Lae N.Dhanasekaran By L/H Ms.D.Geetha, Erode V. Principal CIT, Coimbatore

ITA 980/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9509 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 17-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 30-04-2015
• Court: TRIBUNAL
• Assessee Lawyers: T VASUDEVAN SHRI A V
• Keywords: Principle of natural justice; Fair market value
• Section: 143(3); 263; 63

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! ' . #$ , % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ ITA NO. 980/MDS/2015 / ASSESSMENT YEAR : 2010-11 LATE N. DHANASEKARAN, BY L/H MS. D. GEETHA, NO.144, SATHY ROAD, ERODE 638 003. PAN ACGPD9408F APPELLANT) V. THE INCOME-TAX OFFICER, WARD-I(1), ERODE. RESPONDENT) ./ ITA NO. 981/MDS/2015 / ASSESSMENT YEAR : 2010-11 N. RAJENDRAN, NO.144, SATHY ROAD, ERODE 638003. PAN ACJPR7722D APPELLANT) V. THE INCOME-TAX OFFICER, WARD-II(4), ERODE. RESPONDENT) / APPELLANTS BY : SHRI T. VASUDEVAN, ADVOCATE / RESPONDENT BY : SHRI A.V.SREEKANTH, JCIT ! / DATE OF HEARING : 17.03.2016 '# ! / DATE OF PRONOUNCEMENT : 27.04.2016 2 ITA 980 & 981/15 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS BY DIFFERENT ASSESSEES ARE DIRECTE D AGAINST DIFFERENT ORDERS OF THE COMMISSIONER OF INC OME-TAX PASSED UNDER SEC.263 OF THE I.T. ACT, 1961 FOR THE ASSESSMENT YEAR 2010-11. 2. THE CRUX OF THE GROUND RAISED BY THE ASSESSEES I S THAT THE COMMISSIONER OF INCOME-TAX ERRED IN DIRECTING T HE AO TO CONSIDER THE FAIR MARKET VALUE OF THE PROPERTIES AS ON 1.4.1981 AT ` 40 PER SQ.FT. INSTEAD OF ` 300/- AS CLAIMED BY THE ASSESSEE. 3. THE LD. AR, SUBMITTED THAT THE ESTIMATION OF ASS ESSMENT BY THE CIT ITSELF IS BAD IN LAW, AS THE ASSESSING O FFICER HAS APPLIED HIS MIND WHILE CONSIDERING THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 AT ` 300 PER SQ.FT. ACCORDING TO THE ASSESSEE, WHEN THE ASSESSING OFFICER HAS TAKEN A PO SSIBLE VIEW, THE CIT CANNOT IMPLANT HIS VIEW, WHO IS ALSO A QUASI- JUDICIAL AUTHORITY. ACCORDING TO THE LD. AR, THE E XERCISE OF JURISDICTION IS BAD IN LAW AND THE ORDER OF THE CIT TO BE QUASHED 3 ITA 980 & 981/15 IN BOTH THE CASES. 4. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE RE IS NO APPLICATION OF MIND BY THE AO RATHER THAN WRONGLY A CCEPTED THE FAIR MARKET VALUE OF THE PROPERTY AT ` 300/- PER SQ.FT. WITHOUT ANY BASIS AND IT IS ONLY ESTIMATION, WHICH CANNOT BE SU STAINED. FURTHER, THE LD. DR SUBMITTED THAT AS PER THE LETTE R DATED 11.2.2013 BY THE JOINT SUB-REGISTRAR, DISTRICT REGI STRAR OFFICE, ERODE, THE GUIDE LINE VALUE OF THE TWO PROPERTIES A S ON 1.4.1981 WAS ONLY ` 40/- PER SQ.FT. AGAINST THIS, THE AO HAS ADOPTED THE FMV OF THE PROPERTIES AT ` 300/- PER SQ.FT. AS SUCH, THE CIT VALIDLY INVOKED THE PROVISIONS OF SEC.263 OF THE AC T, SO AS TO CORRECT THE ERROR, WHICH IS PREJUDICIAL TO THE INTE RESTS OF THE REVENUE. