND (III) OF SUB - CLAUSE (B) IS CARRIED ON : HOWEVER IN THE CASE OF THE ASSESSEE, HE IS CLEARLY NOT OWNING ANY SUCH LAND OR EARNING ANY SUCH INCOME. FURTHE R NO EXPENSES HAVE BEEN CLAIMED BY THE ASSESSEE, PURPORTED TO HAVE BEEN INCURRED TO EARN THE SAID AGRICULTURE INCOME. IT IS ALSO SEEN THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE SAID AGRICULTURE INCOME, LIKE K HASARA / GIRDAWARI DOCUMENT, ETC. WERE NEITHER CALLED FOR BY THE ASSESSING OFFICER, NOR WERE FILED BY THE ASSESSEE, EITHER ALONG WITH THE RETURN OF INCOME, OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ACCORDINGLY SHOW CAUSE NOTICE DATED 09.07.2010 WAS ISSUED TO THE ASSESSEE SEEKING AN EXPLANATION AS TO WHY THE ORDER PASSED BY THE A.O ON THIS ISSUE, MAY NOT BE TAKEN AS ERRONEOUS AS THE SAME IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ASSESSEE IN HIS REPLY FILED ON 03/12/2010, VEHEMENTLY CO NTESTED THAT THIS ISSUE WAS EXAMINED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE SUBMITTED THAT HE HAS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, VIDE HIS REPLY DATED 24/11/2008, EXPLAINED THE A.O THAT HE HAD ON SE VERAL OCCASIONS RECEIVED THE SHARE OF AGRICULTURAL INCOME FROM HIS FATHER, WHO IS AN AGRICULTURIST. THE ASSESSEE MENTIONED THAT HIS FATHER IN HIS STATEMENT RECORDED ON 15.11.2006 HAS DEPOSED THAT HE OWNS ABOUT 15 ACRES OF AGRICULTURAL LAND AND THAT THE ASSESSEES YOUNGER BROTHER DOES THE AGRICULTURAL WORK, AND THIS FACT WHICH WAS ALSO CONFIRMED BY THE YOUNGER BROTHER OF THE ASSESSEE IN HIS STATEMENT RECORDED ON THE SAME DATE. ASSESSEE FURTHER SUBMITTED THAT FROM THE CASH FLOW STATEMENT OF HIS FATHER AND BROTHER, AS SUBMITTED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS CLEAR THAT AN AMOUNT OF RS.88,185/ - WAS GIFTED TO ASSESSEE BY HIS FATHER, ON ACCOUNT OF HIS SHARE IN AGRICULTURAL INCOME. THE ASSESSEE ALSO STATED THAT DOCUMENTARY EVIDE NCE, SHOWING THE EARNING OF AGRICULTURAL INCOME AND OWNERSHIP OF AGRICULTURAL LAND BY HIS FATHER WERE SUBMITTED BEFORE THE AO VIDE LETTER DATED 24.11.2008. THE ASSESSEE THUS CONCLUDED THAT THE A.O HAD UNDERTAKEN ENQUIRY AND VERIFICATION OF THE AGRICULTURE INCOME AS DECLARED BY HIM IN HIS RETURN OF INCOME. 12 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) THE ABOVE CONTENTIONS OF THE ASSESSEE WERE CONSIDERED AND EXAMINED AND IT WAS FOUND THAT THE SAME ARE NEITHER FACTUALLY CORRECT NOR LEGALLY TENABLE. FIRSTLY, PERUSAL OF ASSESSMENT RECORD OF THE ASSESS EE SHOWS THAT THE ISSUE OF AGRICULTURE INCOME WAS NEVER RAISED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE IN HIS REPLY DATED 24/11/2008 HAS GIVEN SUBMISSION ON THE CASH OF RS.1,50,000/ - AND RS.2,00,000/ - DEPOSITED IN THE BANK ACCOUNT, BY THE HIM AND HIS WIFE RESPECTIVELY ON 05/10/2006. IN THIS REPLY, THE ASSESSEE HAS FILED A STATEMENT, WHICH IS MENTIONED AS A CASH FLOW STATEMENT OF MR. K. BAKKAIAH / MR. K. YELLESHWAR. HOWEVER, THIS STATEMENT IS NEITHER SIGNED BY MR. K. BAKKAIAH NOR MR. K. YESLLESHWAR. EVEN THE ASSESSEE HIMSELF OR HIS COUNSEL HAVE NOT SIGNED THIS STATEMENT. SINCE THE STATEMENT WAS UNSIGNED, IT HAD NO LEGAL VALUE. EVEN OTHERWISE, THE PAYMENT RECEIVED BY THE ASSESSEE FROM HIS FATHER OR BROTHER, UNDER NO PROVISIONS OF THE INCOME TAX ACT, CAN BE CONSIDERED AS AGRICULTURE INCOME OF THE ASSESSEE. AS THE ASSESSEE IS NEITHER OWNING ANY AGRICULTURE LAND, NOR IS HIMSELF A CULTIVATOR, NONE OF THE RECEIPTS OF THE ASSESSEE CAN BE REGARDED AS HIS AGRICULTURE INCOME. AS MENTIONED IN THE EARLIER PARAS, THE HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS CIT [2000] 243 ITR 83 (SC) HAS HELD THAT AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDE R BEING ERRONEOUS. IT WAS FURTHER HELD THAT WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HIS HANDS ON HIS SO OFFERING, THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME WITHOUT APPLICATION OF MIND AS SUCH WILL BE ERRONEOUS AND PRE JUDICIAL TO THE INTERESTS OF THE REVENUE. HONBLE KARNATAKA HIGH COURT IN THE CASE OF THALIBAI F. JAIN VS ITO [1975] 101 ITR 1 (KAR.). HAD HELD THAT ASSESSMENTS MADE IN UNDUE HASTE AND WITHOUT AN ENQUIRY WHETHER THE INCOME OFFERED WAS THAT OF THE ASSESSEE OR SOMEONE, ELSE, ARE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FURTHER, AS ALLEGED BY THE ASSESSEE, HIS FATHER AND BROTHER IN THEIR STATEMENT RECORDED ON 15/11/2006 HAD NEVER CONFIRMED GIVING ANY SUCH SHARE OF THEIR AGRICULTURE INCOME TO THE ASSESSEE. THE FATHER OF THE ASSESSEE HAS ONLY SUBMITTED THAT HE OWNS AGRICULTURE LAND AND HE ALONG WITH YOUNGER BROTHER OF ASSESSEE WERE EARNING INCOME FROM AGRICULTURE AND SALE OF MILK. FURTHER THE STATEMENT OF AFFAIRS FILED BY THE ASSESSEE FOR THE YEAR ENDING 3 1/03/2004, IT IS SEEN THAT DURING THE FINANCIAL YEAR 2003 - 04, THE ASSESSEE HAS SHOWN AGRICULTURE INCOME OF RS.77,804/ - 13 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) AND GIFT FROM FATHER OF RS.3,25,000/ - . THIS SHOWS THAT THE TWO RECEIPTS ARE DISTINCT FROM EACH OTHER. THUS IT IS ABUNDANTLY CLEAR THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, ON THIS ISSUE, IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2 . CASH IN HAND AS ON 01/04/2010 : IT IS SEEN THAT THE ASSESSEE IN THE DETAILS FILED BY HIM DURING THE COURSE OF ASSESSMENT PROCE EDINGS, HAS ALLEGED THAT HE WAS HAVING CASH IN HAND OF RS.2,92,192/ - AS ON 01/04/2000. IT IS SEEN THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE SOURCE AND GENUINENESS OF THE SAID CASH AT THE BEGINNING OF THE BLOCK PERIOD WAS NEVER ENQUIRED BY THE A.O. FROM THE BANK STATEMENTS OF THE ASSESSEE IT IS OBSERVED THAT THE ASSESSEE HAS MADE SMALL AMOUNTS OF WITHDRAWALS FROM HIS BANK ACCOUNT, AS AND WHEN REQUIRED, FOR HIS DAY TO DAY EXPENDITURE. THUS IT IS SEEN THAT THE A.O FAILED TO APPRECIATE THAT THERE WOULD NOT HAVE BEEN ANY PURPOSE OF MAKING SMALL WITHDRAWALS, IF THE ASSESSEE WAS ACTUALLY HAVING SUCH HUGE CASH IN HAND LYING IN HIS POSSESSION. THE A.O ALSO FAILED TO CONFRONT THE ASSESSEE ABOUT THE SOURCE OF SAID CLAIM AND GENUINENESS OF THE SAID CONTEN TION. ACCORDINGLY IN THE NOTICE DATED 09.07.2010, THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE ORDER PASSED BY THE A.O ON THIS ISSUE MAY NOT BE TAKEN AS ERRONEOUS AS THE SAME IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE A.R OF THE ASSESSEE I N THE REPLY FILED ON 03/12/2010 SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE VIDE HIS SUBMISSION DATED 24/11/2008, HAS SUBMITTED THE BALANCE SHEET DATED 31/03/2000, WHICH HAS BEEN CARRIED FORWARD AS OPENING CASH IN HAND AS ON 01 /04/2000. THE ASSESSEE ALSO CONTESTED THAT THIS ISSUE HAS NO RELEVANCE WITH THE INCOME TAXABLE IN THE BLOCK PERIOD 9AY 2001 - 02 - AY 200607). THE ASSESSEE FURTHER SUBMITTED THAT SOURCE OF OPENING CASH BALANCE AS ON 01.04.2000 IS THE INCOME EARNED IN THE PREC EDING PERIOD WHICH DID NOT FALL WITHIN THE PURVIEW OF BLOCK ASSESSMENT AND CONSEQUENTLY THE SUBJECT NOTICE U/S 263 ON THIS ASPECT IS TOTALLY EXTRANEOUS. THE ABOVE CONTENTIONS OF THE ASSESSEE WERE CONSIDERED AND EXAMINED AND IT WAS FOUND THAT THE SAME ARE NOT FACTUALLY CORRECT. THERE IS NOTHING IN THE STATEMENT OF AFFAIRS FOR THE YEAR ENDING 31/03/2000, WHICH CAN JUSTIFY THE CASH IN HAND OF RS. 2,92,192/ - . MOREOVER, THE ASSESSEE HAS NOT FILED ANY STATEMENT OF AFFAIRS WITH HIS REGULAR RETURN OF INCOME. DU RING THE SEARCH AT THE OFFICE AND RESIDENTIAL PREMISES OF THE ASSESSEE, NO SUCH BOOKS OF ACCOUNTS OR STATEMENT OF AFFAIRS WERE FOUND. HENCE, IT IS APPARENT, THAT THE 14 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) STATEMENT OF AFFAIRS WAS AN AFTER THOUGHT, PREPARED BY THE ASSESSEE TO JUSTIFY HIS UNEXPL AINED INCOMES AND INVESTMENTS. THE ASSESSEES CONTENTION THAT THE SOURCE OF INITIAL CAPITAL CANNOT BE EXAMINED, IS ALSO LEGALLY INCORRECT. THE INQUIRY BEFORE ASSESSMENT IS GOVERNED BY THE