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TMI Blog2013 (9) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses were unverifiable, a sum of Rs. 60,000/- as expenses was dis-allowed. 3. Sometime later, survey was conducted at the premises of the Society on 27.3.2008 and books of accounts found in the premises, were seized. During survey proceedings ON 13.8.2009 a show cause notice under Section 133 of the 1961 Act, was issued to the Assessee by the Income Tax Authorities. It was followed by yet another notice dated 29.9.2009. On the basis of order passed by the Assessing Officer under Section 143(3) for assessment year 2006-2007, wherein it was found that the books of accounts had not been maintained by the assessee in due course of business, proceedings under Section 263 of the 1961 Act, were initiated. 4. In the course of proceedings under Section 263 of the 1961 Act, except for ledger for the financial year 2005-2006 and some more documents, no other books of accounts were found, whereupon an order was passed by the Commissioner holding to the effect that order of 3.9.2007 of the Assessing Officer under Section 143(3) of the 1961 Act for the assessment year 2006-2007 was erroneous as was also prejudicial to the interest of the revenue. The finding was based on the ground that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were appreciated. 8. Referring to show cause notice dated 13.8.2009 followed by yet another notice dated 29.9.2009 of the CIT under Section 263 of the 1961 Act, it is urged that the sole ground for assuming jurisdiction under Section 263 of the 1961 Act, by the authorities, was that the books of accounts had not been maintained in due course of business, though as a matter of fact the said books had been seized during the survey conducted on 27.3.2008 at the premises of the appellant-society. In short, it is claimed that there is variance of reasons given in the show cause notice (for initiation of proceedings under Section 263 of the 1961 Act) and those mentioned in the order affirming action under the said provision. It is thus urged that the Tribunal did not take into account the facts as also the concomitant circumstances, as a result of which the impugned order has not only been rendered illegal but has caused prejudice to the assessee. Buttressing her arguments, counsel for the appellant, citing 243 ITR 83 (SC)- Malabar Industrial Company Limited Vs. Commissioner of Income Tax has urged that for invocation of provisions of Section 263 of the 1961 Act, order of Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation.- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed (on or before or after the Ist day of June, 1988) by the Assessing Officer shall Include- i) an order of assessment made by the Assistant Commissioner (or the Deputy Commissioner) or the Income tax Officer on the basis of the directions issued by the (Joint) Commissioner under Section 144A; ii) an order made by the (Joint) Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under Section 120; b) "Record" shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; c) Where any order referred to in this subsection and passed by the Assessing Officer had been the subject matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer had gone through the books of accounts, whereas in the order of C.I.T, there is a mention that there were no books of accounts. When the entire attending facts are gone through, it transpires that version of the Assessing Officer in its order that he had gone through the books of accounts of the Assessee, is factually incorrect and wrong and is not supported by any record. 17. It may be noticed that taking income at Rs.2,25,080/- the assessment was finalized on the following counts:- i) Various expenses had not been explained and thus a sum of Rs.60,000/- was disallowed; and, ii) Basic exemption limit to the tune of Rs.50,000/- was not allowed. 18. The return was filed on 5.11.2006 by the assessee for the assessment year 2006-2007. Subsequently, on compulsory scrutiny in terms of CBDT instructions (as the refund claimed in this case exceeded Rs. Five Lacs), notice under Section 143(2) of the 1961 Act, was served upon the assessee. Yet, another statutory notice under Section 142(1) of the 1961 Act, had followed along with a questionnaire to be answered by the assessee. Concededly, the assessee-Society is engaged in labour and construction work. During the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of account had been misplaced though they had lodged no complaint on that count anywhere. The relevant questions and answers in this regard extracted from the statement of the President of the Society are as under:- Q10 Please state as to where are the books of accounts, bill and voucher of the Society lying since April, 2000? Ans: I am not aware. Q11. Then who is aware. Please consult other two persons? Ans: I have consulted Shri Jatinder Singh and Shri Sukhbir Singh who are present here. I again state that I am not aware of the whereabouts of the books of accounts of the society since April, 2000. Q12 Are the books since April, 2009 lying at 143, Golden Avenue, Amritsar or your earlier office at Pt. Deen Dayal Complex? Ans: No books of accounts are lying at any of the above places, so far as the books of accounts pertaining to April, 2000 are concerned. Q 13. Please state as to upto which period the books of accounts for the current period has been written? Ans: I have consulted the other two working partner namely Shri Sukhbir Singh and in Jatinder Singh and after consulting them, I confirm that none of us is aware about the date upto which the books have been writt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be given to you regarding additional income in regard to be shown for the year ending 31st March, 2008. (Emphasis by underlining has been added to clarify the point of non-existence of proper account books as this admission comes from the Assessee itself). 