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. WE HAVE ALSO CAREFULLY CONSIDERED THE R IVAL SUBMISSIONS IN THE LIGHT OF MATERIAL PLACED BEFORE US AND ALSO GONE THROUGH ALL THE JUDGEMENTS CITED BY THE PARTIE S BEFORE US. FIRST WE TAKE UP THE LEGAL ISSUE WITH REFERENCE TO THE JURISDICTION OF INVOKING THE PROVISIONS OF SECTION 263 OF THE AC T BY THE LEARNED CIT. THE SCHEME OF THE IT ACT IS TO LEVY AN D COLLECT TAX 4 ITA 980 & 981/15 IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND TH IS TASK IS ENTRUSTED TO THE REVENUE. IF DUE TO ERRONEOUS ORDER OF THE ASSESSING OFFICER, THE REVENUE IS LOSING TAX LAWFUL LY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO THE INT EREST OF THE REVENUE. AS HELD IN THE CASE OF MALABAR INDUSTRIES CO. LTD., VS. CIT ( 243 ITR 83 (SC), THE COMMISSIONER CAN EXERCIS E REVISION JURISDICTIONAL U/S. 263 OF THE ACT, IF HE IS SATIS FIED THAT THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS (I ) ERRONEOUS; AND ALSO (II) PREJUDICIAL TO THE INTERESTS OF THE REVEN UE. THE WORD ERRONEOUS HAS NOT BEEN DEFINED IN THE INCOME TAX ACT. IT HAS BEEN HOWEVER DEFINED AT PAGE 562 IN BLACKS LAW DIC TIONARY (SEVENTH EDITION) THUS; ERRONEOUS, ADJ. INVOLVING ERROR, DEVIATING FROM TH E LAW. THE WORD ERROR HAS BEEN DEFINED AT THE SAME PAGE IN THE SAME DICTIONARY THUS: ERROR NO. 1 : A PSYCHOLOGICAL STATE THAT DOES NOT CONFORM TO OBJECTIVE REALITY; A BRIEF THAT WHAT IS FALSE IS TR UE OR THAT WHAT IS TRUE IS FALSE. AT PAGE 649/650 IN P. RAMANATHA AIYERS LAW LEXICON REPRINT 2002, THE WORD ERROR HAS BEEN DEFINED TO MEAN- ERROR: A MISTAKEN JUDGEMENT OR DEVIATION FROM THE TRUTH IN MATTERS OF FACT, AND FROM THE LAW IN MATTERS OF JUD GEMENT ERROR IS A FAULT IN JUDGEMENT, OR IN THE PROCESS OR PROCE EDING TO JUDGEMENT OR IN THE EXECUTION UPON THE SAME, IN A C OURT OF 5 ITA 980 & 981/15 RECORD; WHICH IN THE CIVIL LAW IS CALLED A NULLITYI E (TERMES DE LA LEY). SOMETHING INCORRECTLY DONE THROUGH IGNORANCE OR INA DVERTENCE S.99 CPC AND S.215 CR.PC. ERROR, FAULT, ERROR RESPECTS THE ACT; FAULT RESPE CT THE AGENT, AN ERROR MAY LAY IN THE JUDGEMENT, OR IN THE CONDUCT, BUT A FAULT LIES IN THE WILL OR INTENTION. 