PROVISIONS OF SECTION 142 OF THE INCOME TAX ACT. THE PROVISO TO SECTION 142(1) CLEARLY LAYS DOWN THAT THE ASSESSING OFFICER CAN CALL FOR THE PRODUCTION OF ANY ACCOUNT RELATING TO A PERIOD UPTO THREE YEARS PRIOR TO THE PREVIOUS YEAR. THE SOURCE OF THE INITIAL CAPITAL IS CRUCIAL FOR ANY ASSESSMENT AND IF THAT IS NOT DO NE, THEN THE ASSESSMENT IS CLEARLY ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. HONBLE PATNA HIGH COURT IN THE CASE OF CIT VS. PUSHPA DEVI [1987] 164 ITR 639 (PAT.) HAS HELD THAT ENQUIRY INTO THE SOURCE OF THE INITIAL CAPITAL IS CRUCIAL FOR THE ASSESSING OFFICER. IF THAT IS NOT DONE, THE ASSESSMENT IS BOUND TO BE ERRONEOUS AND HENCE PREJUDICIAL TO THE REVENUE. SINCE, THE ASSESSING OFFICER HAS FAILED TO ENQUIRE INTO THE SOURCE OF INITIAL CAPITAL AS ALLEGED BY THE ASSESSEE, IT IS CLEAR THAT ASS ESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. CASH DEPOSITED IN THE ACCOUNTS HELD WITH THE BANKS. ETC. : FROM THE BANK STATEMENT OF THE ASSESSEE IT WAS OBSERVED THAT THE ASSESSEE HAS MADE VARIOUS CASH DEPOSITS DURING THE YEAR UNDER CONSIDERATION, THE SOURCE OF WHICH WERE NEVER ENQUIRED BY THE A.O., DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS ALSO OBSERVED THAT THE ASSESSEE VIDE LETTER DATED 22/10/2008, HAD FURNISHED THE COPIES OF HIS BANK STATEMENTS. HOWEVER, THE BANK STATEMENT OF ICICI BANK, S.B. A/C NO. 05601502207, 47 MISSION STREET, PONDICHERY HAD NOT BEEN FILED BY HIM, THOUGH THE SAME IS MENTIONED IN THE COVERING LETTER. THE A.O HAD NOT POINTED OUT THIS DISCREPANCY, WHICH FURTHER SHOW S THAT THE DETAILS FILED BY THE ASSESSEE WERE NOT EXAMINED PROPERLY. THUS IT IS APPARENT THAT THE ISSUE UNDER CONSIDERATION, WAS NOT PROPERLY INVESTIGATED AND EXAMINED BY THE ASSESSING OFFICER. ACCORDINGLY IN THE NOTICE DATED 09.07.2010, THE ASSESSEE W AS ASKED TO SHOW CAUSE AS TO WHY THE ORDER PASSED BY THE A.O., ACCEPTING THE DEPOSITS MADE BY THE ASSESSEE IN HIS BANKS ACCOUNTS, WITHOUT PROPER VERIFICATION, ENQUIRY AND APPLICATION OF MIND, MAY NOT BE TAKEN AS ERRONEOUS AS THE SAME IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 15 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) THE A.R OF THE ASSESSEE IN THE REPLY FILED ON 03/12/2010 SUBMITTED THAT A.O HAD UNDERTAKEN RECONCILIATION OF DEPOSIT IN BANK ACCOUNT AND SUBSEQUENTLY VIDE LETTER DATED 18/08/2008 HAS RAISED SPECIFIC QUERY WITH REGARD TO VERIFICA TION OF DEPOSITS IN BANK ACCOUNT AND DISCREPANCIES AS IDENTIFIED BY THE A.O. THE ASSESSEE SUBMITTED THAT IN THIS NOTICE, THE A.O HAS ALSO ASKED THE ASSESSEE TO FILE COPIES OF ALL BANK STATEMENT ALONGWITH THE EXPLANATION OF THE ENTRIES. THE ASSESSEE FURTHE R SUBMITTED THAT THE AFORESAID QUERIES WERE DULY REPLIED BY HIM VIDE LETTER DATED 15/11/2008. THE ASSESSEE ALSO SUBMITTED THAT THE BANK STATEMENT OF THE ICICI BANK, PONDICHERY WAS ALSO SUBMITTED ALONGWITH THE SAID REPLY. THUS IT WAS CONTENDED BY THE ASSE SSEE THAT IT IS INCORRECT TO ALLEGE THAT THE AO HAD ACCEPTED THE DEPOSITS MADE IN BANK ACCOUNT WITHOUT PROPER VERIFICATION AND ENQUIRY. THE ABOVE CONTENTIONS OF THE ASSESSEE WERE CONSIDERED AND EXAMINED AND IT WAS FOUND THAT THE SAME ARE FACTUALLY INCOR RECT. THOUGHT IT IS CORRECT THAT THE ASSESSING OFFICER HAS ISSUED THE NOTICE SPECIFYING THE DISCREPANCIES AND ASKING FOR ASSESSEES EXPLANATION, HOWEVER, THE SAID DISCREPANCIES WERE ITSELF MOSTLY INACCURATE. OUT OF THE 34 DISCREPANCIES POINTED OUT BY THE ASSESSING OFFICER, IT IS SEEN THAT 16 DISCREPANCIES DID NOT EVEN EXIST IN THE ACCOUNTS OF THE ASSESSEE. IT IS SEEN THAT THE A.O ASKED THE ASSESSEE TO EXPLAIN THE CASH DEPOSITS PERTAINING TO THE PERIOD, WHEN THE SAID BANK ACCOUNT WERE NOT EVEN OP ENED BY THE ASSESSEE. FOR EXAMPLE THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO EXPLAIN THE CASH DEPOSIT IN THE ACCOUNT NO. 1190020852 MADE ON 01/04/2000, 09/01/2005 AND 06/02/2005. THIS IS CONTRARY TO THE FACT THAT THIS ACCOUNT WAS OPENED BY THE ASSESS EE ON 17/02/2005. THIS ITSELF SHOWS HOW THE ACCOUNTS WERE EXAMINED BY THE ASSESSING OFFICER AND DISCREPANCIES WERE. BESIDES, IT IS OBSERVED THAT THE ASSESSING OFFICER VIDE NOTICE DATED 18/08/2008, HAS ASKED THE ASSESSEE TO FURNISH COPIES OF THE BANK STAT EMENTS OF VARIOUS BANK ACCOUNTS OPERATED BY THE ASSESSEE DURING THE BLOCK PERIOD AND ALSO EXPLAIN THE ENTRIES CONTAINED THEREIN. HOWEVER, THE ASSESSEE IN COMPLIANCE THEREOF HAD ONLY FURNISHED COPIES OF BANK STATEMENTS, WITHOUT ANY NARRATION OR EXPLANATION (INSPITE OF THE FACT THAT THE SAME WERE SPECIFICALLY REQUESTED BY THE ASSESSING OFFICER). IN THE ABSENCE OF NARRATION AND EXPLANATION, IT IS CLEAR, THAT THE ENTRIES CONTAINED THEREIN COULD NOT BE EXAMINED BY THE ASSESSING OFFICER. IT IS SEEN THAT IN THE DE TAILS FILED VIDE LETTER DATED 15/11/2008, THE ASSESSEE HAS FURNISHED COPY OF THE FOLLOWING BANK ACCOUNTS, THAT TOO WITHOUT ANY NARRATION : 16 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) BANK ACCOUNT NO. FROM TO SBI, AIZAWL 1190020852 17/02/2005 30/08/2007 ICICI BANK, PONDICHERY 5601502207 31/03/2004 30/11/2004 ICICI BANK, HABSIGUDA 6901026675 06/01/2005 03/10/2006 119070161557 13/03/2004 10/09/2007 FROM THE BANK STATEMENT OF ICICI, PONDICHERY, AS FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS CLEAR THAT THE ACCOU NT STATEMENT SUBMITTED IS OF A VERY SMALL PERIOD AND NOT OF THE ENTIRE BLOCK PERIOD. THUS THE ASSESSMENT ORDER WAS PASSED BY THE A.O CLEARLY WITHOUT PROPERLY EXAMINING THE BANK ACCOUNTS OF THE ASSESSEE. SINCE, THE ASSESSING OFFICER HAS MADE THE ASSESSME NT WITHOUT EXAMINING THE VARIOUS DEPOSITS MADE BY THE ASSESSEE IN ITS BANK ACCOUNT AND ENQUIRING INTO THE SOURCE OF THE SAME, IT IS CLEAR THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 4. IN VESTMENTS IN IMMOVABLE ASSETS : IT IS SEEN THAT IN THE ANNUAL PROPERTY RETURN FILED WITH THE GOVERNMENT, THE ASSESSEE HAS SHOWN EIGHT PROPERTIES. BESIDES PAGE 51, ANNEXURE A - 1, SEIZED FROM THE RESIDENCE OF ASSESSEE AT DELHI IS HAND WRITTEN NOTE ABOUT CONSTRUCTION OF A HOUSE WITHIN THE BLOCK PERIOD. THIS PAPER CONTAINED DETAILS OF MONIES RECEIVED, AMOUNTING TO RS. 6,39,000/ - AND ALSO EXPENDITURE DETAILS REGARDING PURCHASE OF BUILDING FOR RS.6,66,000/ - . IT IS OBSERVED THAT THE ASSESSING OFFICER DURING T HE COURSE OF ASSESSMENT PROCEEDINGS HAD NOT EXAMINED THE VARIOUS PROPERTIES HELD BY THE ASSESSEE; EVIDENCE REGARDING THE DATE OF THEIR PURCHASE; SOURCE OF SAID INVESTMENTS, IF PURCHASED DURING THE BLOCK PERIOD AND THE PURPOSE FOR WHICH THE SAME WERE PUT TO USE. A LETTER WAS WRITTEN TO GOVT. OF MIZORAM BY THE INVESTIGATION WING, REGARDING THE SOURCE OF INVESTMENT, AS DECLARED BY THE ASSESSEE IN HIS IPR OR OTHERWISE. HOWEVER, IT IS OBSERVED THAT THE A.O DID NOT MAKE ANY FURTHER CORRESPONDENCE WITH GOVT. OF MIZORAM OR INVESTIGATION WING OF THE DEPARTMENT IN THIS REGARD. ACCORDINGLY IN THE NOTICE DATED 09.07.2010, THE ASSESSEE WAS SHOW CAUSE AS TO WHY THE ORDER PASSED BY THE A.O., WITHOUT VERIFICATION OF VARIOUS INVESTMENTS MADE BY HIM, EITHER IN HIS OWN NA ME, OR NAME OF ANY OTHER PERSON AND ACCEPTING THE SAME WITHOUT PROPER ENQUIRY, VERIFICATION AND APPLICATION OF MIND MAY NOT BE CONSIDERED ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 17 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) THE A.R OF THE ASSESSEE IN THE REPLY FILED ON 03/12/2010 S UBMITTED THAT THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, VIDE LETTER DATED 18/08/2008, HAS RAISED THE QUERY WITH RESPECT TO INVESTMENT IN PROPERTIES WITH REFERENCE TO SEIZED MATERIAL, WHICH WAS DULY REPLIED BY HIM VIDE LETTER DATED 24/11/2008. THE ABOVE CONTENTION OF THE ASSESSEE WERE CONSIDERED AND EXAMINED AND IT WAS FOUND THAT THE SAME IS MISLEADING AND INCORRECT. IN THE COVERING LETTER DT. 24/11/2008(COMBINED REPLY FOR A.Y. 2001 - 02 TO 2006 - 07), IT IS MENTIONED THAT COPIES OF THE PROPERTY