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TMI Blog2004 (10) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... that the gifts of Rs. 22,04,000 were accepted by the Assessing Officer without making proper and complete enquiries. ( c ) Because, the finding of the Assessing Officer regarding genuineness of the gifts is based on material available on records and such a finding cannot be disturbed on unfounded presumptions and surmises. 3. ( a ) Because, on the facts and in the circumstances of the case, CIT-I, Agra erred in holding that unsecured loan of Rs. 17,40,784 was accepted by the Assessing Officer without making any sincere attempt, and without making any worthwhile enquiry. ( b ) Because, the Assessing Officer had made definite enquiries in this regard during the course of assessment proceedings and the same was also complied with. 4. Because, order dated 18-3-2004 is bad in law and on facts." 2. I have heard the counsel for the assessee as well as the ld. D.R. 3. This appeal was partly heard on 15-10-1994 and since the assessee s counsel had pleaded that the assessee had discharged the onus put on it by the provisions of section 68 of the Act by having filed gift deeds, acknowledgement for having filed the returns of income, by the donors as well as the creditors, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order lying in the assessment records of the assessee reads as under : "Office Note - During the course of assessment proceedings the assessee has filed explanations of all the unsecured loans and gifts which were find satisfactory except an amount of Rs. 1 lakh received as gift on 15-3-2000 from Sh. Deepak Jain of Delhi. This amount has been added to the income of the assessee. After disallowing inadmissible the case has been completed on income of Rs. 1,01,290 as against returned loss of Rs. 49,646. The first notice was issued with the approval of JCIT, Range-3, Mathura and the order has been passed after discussion with the JCIT, R-3, Mathura." Sd/- Sd/- 25-3-2003 (Sandeep Chauhan) (V.P. Lavania) Jt. CIT, Range-3, Mathura ITO 3(2), Mathura 6.2 There is another entry at page 3 of the assessment order, which reads as under : "22/X/03: Issue information letter to Assessing Officers of various donors as dictated for taking action at their end." Sd/- ITO 7. Later on, the C.I.T. initiated the proceedings under section 263 of the Act and ultimately passed order under section 263 on March 18, 2004, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid background of facts and circumstances, I am to conclude that the assessment order passed by the Assessing Officer was undoubtedly erroneous and prejudicial to the interest of revenue. I, therefore, proceed to invoke the powers vested under section 263 of the Income-tax Act, 1961 and set aside the assessment order of the Assessing Officer to be made de novo after carefully considering all the relevant facts and evidences and also giving a reasonable opportunity to the assessee for being heard." 8. It was in view of the above facts and circumstances of the case that the counsel for the assessee, first of all, after referring to the order under section 263, the ld. Counsel submitted that after the reading of the order as a whole, it transpires that the CIT has considered the assessment order as erroneous and prejudicial to the interest of revenue mainly on the ground that ( i ) the assessee had not produced all the donors alongwith their original pass books, ( ii ) that no sincere efforts were made to test the genuineness of the gifts, and ( iii ) that there has been no worthwhile enquiries made by the Assessing Officer before accepting the claim of alleged uns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of onus put on him, to call them in exercise of his powers under section 131 of the Act, but since the Assessing Officer as well as the Joint Commissioner, Income-tax, who was monitoring the assessment, were fully satisfied with respect to the sufficiency of the evidence furnished by the assessee, they might have not considered it necessary. He, therefore, submitted that non-production of donors by the assessee cannot be a ground for resorting to the provisions of section 263 of the Act. 8.3 Similarly, the ld. Counsel submitted that he was never called upon to produce the original pass book of the donors and this observation of the CIT was also not relevant for invoking the provisions of section 263 of the Act. 8.4 Coming to para 7 of the order under section 263, the counsel for the assessee submitted that for exercise of jurisdiction under section 263, it is incumbent upon the CIT to give specific reason in this respect, but if we go through the effective part of the order, it reveals that he has passed the order simply on conjectures, surmises and suspicion, as is evident from the observation that the Assessing Officer in the case has not made sincere efforts to test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para 6.1 