6. AT PAGE 650 OF THE AFORESAID LAW LEXICON , THE SCOPE OF ERROR, MISTAKE, BLUNDER, AND HALLUCINATION HAS BEEN EXPLAINED THUS: AN ERROR IS ANY DEVIATION FROM THE STANDARD OR COU RSE OF RIGHT, TRUTH, JUSTICE OR ACCURACY, WHICH IS NOT INT ENTIONAL. A MISTAKE IS AN ERROR COMMITTED UNDER A MISAPPREHENSI ON OF MISCONCEPTION OF THE NATURE OF A CASE. AN ERROR MAY BE FROM THE ABSENCE OF KNOWLEDGE, A MISTAKE IS FROM INSUFFI CIENT OR FALSE OBSERVATION. BLUNDER IS A PRACTICAL ERROR OF A PECULIARLY GROSS OR AWKWARD KIND, COMMITTED THROUGH GLARING IGNORANCE, HEEDLESSNESS, OR AWKWARDNESS. AN ERROR M AY BE OVERLOOKED OR ATONED FOR, A MISTAKE MAY BE RECTIFIE D, BUT THE SHAME OR RIDICULE WHICH IS OCCASIONED BY A BLUNDER, WHO CAN COUNTERACT. STRICTLY SPEAKING, HALLUCINATION IS AN ILLUSION OF THE PERCEPTION, A PHANTASM OF THE IMAGINATION. THE ONE COMES OF DISORDERED VISION, TH E OTHER OF DISCARDED IMAGINATION. IT IS EXTENDED IN MEDICAL SCIENCE TO MATTERS OF SENSATION, WHETHER THERE IS NO CORRES PONDING CAUSE TO PRODUCE IT. IN ITS ORDINARY USE IT DENOTES AN UNACCOUNTABLE ERROR IN JUDGEMENT OR FACT, ESPECIALL Y IN ONE REMARKABLE OTHERWISE FOR ACCURATE INFORMATION AND R IGHT DECISION. IT IS EXCEPTIONAL ERROR OR MISTAKE IN THO SE OTHERWISE NOT LIKELY TO BE DECEIVED. 7. IN ORDER TO ASCERTAIN WHETHER AN ORDER SOUGHT T O BE REVISED UNDER SECTION 263 IS ERRONEOUS, IT SHOULD B E SEEN 6 ITA 980 & 981/15 WHETHER IT SUFFERS FROM ANY OF THE AFORESAID FORMS OF ERROR. IN OUR VIEW, AN ORDER SOUGHT TO BE REVISED UNDER SECTION 2 63 WOULD BE ERRONEOUS AND FALL IN THE AFORESAID CATEGORY OF 'ER RORS' IF IT IS, INTER ALIA, BASED ON AN INCORRECT ASSUMPTION OF FAC TS OR AN INCORRECT APPLICATION OF LAW OR NON-APPLICATION OF MIND TO SOMETHING WHICH WAS OBVIOUS AND REQUIRED APPLICATIO N OF MIND OR BASED ON NO OR INSUFFICIENT MATERIALS SO AS TO A FFECT THE MERITS OF THE CASE AND THEREBY CAUSE PREJUDICE TO THE INTE REST OF THE REVENUE. 8. SECTION 263 OF THE INCOME-TAX ACT SEEKS TO REMO VE THE PREJUDICE CAUSED TO THE REVENUE BY THE ERRONEOUS OR DER PASSED BY THE ASSESSING OFFICER. IT EMPOWERS THE COMMISSIO NER TO INITIATE SUO MOTO PROCEEDINGS EITHER WHERE THE ASSE SSING OFFICER TAKES A WRONG DECISION WITHOUT CONSIDERING THE MATE RIALS AVAILABLE ON RECORD OR HE TAKES A DECISION WITHOUT MAKING AN ENQUIRY INTO THE MATTERS, WHERE SUCH INQUIRY WAS PR IMA FACIE WARRANTED. THE COMMISSIONER WILL BE WELL WITHIN HIS POWERS TO REGARD AN ORDER AS ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER SH OULD HAVE 7 ITA 980 & 981/15 MADE FURTHER INQUIRIES BEFORE ACCEPTING THE CLAIM M ADE BY THE ASSESSEE IN HIS RETURN. THE REASON IS OBVIOUS. UNLI KE THE CIVIL COURT WHICH IS NEUTRAL IN GIVING A DECISION ON THE BASIS OF EVIDENCE PRODUCED BEFORE IT, THE ROLE OF AN ASSESSI NG OFFICER UNDER THE INCOME-TAX ACT IS NOT ONLY THAT OF AN ADJ UDICATOR BUT ALSO OF AN INVESTIGATOR. HE CANNOT REMAIN PASSIVE I N THE FACE OF A RETURN, WHICH IS APPARENTLY IN ORDER BUT CALLS FOR FURTHER ENQUIRY. HE MUST DISCHARGE BOTH THE ROLES EFFECTIVELY. IN OT HER WORDS, HE MUST CARRY OUT INVESTIGATION WHERE THE FACTS OF THE CASE SO REQUIRE AND ALSO DECIDE THE MATTER JUDICIOUSLY ON T HE BASIS OF MATERIALS COLLECTED BY HIM AS ALSO THOSE PRODUCED B Y THE ASSESSEE BEFORE HIM. THE SCHEME OF ASSESSMENT HAS UNDERGONE RADICAL CHANGES IN RECENT YEARS. 8.1 IT DESERVES TO BE NOTED THAT THE PRESENT ASSESS MENT WAS MADE UNDER SECTION 143(3) OF THE INCOME-TAX ACT. IN OTHER WORDS, THE ASSESSING OFFICER WAS STATUTORILY REQUIR ED TO MAKE THE ASSESSMENT UNDER SECTION 143(3) AFTER SCRUTINY AND NOT IN A SUMMARY MANNER AS CONTEMPLATED BY SUB-SECTION (1) O F SECTION 143. BULK OF THE RETURNS FILED BY THE ASSESSEES ACR OSS THE COUNTRY IS ACCEPTED BY THE DEPARTMENT UNDER SECTION 143(1) 8 ITA 980 & 981/15 WITHOUT ANY SCRUTINY. ONLY A FEW CASES ARE PICKED U P FOR SCRUTINY. THE ASSESSING OFFICER IS THEREFORE, REQUIRED TO ACT FAIRLY WHILE ACCEPTING OR REJECTING THE CLAIM OF THE ASSESSEE IN CASES OF SCRUTINY ASSESSMENTS. HE SHOULD BE FAIR NOT ONLY TO THE ASSESSEE BUT ALSO TO THE PUBLIC EXCHEQUER. THE ASSESSING OFF ICER HAS GOT TO PROTECT, ON ONE HAND, THE INTEREST OF THE ASSESS EE IN THE SENSE THAT HE IS NOT SUBJECTED TO ANY AMOUNT OF TAX IN EX CESS OF WHAT IS LEGITIMATELY DUE FROM HIM, AND ON THE OTHER HAND, H E HAS A DUTY TO PROTECT THE INTERESTS OF THE REVENUE AND TO SEE THAT NO ONE DODGED THE REVENUE AND ESCAPED WITHOUT PAYING THE L EGITIMATE TAX. THE ASSESSING OFFICER IS NOT EXPECTED TO PUT B LINKERS ON HIS EYES AND MECHANICALLY ACCEPT WHAT THE ASSESSEE CLAI MS BEFORE HIM. IT IS HIS DUTY TO ASCERTAIN THE TRUTH OF THE F ACTS STATED AND THE GENUINENESS OF THE CLAIMS MADE IN THE RETURN WHEN T HE CIRCUMSTANCES OF THE CASE ARE SUCH AS TO PROVOKE IN QUIRY. ARBITRARINESS IN EITHER ACCEPTING OR REJECTING THE CLAIM HAS NO PLACE. THE ORDER PASSED BY THE ASSESSING OFFICER BE COMES ERRONEOUS BECAUSE AN ENQUIRY HAS NOT BEEN MADE OR GENUINENESS OF THE CLAIM HAS NOT BEEN EXAMINED WHER E THE INQUIRIES OUGHT TO HAVE BEEN MADE AND THE GENUINENE SS OF THE 9 ITA 980 & 981/15 CLAIM OUGHT TO HAVE BEEN EXAMINED AND NOT BECAUSE T HERE IS ANYTHING WRONG WITH HIS ORDER IF ALL THE FACTS STAT ED OR CLAIM MADE THEREIN ARE ASSUMED TO BE CORRECT. THE COMMISSIONER MAY CONSIDER AN ORDER OF THE ASSESSING OFFICER TO BE ER RONEOUS NOT ONLY WHEN IT CONTAINS SOME APPARENT ERROR OF REASON ING OR OF LAW OR OF FACT ON THE FACE OF IT BUT ALSO WHEN IT IS A STEREO-TYPED ORDER WHICH SIMPLY