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TMI Blog2015 (10) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that the assessment order passed by the A.O. without making enquiries on various issues was erroneous as well as prejudicial to the interests of the Revenue. He therefore, issued a notice under section 263 pointing out such issues and requiring the assessee to show cause as to why the assessment order passed by the A.O. under section 143(3) should not be revised by exercising the powers conferred under section 263. In response to the said notice, a detailed reply was filed by the assessee offering his explanation in support of each and every issue raised by the Ld. CIT in the notice issued under section 263. The said explanation of the assessee, however, was not found acceptable by the Ld. CIT. According to him, various issues involved in the case of the assessee as pointed out by him in the notice issued under section 263 had not been looked into or enquired by the A.O. while completing the assessment under section 143(3) and such non-consideration of these issues made the assessment order passed by the A.O. under section 143(3) erroneous as well as prejudicial to the interests of the Revenue. Accordingly, he passed an order under section 263 setting aside the order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce caused to the Revenue, has erroneously ordered Revision of assessment order on this issue. Kindly refer to Page Nos.01 to 02 of the Paper Book. ISSUE NO.2: "6.1 As per P & L a/c, the gross profit for the A.Y. 2008-09 is at Rs. 37,08,700/- on a turnover of Rs. 3,16,47,667/- which works out to 11.72%. whereas the gross profit for the A.Y. 2009-10 is at Rs. 36,54,504/- on a turnover of Rs. 3,38,03,515/- (i.e., @ 10.80%). The A.O. without calling for the reasons for the decrease in the gross profit by way of debit notes worth Rs. 3,31,974/- and credit notes of Rs. 1,30,619/- and due examination, accepted the trade results." ASSESSEE'S REPLY: The Assessee (Appellant) explained to the Ld. CIT that, this issue has been enquired into and examined by the A.O. during the assessment proceedings. The allegation made by the Ld. CIT that the issue of "Debit Notes" from M/s. Nirma Limited has not been examined and verified by the AO and without due examination, accepted the trade results, is devoid of any merits and contrary to the facts available on record. The Assessee furnished before the Ld. CIT, the copies of the debit notes and credit notes and also copy of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made, explanations offered and the material produced, has brushed aside and the same and without assigning any reason are offering any material to support his point of view and treated the assessment order as erroneous and prejudicial to the interest of the Revenue. The relevant documentary evidence is furnished at Page Nos. 19-21 in the paper book. ISSUE NO.4 : "In the balance sheet as on 31.03.2009, sundry creditor in the name of M/s. Nirma Ltd., Ahmedabad at Rs. 33,27,419/- was not reconciled with the assessee's account copy in the books of the said creditor." ASSESSEE'S REPLY: The Assessee has explained to the Ld. CIT that, there is no requirement for preparing reconciliation statement in the case of M/s. Nirma Limited, has the account of Nirma in the books of accounts of the Assessee firm and the ledger account of the assessee firm in the books of M/s. Nirma Limited are showing the same figure and there is no difference between the two sets of accounts. Ledger extracts are furnished to the Ld. CIT who has brushed aside the same without assigning any reasons and treated the assessment order as erroneous on this issue. The relevant ledger extracts are p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot obtained the details and examined the relevant details for cash withdrawal of Rs. 4,50,000/- by way of cash or Yourself on various dates from the Assessee's current account with Axis Bank Ltd., Khammam. ASSESSEE'S REPLY The provisions of Sec.14A are applicable when the expenditure incurred does not relate to the income earned. When there is no nexus between income earned and expenditure incurred, the provisions of Sec.14A are applicable. Simple withdrawal of cash through self-cheques or otherwise does not mean that the provisions of Sec.14A are applicable. The amounts withdrawn from bank have been duly credited/recorded in the books of accounts. The total bank entries have been verified with books of accounts during the assessment proceedings. There is no deficiency in this aspect and hence the order cannot be considered as erroneous. The facts stated by the Assessee have not been controverter by the Ld. Commissioner of Income Tax and ordered revision of the Assessment order on sheer suspicion and surmise. He could not pin point the error except stating that, the AO did not call for and examined the reasons for the cash withdrawals. He could not even state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was not acceptable and simply set aside the order passed by the A.O. under section 143(3) by observing that the same was made without enquiring into certain issues. He contended that the so-called errors pointed out by the Ld. CIT are nothing but only the wild allegations and the same are passed on surmises and conjectures. In support of this conclusion, he relied on the decision of Hon'ble Delhi High Court in the case of CIT vs. Hindustan Marketing and Advertising Co. Ltd., 341 ITR 180 wherein it was held that the Income Tax Officer having made reasonably a detailed enquiry, collected relevant material and discussed various facts of the case with the assessee's representative before making the assessment, there was no valid basis for the Commissioner to exercise jurisdiction under section 263 and to direct the A.O. to make fresh assessment by going deeper into the matter. He also relied on the decision of Hon'ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd., 332 ITR 167 (HC) (Del.) and the decision of Hon'ble Allahabad High Court in the case of Janardhan Prasad Ashok Kumar vs. CIT 193 ITR 186 (HC) (All.) wherein it was held that the order passed by the Ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income Tax Officer is unsustainable in law. (c) To invoke suo motu revisional powers to reopen a concluded assessment under Sec.263, the Commissioner must give reasons; that a bare reiteration by him that the order of the Income Tax Officer is erroneous insofar as it is prejudicial to the interests of the Revenue, will not suffice; that the reasons must be such as to show that the enhancement or modification of the assessment or cancellation of the assessment or directions issued for a fresh assessment were called for, and must irresistibly lead to the conclusion that the order of the Income Tax Officer was not only erroneous but was prejudicial to the interests of the Revenue. Thus, while the Income Tax Officer is not called upon to write an elaborate judgment giving detailed reasons in respect of each and every disallowance, deduction, etc., it is incumbent upon the Commissioner not to exercise his suo motu revisional powers unless supported by adequate reasons for doing so; that if a query is raised during the course of the scrut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I am of the view that the assessment order passed by him cannot be held to be erroneous and prejudicial to the interests of the Revenue only because the Ld. CIT is of the opinion that some more enquiry should have been made by the A.O. The power under section 263 cannot be extended to hold an order passed by the A.O. as erroneous and prejudicial to the interests of the Revenue due to inadequacy of enquiry. After having perused the impugned order of the Ld. CIT in the light of the facts and material on record and detailed submissions made by the assessee, I find that the directions of the Ld. CIT on various issues are in the nature of starting roving and fishing enquiry which is not permissible under section 263 as held inter alia by the Hon'ble Bombay High Court in the case of CIT vs. Gabriel India Ltd., 203 ITR 108. In my view, the Ld. CIT has no material before him to consider the assessment order to be erroneous and prejudicial to the interests of the Revenue on the issues pointed out by him. A perusal of the discussion made by him in this regard shows that his actions are more like an A.O. in session of assessment proceedings rather than revisional authority exercising power u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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