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TMI Blog2012 (12) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, there was no necessity to set aside the assessment for fresh consideration. Case remand back to CIT. - IT Appeal No. 645 (bang.) of 2011 - - - Dated:- 18-7-2012 - George George K., Jason P. Boaz, JJ. V. Srinivasan for the Appellant. Farhat Hussain Qureshi for the Respondent. ORDER George George K, Judicial Member This appeal preferred by the assessee is directed against the order of the CIT, Bangalore dated 28/3/2011 passed under section 263 of the Act. The relevant assessment year is 2006-07. 2. The grounds raised read as follows:- ( i ) The order passed by the learned CIT under section 263 of the Act, in so far as it is against the appellant, is opposed to law, equity, weight of evidence, probabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d depreciation claimed to the extent of Rs.10,24,250/- and added the same to the returned income. Thus, the total taxable income was calculated at Rs. 13,14,810/-. 3.1 Later, notice was issued under section 263 of the Act by the CIT, as according to him, the order passed under section 144 is erroneous and prejudicial to the interest of the revenue, since the Assessing Officer had failed to initiate penalty proceedings under section 271(1)(c) of the Act. Therefore, it was proposed by the CIT that the assessment completed under section 144 of the Act vide order dated 30/12/2008 is to be cancelled and directions were to be issued to the Assessing Officer to re-do the assessment. 3.2 In reply to the notice under section 263 of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed below for ready reference:- "8. In the present case to initiate the revisionary proceedings two conditions have to be satisfied. The order of the Assessing Officer should be erroneous and prejudicial. An incorrect assumption of facts or lack of application of law definitely satisfies the twin conditions. The order passed by the Assessing Officer under section 144 dated 30/12/2008 does fall under this category i.e. an order without applying the principles of natural justice which renders the assessment order to be set aside in view of the powers vested upon me under section 263 of the Income-tax Act. Hence, I cancel the assessment made by the Assessing Officer on 30/12/2008 and the case is remitted back to the Assessing Officer for redo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fulfillment of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the revenue. If one of them is absent, recourse cannot be had to section 263(1) of the Act. Further, if the Assessing Officer has adopted one of the courses permissible in law, and it has resulted in loss of revenue, it cannot be treated as prejudicial to the interests of the revenue; or where two views are possible and the Assessing Officer has taken one view with which the Commissioner does not agree, the order cannot be treated as erroneous or prejudicial to the interests of the revenue unless the view taken by the Assessing Officer is unsustainable in law. The Hon'ble Apex C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to play and applies to clauses (i), (ii) and (iii), as the case may be. 8.2 The Finance Act, 2002 amended section 271(1)(c) to include a reference to the Commissioner as being an authority, who can initiate and levy penalty under section 271(1) of the Act. Similar reference to the Commissioner has been incorporated by the amendment in Explanation 1 and Explanation 7 of section 271(1). In the instant case, the CIT issued notice under section 263 since the Assessing Officer had failed to initiate penalty proceedings under section 271(1)(c) of the Act for concealing particulars of income/furnishing of inaccurate particulars of income. However, when revisionary order was passed under section 263 of the Act, the assessment was set aside to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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