STATEMENT FURNISHED BY THE ASSESSEE TO HIS EMPLOYER ALONGWITH SOURCES OF INVESTMENT IN THE SAID PROPERTIES, MADE DURING THE RELEVANT BLOCK PERIOD UNDER CONSIDERATION ARE ENCLOSED. HOWEVER, ALONGWITH THIS LETTER THE ASSESSEE HAS FILED COPY OF ONLY ONE PROPERTY STATEMENT IN WHICH SIX PROPERTIES ARE MENTIONED (AS AGAINST EIGHT PROPERTIES REFLECTED IN THE ANNUAL PROPERTY RETURN FILED WITH THE GOVERNMENT AS MENTIONED ABOVE). FURTHER, AS THE ASSESSMENT PERIOD PERTAINS TO SIX FINANCIAL YEARS, IT IS CLEAR THAT DURING THIS PERIOD SIX ANNUAL PROPERTY STATEMENT MUST HAVE BEEN FILED BY THE ASSESSEE, BUT THE ASSESSEE HAS FURNISHED COPY OF ONLY ONE STATEMENT. FURTHER THE PROPERTY STATEMENT ENCLOSED BY THE ASSESSEE IS NEITHER DATED NOR SIGNED BY THE ASSESSEE . IT ALSO DOES NOT CONTAINING ANY ACKNOWLEDGEMENT OF ANY GOVERNMENT OFFICE, TO ESTABLISH THAT THIS WAS THE SAME IPR WHICH HAS BEEN FILED BY THE ASSESSEE WITH HIS EMPLOYER. ABOVE ALL, IN THE ABSENCE OF ANY DATE AND OTHER PARTICULARS, IT IS NOT CLEAR, THE PE RIOD TO WHICH THIS STATEMENT PERTAINS. IN THE ABSENCE OF ANY SIGNATURE AND ACKNOWLEDGEMENT, THIS PROPERTY STATEMENT HAS NO EVIDENTIARY VALUE. FURTHER THIS ALLEGED IPR IS INCOMPLETE IN SO MANY RESPECTS. FIRSTLY IT IS NOT CONTAINING THE DATE OF ACQUISITION OF THE PROPERTIES AND SECONDLY THE SIZE AND LOCATION OF THE PROPERTY IS ALSO NOT GIVEN, WHICH ARE VERY CRUCIAL PARAMETERS TO ASCERTAIN THE VALUE OF THE PROPERTY, AND HAS TO BE FURNISHED THEREIN. FOR EXAMPLE IN CASE OF TWO PLOTS AT HYDERABAD, IT IS MENTION ED THAT VALUE IS NOT KNOWN AN D SIZE AS WELL AS LOCATION IS ALSO NOT MENTIONED. LIKE WISE IN THE CASE OF BIBI NAGAR THE SIZE, LOCATION AS WELL AS VALUE OF THE PLOT ARE ALL MISSING. THE ASSESSEE ALONGWITH THIS LETTER HAS ALSO FILED A STATEMENT CONTAINING D ETAILS OF MEMBER OF CIVIL SERVICES OFFICERS WELFARE SOCIETY, OF WHICH THE ASSESSEE HAD ALSO BECOME MEMBER FOR ACQUIRING RESIDENTIAL PLOT AT GREATER NOIDA. THIS STATEMENT IS SIGNED BY THE PRESIDENT, SECRETARY AND TREASURER OF THE SOCIETY, AS WELL AS OF THE CHARTERED ACCOUNTANT, M/S BHATIA & BHATIA. AS PER 18 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) THIS STATEMENT THE CONTRIBUTION MADE BY THE ASSESSEE IN THIS SOCIETY AS ON 01/04/2005 AND 31/03/2006 WAS RS.12,70,217/ - AND RS.13,20,217/ - RESPECTIVELY. HOWEVER, THIS FIGURES ALSO DO NOT TALLY WITH THE STA TEMENT OF AFFAIRS FILED BY THE ASSESSEE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ON THE ISSUE OF THE DOCUMENT SEIZED FROM THE RESIDENCE OF THE ASSESSEE AT DELHI, WHICH IS A HAND WRITTEN NOTE REGARDING SUM OF RS.6,39,000/ - RECEIVED AND EXPENDITURE OF RS.6,66,000/ - ON PURCHASE OF BUILDING, THE ASSESSEE DID NOT FURNISHED ANY REPLY AND DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE SAME, THOUGH THERE WAS SPECIFIC QUERY OF THIS ISSUE. HOWEVER, INSPITE OF THE ABOVE MENTIONED DISCREPANCIES AND INACCURATE PARTI CULARS, THE ASSESSING OFFICER, DID NOT MADE ANY FURTHER QUERY / VERIFICATION ON THIS ISSUE, AND COMPLETED THE ASSESSMENT, WITHOUT ANY ADVERSE OBSERVATIONS. SINCE, THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT WITHOUT EXAMINING THE ISSUE UNDER CONSI DERATION AND WITHOUT ENQUIRING INTO THE SOURCE OF THE INVESTMENTS AND AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD VS. CIT, INCORRECT ASSUMPTION OF FACTS AND WITHOUT APPLICATION OF MIND. HENCE, IT IS CLEAR THAT ASSESSMEN T ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 5. NON EXAMINATION OF THE SEIZED MATERIAL : IT IS SEEN THAT DURING THE COURSE OF SEARCH PROCEEDINGS, A DIARY MARKED AS ANNEXURE A/RK/311/3, LAPTOP AND VA RIOUS OTHER INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED FROM ROOM NO.311 OF THE H OTEL MANOHAR (MARKED AS A/RK/311/1 TO 6) BY THE INVESTIGATION WING. IT IS OBSERVED THAT THE SAID DOCUMENTS WERE NOT AT ALL EXAMINED BY THE ASSESSING OFFICER DURING THE COU RSE OF ASSESSMENT PROCEEDINGS. REGARDING THE LAPTOP, THE A.O ONLY OBSERVED THAT NOTHING INCRIMINATING REGARDING ANY LAND DEAL HAS BEEN FOUND THEREIN. HOWEVER, THE A.O FAILED TO EXAMINE THE OTHER FILED, CONTAINED IN THE SAID LAPTOP AND THEIR FINANCIAL IMPL ICATIONS. DOCUMENTS RELATING TO CONSTRUCTION OF HOUSE WITHIN THE BLOCK PERIOD WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH PROCEEDINGS, BUT AGAIN THESE AND OTHER INCRIMINATING SEIZED MATERIALS WERE ALSO NOT PROPERLY INVESTIGATED. ACCORDINGLY IN THE NO TICE DATED 09.07.2010, THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, WITHOUT PROPER EXAMINATION OF SEIZED MATERIAL, ETC 19 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) MAY NOT BE CONSIDERED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENU E. THE A.R OF THE ASSESSEE IN THE REPLY FILED ON 03/12/2010 SUBMITTED THAT THE ASSESSING OFFICER VIDE HIS LETTER DATED 18/08/2008 HAD SPECIFICALLY ENQUIRED WITH RESPECT TO THE CONTENTS OF DIARY SEIZED. THE ASSESSEE FURTHER SUBMITTED THAT THE LAPTOP OF TH E ASSESSEE WAS SENT FOR FORENSIC EXAMINATION AND ON THE SAID BASIS, ASSESSING OFFICER HAS SOUGHT CLARIFICATION FROM THE ASSESSEE VIDE PARA (IX) OF ITS LETTER DATED 18.08.2008 TO THE ASSESSEE. THE ASSESSEE SUBMITTED THAT THE CONTENTS OF THE SEIZED DIARY A ND LAPTOP WERE DULY EXPLAINED TO THE A.O VIDE SUBMISSION DATED 15/11/2008 AND 05/12/2008 RESPECTIVELY. THE ASSESSEE FURTHER SUBMITTED THAT VIDE LETTER DATED 24.11.2008 HE EXPLAINED THAT A SUM OF RS.1,80,000/ - WAS INCURRED BY HIM, AS CONTRIBUTION FOR REPAIR AND RENOVATION OF HIS OLD HOUSE, OUT OF THE FUNDS AVAILABLE WITH HIM AND THE A BALANCE AMOUNT OF RS.3,41,600/ - WAS INCURRED BY ASSESSEES FATHER OUT OF THE RECEIPTS FROM THE MATURITY OF THE CHIT FUND FOR WHICH THE NECESSARY EVIDENCE DATED 24.11.2008. THE ASSESSEE ALSO SUBMITTED THAT THE A.O HAS CATEGORICALLY CONFIRMED IN PARA2 OF HIS ASSESSMENT ORDER THAT THE RETURN OF INCOME ALONG WITH ALL THE DETAILS WERE EXAMINED WITH REFERENCE TO THE SEIZED / IMPOUNDED MATERIALS. THE ABOVE CONTENTIONS OF THE ASSE SSEE WERE CONSIDERED AND EXAMINED AND IT WAS FOUND THAT THE SAME ARE NOT FACTUALLY CORRECT. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS ASKED THE ASSESSEE TO EXPLAIN THE CONTENTS OF DIARY SEIZED. HOWEVER, THE ASSESSEE INSTEAD OF EXPLAINING THE ENTRIES CONTAINED THEREIN, SUBMITTED A VAGUE REPLY THAT INFORMATION CONTAINED IN THE SAID DIARY DOES NOT HAS ANY FINANCIAL IMPLICATIONS. THE REPLY OF THE ASSESSEE FILED BEFORE THE ASSESSING OFFICER IS AS FOLLOWS: - IT MAY BE APPRECIATED TH AT THE ANNEXURE A/RK/311/3 IS A PERSONAL DIARY OF THE ASSESSEE PERTAINING TO THE CALENDAR YEAR 2005. THE SAID DIARY IS FULL OF JOTTINGS, SCRUBBINGS AND NOTINGS RELATING TO HIS PERSONAL CHORES / ASSIGNMENTS / CONTACTS / INFORMATION WHICH ARE DEVOID OF ANY FINANCIAL TRANSACTIONS HAVING IMPLICATIONS OF ANY NATURE WHATSOEVER. AS PER THE NORMAL PRACTICE IN ASSESSMENT PROCEEDINGS AFTER THE QUERY RAISED THE ASSESSING OFFICER, IT IS THE DUTY OF THE ASSESSEE TO EXPLAIN THE CONTENTS OF THE SEIZED MATERIAL, AND TH ERE AFTER IT IS THE BOUNDEN DUTY OF THE ASSESSING OFFICER TO ANALYZE AND EXAMINE THE SAME, AND DECIDE IF THERE IS ANY FINANCIAL IMPLICATION OR NOT. HOWEVER, IT IS SEEN THAT THE ASSESSEE INSTEAD OF FURNISHING THE DETAILS, HAS HIMSELF JUMPED INTO THE CHAIR O F THE ASSESSING OFFICER AND HAS GIVEN THE VERDICT. 