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TMI Blog2017 (12) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... thereto the assessee has submitted copies of the details A perusal of the order passed by the CIT indicated that the assessment order passed by the Assessing Officer was cancelled on the ground that the Assessing Officer has not made proper enquiry and verification in respect of the issues. This, in our considered opinion, cannot be sufficient ground for cancelling the assessment. While making the assessment order, it is the satisfaction of the Assessing Officer who made the enquiry and it should be touchstone of assessment order passed by him. No cogent material or evidence was brought to our knowledge by the Ld. DR which may prove that view taken by the Assessing Officer in the case of the assessee was unsustainable in law. Therefore, we are of the view that the order passed by the CIT is illegal and without jurisdiction. If the order passed by the CIT is sustained then this will permit the illegality to continue and the subsequent action is carried out on the illegal order is also illegal per se. - Decided in favour of assessee. - ITA No.3745 And 3746/Mum/2016 - - - Dated:- 27-11-2017 - Shri P K Bansal, Vice President And Shri Ram Lal Negi, Judicial Member For The Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was completed by the Assessing Officer vide order u/s. 153A r.w.s. 143(3) dated 28.02.2014, determining total income at ₹ 47,87,600/- as against the returned income of ₹ 1,37,603/-. The CIT(A) after going through the record was of the view that the Assessing Officer passed the assessment order without making required inquiries and investigation, which resulted into the order being erroneous in so far as prejudicial to the interests of the Revenue. Accordingly, he issued show cause notice to the assessee dated 15.03.2016, which read as under: 1.1] On an examination of the records for A.Y. 2007-08, it is noticed that the assessment proceedings were completed u/s. 153A r.w.s. 143(3) of the I.T. Act vide order dated 28.02.2014, determining total income of ₹ 47,87,600/-. On perusal of records, it is seen that during the year under consideration the assessee had introduced capital amounting to ₹ 20,00,000/- in the firm M/'s. Dev Steels. 1.2] A perusal of the records and the assessment order, shows that the AO has not obtained any details about the source of funds which has been introduced as capital in the firm. The AO did not carry out any such ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities below. We noted from the provisions of section 263 that this section empowered the CIT to call for and examine the record of any proceedings under the Act. It also makes it very clear that the Commissioner has to be satisfied before invoking the provisions of section 263 that the order passed by the Assessing Officer is erroneous as well as prejudicial to the interests of the Revenue and even if one of the conditions is absent, the CIT cannot invoke the provisions of section 263. We noted that in this case, the assessee vide its letter dated 28.01.2014 has given complete details of the capital introduced during the impugned assessment year. Not only this, it is apparent from page 17 of the paper-book wherein the assessee has given details of ₹ 76 lacs towards capital introduced. Out of ₹ 76 lacs, ₹ 20 lacs was given to the firm M/s. Dev Steel vide cheque dated 30.03.2007. The assessee has also filed copy of balance sheet of M/s. Dev Steel in which the assessee capital accounts and current account is duly reflected. Capital account shows ₹ 20 lacs, copy of which is placed at pages 22 and 23 of the paper-book. Thus, we find that the assessee has fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and prejudicial to the interest of the Revenue without bringing on record specific instances, which in the present case, the CIT has failed to do. A perusal of the order passed by the CIT indicated that the assessment order passed by the Assessing Officer was cancelled on the ground that the Assessing Officer has not made proper enquiry and verification in respect of the issue as discussed above. This, in our considered opinion, cannot be sufficient ground for cancelling the assessment. While making the assessment order, it is the satisfaction of the Assessing Officer who made the enquiry and it should be touchstone of assessment order passed by him. No cogent material or evidence was brought to our knowledge by the Ld. DR which may prove that view taken by the Assessing Officer in the case of the assessee was unsustainable in law. Therefore, we are of the view that the order passed by the CIT is illegal and without jurisdiction. If the order passed by the CIT is sustained then this will permit the illegality to continue and the subsequent action is carried out on the illegal order is also illegal per se. 6. In the case of CIT vs. R.K. Construction Co. (supra), Hon ble Gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal and it arrived at a factual finding that there was no illegality committed by the assessee in entrusting the work to sub-contractors nor there was any illegality in making all due payments to them. The Tribunal has also given specific finding to the effect that there was no evidence on record that these contractors were related to the assessee or were associates or sister concerns of the assessee. The Tribunal has also given finding that the Revenue has not discharged the onus that the payments to sub-contractors were not genuine. Thus the Tribunal has come to the conclusion that no disallowances can be made merely on the basis of suspicion, howsoever strong may it be, and the suspicion cannot take the place of actuality. AO has taken a particular view on the basis of evidence produced before him. On the basis of the said material and materials which were collected by the CIT in revisional proceedings, the CIT has taken a different view. However, in the revisional proceedings under s. 263, it is not open for the CIT to take such a different view. No substantial questions of law arise out of the order of the Tribunal and hence, the appeal filed by the Revenue deserves to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion such a conclusion cannot be found to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. The assessee was a manufacturer of car parts. Its return for the assessment year 2001-02 was taken up for scrutiny and assessment was completed. In revisional proceedings, the solitary objection of the Commissioner was that the expenditure on tools and dyes aggregating to ₹ 10 56,69,367/- was allowed as revenue expenditure without a detailed investigation. After considering all the materials furnished by the assessee the Commissioner took the view that the accounting practice followed by the assessee to debit the entire cost of tools and dyes in the year of installation was not correct and he remitted the case to the Assessing officer for re-examination. The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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