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TMI Blog2013 (7) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... OMBAY High Court] - Decided against Revenue. - Income Tax Appeal No. 267/2013 - - - Dated:- 9-7-2013 - Sanjiv Khanna And Sanjeev Sachdeva,JJ. For the Appellant : Mr. Karan Khanna, Sr. Standing Counsel For the Respondent : Ms. Prem Lata Bansal, Sr. Advocate with Mr. Sarfaraz Ahmad Ms. Ruchi Jain, Advocates ORDER Sanjiv Khanna, J. (Oral): This appeal by the Revenue impugns order dated 24th August, 2012 passed by the Income Tax Appellate Tribunal in the case of Jyoti Foundation, a charitable trust. The assessment year involved is 2006-07 and by the impugned order the tribunal has struck down order dated 30th March, 2012 passed by the Director of Income Tax (Exemptions) under Section 263 of the Income Tax Act, 1961 (Act, for short). 2. For the Assessment Year 2006-07, pursuant to a complaint made by one Jayant Pandey, re-assessment notice under Section 147 was issued to examine and verify the sale consideration received on sale of four plots measuring 500 square yards each in village Nangli, Sakarawati, Delhi. The respondent-assessee had declared sale consideration of Rs.4 lacs each (total Rs.16 lacs) whereas it was alleged by the complainant that the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrive at proper conclusion on the veracity of Bayana Receipt, in question and pass a fresh assessment in accordance with law after affording due opportunity of hearing to the assessee. 4. Revisionary power under Section 263 of the Act is conferred by the Act on the Commissioner/Director of Income Tax when an order passed by the lower authority is erroneous and prejudicial to the interest of the Revenue. Orders which are passed without inquiry or investigation are treated as erroneous and prejudicial to the interest of the Revenue, but orders which are passed after inquiry/investigation on the question/issue are not per se or normally treated as erroneous and prejudicial to the interest of the Revenue because the revisionary authority feels and opines that further inquiry/investigation was required or deeper or further scrutiny should be undertaken. In Income Tax Officer versus DG Housing Projects Limited, (2012) 343 ITR 329 (Delhi) it has been observed: 11. The Assessing Officer is both an investigator and an adjudicator. If the Assessing Officer as an adjudicator decides a question or aspect and makes a wrong assessment which is unsustainable in law, it can be corrected by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions show that it is not necessary for the Commissioner to make further inquiries before cancelling the assessment order of the Income-tax Officer. The Commissioner can regard the order as erroneous on the ground that in the circumstances of the case the Income-tax Officer should have made further inquiries before accepting the statements made by the assessee in his return. 14. The aforesaid observations have to be understood in the factual background and matrix involved in the said two cases before the Supreme Court. In the said cases, the Assessing Officer had not conducted any enquiry or examined evidence whatsoever. There was total absence of enquiry or verification. These cases have to be distinguished from other cases (i) where there is enquiry but the findings are incorrect/erroneous; and (ii) where there is failure to make proper or full verification or enquiry. 15. In the case of Commissioner of Income Tax vs. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del), Delhi High Court was considering the aspect, when there is no proper or full verification, and it was held as under:- We have considered the rival submissions of the counsel on the other side and have gone thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. (See Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 (SC) at page 10) . . . From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding that the order/inquiry made is erroneous. This can happen if an enquiry and verification is conducted by the CIT and he is able to establish and show the error or mistake made by the Assessing Officer, making the order unsustainable in Law. In some cases possibly though rarely, the CIT can also show and establish that the facts on record or inferences drawn from facts on record per se justified and mandated further enquiry or investigation but the Assessing Officer had erroneously not undertaken the same. However, the said finding must be clear, unambiguous and not debatable. The matter cannot be remitted for a fresh decision to the Assessing Officer to conduct further enquiries without a finding that the order is erroneous. Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under Section 263 of the Act. In such matters, to remand the matter/issue to the Assessing Officer would imply and mean the CIT has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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