20 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) REGARDING THE FORENSIC EXAMINATION OF THE LAPTOP, PERUSAL OF THE ASSESSMENT RECORD SHOWS THAT NO SUCH EXAMINATION WAS TAKEN / AUTHORIZED BY THE ASSESSING OFFICER. THE FORENSIC EXAMINATION, AT THE MOST WA S DONE BY THE INVESTIGATION WING. THE A.O VIDE LETTER DATED 18/08/2008 RAISED THE QUERY AS FOLLOWS: - THE FORENSIC EXAMINATION OF THE LAPTOP FOUND DURING THE COURSE OF SEARCH SHOWS CERTAIN LAND TRANSACTION ENTERED IN TO BY DR. RAMESH KAPOR IN ORISSA WITH M/S TEJESWANI CONSULTANCY. EXPLAIN YOUR ROLE IN AFORESAID DEALS. THE FACTS AND CIRCUMSTANCES SUGGEST THAT YOU HAD BROKERED THE AFORESAID LAND DEALS. EXPLAIN WHY BROKERAGE INCOME SHOULD NOT BE ESTIMATED AS ATTRIBUTABLE TO THE AFORESAID LAND DEALS. LI KEWISE THE MS WORD DOCUMENT SHOWS DEALING WITH SUNDERED AND L.R.B REDDY: DURING THE COURSE OF SEARCH AT YOUR DELHI RESIDENCE ANN. A - 1 AND A - 2 WERE FOUND AND SEIZED. YOU ARE REQUIRED TO EXPLAIN THE CONTENTS OF THESE ANNEXURE AND YOUR RELATIONSHIP WITH DO CUMENTS FOUND. IF ANY YOUR FAMILY MEMBERS IS CONNECTED WITH THESE DOCUMENTS THAT MAY ALSO BE INTIMATED. IN RESPONSE TO THE SAME, THE REPLY WAS FILED ON 05/12/2008 DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS FOLLOWS : - IT IS ALSO CLARIFIED THAT THE LAPTOP WAS OPERATED ON 25/11/2008 AND NOTHING INCRIMINATING REGARDING ANY LAND DEALS ALLEGED WAS FOUND THEREIN. THUS NO ADVERSE COGNIZANCE IN THIS REGARD CAN BE TAKEN. AS CLEAR FROM THE ABOVE REPLY, IT IS VERY VAGUE AND GENERAL AND THE ASSESSEE HA S CHOSEN TO REMAIN SILENT ON VARIOUS DOCUMENTS CONTAINED IN THE SAID LAPTOP AND VARIOUS ENTRIES IN THE DIARY AND NO EXPLANATION WAS SUBMITTED. IT IS ALSO CLEAR FROM THE FACTS OF THE CASE THAT THE QUESTIONNAIRE WAS ISSUED BY THE ASSESSING OFFICER ON 18/08/2 008. HOWEVER, SUBSEQUENT TO THE OPERATION OF THE LAPTOP ON 25/11/2008 (AS MENTIONED BY THE ASSESSEE), NO QUERY, ON THE ISSUE WAS RAISED BY THE ASSESSING OFFICER. REGARDING, THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH PROCEEDINGS, RELATING TO CONS TRUCTION OF HOUSE WITHIN THE BLOCK PERIOD, AS ALSO MENTIONED IN PARA 4 ABOVE, THE SAID DOCUMENTS SHOWED RECEIPT OF RS.6.39 LAKHS AND EXPENDITURE INCURRED BY THE ASSESSEE ON PURCHASE OF BUILDING AMOUNTING TO RS.6,66,000/ - . THE ASSESSEE HAS CONTENDED THAT RE PLY ON THIS ISSUE WAS FILED BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON 24/11/2008, WHEREIN IT WAS SUBMITTED THAT A SUM OF RS.1,80,000/ - WAS INCURRED BY THE ASSESSEE OUT OF THE FUNDS AVAILABLE AND RS.3,41,600/ - WAS INCURRED BY HIS FATHER. PERUSAL OF THE ABOVE SUBMISSION OF THE ASSESSEE, SHOWS THAT THE ASSESSEE HAS GIVEN 21 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) DETAILS OF RS.5,21,600/ - (1,80,000 + 3,41,600), WHEREAS THE AMOUNT INVESTED AS PER THE DOCUMENT WAS RS.6,66,000/ - . MOREOVER , AS PER THE DOCUMENT, THE INVESTMENT WAS MADE BY THE ASS ESSEE OUT OF RECEIPTS OF RS.6.39 LAKHS AND NOT FROM INTERNAL ACCRUALS. BESIDES THE ASSESSEE HAS NEITHER FURNISHED ANY DETAILS OF THE PROPERTY WHICH WAS RENOVATED, NOR ANY DOCUMENTARY EVIDENCE THEREOF, IN SUPPORT OF HIS ALLEGED CONTENTION. THE ASSESSING O FFICER, ALSO FAILED TO APPRECIATE THAT THE STATEMENT OF THE FATHER OF THE ASSESSEE WAS RECORDED DURING THE COURSE OF SEARCH PROCEEDINGS, WHEREIN HE HAS NOT MENTIONED MAKING ANY SUCH INVESTMENT OR GIVING ANY SUCH SUM TO THE ASSESSEE. THUS IT IS APPARENT T HAT THE DOCUMENT FOUND AND SEIZED DURING THE COURSE OF SEARCH PROCEEDINGS, AS MENTIONED ABOVE, REFERS TO ALTOGETHER DIFFERENT TRANSACTION, WHICH THE A.O FAILED TO EXAMINE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. SINCE, THE ASSESSING OFFICE R HAS COMPLETED THE ASSESSMENT WITHOUT PROPER EXAMINING OF THE SEIZED MATERIAL, IT IS CLEAR THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. I, THUS, HOLD THAT THE ASSESSMENT OR DER MADE BY THE ASSESSING OFFICER U/S 143(3)/153A WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE ISSUES MENTIONED ABOVE. SINCE T HESE ISSUES WERE NOT CONSIDERED / EXAMINED / INVESTIGATED BY THE A.O AT THE TIME OF FRAMING OF ASSESSMENT, THE ASSESSING OFFICER IS THEREFORE, DIRECTED TO FRAME THE ASSESSMENT AFRESH ON THE ABOVE ISSUES AFTER AFFORDING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING PROPER INQUIRIES AND VERIFICATIONS. 6 . WE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY CONSIDERED THE SAME ALONG WITH THE ORDER OF THE AUTHORITIES BELOW. BEFORE DECIDING THE ISSUE WHETHER THE ORDER PASSED U/S 263 IS VALID OR NOT, IT IS ESSENTIAL TO REFER TO THE RE LEVANT PROVISIONS OF SEC. 263. SECTION 263 LAYS DOWN AS UNDER : - 263. (1) THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CAN CELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. 22 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) EXPLANATION. - FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT, FOR THE PURPOSES OF THIS SUB - SECTION, - (A) AN ORDER PASSED ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988 BY THE ASSESSING OFFI CER SHALL INCLUDE - (I) AN ORDER OF ASSESSMENT MADE BY THE ASSISTANT COMMISSIONER OR DEPUTY DIRECTOR OR THE INCOME - TAX OFFICER ON THE BASIS OF THE DIRECTIONS ISSUED BY THE JOINT COMMISSIONER UNDER SECTION 144A; (II) AN ORDER MADE BY THE JOINT COMMISSIONE R IN EXERCISE OF THE POWER OR IN THE PERFORMANCE OF THE FUNCTIONS OF AN ASSESSING OFFICER CONFERRED ON, OR ASSIGNED TO, HIM UNDER THE ORDERS OR DIRECTIONS ISSUED BY THE BOARD OR BY THE CHIEF COMMISSIONER OR DIRECTOR GENERAL OR COMMISSIONER AUTHORISED BY TH E BOARD IN THIS BEHALF UNDER SECTION 120; (B) 'RECORD' SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT AVAILABLE AT THE TIME OF EXAMINATION BY THE COMMISSIONER; (C) WHERE ANY ORDER REFERRED TO IN THIS SUB - SECTION AND PASSED BY THE ASSESSING OFFICER HAD BEEN THE SUBJECT MATTER OF ANY APPEAL FILED ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988, THE POWERS OF THE COMMISSIONER UNDER THIS SUB - SECTION SHALL EXTEND AND SHALL BE DEEMED ALWAYS TO HAVE EXTENDED TO SUCH MATTERS AS HAD NOT BEEN CONSIDERED AND DECIDED IN SUCH APPEAL. (2) NO ORDER SHALL BE MADE UNDER SUB - SECTION (1) AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED. (3) NOTWI THSTANDING ANYTHING CONTAINED IN SUB - SECTION (2), AN ORDER IN REVISION UNDER THIS SECTION MAY BE PASSED AT ANY TIME IN THE CASE OF AN ORDER WHICH HAS BEEN PASSED IN CONSEQUENCE OF OR TO GIVE EFFECT TO, ANY FINDING OR DIRECTION CONTAINED IN AN ORDER OF THE APPELLATE TRIBUNAL, THE HIGH COURT OR THE SUPREME COURT. EXPLANATION. - IN COMPUTING THE PERIOD OF LIMITATION FOR THE PURPOSES OF SUB - SECTION (2), THE TIME TAKEN IN GIVING AN OPPORTUNITY TO THE ASSESSEE TO BE REHEARD UNDER THE PROVISO TO SECTION 129 AND ANY PERIOD DURING WHICH ANY PROCEEDING UNDER THIS SECTION IS STAYED BY AN ORDER OR INJUNCTION OF ANY COURT SHALL BE EXCLUDED. 23 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) 7 . FROM THE PERUSAL OF THE AFORESAID SECTION, IT IS APPARENT THAT THERE ARE FOUR MAIN FEATURES OF THE POWER OF REVISION TO BE EXERCI SED U/S 263 BY T HE COMMISSIONER OF INCOME - TAX. FIRSTLY, THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORDS OF ANY PROCEEDINGS UNDER THE ACT AND FOR THIS PURPOSE HE NEED NOT TO SHOW ANY REASON OR RECORD ANY REASON TO BELIEVE. IT IS A PART OF HIS ADMINI STRATIVE POWER TO CALL FOR THE RECORD AND EXAMINE THEM RELATING TO ANY ASSESSEE. SECONDLY, HE MAY CONSIDER ANY ORDER PASSED BY THE ASSESSING OFFICER AS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE R EVENUE. THIS IS EXERCISED BY CALLING FOR AND E XAMINING THE RECORD AVAILABLE AT THIS STAGE. THERE IS NO QUESTION OF THE ASSESSEE TO APPEAR AND MAKE SUBMISSION AT THIS STAGE. THIRDLY, IF AFTER CALLING FOR AND EXAMINING THE RECORDS THE COMMISSIONER CONSIDERS THAT THE ORDER OF THE ASSESSING OFFICER IS ER RONEOUS IN SO FAR IT IS PREJUDICIAL TO THE INTEREST OF THE R EVENUE, HE IS BOUND TO GIVE AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH ENQUIRY AS HE MAY DEEM FIT, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF TH E CASE MAY JUSTIFY INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT OR CANCELLING ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. THIS EMPOWERS THE CIT TO CAUSE OR MAKE SUCH ENQUIRIES AS HE DEEMS NECESSARY. FOURTHLY, THE CIT U/S 263 CAN ENHANCE OR M ODIFY THE ASSESSMENT AS A RESULT OF ENQUIRY CONDUCTED AND HEARING OF THE ASSESSEE. 8 . FOR INVOKING THE PROVISIONS OF SECTION 263, WE DO AGREE WITH THE LD. A.R BOTH THE CONDITIONS THAT THE ORDER PASSED BY THE A.O IS ERRONEOUS AND ALSO THAT IT IS PREJUDIC IAL TO THE INTEREST OF REVENUE MUST BE SATISFIED. IF ONE OF THEM IS ABSENT, THE PROVISIONS OF SECTION 263 CANNOT BE INVOKED. THE TERM ERRONEOUS HAS NOT BEEN DEFINED UNDER THE INCOME - TAX ACT BUT IT IS WELL SETTLED THAT EACH AND EVERY TYPE OF MISTAKE O R ER ROR COMMITTED BY THE A.O CANNOT BE SAID TO BE AN ERROR. AN ORDER CAN BE SAID TO BE ERRONEOUS IF THERE IS INCORRECT ASSUMPTION OF FACTS OR INCORRECT APPLICATION OF LAW IN THE ORDER BY THE A.O. IF 24 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) THE A.O AFTER MAKING THE ENQUIRIES AND EXAMINING THE RECORDS TAKEN ONE OF THE POSSIBLE VIEW, IT CANNOT BE SAID T HAT THE ORDER PASSED BY THE A.O WAS ERRONEOUS. 9 . WE NOTED IN THE CASE OF THE ASSESSEE THE CIT INVOKED THE JURISDICTION U/S 263 ON THE BASIS OF THE REASONS AS STIPULATED IN THE PRECEDING PARAGRAPHS. 10 . FROM THESE REASONS IT IS APPARENT THAT IT WAS NOTED BY CIT FROM THE ASSESSMENT RECORDS SO FAR AS AGRICULTURAL INCOME IS CONCERNED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS DOCUMENT TO SUBSTANTIATE THE AGRICULTURAL RETURN LIKE KHASRA / GIRDA WARI DOCUMENT WERE NEITHER CALLED FOR BY THE ASSESSING OFFICER NOR FILE D BY THE ASSESSEE . B EFORE THE CIT THE ASSESSEE HAS TAKEN A PLEA THAT HIS FATHER OWNS 15 ACRES OF AGRICULTURAL LAND AND HIS BROTHER HAS CARRIED OUT CULTIVATION AND HE HAS RECEIVED SU M OF RS.88,185/ - AS GIFT BY HIS FATHER ON ACCOUNT OF HIS SHARE IN AGRICULTURE INCOME. A GRICULTURE INCOME EARNED BY THE FATHER OF THE ASSESSEE CANNOT BE THE AGRICULTURE INCOME OF THE ASSESSEE. WE ASK THE LD. A.R IN THE OPEN COURT WHETHER ANY QUERY HAS BEEN RAISED BY THE ASSESSING OFFICER ABOUT THE EARNING OF THE AGRICULTURAL INCOME OR WHETHER YOU HAVE FILED ANY REPLY IN THIS REGARD WHICH MAY PROVE THAT THE ISSUE REGARDING THE EARNING OF THE AGRICULTURAL INCOME WAS EXAMINED BY THE ASSESSING OFFICER. THE LD. A.R WAS FAIR ENOUGH TO CONCEDE THAT THE ASSESSING OFFICER HAS NOT RAISED ANY QUERY IN THIS REGARD. THIS ITSELF PROVE THAT THIS IS A CASE OF NO INQUIRY. THE SIMILAR SITUATION HAS BEEN ACCEPTED BY THE LD. COUNSEL IN EACH OF THE ASSESSMENT YEAR S , BUT HE VEHE MENTLY RELIED ON THE DECISION OF DELHI HIGH COURT IN THE CASE OF ITO VS. DG HOUSING PROJECTS LTD., 343 ITR 329 (DEL.). 11 . IN RESPECT OF THE SECOND ISSUE, RELATING TO THE CASH IN HAND AS ON 01.04.2000 THE CIT NOTED THAT THIS WAS ALSO NOT EXAMINED BY TH E ASSESSING OFFICER BUT THE CIT WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE THAT THE 25 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) SOURCE OF OPENING CASH BALANCE IS THE INCOME EARNED IN THE PRECEDING PERIOD WHICH DO NOT FALL WITHIN THE PURVIEW OF THE BLOCK ASSESSMENT I N VIEW OF PROVISO TO S ECTION 142(1) WHICH LAYS DOWN THAT THE ASSESSING OFFICER CAN CALL FOR THE PRODUCTION OF ANY ACCOUNT RELATING TO A PERIOD UPTO THREE YEARS PRIOR TO PREVIOUS YEAR. THE CIT RELIED IN THE CASE OF CIT VS PUSHPA DEVI, 164 ITR 639 (PAT.) IN WHICH IT WAS HELD T HAT INQUIRY INTO THE SOURCE OF INITIAL CAPITAL IS CRUCIAL FOR THE ASSESSING OFFICER. WHEN WE INQUIRED OF DURING THE COURSE OF THE HEARING, THE LD. A.R WAS FAIR ENOUGH TO CONCEDE THAT NEITHER ANY INQUIRY WAS MADE BY THE ASSESSING OFFICER NOR ANY REPLY WAS S UBMITTED BY THE ASSESSEE IN THIS REGARD. 11.1 IN RESPECT OF CASH DEPOSITED IN THE ACCOUNTS HELD WITH THE BANKS ETC, THE CIT NOTED THAT THE ASSESSING OFFICER NEVER INQUIRED ABOUT THE SOURCE OF THE DEPOSITS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. I T WAS ALSO NOTED BY THE CIT THAT VIDE LETTER DATED 22.10.2008 ASSESSEE FURNISHED THE COPIES OF BANK STATEMENT HOWEVER, BANK STATEMENT OF ICICI BANK SAVINGS ACCOUNT NO. 05601502207, 47 MISSION STREET, PONDICHERY HAD NOT BEEN FILED ALTHOUGH THE SAME WAS M ENTIONED IN THE COVERING LETTER. THE A.O DID NOT POINT OUT THE SAME WHICH PROVE THAT THIS BANK ACCOUNT WAS NOT AT ALL EXAMINED. THE LD. A.R AGAIN BEFORE US RELIED ON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS DG HOUSING PROJECTS LTD., 343 ITR 329 BUT EXPRESSED HIS INABILITY TO PROVE THAT ANY QUERY HAS BEEN RAISED BY THE ASSESSING OFFICER IN THIS REGARD. 11.2 SIMILARLY, IN RESPECT OF INVESTMENT IN IMMOVABLE ASSETS THE CIT NOTED THAT THE ASSESSING OFFICER DURING THE COURSE OF THE ASSES SMENT PROCEEDINGS HAS NOT EXAMINED THE VARIOUS PROPERTIES HELD BY THE ASSESSEE EVEN THOUGH SEIZED MATERIAL PAGE NO.51 ANNEXURE A1 , CONSIST S OF DETAIL OF EIGHT PROPERTIES AND PAPER FOUND FROM THE RESIDENCE SHOWS THE WRITTEN NOTE ABOUT THE CONSTRUCTIO N NOTE OF A HOUSE WITHIN THE BLOCK PERIOD, DETAILS OF RS. 6,39,000/ - RECEIVED, AND ALSO THE DETAILS OF EXPENDITURE FOR PURCHASE OF BUILDING FOR RS. 6,66,000/ - . 26 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) SIMPLY A LETTER WAS WRITTEN TO GOVT. OF MIZORAM, BUT NO FURTHER CORRESPONDENCE WAS MADE. AGAIN W HEN WE INQUIRED OF FROM THE LD. A.R, HE COULD NOT DRAWN OUR ATTENTION TO ANY MATERIAL WHICH MAY PROVE THAT THE ASSESSING OFFICER HAS INQUIRED OR EXAMINED THIS ISSUE. 11.3 IN RESPECT OF NON - EXAMINATION OF THE SEIZED MATERIAL THE CIT OBSERVED THAT DURING S EARCH, A DIARY MARKED AS ANNEXURE A/RK/311/3, LAPTOP AND VARIOUS OTHER INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED FROM ROOM NO.311 OF THE HOTEL MANOHAR (MARKED AS A/RK/311/1 TO 6) BY THE INVESTIGATION WING. THE ASSESSING OFFICER DURING THE COURSE OF ASS ESSMENT PROCEEDINGS ASKED THE ASSESSEE TO EXPLAIN THE CONTENTS OF DIARY SEIZED BUT THE ASSESSEE INSTEAD OF EXPLAINING THE ENTRIES CONTAINED THEREIN SUBMITTED THAT INFORMATION CONTAINED IN THE SAID DIARY DOES NOT HAVE ANY FINANCIAL IMPLICATION. SIMILARLY IN RESPECT OF THE LAPTOP FOUND THE CIT OBSERVED THAT THE ASSESSING OFFICER ISSUE D QUESTIONNAIRE ON 18.08.2008 BUT AFTER OPERATION OF LAPTOP ON 25.11.2008 NO QUERY WAS RAISED BY THE ASSESSING OFFICER. IN VIEW OF ALL THESE, WE NOTED THAT THE CASE OF THE REVENU E IS THAT SINCE THE ASSESSING OFFICER HAD NOT CONSIDERED / EXAMINED THE ISSUES TAKEN IN THE SHOW CAUSE THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 12 . THE LD. A.R. BEFORE US VEHEMENTLY CONTENDED THAT THE CASE OF THE ASSESSEE IS DULY CO VERED BY THE DECISION OF CIT VS. DG HOUSING PROJECTS LTD, 343 ITR 329. HE SPECIALLY RELIED ON PARA NO. 1 7 OF THE ORDER AND STRESSED ON THE BASIS OF THIS PARAGRAPH OF THE ORDER THAT THE CIT IN CASE FINDS THAT ASSESSI NG OFFICER HAS NOT CONDUCTED THE INQUIRY OR EXAMINED THE ISSUE, CIT MUST HIMSELF CONDUCT THE INQUIRY AND RECORD THE FINDING INSTEAD OF SETTING ASIDE THE MATTER AND DIRECTING THE ASSESSING OFFICER TO MAKE A FRESH ASSESSMENT . IF THE CIT HAS NOT CONDUCTED THE INQUIRY, THE ORDER PASSED BY THE ASSESSING OFFICER CANNOT BE REGARDED TO BE ERRONEOUS. ON THIS BASIS ITSELF THE ORDER PASSED U/S 263 BE 27 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) QUASHED AS THE CIT HAS NOT MADE THE INQUIRIES ON EACH OF THE ISSUES TAKEN BY HIM. WE HAVE GONE THROUGH PARA NO.17 OF TH IS ORDER WHICH READ AS UNDER : - 17. THUS, IN CASES OF WRONG OPINION OR FINDING ON THE MERITS, THE COMMISSIONER OF INCOME - TAX HAS TO COME TO THE CONCLUSION AND HIMSELF DECIDE THAT THE ORDER IS ERRONEOUS, BY CONDUCTING NECESSARY ENQUIRY, IF REQUIRED AND NEC ESSARY, BEFORE THE ORDER UNDER SECTION 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. THE COMMISSIONER OF INCOME - TAX CANNOT 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 COMMISSIONER OF INCOME - TAX 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 COMMISSIONER OF INCOME - TAX 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 POSSIB LY THOUGH RARELY, THE COMMISSIONER OF INCOME - TAX CAN ALSO SHOW 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 