ACCEPTS WHAT THE ASSESSEE HAS STATED I N HIS RETURN AND FAILS TO MAKE ENQUIRIES OR EXAMINE THE GENUINEN ESS OF THE CLAIM WHICH ARE CALLED FOR IN THE CIRCUMSTANCES OF THE CASE. IN TAKING THE AFORESAID VIEW, WE ARE SUPPORTED BY THE DECISIONS OF THE HON'BLE SUPREME COURT IN RAMPYARI DEVI SARAOGI V. CIT (67 ITR 84) (SC), SMT. TARA DEVI AGGARWAL V. CIT (88 IT R 323) (SC), AND MALABAR INDUSTRIAL CO. LTD'S CASE ( 243 ITR 83) (SC). 9. IN MALABAR INDUSTRIAL CO. LTD. CASE THE HON'BLE COURT HAS HELD AS UNDER: THERE CAN BE NO DOUBT THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. AN IN CORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOU S. IN THE SAME CATEGORY FALL THE ORDERS PASSED WITHOUT APPLYI NG THE PRINCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATIO N OF MIND. IN OUR HUMBLE VIEW, ARBITRARINESS IN DECISION-MAKING W OULD 10 ITA 980 & 981/15 ALWAYS NEED CORRECTION REGARDLESS OF WHETHER IT CAU SES PREJUDICE TO AN ASSESSEE OR TO THE STATE EXCHEQUER. THE LEGISLATURE HAS TAKEN AMPLE CARE TO PROVIDE FOR THE MECHANISM TO HAVE SUCH PREJUDICE REMOVED. WHILE AN ASSESSEE CAN HAVE IT CORRECTED THROUGH REVISIONAL JURISDICTION OF THE COMMISSIONER UNDER SECTION 264 OR THROUGH APPEALS AND OTHER MEANS OF JUDICIAL REVIEW, THE PREJUDICE CAUSED TO THE STATE EXCHEQUER CAN ALSO BE CORRECTED BY INVOKING REVISIONAL JURISDICTION OF TH E COMMISSIONER UNDER SECTION 263. ARBITRARINESS IN DE CISION- MAKING CAUSING PREJUDICE TO EITHER PARTY CANNOT THE REFORE BE ALLOWED TO STAND AND STARE AT THE LEGAL SYSTEM. IT IS DIFFICULT TO COUNTENANCE SUCH ARBITRARINESS IN THE ACTIONS OF THE ASSESSING OFFICER. IT IS THE DUTY OF THE ASSESSING OFFICER TO ADEQUATELY PROTECT THE INTEREST OF BOTH THE PARTIES , NAMELY, THE ASSESSEE AS WELL AS THE STATE. IF HE FAILS TO D ISCHARGE HIS DUTIES FAIRLY, HIS ARBITRARY ACTIONS CULMINATING IN ERRONEOUS ORDERS CAN ALWAYS BE CORRECTED EITHER AT THE INSTAN CE OF THE ASSESSEE, IF THE ASSESSEE IS PREJUDICED OR AT THE I NSTANCE OF THE COMMISSIONER, IF THE REVENUE IS PREJUDICED. WHI LE MAKING AN ASSESSMENT, THE ITO HAS A VARIED ROLE TO PLAY. HE IS THE INVESTIGATOR, PROSECUTOR AS WELL AS ADJUD ICATOR. AS AN ADJUDICATOR HE IS AN ARBITRATOR BETWEEN THE REVE NUE AND THE TAXPAYER AND HE HAS TO BE FAIR TO BOTH. HIS DUT Y TO ACT FAIRLY REQUIRES THAT WHEN HE ENQUIRES INTO A SUBSTA NTIAL MATTER LIKE THE PRESENT ONE, HE MUST RECORD A FINDI NG ON THE RELEVANT ISSUE GIVING, HOWSOEVER BRIEFLY, HIS REASO NS THEREFOR. IN S.N. MUKHERJEE V. UNION OF INDIA AIR 1 990 SC 1984, IT HAS BEEN OBSERVED BY THE HON'BLE SUPREME C OURT AS FOLLOWS: REASONS, WHEN RECORDED BY AN