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TMI Blog2015 (6) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... nquiries are conducted with application of mind; there is conspicuous difference between the cases of lack of enquiry and perception about the level of enquiry. In this case it emerges that ld. CIT carried a different perception about the manner of enquiry which ought to have been conducted by the AO; however it is not 'sufficient to hold the assessment order as erroneous and thereby prejudicial to the interest of revenue. The plethora of case laws cited by the assessee do not support such type of exercise of power u/s 263 of the Act. Hence 263 order holding the AO's order as erroneous cannot be sustained merely because the ld. CIT holds different plausible view about manner of inquiry. Consequently, we are unable to uphold the impugned order u/s 263 of the Act passed by the ld. CIT which is quashed. - Decided in favour of assessee. - ITA No. 150/JP/2015 - - - Dated:- 29-5-2015 - R. P. Tolani, JM And T. R. Meena, AM,JJ. For the Appellant : Shri Siddharth Ranka, Adv. For the Respondent : Smt Rolee Agarwal, CIT-DR ORDER Per R P Tolani, JM. The assessee has filed an appeal challenging the validity of revision order passed u/s 263 dated 30-01-2015 passed by CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and investigation. No enquiries were made at the end of Shri N.K. Gupta, purchaser of the shares, to verify his identity and creditworthiness. The assessee has claimed deduction u/s 54EC of the Act which is allowable against Long term capital gain however assessee had not filed any documentary evidence to prove date of acquisition so as to hold a view that the gains were Long term capital gain. 2.3 In reply to 263 notice, assessee filed detailed written submission duly supported by a plethora of case laws and along with copies of the documents filed before the AO. It was demonstrated that most of the information and papers were already filed along with return which ld. AO by an error has held to be not filed. During the course of reassessment proceedings also all the necessary enquiries were made which is evident from AO's observation that the assessee attended the proceedings from time to time and furnished requisite documents. To verify the source of amount for investment in Bonds letters u/s 133(6) were issued to companies whose shares were transferred to assessee which were duly complied with confirming assessee's version. Thus in reassessment assessee's claim ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 375. (v) Rajalakshmi Mills Ltd. vs. ITO (ITAT, SB-Chennai) 121 ITD 343; 313 ITR (AT) 182 (vi) SRM Systems Software (P) Ltd. vs. ACIT - 2010-TIOL-646-HC-MAD-IT 5. Considering all the facts and circumstances of the case and judicial pronouncements, as discussed above, I hold that the reassessment order dated 15-03-2014 for A.Y. 2006-07, was erroneous in so far as prejudicial to the interest of Revenue in terms of Section 263 of the I.T. Act. I therefore, set aside the assessment order to be made afresh after making proper enquiries on the issues discussed above. AO should allow reasonable opportunity of hearing to the assessee. 2.5 Aggrieved, the assessee is before us. 2.6 The ld. Counsel for the assessee Shri Siddharth Ranka, Advocate vehemently contends that notice u/s 263 of the Act and the ld. CIT order dated 30-01-2015 are devoid of any merits and unjustified as they do not conform to the provisions of Section 263 inasmuch as:- (i) 148 assessment itself was based on wrong reasons that the assessee has not filed the return of income whereas the same was already on the record of the AO. It shows that the Department before issuing notice u/s 148 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T, 153 TTJ 195(Jodhpur) Further reliance is placed by the ld. AR in the case of CIT vs. Gabriel India Ltd., 203 ITR 108 (Bom) wherein the Hon'ble Court held as under: The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in the matters or orders which are already concluded. The power u/s 263 can be exercised only when the order is erroneous and due to this, prejudice has been caused to the interests of the Revenue. The order cannot be branded as erroneous by the Commissioner because according to him the order should have been written more elaborately. The Court observed that when ITO has exercise the quasi judicial power vested in him in accordance with the law and arrived at a conclusion, such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. The Court held that in order to exercise power u/s 263, the order must be presented in material before the CIT and if that order was erroneous in so far as it is prejudicial to the interest of the Revenue. Ld. Counsel for the assessee placed reliance of Hon'ble Delhi High Court in the case of CIT vs. Sun Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roving enquiries. There is no prescribed proforma of an assessment order in IT Act which prescribed how the assessment order should be passed. Thus the contents of the body of the assessment order depend on the discretion of quasi judicial authority i.e. AO. The order does not become erroneous as long as record reflects that relevant enquiries were made. Therefore, no adverse inference can be drawn in this behalf as the assessee has been able to demonstrate conducting of relevant enquiries and compliance during the course of assessment proceedings. The Hon'ble Delhi High Court in the case of CIT vs. Vikas Polymers (2010) 236 CTR 476 held that if the CIT is of the view that the some documents ought to have been placed on record by the AO. which are produced by the assessee before CIT, in that case the ld. CIT himself should decide the matter on the material made available. In this case if in the perception of ld CIT some documents were not placed on record they were forthwith supplied by the assessee. Consequently, no case is made out for setting the assessment to frame the same denovo. We find merit in the contentions of assessee that it has no control over AO as to what copie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s reflecting reasonable discharge of assessment which cannot be held as erroneous. In our considered view, the case laws cited by the ld. AR in the case of CIT vs. Sun Beam Auto Ltd. (Delh), Malabar Industrial Co. Ltd. vs. CIT (SC) and CIT vs. Max India Ltd. (supra) support assessee's contentions. We are of view that 263 proceedings cannot be invoked where reasonable inquiries are conducted with application of mind; there is conspicuous difference between the cases of lack of enquiry and perception about the level of enquiry. In this case it emerges that ld. CIT carried a different perception about the manner of enquiry which ought to have been conducted by the AO; however it is not 'sufficient to hold the assessment order as erroneous and thereby prejudicial to the interest of revenue. The plethora of case laws cited by the assessee do not support such type of exercise of power u/s 263 of the Act. Hence 263 order holding the AO's order as erroneous cannot be sustained merely because the ld. CIT holds different plausible view about manner of inquiry. Consequently, we are unable to uphold the impugned order u/s 263 of the Act passed by the ld. CIT which is quashed. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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