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2023 (2) TMI 743 - AT - Income TaxRevision u/s 263 - Amount received which according to the CIT remained unverified as the said party has failed to respond to the notice received u/s 133(6) - HELD THAT - The Hon ble Supreme Court in the case of Malabar Industries Co. Ltd 2000 (2) TMI 10 - SUPREME COURT has held that where AO has adopted one of the courses permissible in law and which has resulted in loss to the revenue; or where two views are possible and the AO has taken one view with which the Commissioner does not agree, then the assessment cannot be treated as erroneous insofar as it is prejudicial to the interest of the revenue, unless the view taken by the Assessing Officer is not sustainable in law. Also in the case of Max India Ltd. 2007 (11) TMI 12 - SUPREME COURT as held that when the AO has adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the AO has taken one view with which the Commissioner does not agree, the assessment order cannot be treated as erroneous order prejudicial to the interest of the revenue, unless the view taken by the Assessing Officer is unsustainable in law. In the case of Gabriel India Ltd. 1993 (4) TMI 55 - BOMBAY HIGH COURT as held that, the ld. Pr. CIT cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Thus we hold that the revisionary jurisdiction was invalidly invoked by the ld Pr CIT and consequently quash the order passed u/s 263 of the Act. The appeal of the assessee is allowed.
Issues:
Invalid exercise of revisionary jurisdiction by the Principal Commissioner under section 263 of the Income Tax Act. Analysis: The appeal challenged the order of the Principal Commissioner of Income Tax under section 263 of the Income Tax Act for the Assessment Year 2010-11. The appeal was initially considered time-barred, but due to a Supreme Court decision during the COVID-19 pandemic, the appeal was treated as filed within the limitation period. The only issue raised by the assessee was against the invalid exercise of revisionary jurisdiction by the Principal Commissioner under section 263 of the Act without fulfilling the conditions as envisaged. The facts revealed that the assessment was reopened under section 147 of the Act, focusing on a beneficiary amount received from a company. The Assessing Officer conducted detailed examinations and accepted the genuineness of share capital transactions. However, the Principal Commissioner revised the assessment only concerning the share capital received from one company, citing non-verification due to an unserved notice. The argument presented by the assessee highlighted the evidence provided during the assessment and the failure of the Principal Commissioner to demonstrate inaccuracies in the submitted information. The case involved a thorough examination of the assessment records and the jurisdiction exercised by the Principal Commissioner. Decision: After considering the arguments and legal precedents cited, the tribunal found that the revisionary jurisdiction was invalidly invoked by the Principal Commissioner. The tribunal referenced various decisions, including the Malabar Industries Co. Ltd. case and the Max India Ltd. case, to support the conclusion that the assessment order could not be deemed erroneous unless the view taken by the Assessing Officer was unsustainable in law. Additionally, the tribunal emphasized that the Principal Commissioner cannot initiate proceedings for fishing and roving enquiries in concluded matters. Consequently, the tribunal quashed the order passed under section 263 of the Act, allowing the appeal of the assessee. The judgment was pronounced on 16th December 2022 in Kolkata.
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