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TMI Blog2016 (1) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... ng such a disallowance. On the facts and circumstances of the case, the Assessing Officer did not find it appropriate to carry on any elaborate investigation. It is Assessing Officer’s prerogative to decide the extent of enquiry or investigation to be carried out by him. There is no law which directs the Assessing Officer the extent of enquiry to be made in such a case. This is, undoubtedly, not a case of lack of enquiry. Though we do not find it even a case of inadequate enquiry, even in that case, the Commissioner of Income Tax does not get the jurisdiction under section 263 - Decided in favour of assessee.. - ITA No.495/Chd/2015 - - - Dated:- 5-1-2016 - SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER For The Appellant : S/Shri Sandeep Sapra Kamal Khanna For The Respondent : Shri Manoj Mishra, DR ORDER PER RANO JAIN, A.M. : The appeal filed by the assessee is directed against the order of learned Principal Commissioner of Income Tax, Panchkula dated 26.3.2015, passed under section 263 of the Income Tax Act, 1961 (in short the Act ) for assessment year 2010-11. 2. Briefly, the facts of the case are that the assessment under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital raised in these years. Relying of the judgment of the Hon'ble Jurisdictional Punjab Haryana High Court in the case of CIT Vs. Winsome Textiles Industries Ltd., 319 ITR 204 and CIT Vs. M/s Hero Cycles Ltd., 323 ITR 518. It was submitted that the provisions of section 14A of the Act are not applicable to the present case. Further, on the jurisdiction of the Commissioner of Income Tax invoked under section 263 of the Act, it was submitted that the Assessing Officer vide para 20 of the questionnaire dated 24.2.2012 for the year under consideration has raised a query in response to which the assessee vide para 12 of letter dated 18.5.2012 filed details of dividend income in which it was specifically pointed out that the source of investment in shares of Jai Suspension System Limited from whom the dividend income has been received was out of its own funds. It was further submitted that in the succeeding assessment year 2011-12 in assessee s own case the Assessing Officer vide letter dated 24.2.2014 specifically raised query as to why the provisions of section 14A of the Act may not be applied in respect of exempt income which was replied by the assessee vide its letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention was invited to Paper Book pages 11 to 16, whereby in a questionnaire dated 24.2.2012, the assessee was asked to furnish the details of investment, source of investment in Jai Suspension System Limited and dividend earned on such investment. Further attention was invited to Paper Book pages 7 to 20, whereby the assessee duly replied the said questionnaire and at Paper Book page 21 in the form of chart, the assessee has given details of amount of dividend received from Jai Suspension System Limited with number of shares held and source of investment stated to be out of its own funds or out of profits of the company. In this way, it was submitted that the Assessing Officer had not only sought details of dividend but also sought the source of investment made in shares of Jai Suspension System Limited, which was duly filed before the Assessing Officer by submitting that source of investment was assessee s own funds from the profits of the company. The Assessing Officer had duly applied his mind while passing the order under section 143(3) of the Act and, therefore, not made disallowance of interest under section 14A of the Act with regard to investment in Jai Suspension Syste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in the case of Radhasoami Satsang Vs. CIT, 193 ITR 321 and CIT Vs. ARG Securities Printers, 264 ITR 276. Another argument raised by the learned counsel for the assessee was that the order for the year under consideration could not be held to be erroneous and prejudicial to the interest of the Revenue since the assessee had made strategic/business investment in shares of Jai Suspension System Limited. Another interesting argument made by the learned counsel for the assessee was that the order passed by the learned Commissioner of Income Tax under section 263 of the Act is self-contradictory and, therefore, illegal because on the one hand, disallowance of interest expenses under section 14A of the Act was directed to be made on the investment in Jai Suspension System Limited and on the other hand, the assessment order passed by the Assessing Officer has been cancelled by issuing direction to the Assessing Officer to frame afresh assessment order after affording reasonable opportunity of being heard to the assessee. On the basis all these submissions, it was prayed that the order passed by the learned Commissioner of Income Tax under section 263 of the Act be quashed. 6. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax cannot impose his opinion over that of the opinion formed by the Assessing Officer. However, there can be an exception in case of inadequate enquiry, if Assessing Officer fails to do something which he is required to do under the law, the order may be erroneous. In this background, we now proceed to examine the facts of the present case. At Paper Book page 12, questionnaire issued by the Assessing Officer during the assessment proceedings dated 24.2.2012 is annexed, whereby at point No.20, the Assessing Officer has raised a query which reads as under : 20. Please furnish detail of dividend income amounting to ₹ 2,99,98,000/- in the following proforma : S.No. Amount of Dividend Name of the company from which dividend received No.of share held /year of acquisition other Original investment Source of investment 10. From the above, it is quite clear that the Assessing Officer intended to raise the query regarding dividend received by the assessee not only to the extent of amount of dividend but also with regard to the investments made an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not make any disallowance. In such a scenario, the Commissioner of Income Tax cannot impose his opinion on the decision taken by the Assessing Officer. Since it is Assessing Officer s satisfaction which matters for making such a disallowance. On the facts and circumstances of the case, the Assessing Officer did not find it appropriate to carry on any elaborate investigation. It is Assessing Officer s prerogative to decide the extent of enquiry or investigation to be carried out by him. There is no law which directs the Assessing Officer the extent of enquiry to be made in such a case. This is, undoubtedly, not a case of lack of enquiry. Though we do not find it even a case of inadequate enquiry, even in that case, the Commissioner of Income Tax does not get the jurisdiction under section 263 of the Act. However inadequate the enquiry may be, the Commissioner of Income Tax cannot enter into the shoes of the Assessing Officer in the garb of assuming jurisdiction under section 263 of the Act. Therefore, we do not find any error in the order of the Assessing Officer. In view of the above, we set aside the order of the Commissioner of Income Tax. 13. Though, many other issues as r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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