above, the fact that this foot note has been signed by both the ITO, V.P. Lawania and JCIT, Range-3, Mathura Shri Satish Chand and that there is another entry dated 28-10-2003, as per which ITO had information letters to Assessing Officers of various donors for taking action at their ends, I am of the opinion that there remains no doubt with regard to the submissions of the counsel for the assessee that the assessee had discharged the onus put on him by the provisions of section 68 of the Act because the documentary evidence furnished by the assessee, which have been duly acknowledged by the CIT also, clubbed with the fact that all the donors and creditors were Income-tax payers, had filed their returns of income showing sufficient income, was sufficient to establish all the three ingredients i.e., identity, capacity and genuineness of the transactions both in case of donors as well as the creditors and therefore, I am of the opinion that the assessment order is neither erroneous nor prejudicial to the interest of Revenue. 12. So far as the nature of assessment order is concerned, I am inclined to agree with the submissions of the counsel for the assessee that howsoe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee s case is concerned, the out come of assessee s appeal is wholly on the appreciation of facts on record, i.e., evidence furnished by the assessee before the ITO and acceptance of the same by the ITO as well as JCIT. Consequently this decision supports the assessee s case that the Assessing Officer had made proper enquiries. (2) CIT v. Mrs. Sunita Vachani [1990] 184 ITR 121 (Delhi) ( a )In this case the CIT had set aside the assessment order because he was of the view that the ITO had not gone into the source of gift of large sum of money received by the assessee. ( a.i )On appeal, the Appellate Authority saw the balance sheet of the donors, which had been placed on record and came to the conclusion on merits that the decision of ITAT to treat the monies receipt of gifts was correct and there was no error committed by the officer as there was nothing more which he could investigate than what he cannot be done. The Hon ble High Court on appeal of the Revenue held that the findings of the Tribunal that the gifts were genuine was a pure question of fact and no question of law arose from the order of the Tribunal. ( b )So far as the present case is concerned, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corrective or as a review of a subordinate s order in exercise of the supervisory power but it is to be invoked and employed only for the purpose of setting right distortions and prejudices to the revenue which is a unique conception which has to be understood in the context of and in the interest of revenue administration. Such a power cannot in any manner be equated to or regarded as approaching in any way the appellate jurisdiction or even the ordinary revisional jurisdiction conferred on the Commissioner under section 264." ( b )So far as the present case is concerned, it is not the CIT s case that the assessment order which has been passed by the ITO under the supervision of JCIT, is not in accordance with law and therefore, so far as the assessment order remains as per the law, the same cannot be erroneous or prejudicial to the interest of revenue. The aforesaid decision fully supports the assessee s case. (4) CIT v. Goyal Private Family Specific Trust [1988] 171 ITR 698 (All.) ( a )In this case, the assessee, Private trust, filed its returns and the ITO assessed the beneficiaries of the trust holding that the trust was not assessable. The CIT, under section 263 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence, no question of law arises. ( iii )That there is no finding by the Commissioner that the Income-tax Officer reached an erroneous conclusion and that, on the facts and circumstances of the case, the conclusion would have been different. The orders of the Income-tax Officer may be brief and cryptic, but that by itself is not sufficient reason to brand the assessment orders as erroneous and prejudicial to the interest of the revenue. Writing an order in detail may be a legal requirement, but the order not fulfilling this requirement cannot be said to be erroneous and prejudicial to the interest of the revenue. It was for the Commissioner to point out as to what error was committed by the Income-tax Officer in having reached the conclusion that the income of the trust was exempt in his hands and was assessable only in the hands of the beneficiaries. The Commissioner having failed to point out any error, no error can be inferred from the orders of the Income-tax Officer for the simple reason that they are bereft of the details. If the order is not erroneous, then it cannot be prejudicial to the interest of the revenue. There is nothing to show in the order of the Commissioner t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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