ADMINISTRATIVE AUTHOR ITY IN AN ORDER PASSED BY IT WHILE EXERCISING QUASI-JUD ICIAL FUNCTIONS, WOULD NO DOUBT FACILITATE THE EXERCISE O F ITS JURISDICTION BY THE APPELLATE OR SUPERVISORY AUTHOR ITY. BUT THE OTHER CONSIDERATIONS, REFERRED TO ABOVE, WH ICH HAVE ALSO WEIGHED WITH THIS COURT IN HOLDING THAT A N ADMINISTRATIVE AUTHORITY MUST RECORD REASONS FOR IT S DECISION ARE OF NO LESS SIGNIFICANCE. THESE CONSIDERATIONS SHOW THAT THE RECORDING OF REASONS B Y 11 ITA 980 & 981/15 AN ADMINISTRATIVE AUTHORITY SERVES A SALUTARY PURPO SE, NAMELY, IT EXCLUDES CHANCES OR ARBITRARINESS AND ENSURES A DEGREE OF FAIRNESS IN THE PROCESS OF DECI SION- MAKING. THE SAID PURPOSE WOULD APPLY EQUALLY TO ALL DECISIONS AND ITS APPLICATION CANNOT BE CONFINED TO DECISIONS WHICH ARE SUBJECT TO APPEAL, REVISION OR JUDICIAL REVIEW. IN OUR OPINION, THEREFORE, THE REQUIREMENT THAT REASONS BE RECORDED SHOULD GOVERN THE DECISIONS OF AN ADMINISTRATIVE AUTHORITY EXERCI SING QUASI-JUDICIAL FUNCTIONS IRRESPECTIVE OF THE FACT M AY, HOWEVER, BE ADDED THAT IT IS NOT REQUIRED THAT THE REASONS SHOULD BE AS ELABORATE AS IN THE DECISION O F A COURT OF LAW. THE EXTENT AND NATURE OF THE REASONS WOULD DEPEND ON PARTICULAR FACTS AND CIRCUMSTANCES. WHAT IS NECESSARY IS THAT THE REASONS ARE CLEAR AND EXPLICIT SO AS TO INDICATE THAT THE AUTHORITY HAS G IVEN DUE CONSIDERATION TO THE POINTS IN CONTROVERSY. THE NEED FOR RECORDING OF REASONS IS GREATER IN A CASE WHERE THE ORDER IS PASSED AT THE ORIGINAL STAGE. TH E APPELLATE OR REVISIONAL AUTHORITY, IF IT AFFIRMS SU CH AN ORDER, NEED NOT GIVE SEPARATE REASONS IF THE APPELL ATE OR REVISIONAL AUTHORITY AGREES WITH THE REASONS CONTAINED IN THE ORDER UNDER CHALLENGE. 10. SIMILAR VIEW WAS EARLIER TAKEN BY THE SUPREME COURT IN SIEMENS ENGG. & MFG. CO. LTD. V. UNION OF INDIA AIR 1976 SC 1785. IT IS SETTLED LAW THAT WHILE MAKING ASSESSMEN T ON ASSESSEE, THE ITO ACTS IN A QUASI-JUDICIAL CAPACITY . AN ASSESSMENT ORDER IS AMENABLE TO APPEAL BY THE ASSES SEE AND TO REVISION BY THE COMMISSIONER UNDER SECTIONS 263 AND 264. THEREFORE, A REASONED ORDER ON A SUBSTANTIAL ISSUE IS LEGALLY NECESSARY. THE JUDGMENTS ON WHICH RELIANCE WAS PLAC ED BY THE 12 ITA 980 & 981/15 LEARNED COUNSEL FOR THE ASSESSEE ALSO POINTS TO THE SAME DIRECTION. THEY HAVE HELD THAT ORDERS, WHICH ARE SU BVERSIVE OF THE ADMINISTRATION OF REVENUE, MUST BE REGARDED AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF THE ASSESSING OFFICERS ARE ALLOWED TO MAKE ASSESSMENTS IN AN ARBI TRARY MANNER, AS HAS BEEN DONE IN THE CASE BEFORE US, THE ADMINISTRATION OF REVENUE IS BOUND TO SUFFER. IF WI THOUT DISCUSSING THE