UNDE RTAKEN THE SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, UNAMBIGUOUS 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 TH E ORDER IS ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER SECTION 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY AND MEAN THE COMMISSIONER OF INCOME - TAX H AS NOT EXAMINED AND DECIDED WHETHER OR NOT THE ORDER IS ERRONEOUS BUT HAS DIRECTED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. FROM THIS CASE OF ITO VS DG HOUSING PROJECTS LTD(SUPRA) AS RELIED BY THE LD. A.R , WE NOTED THE HONBLE DELHI HIGH C OURT TOOK THE VIEW THAT THE CIT WHILE EXERCISING THE JURISDICTION U/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 SUSTAINAB LE. IT WAS FURT HER HELD THAT IN MOST CASES OF ALLEGED INADEQUATE INVESTIGATION , IT WILL BE DIFFICULT TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED INQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS ERRONEOUS, WITHOUT CIT CONDUCTING VERIF ICATION / INQUIRY. IN THAT CASE THE CIT HAD DOUBTS ABOUT THE VALUATION AND 28 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) SALE CONS IDERATION RECEIVED EVEN THOUGH THE CIT HAS RECORDED THAT THE CONSIDERATION RECEIVABLE WAS EXAMINED BY THE ASSESSING OFFICER BUT WAS NOT PROPERLY EXAMINED AND THEREFORE HE T OOK THE VIEW THAT THE ASSESSMENT ORDER IS ERRONEOUS AND DIRECTED THE ASSESSING OFFICER TO MAKE FURTHER INQUIRY. ON THESE FACTS THE HONBLE HIGH COURT DECIDED THE QUESTION OF LAW IN FAVOUR OF THE ASSESSEE. THIS DECISION IS NOT APPLICABLE IN OUR OPINION TO A CASE WHERE NO INQUIRY HAS BEEN CONDUCTED BY THE ASSESSING OFFICER AS THE CASE OF THE ASSESSEE IS THAT OF NO INQUIRY BEING CONDUCTED BY THE ASSESSING OFFICER ON MOST OF THE ISSUES TAKEN BY THE CIT AS DISCUSSED BY US IN THE PRECEDING PARAGRAPH . THIS IS UNDI SPUTED FACT THAT THE ASSESSING OFFICER HAS NOT CONDUCTED INQUIRY IN RESPECT OF THE AGRICULTURAL INCOME, CASH IN HAND, CASH DEPOSITED IN THE ICICI BANK, SAVINGS BANK ACCOUNT AS WELL AS INVESTMENT MADE IN THE IMMOVABLE PROPERTY. IT IS A CASE SO FAR THESE ITE MS ARE CONCERNED WHERE NO INQUIRY HAS BEEN CONDUCTED BY THE ASSESSING OFFICER. IT IS NOT THE CASE OF INADEQUACY OF THE INQUIRY BUT A CASE OF LACK OF INQUIRY . IN THE LAPTOP SEIZED THERE MAY BE INADEQUACY OF INQUIRY. IF THERE IS NO INQUIRY BY THE ASSESSING OFFICER ON ONE OF THE ISSUE S AS NOTED BY THE CIT. THE ORDER PASSED BY THE ASSESSING OFFICER HAS TO BE REGARDED TO BE ERRONEOUS. IN THE CASE OF ITO VS. DG HOUSING PROJECTS LTD,(SUPRA) AS RELIED BY THE LD. A.R THE HONBLE HIGH COURT HAS HOLD THAT WHERE THERE IS NO INQUIRY ORDER BECOMES ERRONEOUS. THE RELEVANT FINDING OF THE HONBLE HIGH COURT ARE REPRODUCED AS UNDER: - 11. THE REVENUE DOES NOT HAVE ANY RIGHT TO APPEAL TO THE FIRST APPELLATE AUTHORITY AGAINST AN ORDER PASSED BY THE ASSESSING OFFICER. SECTION 2 63 HAS BEEN ENACTED TO EMPOWER THE COMMISSIONER OF INCOME - TAX TO EXERCISE POWER OF REVISION AND REVISE ANY ORDER PASSED BY THE ASSESSING OFFICER, IF TWO CUMULATIVE CONDITIONS ARE SATISFIED. FIRSTLY, THE ORDER SOUGHT TO BE REVISED SHOULD BE ERRONEOUS AND, S ECONDLY, IT SHOULD BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE EXPRESSION 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' IS OF WIDE IMPORT AND IS NOT CONFINED TO MERELY LOSS OF TAX. THE TERM 'ERRONEOUS' MEANS A WRONG/INCORRECT DECISION DEVIATING FRO M LAW. THIS EXPRESSION POSTULATES AN ERROR WHICH MAKES AN ORDER UNSUSTAINABLE IN LAW. 12. 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 29 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) 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 IN COME. 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 BECAUSE ENQUIRY OR VERIFICATION HAS NOT BEEN MADE AND NOT BECAUSE A WRONG ORDER HAS BEEN PASSED ON THE MERITS. 13 . FROM THIS AFORESAID DECISION ITSELF, IN OUR OPINION THE ASSESSEE DOES NOT HAVE ANY LEG TO STAND AS IN THE CASE OF THE ASSESSEE, THE ASSESSING OFFICER HAS NOT MADE INQUIRIES ON MOST OF THE ISSUES AS POINTED OUT BY US AND EVEN THE LD. A.R ALSO AGREED THAT NO QUESTIONNAIRE ISSUED OR QUERY WAS RAISED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT IN RESPECT OF THESE ISSUES . THIS IS NOT A CASE OF INADEQUACY OF INQUIRY BUT A CASE OF NO INQUIRY B EING CONDUCTED BY THE ASSESSING OFFICER WHERE IT WAS INCUMBENT UPON THE ASSESSING OFFICER TO EXAMINE AND VERIFY THE FACTS FOR DETERMINING THE CORRECT INCOME OF THE ASSESSEE IN EACH OF THE ASSESSMENT YEARS. 1 4 . WHETHER LACK OF I NQUIRY BY THE ASSESSING O FFICER WILL TANTAMOUNT TO BE THE ONE WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. WE NOTED THAT A SIMILAR ISSUE HAS ARISEN IN THE ASSESSMENT YEAR 2006 - 07 IN I.T.A. NO.139/PNJ/11 BEFORE CORDINATE BENCH, PANAJI IN THE CASE OF V.M. SALG AO C AR IN WHICH ALSO THE A.O HAS NOT CARRIED OUT ANY ENQUIRY AND THE CORDINATE BENCH , VIDE ORDER DATED 25/08/2011 HAS HELD AS UNDER : - 12. WE HAVE HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECORD AND CASE LAWS BROUGHT TO OUR NOTICE. THE APPELLANT DOES NOT DISPUTE THAT HE ALSO IS ENGAGED IN THE BUSINESS OF TRADING OF IRON ORE. THE APPELLANT IN HIS RETURN OF INCOME MADE CLAIM OF ADDITIONAL DEPRECIATION AMOUNTING TO RS.4,42,46,711/ - AND DECLARED INCOME OF RS FROM THE BUSINESS OF IRON ORE MINING, P ROCESSING AND EXPORTING AS REPRODUCED AT PA GE 1 OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SIMPLY ACCEPTED THE AFORESAID CLAIM OF ADDITIONAL DEPRECIATION AS WAS STATED IN THE RETURN OF INCOME AND HAS FAILED TO MAKE ANY ENQUIRY AS TO WHETHER THE CONDI TIONS CONTAINED U/S 32(1)(IIA) FOR ALLOWING THE ADDITIONAL DEPRECIATION HAVE ACTUALLY BEEN SATISFIED. EVEN THE 30 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) APPELLANTS RETURN DID NOT CONTAIN SUCH DETAILS FROM WHICH A CONCLUSION IN ACCORDANCE WITH LAW COULD BE DRAW N. THE IMPLICATION OF THE JUDGMENT B Y APEX COURT IN THE CASE OF CIT VS. SESA GOA LTD. 271 ITR 332 (SC) HAS NOT BEEN ANALYZED TO FIND OUT AS TO WHETHER THE NEW MACHINERY ON WHICH ADDITIONAL DEPRECIATION HAS BEEN CLAIMED IS ACQUIRED OR INSTALLED IN THE ASSESSEES BUSINESS OF MANUFACTURE OR PRO DUCTION OF ANY ARTICLE OR THING OR THAT IT WAS A MACHINERY INSTALLED IN THE TRADING BUSINESS OR OTHERWISE IN A BUSINESS WHICH DOES NOT AMOUNT TO MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING AS CLARIFIED IN THE SUPREME COURT JUDGMENT IN SESA GOA LTD., SUPRA. NO FINDINGS OF FACT ARE SHOWN TO HAVE BEEN RECORDED BY THE ASSESSING OFFICER ON THESE ASPECTS. THE NATURE OF BUSINESS MENTIONED AT PAGE NO. 1 OF THE ASSESSMENT ORDER SIMPLY STATES THE EX - FACIE POSITION AS IS NARRATED BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY HIM. THE SAME DOES NOT CONSTITUTE ANY FINDING OF FACT REACHED AFTER MAKING ANY ENQUIRY BY THE ASSESSING OFFICER. IT THUS IS APPARENT THAT THE ASSESSING OFFICER ACCEPTED THE CLAIM ON ITS FACE WITHOUT PERFORMING HIS FUNCTIONS AS ARE REQU IRED OF HIM AS A QUASI JUDICIAL AUTHORITY. THE ASSESSMENT ORDER THUS MADE WAS ERRONEOUS AND UNDER THE CIRCUMSTANCES OF THE CASE, IT WAS NOT NECESSARY FOR THE LEARNED CIT TO MAKE FURTHER ENQUIRIES BEFORE SETTING ASIDE THE ORDER AND FIND OUT HIMSELF ALL SUC H RELEVANT FACTS IN A MANNER AS ARE REQUIRED TO BE DONE BY THE ASSESSING AUTHORITY. THE ASPECT OF DEDUCTION OF INTEREST PAID ON INCOME TAX WAS NEITHER ENQUIRED NOR SHOWN TO HAVE BEEN VERIFIED BY THE ASSESSING OFFICER AND THUS THE ORDER OF ASSESSMENT IS ER RONEOUS ON THAT COUNT AS WELL. 13. ADMITTEDLY THE ASSESSING OFFICER BEING A QUASI - JUDICIAL AUTHORITY HAD THREE FUNCTIONS (I) TO COLLECT THE MATERIALS AND INFORMATION (II) TO PROCESS THE MATERIALS AND INFORMATION; AND (III) TO ADJUDICATE ON THE CONSIDERAT ION OF SUCH MATERIALS AND INFORMATION. IN A CASE LIKE THIS, WHERE THE ASSESSING OFFICER HAS FAILED TO PERFORM HIS