26. Nonetheless, even while concluding his statement, representative of the Assessee made an absolute statement undertaking to produce books of accounts, as under:- "I further state that the complete books of accounts will be produced on 31st March, 2008 alongwith bills and vouchers for the period April, 2008 onwards". 27. Despite this undertaking, no books of accounts were produced. It is worth noticing further that neither the books of accounts were produced nor any explanation was furnished with regard to the infirmities in the statement of accounts furnished earlier. Instead of producing books of accounts, the appellant assessee vide Annexure A-8, surrendered a sum of Rs. Two Crores. 28. What prompted the appellant to make such surrender emerges from paras 2 and 4 of Annexure A-8 dated 3.7.2008. These paras are being reproduced on the next page. "Para 2. That in order to avoid litigation and to have good relations with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Not. 34. Power of Revision would not be exercised by the supervisory officer to enable substitution of his own opinion for that of the Assessing Officer. Merely because the Commissioner comes to a conclusion that the Assessing Officer had estimated the income of the assessee on the lower side, this conclusion ipso facto would not vest power to order revision of assessment. For correction of such type of errors of judgment or of interpretation of law, there are provisions of appeal one after the other, in the Act. 35. Moreover, merely because a CIT is not fully satisfied with the conclusion arrived at by the Assessing Officer, would not be a ground to label the assessment framed by the Assessing Officer, as erroneous. To term an order to be biasd or erroneous, there has to be clear error of law or of appreciation of facts resulting in a completely different result from the one which was arrived at by the Assessing Officer. The conclusion arrived at by the CIT should be objective and not dependent on whims and fancies of an individual. Error of law or of appreciation of facts, should be perceptible and discernible even though facts are to be re-evaluated and marshalled again. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er nor all pervasive in amplitude; 2. This power is not exercisable in hierarchy of Appellate powers but it is supervisory in nature; nonetheless, has quasi judicial implications; 3. Though suo moto invocation of this power is permissible but even then assessee has a right to put up his version and his side of the story; 4. If proceedings under Section 263 of the 1961 Act are initiated by issuance of a show cause notice, grounds taken therein are to form part of the order to be passed on culmination of the proceedings. Reliance on grounds other than those communicated in the show cause notice would not form foundation of the order to be ultimately passed. 5. To term an order to be erroneous, there should be clear error of law or of appreciation of facts resulting in a different result than the one which was arrived at by the assessing officer; 6. Error of law or of appreciation of facts should be perceptible even though facts are to be marshalled again; 7. The opinion of the Commissioner that an order is prejudicial to the interest of the revenue, by itself will not be sufficient to invoke the powers of Revision; 8. In addition to being erroneous the order sought to be revis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of the vouchers and other related documents had well been gone into in earlier part of this judgment. Even in the order of the Commissioner, (Annexure A-13) the entire discussion interalia is concentrating on this aspect. 42. It is rather a clear case, where the Assessing Officer should have rejected the books of accounts under Section 145 of 1961 Act or could have made proper examination and scrutiny of the same, in whatsoever form those had been produced before him. It is evident by now that no books of accounts maintained in regular course of business and prepared in due discharge of their duties by their Accountant or their C.A, had in fact been produced much-less for examination, as recorded in order of the Assessing Officer. 43. Following further points are also noteworthy:- i) During survey proceedings ledger and cash books for the financial year 2005-06 relevant to the assessment order for the year 2006-07 had been impounded on 27.3.2008 but neither supporting bills nor vouchers were available and there was a woeful lack of sufficient material to check the entries therein; and, ii) The Assessing Officer instead of scrutinizing the books of accounts and taking pai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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