NATURE OF THE TRANSACTION AND MATERIALS ON RECO RD, THE ASSESSING OFFICER HAD MADE CERTAIN ADDITION TO THE INCOME OF THE ASSESSEE, THE SAME WOULD HAVE BEEN CONSIDERED ERRON EOUS BY ANY APPELLATE AUTHORITY AS BEING VIOLATIVE OF THE P RINCIPLES OF NATURAL JUSTICE WHICH REQUIRE THAT THE AUTHORITY MU ST INDICATE THE REASONS FOR AN ADVERSE ORDER. WE FIND NO REASON WHY THE SAME VIEW SHOULD NOT BE TAKEN WHEN AN ORDER IS AGAINST T HE INTERESTS OF THE REVENUE. AS A MATTER OF FACT SUCH ORDERS AR E PREJUDICIAL TO THE INTERESTS OF BOTH THE PARTIES, BECAUSE EVEN THE ASSESSEE IS DEPRIVED OF THE BENEFIT OF A POSITIVE FINDING IN HI S FAVOUR, THOUGH HE MAY HAVE SUFFICIENTLY ESTABLISHED HIS CASE. 11. IN VIEW OF THE FOREGOING, IT CAN SAFELY BE SAI D THAT AN ORDER PASSED BY THE ASSESSING OFFICER BECOMES ERRON EOUS AND 13 ITA 980 & 981/15 PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNDER S ECTION 263 IN THE FOLLOWING CASES: (I) THE ORDER SOUGHT TO BE REVISED CONTAINS ERROR O F REASONING OR OF LAW OR OF FACT ON THE FACE OF IT. (II) THE ORDER SOUGHT TO BE REVISED PROCEEDS ON INC ORRECT ASSUMPTION OF FACTS OR INCORRECT APPLICATION OF LAW . IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PR INCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. (III) THE ORDER PASSED BY THE ASSESSING OFFICER IS A STEREOTYPE ORDER WHICH SIMPLY ACCEPTS WHAT THE ASSESSEE HAS ST ATED IN HIS RETURN OR WHERE HE FAILS TO MAKE THE REQUISITE ENQU IRIES OR EXAMINE THE GENUINENESS OF THE CLAIM WHICH IS CALLE D FOR IN THE CIRCUMSTANCES OF THE CASE. 12. WE SHALL NOW TURN TO THE FACTS OF THE CASE TO SEE WHETHER THE CASE BEFORE US IS COVERED BY THE AFORESAID PRIN CIPLES. PERUSAL OF THE ASSESSMENT ORDER PASSED BY THE ASSES SING OFFICER DOES NOT SHOW ANY APPLICATION OF MIND ON HI S PART. HE SIMPLY ACCEPTED THE INCOME DECLARED BY THE ASSESSEE . THIS IS A CASE WHERE THE ASSESSING OFFICER MECHANICALLY ACCEP TED WHAT THE ASSESSEE WANTED HIM TO ACCEPT WITHOUT ANY APPLI CATION OF MIND OR ENQUIRY. THE EVIDENCE AVAILABLE ON RECORD I S NOT ENOUGH TO HOLD THAT THE RETURN OF THE ASSESSEE WAS OBJECTI VELY EXAMINED OR CONSIDERED BY THE ASSESSING OFFICER. IT IS BECAU SE OF SUCH NON-CONSIDERATION OF THE ISSUES ON THE PART OF THE ASSESSING 14 ITA 980 & 981/15 OFFICER THAT THE RETURN FILED BY THE ASSESSEE STOOD AUTOMATICALLY ACCEPTED WITHOUT ANY PROPER SCRUTINY. THE ASSESSMEN T ORDER PLACED BEFORE US IS CLEARLY ERRONEOUS AS IT WAS PAS SED WITHOUT PROPER EXAMINATION OR ENQUIRY OR VERIFICATION OR OB JECTIVE CONSIDERATION OF THE CLAIM MADE BY THE ASSESSEE. TH E ASSESSING OFFICER HAS COMPLETELY OMITTED TO EXAMINE THE