DUTIES IN NUMBER (I) AND (II) ABOVE AND PROCEEDS TO ADJUDICATE, SUCH ORDERS ARE TAKEN TO HAVE BEEN PASSED IN A SLIP - SHOD MANNER AND CANNOT BE TAKEN TO BE ORDERS PASSED IN ACCORDANCE WITH LAW. DEFINITELY SUCH ACTIONS OF THE GOVT. FUNCTIONARIES GOES TO EFFECT THE REPUTATION OF REVENUE DEPARTMENT ADVERSELY AND CAUSE PREJUDICE TO THEIR INTERESTS, BESIDES CAUSING LOSS OF REVENUE BY HIS SUCH DECISIO N. 14. THE APPELLANTS PLEA THAT SIMILAR ISSUE WAS ALSO A SUBJECT MATTER OF ASSESSMENT IN ASSESSMENT YEAR 2008 - 09, NOT AN YEAR IN APPEAL BEFORE US IS OF NO CONSEQUENCE IN CASE OF EXERCISE OF JURISDICTION U/S 263 FOR THE DIFFERENT YEAR. UNDER THE PECULIAR FACTS, THE CASE LAWS REFERRED INCLUDING THOSE ON POSSIBILITY OF TWO VIEWS ON THE ISSUES BEFORE US CANNOT IMPRESS US TO SAY THAT THE EXERCISE OF JURISDICTION U/S 263 OF THE ACT IS INITIATED AS THE OPINION ON THE BASIS OF SUCH CASE LAWS NEEDS TO BE TESTED I N THE CIRCUMSTANCE WHEN ASSESSING OFFICER HIMSELF HAS MADE ENQUIRIES AND TAKEN A POSSIBLE DECISION IN ACCORDANCE WITH LAW. 31 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) 15. IN THE PRESENT CASE, THE LEARNED CIT IS FOUND SATISFIED THAT THE ASSESSMENT ORDER PASSED IS BOTH ERRONEOUS AS WELL AS PREJUDICIA L TO THE INTERESTS OF REVENUE AND THUS THE TWIN CONDITIONS OF SECTION 263 OF THE ACT AS ARE ALSO ENUNCIATED BY APEX COURT IN MALABAR INDUSTRIAL CO. LTD. VS. CIT [2000] 243 ITR 83 (SC) STAND DULY SATISFIED. THE LEARNED CIT ALSO DIRECTED THE ASSESSING OFFIC ER TO CALL FOR INFORMATION ON BOTH THE ISSUES AND EXAMINE IT AND TAKE DECISION AFRESH ON MERITS AFTER PROVIDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS WOULD CAUSE NO PREJUDICE TO THE ASSESSEE. HAVING REGARD TO THE JUDGMENT RENDERED BY HON'BLE D ELHI HIGH COURT IN THE CASE OF GEE VEE ENTERPRISES VS. ADDL. CIT [1975] 99 ITR 375 (DEL), HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF SMT. RENU GUPTA VS. CIT [2008] 301 ITR 45 (RAJ.) AND HON'BLE MADHYA PRADESH HIGH COURT IN CIT VS. DEEPAK KUMAR GARG [2008] 299 ITR 435 (MP) AND THE FINDINGS REACHED AS AFORESAID, WE FIND NO INFIRMITY IN THE DECISION TAKEN BY LEARNED CIT. THE GROUNDS RAISED IN APPEAL, THEREFORE, STAND REJECTED AND APPEAL IS DISMISSED. 1 5 . IT IS NOT A CASE WHERE THE A . O HAS ACCEPTED THE IN COME OF THE ASSESSEE BY TAKING ONE OF THE POSSIBLE VIEWS. IT IS ALSO NOT A CASE OF INADEQUATE INQUIRY ON ALL THE ISSUES BUT A CASE WHERE NO INQUIRY HAS BEEN CONDUCTED BY THE A . O IN THREE ISSUES OUT OF THE FIVE ISSUES ON WHICH SHOW CAUSE NOTICE WAS ISSUED BY THE CIT U/S 263 . 1 6 . WE HAVE GONE THROUGH THE DECISION OF CIT VS. VODAFONE ESSAR SO UTH LTD. 212 , TAXMANN 184 (DEL.). WE NOTED THAT THIS DECISION WILL ALSO NOT ASSIST THE ASSESSEE. IN THIS DECISION THE HONBLE HIGH COURT RELIED ON THE EARLIER DECISI ON OF THE HIGH COURT IN THE CASE OF CIT VS. SUNBEAM AUTO LTD., 332 ITR 167 IN WHICH IT WAS HELD THAT IF THERE IS SOME INQUIRY BY THE AO IN THE ORIGINAL PROCEEDINGS, EVEN IF INADEQUATE, THAT CANNOT CLOTHE THE COMMISSIONER WITH JURISDICTION U/S 263 MERELY BE CAUSE HE CAN FORM ANOTHER OPINION. IN THIS CASE ON THE BASIS OF THIS DECISION, HONBLE HIGH COURT TOOK THE VIEW THAT IF THERE WAS ANY INQUIRY, EVEN INADEQUATE, THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS U/S 263 OF THE ACT ME RELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER. IT IS ONLY IN CASES OF LACK OF INQUIRY , THE 32 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) COMMISSIONER CAN PASS ORDER U /S 263 . IN THIS DECISION UNDER PARA 11 HONBLE HIGH COURT CLEARLY LAID DOWN THAT THAT WAS NOT A CASE OF NO INQUIRY. IN THE CASE OF THE ASSESSEE WE NOTED THE A . O HAS NOT MADE ANY INQUIRY IN RESPECT OF THREE ISSUES OUT OF THE FIVE ISSUES . 17 . IN THE CASE OF DIT VS JYOTI FOUNDATIONS, 357 ITR 388 (DEL.), WE NOTED IN THIS CASE, THE HONBLE HIGH COURT HAS OBSERVED AS UNDER : - HELD, DISMISSING THE APPEAL, THAT INQUIRIES WERE CERTAINLY CONDUCTED BY THE ASSESSING OFFICER. IT WAS NOT A CASE OF NO INQUIRY. THE ORDER UNDER SECTION 263 ITSELF RECORDED THAT THE DIRECTOR FELT THAT THE INQUIRIES WERE NOT SUFFICIENT AND FURTHER INQUIRIES OR DETAILS SHOULD HAVE BEEN CALLED FOR. THE INQUIRY SHOULD HAVE BEEN CONDUCTED BY THE DIRECTOR HIMSELF TO RECORD THE FINDING THAT THE ASSESSING ORDER WAS ERRONEOUS. HE SHOULD NOT HAVE SET ASIDE THE ORDER AND DIRECTED THE ASSESSING OFFICER TO CONDUCT THE IN QUIRY. 18 . IN OUR OPINION THIS DECISION WILL NOT ALSO HELP THE ASSESSEE AS THIS CASE DOES NOT RELATE TO A CASE OF NO INQUIRY, BUT A CASE WHERE INQUIRIES WERE CONDUCTED BUT WERE NOT SUFFICIENT IN THE OPINION OF CIT. 19 . IN THE CASE OF CIT VS. GAB RIEL INDIA, 203 ITR 108 (MUM) THE A . O HAD MADE THE INQUIRIES IN REGARD TO THE NATURE OF THE EXPENDITURE INCURRED BY THE ASSESSEE AND ASSESSEE HAD GIVEN DETAILED EXPENDITURE. THE ORDER PASSED BY THE A . O WAS HELD NOT TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORD ER HE DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. THUS, IN OUR VIEW THIS CASE LAW RELIED ON FOR INADEQUATE INQUIRY WILL NOT ASSIST THE ASSESSEE. 2 0 . HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT [2000] 243 ITR 83 , AT PAGE 88 HAS CATEGORICALLY HELD AS UNDER: - IN THE INSTANT CASE, THE COMMISSIONER NOTED THAT THE INCOME TAX OFFICER PASSED THE ORDER OF NIL ASSESSMENT WITHOUT APPLICATION OF MIND. INDEED, THE HIGH COURT RECORDED THE FINDING THAT THE INCOME TAX OFFICE R FAILED TO APPLY HIS 33 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) MIND TO THE CASE IN ALL PERSPECTIVE AND THE ORDER PASSED BY HIM WAS ERRONEOUS. IT APPEARS THAT THE RESOLUTION PASSED BY THE BOARD OF THE APPELLANT COMPANY WAS NOT PLACED BEFORE THE ASSESSING OFFICER. THUS, THERE WAS NO MATERIAL TO S UPPORT THE CLAIM OF THE APPELLANT THAT THE SAID AMOUNT REPRESENTED COMPENSATION FOR LOSS OF AGRICULTURAL INCOME. HE ACCEPTED THE ENTRY IN THE STATEMENT OF THE ACCOUNT FILED BY THE APPELLANT IN THE ABSENCE OF ANY SUPPORTING MATERIAL AND WITHOUT MAKING ANY INQUIRY . ON THESE FACTS THE CONCLUSION THAT THE ORDER OF THE INCOME TAX OFFICER WAS ERRONEOUS IS IRRESISTIBLE. WE, ARE, THEREFORE OF THE OPINION THAT THE HIGH COURT HAS RIGHTLY HELD THAT THE EXERCISE OF THE JURISDICTION BY THE COMMISSIONER U/S 263(1) WAS JUSTIFIED. 2 1 . THIS ITSELF PROVES NON APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER AND ACCEPTING THE INCOME OF THE ASSESSEE WITHOUT MAKING AN ENQUIRY WILL TANTAMOUNT THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF THE REVENUE . HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. (SUPRA) WHILE HOLDING SO HAS RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF RAMPYARI DEVI SARAOGI VS. COMMISSIONER OF INCOME - TAX , 67 ITR 84 (SC). IN THIS CASE THE INCOME TAX OF FICER ACCEPTED THE RETURN OF THE ASSESSEE IN RESPECT OF THE INITIAL CAPITAL, GIFT RECEIVED AND SALE OF JEWELLERY, THE INCOME FROM BUSINESS ETC. WITHOUT ANY ENQUIRY OR EVIDENCE WHATSOEVER. FOR THAT REASON THE CIT HELD THE ORDER TO BE ERRONEOUS. IN REVISIO N, HE CANCELLED THE ORDER AND ORDERED THE INCOME TAX OFFICER TO MAKE FRESH ASSESSMENT 2 2 . THUS, THE LAW AS MAY BE STATED AFTER GOING THROUGH BOTH THE DECISIONS OF SUPREME COURT IS VERY CLEAR THAT IF THE ASSESSMENT HAS BEEN MADE WITHOUT MAKING THE INQUIRY AND APPLICATION OF MIND, THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. UNLIKE THE CIVIL COURT WHICH IS NEUTRAL TO GIVE A DECISION ON THE BASIS OF EVIDENCE PRODUCED BEFORE IT, AN ASSESSING OFFICER IS NOT ONLY AN ADJUDICATO R BUT IS ALS O AN INVESTIGATOR. THE ASSESSING OFFICER CANNOT REMAIN PASSIVE ON THE FACE OF A RETURN WHICH IS APPARENTLY IN ORDER BUT CALLS FOR INQUIRY. IT IS THE DUTY OF THE ASSESSING OFFICER TO ASCERTAIN THE TRUTH OF THE FACTS STATED IN THE RETURN WHEN THE CIRCUMSTAN CES OF THE CASE ARE 34 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) SUCH AS TO PROVOKE INQUIRY. IF THERE IS FAILURE TO MAKE SUCH INQUIRY, IN OUR OPINION, THE ORDER IS ERRONEOUS AND PREJUDICI AL TO THE INTEREST OF REVENUE. THE R EVENUE HAS NOT TO PROVE THAT ITS ORDER IS ERRONEOUS AND CIT CAN REVISE IT U/S 263. EVEN THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SWARUP VEGETABLE PRODUCTS INDUSTRIES LTD. (NO. 1) VS. CIT [1991] 187 ITR 412 HAS ALSO TAKEN THE SIMILAR VIEW BY OBSERVING AS UNDER : - IT IS BEYOND DISPUTE THAT, UNDER SECTION 263 OF THE I.T. AC T, THE COMMISSIONER HAS POWER TO SET ASIDE THE ASSESSMENT ORDER AND SEND THE MATTER FOR FRESH ASSESSMENT IF HE IS SATISFIED THAT FURTHER ENQUIRY IS NECESSARY AND THAT THE ORDER OF INCOME TAX OFFICER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2 3 . HON 'BLE DELHI HIGH COURT ALSO IN THE CASE OF GEE VEE ENTERPRISES VS. ADDL. CIT [1975] 99 ITR 375 (DEL) HAS ALSO TAKEN THE SIMILAR VIEW THAT LACK OF PROPER INQUIRY TANTAMOUNTS THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF R EVENUE. 