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TMI Blog2017 (6) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... DR ORDER PER Waseem Ahmed, Accountant Member:- This appeal of the assessee is for the assessment year 2011-12. The assessee is directed against the order of Commissioner of Income Tax-15, Kolkata dated 29.02.2016 passed u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). Shri Promod Kumar Himmatsinghka, Ld. Authorized Representative appeared on behalf of assessee and Shr Gouten Hangshing, Ld. Departmental Representative represented on behalf of Revenue. 2. At the outset, we find that there was a delay of 36 days in filing the appeal of assessee and therefore the petition for condonation of delay was filed which is on record. It was explained that the old counsel was not well versed with the tribunal work and therefore the assessee had to find out new counsel, as a result the delay in filing the appeal on time occurred. We have heard Ld. Counsel for the assessee and Ld. DR for the Revenue. We find that there was sufficient cause which prevented the assessee in filing the appeal within the stipulated time therefore we condone the delay and admit the same. We accordingly decided to proceed for hearing the appeal of assessee. 3. The assessee in this appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- Subject:-Selection of cases for scrutiny on the basis of data in AIR returns and subsequent assessment proceeding-regarding. **** Reference is invited to Board's letter of even number dated 23rd May, 2007 regarding scope of enquiry in the scrutiny cases selected only on the basis of information received through the AIR returns. 2. The above mentioned guidelines have been reconsidered by the Board and it has been decided that the scrutiny of such cases would be limited only to the aspect of information received through AIR. However, a case may be taken up for wider scrutiny with the approval of the administrative Commissioner, where it is felt that apart from the AIR information there is a potential escapement of income more than ₹ 10 lacs. 3. It has also been decided that in all the cases which are picked up for scrutiny only on the basis of AIR information, the notice u/s. 143(2) of Income Tax Act should clearly be stamped with "AIR Cases". This should be immediately brought to the notice of all the officers working in your region. In view of the above, it was submitted that the AO has exceeded his jurisdiction while framing his assessment order u/s 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rage income etc. It is the case of the assessee that in the assessment order passed u/s 143(3) of the Act, the AO has travelled beyond the points of the AIR on the basis of which the case of scrutiny was selected under CASS module. It is the plea of the assessee that when no addition/disallowance can be made beyond the points mentioned in AIR in the assessment proceedings then same is the case with proceedings initiated u/s 263 of the Act. 4.1 The first aspect which needs to be examined is as to whether the assessee is entitled to challenge the validity of initiation expanded in the proceedings u/s 143(3) of the Act in the present appeals in which he has challenged the validity of expanded order passed u/s 263 of the Act covering the points which are not part of the AIR. The ld. Counsel for the assessee submitted before us that it is open to an assessee in an appeal against the order u/s 263 of the Act which seeks to revise an order passed u/s 143(3) of the Act, to challenge the validity of the expansion of order passed u/s.143(3) of the Act covering the points which are not part of the AIR. In this regard we find that Lucknow Bench of Hon'ble ITAT in the case of Inder Kumar Bacha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch a defect cannot be cured even by consent of parties." Now coming to the facts of the instant case, we find that the instant case was selected on the basis of AIR Information as evident from the order of AO under section 143(3) of the Act. There is also no whisper in the order of the AO for expanding the scope of limited scrutiny after obtaining the permission from the Administrative CIT. The ld. DR has also failed to bring anything contrary to the argument of the ld. AR. Therefore in our considered view the scrutiny should have been limited only to the information emanating from the AIR. Admittedly, the assessee has claimed to have filed an appeal before Ld. CIT(A) challenging the jurisdiction exceeded by the AO while framing the assessment order u/s 143(3) of the Act. We find that the impugned issue being legal in nature and goes to the root of the matter therefore we are inclined to proceed with this issue first by holding that, from the above submission and after examining of the records, we find that the Ld. CIT in his impugned order u/s 263 of the Act has exceeded his jurisdiction while holding the order of AO as erroneous in so far prejudicial to the interest of Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03151930000609 was duly reflected in his IT return. Therefore, no cause has happened to the Revenue which is prejudicial to the interest of Revenue. ii) The deposit of ₹19,73,750/- was duly reflected in the IT return and therefore there was no error which is prejudicial to the interest of Revenue. iii) Regarding the credit card payment, the addition on account of undisclosed cash deposit has already been added by the AO and therefore there is no error causing prejudice to the interest of Revenue. iv) There was no sale of the property and therefore no exemption u/s10(38) of the Act was claimed. However the Ld. CIT after considering the submission of assessee has held the order of AO is error and prejudicial to the interest of Revenue by observing as under:- "I have carefully considered the issues with specific reference to the relevant assessment records as well as written submission furnished by the A/R. The AO has not taken cognizance of the following issues, despite being apparent from record:- (1) Addition of ₹ 4 lakhs only was made against total cash deposit of ₹ 17,56,000/- without taking any explanation from the assessee. (2) The balance depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f law and therefore liable to be quashed. (3) For that the L'd Pr. CIT had alleged arbitrarily irrelevant matters, factual and untrue position in the show cause notice u/s. 263 and therefore order passed by Pr. CIT-15 Kolkata u/s. 263 is nullity and liable to be quashed. (4) For that L'd Pr. CIT has wrongly assumed the jurisdiction u/s. 263 by wrongly mentioning that deposits in HDFC Goa A/c & HDFC Porvorim Goa A/c were under-assessed by the AO despite these two a/cs were disclosed in the balance sheet and deposits were explained, therefore allegation so made is bad in law and void ab-initio. (5) For that on the facts & in the circumstances of the case L'd Pr. CIT was not justified in initiating proceeding u/s. 263. (6) For that your petitioner craves the right to put additional grounds and/or to alter/amend/modify the present grounds before or at the time of hearing." The ld. AR before us filed two paper books which are running from pages 1 to 27 and 28 to 31. The ld. AR before us submitted that the necessary enquiries were made by the AO at the time of assessment. Thus the order of the AO cannot be held erroneous and prejudicial to the interest of Revenue on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed sufficient enquiry in relation to sale of immovable property is not true. 5.1 In view of the above we find that Ld. CIT has passed impugned order u/s. 263 of the Act by holding the order of AO as erroneous in so far as prejudicial to the interest of revenue on account of inadequate enquiry made by AO while passing order u/s. 143(3) of the Act. However, we find that proper and sufficient enquiries were conducted by the AO at the time of assessment as evident from the order of AO. Therefore it cannot be concluded that no proper enquiry has been conducted by the AO at the time of assessment proceedings. The AO has taken conscious view after considering the facts and circumstances of the case and giving proper opportunity to the assessee. Thus, the view expressed by AO in the form in his assessment order cannot be replaced with the view of Ld. CIT u/s 263 of the Act. In holding so, we find support and guidance from the judgment of Hon'ble jurisdictional High Court in the case of CIT vs. M/s. J.L. Morrison (India) Ltd.(ITA No 168 of 2011) in GA No 1541 of 2012 dated 15.05.2014, wherein it was held as under:- "By sections 3 and 4, the Indian Income-tax Act, 1922, imposes a gene ..... X X X X Extracts X X X X X X X X Extracts X X X X
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