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2021 (9) TMI 1331 - AT - Income TaxRevision u/s 263 by CIT - validity of assessment order passed u/s 143(3) r.w.s. 153A - whether the requisite jurisdiction necessary to assume revisional jurisdiction is there existing before the Pr. CIT to exercise his power? - HELD THAT - Assessing Officer s role while framing an assessment is not only an adjudicator.AO has a dual role to dispense with i.e. he is an investigator as well as an adjudicator; therefore, if he fails in any one of the role as afore-stated, his order will be termed as erroneous. We note that in these group cases, the assessing officer has issued notice under section 142(1) of the Act and in response to notice under section 142(1) of the Act, the assessee has submitted documents and evidences which were examined by the assessing officer and while examining the assessing officer has applied his mind also. On this finding of fact by us, we cannot term the assessment order passed by the AO u/s 153A/143(3), as erroneous. There was as such no allegation of no enquiry or lack of enquiry or verification, because the Ld. Pr. C.I.T. himself found all the details/evidences in the assessment record, i.e. well within the A.O. s possession and what he alleged was about the plausible view taken by the A.O. as against his perception and understanding on the same set of facts and documents. The main allegation of ld PCIT in his order under section 263, was that assessing officer has not made further inquiry. It means inquiry has been made by the assessing officer. The ld Counsel at this juncture submitted before the Bench that there is no end of further inquiry, the assessing officer whenever needed made further inquiry also. It is the domain of the assessing officer to decide, whether further inquiry is needed or not in a particular case. After getting the documents and information from the assessee, during the assessment proceedings, the assessing officer has examined the documents and evidences and applied his mind, and he made further inquiry also whenever he thinks fit that further inquiry is necessary and then framed the assessment under section 143(3) r.w.s. 153A of the Act. Section 142(1) of the Act speaks of inquiry before assessment and gives immense power to the Assessing Officer for conducting enquiry. Therefore, the Assessing Officer, under section 142(1)(ii) and (iii) of the Act, can ask the assessee almost any information which he things necessary for passing assessment and even if Ld. PCIT has such results of enquiries, the resultant order cannot be subjected to revision proceedings. Therefore, the very initiation of proceeding u/s 263 of the Act by the Ld. Pr. C.I.T. is in violation of the settled position in law. When the conditions precedent for invoking revisional power u/s 263 of the Act on the facts and in the circumstances of the case are not fulfilled in the case of the assessee, the subsequent action in passing the order u/s 263 on such invalid proceeding becomes null and void. As during the course of the scrutiny assessment proceeding, the assessee furnished full details of land at Khator village, investments, amount advanced and amount received, balances shown in ledger accounts and books of accounts, details of capital gains, trading activities, party-wise break-up of debit and credit entries/balances of sundry debtors and creditors, audited books of account, notes of the financial statements, bank details, quarterly VAT returns etc., which were as well filed before the Ld. Pr. C.I.T. during 263 proceeding. The A.O. also raised further queries to establish genuineness of sales, purchases, advances received and paid, investments in land, gift, cash deposit in bank out of assessee s own fund, debtors and creditors etc, during the year. Considering all these facts and hearing the A.R. of the assessee on various dates, the impugned assessment order under section 143(3) r.w.s.153A was passed by the assessing officer. Therefore, the order so passed by the assessing officer is based on reasonable and plausible view which cannot be termed as erroneous. There was no allegation by the Ld. revenue authorities that the evidences produced were fictitious or invented, thus accepted the authenticity of the same. Such an order cannot be called erroneous and prejudicial to interests of revenue only because the A.O. made the assessment without discussing such details therein - there was no allegation by the Ld. revenue authorities that the evidences produced were fictitious or invented, thus accepted the authenticity of the same. Such an order cannot be called erroneous and prejudicial to interests of revenue only because the A.O. made the assessment without discussing such details therein - Decided in favour of assessee.
Issues Involved:
1. Validity of the order passed under Section 263 of the Income Tax Act, 1961 by the Principal Commissioner of Income Tax (PCIT). 2. Whether the original assessment order was erroneous and prejudicial to the interest of the revenue. 3. Adequacy of inquiries conducted by the Assessing Officer (AO) during the original assessment proceedings. 4. Double taxation concerns due to disclosure under the Income Declaration Scheme (IDS) 2016. 5. Specific issues raised by the PCIT in various assessment years. Issue-wise Detailed Analysis: 1. Validity of the Order Under Section 263: The PCIT exercised jurisdiction under Section 263 of the Income Tax Act, 1961, claiming the original assessment order was erroneous and prejudicial to the interest of the revenue. The Tribunal examined whether the twin conditions for invoking Section 263 were satisfied: the order must be erroneous and prejudicial to the revenue. The Tribunal referred to judicial precedents, including Malabar Industries Ltd. vs. CIT, emphasizing that an order cannot be revised merely because the PCIT holds a different opinion. 2. Erroneous and Prejudicial to Revenue: The Tribunal noted that for an order to be considered erroneous and prejudicial, it must be based on incorrect facts, incorrect application of law, or lack of inquiry. The Tribunal found that the AO had conducted detailed inquiries and issued notices under Section 142(1) during the assessment proceedings. The AO's conclusions, based on these inquiries, were within the permissible legal framework and could not be deemed erroneous simply because the PCIT disagreed. 3. Adequacy of Inquiries by AO: The Tribunal reviewed the assessment records and found that the AO had issued detailed questionnaires and show-cause notices, to which the assessee responded with documentary evidence. The AO had examined these responses before finalizing the assessment. The Tribunal held that the AO's inquiries were adequate, and the PCIT's claim of insufficient inquiry was unfounded. 4. Double Taxation Concerns: The assessee argued that the issues raised by the PCIT were already covered by disclosures made under the IDS 2016, and taxing the same income again would result in double taxation. The Tribunal agreed, noting that the IDS 2016 disclosure covered the net profit from "on money" transactions, and further additions in the hands of the firm or partners would amount to double taxation, which is not permissible under the Income Tax Act. 5. Specific Issues Raised by PCIT: The Tribunal examined specific issues raised by the PCIT for various assessment years, including unaccounted cash payments for land purchases, loan transactions, and capital gains. The Tribunal found that: - In each case, the AO had issued notices and received responses with supporting documents. - The AO had made inquiries and applied his mind to the evidence presented. - The PCIT's claim that the AO failed to make further inquiries was not substantiated by the records. The Tribunal concluded that the AO had adopted one of the permissible courses of action based on the inquiries and evidence, and the PCIT's differing opinion did not render the original assessment order erroneous. Conclusion: The Tribunal quashed the order passed by the PCIT under Section 263, holding that the original assessment order was neither erroneous nor prejudicial to the interest of the revenue. The Tribunal emphasized that the AO had conducted adequate inquiries, and the PCIT's attempt to impose his opinion was not justified. The appeals of the assessees were allowed, and the Tribunal's decision applied to all related appeals.
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