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2015 (1) TMI 1216 - AT - Income TaxAssessment u/s 153C - revision u/s 263 - Held that - Until the order is not quashed or cancelled or annulled, we cannot say that there is no order passed u/s 153C. It is not denied that order u/s 153C was passed on 16.12.2011 in the case of the assesse and the proceedings u/s 263 were initiated against the assessee by show cause notice and order u/s 263 was passed on 28.03.2014. The order u/s 263 has been passed within two years from the end of the financial year in which the order u/s 153C was passed. CIT has not invoked the jurisdiction in respect of the intimation issued u/s 143(1) and limitation cannot start from the date when the return was processed u/s 143(1). We therefore, dismiss the ground no.1 taken by the assesse so far it relates to the order passed u/s 263 is barred by limitation. If we look into the explanation to section 263, it is apparent that CIT can invoke the jurisdiction u/s 263 even in respect of the order made by the Joint Commissioner or an order passed by the Assessing Officer on the basis of the directions issued by the Joint Commissioner u/s 144A. Initiation of such proceedings u/s 132 cannot be regarded that the order passed u/s 153C has been passed with the approval of the CIT. The power u/s 263 is a part of the Administrative power to be exercised against the assessing officer with the intention that in case an assessing officer passes an order which is erroneous and prejudicial to the interest of the revenue, the CIT can invoke jurisdiction u/s 263. If this power is not given, the section will become redundant and the CIT will not have any administrative control over the order passed by the assessing officer. We therefore do not agree with the ld. AR that the order passed u/s 153C cannot be revised u/s 263. We dismiss this ground. A perusal of the order framed by CIT indicates that the Assessment Order passed by the A.O. was set aside on the ground that the assessee has not offered her taxation the sum of ₹ 6 crores received from Mr. N. Suryanarayan. This, in our considered opinion, cannot be sufficient ground for setting aside the assessment. While making Assessment Order, it is the satisfaction of the A.O. who made the enquiry and it should be a touchstone of the assessment order passed by him, the CIT cannot substitute his view in place of finding of the A.O. until and unless the view taken by the A.O. is unsustainable in law. No cogent material or evidence was brought to our knowledge by the ld. D.R. which may prove that the decision taken by the A.O. that the sum of ₹ 6 crores has to be added in the hands of the company namely GAPL. The order passed by CIT is illegal without jurisdiction. The order passed by the CIT cannot be sustained if the order is sustained then this will permit the illegality to continue and the subsequent action carried out on the illegal order are also illegal.Therefore, on this basis, we are of the view that the order passed by the assessing officer is not erroneous and prejudicial to the interest of the revenue and accordingly we quash the order passed u/s 263 by allowing the ground no.3. The sum of ₹ 6 crores received by the assesse cannot be regarded to be the income of the assesse. After considering the rival submissions we noted that this ground does not arise out of the order of the CIT as the CIT has not given the direction to the assessing officer to make the addition of ₹ 6 crores but has only set aside the order passed u/s 263 with the direction to consider the above sum of ₹ 6 crores deposited in the bank of the assesse for the assessment year 2008- 09 in accordance with law after giving reasonable opportunity to the assessee. Thus the ground no.4 stands dismissed.
Issues Involved:
1. Limitation period for passing the order under Section 263. 2. Revisional jurisdiction under Section 263 over an order passed under Section 153C. 3. Satisfaction of conditions under Section 263. 4. Addition of loan receipt of Rs. 6 crores. Issue-wise Detailed Analysis: 1. Limitation Period for Passing the Order under Section 263: The Assessee argued that the CIT's order under Section 263 was barred by limitation. The Assessee contended that the CIT should have considered the date of the original order under Section 143(3) for the purpose of limitation, not the date of the order under Section 153C. The tribunal noted that the order under Section 153C was passed on 16.12.2011, and the CIT passed the order under Section 263 on 28.3.2014, which was within two years from the end of the financial year in which the order under Section 153C was passed. Hence, the tribunal dismissed the Assessee's argument, stating that the proceedings under Section 263 were not barred by limitation. 2. Revisional Jurisdiction under Section 263 over an Order Passed under Section 153C: The Assessee argued that the CIT erred in exercising revisional jurisdiction under Section 263 to revise an order passed under Section 153C. The tribunal examined the provisions of Section 153C and Section 153D, noting that prior approval of the Joint Commissioner is required for orders under Section 153C. However, the tribunal clarified that the jurisdiction under Section 263 is exercised by the Commissioner, not the Joint Commissioner, and includes orders passed by the Assessing Officer under the directions of the Joint Commissioner. Consequently, the tribunal dismissed the Assessee's argument, holding that the CIT could revise the order under Section 153C using Section 263. 3. Satisfaction of Conditions under Section 263: The Assessee contended that the CIT erred in exercising jurisdiction under Section 263 concerning the loan transaction of Rs. 6 crores with Mr. Suryanarayana, which was already examined and accepted during the assessment proceedings under Section 153C. The tribunal noted that the AO had made inquiries about the Rs. 6 crores and decided to add the amount in the hands of M/s. Britto Amusements Pvt. Ltd. (BAPL), where the Assessee is a Director. The tribunal emphasized that if the AO has taken one of the possible views and applied his mind, the order cannot be deemed erroneous unless the view is unsustainable in law. The tribunal cited the Supreme Court's decision in Malabar Industrial Co. Ltd. vs. CIT, which held that an order is erroneous if there is an incorrect assumption of fact or law. The tribunal concluded that the AO's decision was a possible view and not erroneous or prejudicial to the revenue's interest. Therefore, the tribunal quashed the CIT's order under Section 263. 4. Addition of Loan Receipt of Rs. 6 Crores: The Assessee argued that the Rs. 6 crores received from Mr. Suryanarayana was a genuine loan transaction and not taxable as income. The tribunal noted that the CIT had not directed the AO to add the Rs. 6 crores as income but had set aside the assessment order, directing the AO to reconsider the sum in accordance with the law after giving the Assessee a reasonable opportunity. Therefore, the tribunal dismissed this ground, stating that it did not arise from the CIT's order. Conclusion: The tribunal partly allowed the Assessee's appeal, quashing the CIT's order under Section 263 on the ground that the AO's order was not erroneous and prejudicial to the revenue's interest. However, the tribunal dismissed the grounds related to the limitation period, revisional jurisdiction, and the addition of the loan receipt.
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