2 4 . SIMIL AR ISSUE HAS ARISEN BEFORE THE SPECIAL BENCH OF I.T.A.T. CHENNAI B BENCH IN THE CASE OF RAJALAKSMI MILLS LTD. V S. INCOME TAX OFFICER [2009] 121 ITD 343 (CHENNAI) (SB). THE FACTS OF THIS CASE WERE THAT THE ASSESSEE ENCLOSED THE BALANCE SHEET ALONG WITH THE RETURN AND IN THE BALANCE SHEET THE ASSESSEE MADE A PROVISION FOR GRATUITY AMOUNTING TO RS.7,85,600/ - . THE ASSESSEE CLAIMED IT AS DED UCTION IN THE RETURN OF INCOME. THE ASSESSING OFFICER ALLOWED THE SAME WITHOUT MAKING ANY DISCUSSI ON IN THE ORDER OF A SSESSMENT. THE CIT BY INVOKING THE PROVISION OF SECTION 263 TOOK THE VIEW THAT THE ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF R EVENUE. THE SPECIAL BENCH OF I.T.A.T. UNDER THESE FACTS HAS HELD AS UNDER: - IT IS NOT NECESSARY FOR THE COMMISSIONE R TO MAKE FURTHER ENQUIRIES BEFORE CANCELLING THE ASSESSMENT ORDER OF THE ASSESSING OFFICER. THE COMMISSIONER CAN REGARD THE ORDER AS ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES OF 35 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) THE CASE THE ASSESSING OFFICER SHOULD HAVE MADE FURTHER INQUIRIES BE FORE ACCEPTING THE STATEMENTS MADE BY THE ASSESSEE IN THE RETURN . THE REASON IS OBVIOUS. UNLIKE THE CIVIL COURT WHICH IS NEUTRAL TO GIVE A DECISION ON THE BASIS OF EVIDENCE PRODUCED BEFORE IT, AN ASSESSING OFFICER IS NOT ONLY AN ADJUDICATOR BUT IS ALSO A N INVESTIGATOR. HE CANNOT REMAIN PASSIVE IN THE FACE OF A RETURN WHICH IS APPARENTLY IN ORDER BUT CALLS FOR FURTHER ENQUIRY. IT IS HIS DUTY TO ASCERTAIN THE TRUTH OF THE FACTS STATED IN THE RETURN WHEN THE CIRCUMSTANCES OF THE CASE ARE SUCH AS TO PROVOKE AN INQUIRY. THE MEANING TO BE GIVEN TO THE WORD 'ERRONEOUS IN SECTION 263 EMERGES OUT OF THIS CONTEXT. THE WORD 'ERRONEOUS' IN THAT SECTION INCLUDES CASES WHERE THERE HAS BEEN FAILURE TO MAKE THE NECESSARY INQUIRIES. IT IS INCUMBENT ON THE ASSESSING OFFI CER TO INVESTIGATE THE FACTS STATED IN THE RETURN WHEN CIRCUMSTANCES MAKE SUCH AN INQUIRY PRUDENT AND THE WORD 'ERRONEOUS' IN SECTION 263 INCLUDES THE FAILURE TO MAKE SUCH AN ENQUIRY. THE ORDER BECOMES ERRONEOUS BECAUSE SUCH AN ENQUIRY HAS NOT BEEN MADE AN D NOT BECAUSE THERE IS ANYTHING WRONG WITH THE ORDER IF ALL THE FACTS STATED THEREIN ARE ASSUMED TO BE CORRECT. IN THE INSTANT CASE, THE ASSESSING OFFICER FAILED TO MAKE ANY ENQUIRY IN REGARD TO THE ALLOWABILITY OF THE PROVISION FOR GRATUITY. AS SUCH, TH E ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THEREFORE, THE CONDITIONS PRECEDENT FOR ASSUMING JURISDICTION UNDER SECTION 263 DID EXIST IN THE FACTS OF THE INSTANT CASE. 2 5 . WE NOTED THAT I.T.A.T. E BENCH NEW DELHI IN I.T.A. N O.1438/DEL/09 IN THE CASE OF N.T.P.C. LIMITED VS. DY. CIT IN RESPECT OF LACK OF INQUIRY IN THIS JUDGMENT WHILE DEALING THE ISSUE OF LACK OF INQUIRY, THE TRIBUNAL, UNDER PARA 14 HAS HELD AS UNDER : - 14. IN THE LIGHT OF ABOVE PROPOSITIONS LET US EXAMINE TH E FACTS OF THE PRESENT CASE. ON PAGE NO. 5 OF THE PAPER BOOK, VOLUME - I, THE ASSESSEE HAS PLACED ON RECORD COPY OF THE QUESTIONNAIRE DATED 29/06/2006 ISSUED BY THE ASSESSING OFFICER. IN THIS QUESTIONNAIRE, ASSESSING OFFICER HAS CALLED FOR INFORMATION FROM THE ASSESSEE UNDER SEC. 142(1) ON FIFTEEN COUNTS. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THIS QUESTIONNAIRE CAREFULLY. PERUSAL OF THIS QUESTIONNAIRE REVEALS THAT ASSESSING OFFICER HAS NOT A SINGLE QUESTION ON BOTH THE ISSUES . THEREFORE, IT SUGGESTS THAT HE HAS NOT CONDUCTED ANY INQUIRY ON THESE TWO ISSUES. THE CONTENTIONS OF THE ASSESSEE IS THAT IT HAS DISCLOSED ALL MATERIAL FACTS FULLY AND TRULY DURING THE ASSESSMENT PROCEEDINGS AND ASSESSMENT HAS BEEN FRAMED UNDER SEC.143(3 ) OF THE ACT, THEREFORE, IT BE PRESUMED THAT ASSESSING OFFICER MUST HAVE GONE THROUGH ALL THESE DETAILS. 36 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) HOWEVER, HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES, HON'BLE DELHI HIGH COURT IN THE CASE OF GEE VEE ENTERPRISES AS WELL AS IN THE CASE O F ASHOK LOGANI AND DLF POWER EQUIPMENTS, IT HAS BEEN HELD THAT IF THE ASSESSING OFFICER FAILED TO GO INTO THE ISSUES IN PROPER PERSPECTIVE AND HIS APPROACH IS PERFENTORY THEN THE ORDER WOULD BE TERMED AS ERRONEOUS WHICH WOULD ULTIMATELY CAUSED A PREJUDICE TO THE ASSESSEE ON ESCAPEMENT OF INCOME FROM TAX. THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ASHOK LOGANI AS WELL AS IN THE CASE OF DLF POWER ARE THE LATEST DECISIONS ON THIS ISSUE. SIMILARLY, LEARNED DR HAS BROUGHT TO OUR NOTICE THE DECIS ION OF HON'BLE DELHI HIGH COURT DATED 15.2.2002 IN THE CASE OF CIT VS. REGENCY PARK PROPERTY MANAGEMENT SERVICES PVT. LTD. REPORTED IN [2012] TIOL PAGE 75 WHERE IT HAS BEEN HELD THAT IF ASSESSING OFFICER HAD NOT DEALT WITH THE DETAILS AND EXAMINED THE ISS UES THEN THERE WAS AN ERROR ON THE PART OF THE ASSESSING OFFICER UPON WHICH ACTION U/S 263 CAN BE JUSTIFIED. THUS, CONSIDERING ALL THESE ASPECTS, WE ARE OF THE VIEW THAT LEARNED COMMISSIONER HAS RIGHTLY TAKEN COGNIZANCE U/S 263 OF THE ACT BECAUSE ASSESSIN G OFFICER HAS NOT CONDUCTED ANY INQUIRY ON THESE TWO ISSUED. 2 6 . THIS CLEARLY PROVES THAT THE TRIBUNAL HAS ALSO TAKEN THE VIEW THAT LACK OF INQUIRY WILL TANTAMOUNT TO BE THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE CIT HA S ALREADY RESTORED THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER AND THE ASSESSING OFFICER, AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE HAS TO RE - REFRAME THE ASSESSMENT AFTER GIVING THE OPPORTUNITY TO THE ASSESSEE . 2 7 . IN VIEW OF AFORESAID DISCUS SION, THE ORDER PASSED U/S 263 HAS TO BE UPHELD AS, IN OUR OPINION, IT HAS PASSED THROUGH TEST OF FULFILMENT OF BOTH THE CONDITIONS BY THE CIT THAT THE ORDER PASSED BY THE A . O IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. WE, THEREFO RE, DISMISS THE GROUND NOS. 1 TO 3 BY UPHOLDING THE ORDER PASSED U/S 263. 28 . SO FAR THE GROUND NO.4 IS CONCERNED IN ALL THE APPEALS , IN OUR OPINION, THIS GROUND IS INFRUCTUOUS AS CIT HAS SET ASIDE THE ASSESSMENT AND DIRECTED THE ASSESSING OFFICER TO RE FRAME IT AFTER EXAMINING THE ISSUE IN ACCORDANCE WITH THE LAW . THE CIT HAS NOT DECIDED THE ISSUE ON MERIT WHETHER 37 ITA NO S . 953 TO 958 &960 / DEL /201 1 (ASST. YEAR S : 20 01 - 02,02 - 03,03 - 04,04 - 05,05 - 06,06 - 07 &07 - 08 ) THE ASSESSING OFFICER SHOULD MAKE ADDITION ON THE BASIS OF ITEMS STATED IN THE SHOW CAUSE NOTICE . 29 . IN THE RESULT, ALL THE APPEAL S FILED B Y THE ASSESSEE ARE DISMISSED. 30 . ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 1963 BY PUTTING ON THE NOTICE BOARD OF THE BENCH AT NEW DELHI ON 26.03 .2015. SD/ - SD/ - ( SMT. DIVA SINGH ) JUDICIAL MEMBER (P.K. BANSAL) ACCOUNTANT MEMBER DATED : 26 . 03 .201 5 *A* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) G UARD FILE TRUE COPY, BY ORDER ASSISTANT REGISTRAR ITAT, DELHI BENCHES, NEW DELHI