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TMI Blog2011 (10) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 lakhs. Enquiries made by the Assessing Officer revealed that the property had been purchased and sold in assessee's name, thus the income arising from such transaction is required to be taxed in assessee's hands. As per the ld. CIT, the Assessing Officer has accepted assessee's contention regarding the existence of AOP, without verifying the facts pertaining to the entire transaction, therefore, he proposed to revise the assessment order dated 31.12.2008 holding it to be erroneous as well as prejudicial to the interests of the Revenue in so far as this aspect of income is concerned. As against the show cause notice, the assessee replied as under: "1. It is not correct to state that the A.O has not enquired into the issue of existence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax, Chennai VI passed without jurisdiction, is erroneous, contrary to law and facts of the case, and is against the principles of equity and natural justice and hence liable to be set aside at the threshold itself. 1.2 The Hon'ble Commissioner of Income-tax failed to note that the assessment order which is the subject matter of revision u/s 263 was only a limited scrutiny case selected on the basis of sale of property and thus, as per the instructions of the CBDT "the scrutiny of such cases would be limited only to the aspects of information received through AIR" (Annual Information Report) and hence the Department cannot go into any other question including the source of funds for ~ purchase in as much as the information about the purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh brought to his notice vis-a-vis the copy of an appellate order in ITA No.729/Mds/2008 dated 2.1.2009 of the D Bench of the Hon ITAT, Chennai which was also supplied for record purposes in which this decision was applied which is a violation of the principles of natural justice. 2.3 The Hon'ble Commissioner ought to have taken note of the fact that the transaction of sale effected in the name of he appellant really belonged to an AOP K. Vasu, Ramayee & 4 others in which the appellant was only a member with equal share and that the AOP has offered the income in the transaction and paid taxes thereon. An assessment of the same income cannot be made on another entity without canceling the assessment of the former as it would amount to taxi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause to be made such an enquiry as he deems necessary in order to find out if any order passed by Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The only limitation on his powers is that he must have some material(s) which would enable him to form a prima facie opinion that the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the Revenue. Once he comes to the above conclusion on the basis of the 'material' that the order of the Assessing Officer is erroneous and also prejudicial to the interests of the Revenue, the CIT is empowered to pass an order as the circumstances of the case may warrant. He may pass an order enhancing the assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it is only when an order is erroneous, that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice for the requirement or order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated as prejudicial to the interest of the revenue and if the Assessing Officer has adopted one of the courses permissible under law or where two views are possible and the Assessing Officer has taken one view under with which the CIT does not agree, it cannot be treated as an erroneous order, unless the view taken by the Assessing Officer is unsustainable under the law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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