ISSUE S IN QUESTION FROM CONSIDERATION AND MADE THE ASSESSMENT IN AN AR BITRARY MANNER. HIS ORDER IS A COMPLETELY NON-SPEAKING ORDE R. IN OUR VIEW, IT WAS A FIT CASE FOR THE LEARNED COMMISSIONE R TO EXERCISE HIS REVISIONAL JURISDICTION UNDER SECTION 263 WHICH HE RIGHTLY EXERCISED BY CANCELLING THE ASSESSMENT ORDER AND DI RECTING THE ASSESSING OFFICER TO PASS A FRESH ORDER CONSIDERING THE ISSUES RAISED BY THE CIT. IN OUR VIEW, THE ASSESSEE SHOULD HAVE NO GRIEVANCE IN THE ACTION OF LEARNED COMMISSIONER IN EXERCISING THE JURISDICTION U/S. 263 OF THE IT ACT. 13. IN VIEW OF THIS, THE ASSESSING OFFICER CANNOT T AKE A VIEW EITHER AGAINST OR IN FAVOUR OF THE ASSESSEE WITHOUT MAKING PROPER ENQUIRIES AND WITHOUT PROPER EXAMINATION OF THE CLA IM MADE BY THE ASSESSEE IN THE LIGHT OF APPLICABLE LAW. IN TH E PRESENT CASE, THE ASSESSING OFFICER CONSIDERED THE FMV AT ` 300 PER SQ.FT. AS 15 ITA 980 & 981/15 ON 1.4.1981 AS SUBMITTED BY THE ASSESSEE WITHOUT BR INGING ANY COMPARABLE CASES OR REFERRING THE MATTER TO THE DVO FOR VALUATION. THIS ITSELF IS AN ERROR COMMITTED BY TH E AO THAT ASPECT INVOLVES THE REJECTION OF TAX, WHICH IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE CIT IS EMPOWERED TO INVOKE THE PROVISIONS OF SEC.263 OF THE ACT, SO AS TO RECTIFY THE ERRORS COMMITTED OR WRONG DECISION TAKEN BY THE ASSESSING OFFICER. AFT ER CONSIDERING THE MATERIAL ON RECORD, IN OUR OPINION, IT CANNOT BE SAID THAT EXERCISE OF JURISDICTION BY THE CIT U/S.2 63 OF THE ACT, IS BAD IN LAW. ACCORDINGLY, WE UPHOLD THE ORDER OF TH E CIT TO THE EXTENT THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN CONSIDERING THE FMV AS ON 1.4.1981 AT ` 300 PER SQ.FT.. HOWEVER, THE CIT CANNOT DETERMINE THE FMV OF THE PROPERTY, HIMSELF. IN THE PRESENT CASE, THE CIT, HIMSELF FIXED THE FMV OF TH E PROPERTIES AS ON 1.4.1981 AT ` 40 PER SQ.FT., WHICH IS NOT CORRECT. ACCORDINGLY, WE DIRECT THE AO TO REFER THE MATTER B OTH, LANDED PROPERTIES AS WELL AS BUILDINGS TO THE DVO AND DECI DE THE ISSUE AFRESH. IT IS NEEDLESS TO SAY THAT THE DVO HAS TO CONSIDER COMPARABLE CASES IN THE IMMEDIATE VICINITY OF THE P ROPERTIES, WHERE IT IS LOCATED AND ALSO GIVE AN OPPORTUNITY OF HEARING TO THE 16 ITA 980 & 981/15 ASSESSEE. WITH THIS OBSERVATION, THE APPEALS OF TH E ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 27 TH OF APRIL, 2016 AT CHENNAI. SD/- SD/- ( $ % . & '( ) ( ) * + , ) DUVVURU RL REDDY - ./012304556037- 8 9: /JUDICIAL MEMBER ! 9:;<<5=1>01>?@AB@3 )8 /CHENNAI, C9 /DATED, THE 27 TH APRIL, 2016. MPO* 9D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H- /CIT(A) 4. H /CIT 5. FIJ K /DR 6. J(L /GF.