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TMI Blog2019 (2) TMI 1429X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 (11) TMI 1322 - ITAT DELHI] and set aside the order of the PCIT and restored that of the AO. The facts of assessment year 2011-12 are same as the facts of the year under consideration except the claim of deduction under Chapter VI is different in value. Since the Tribunal has quashed the order framed u/s 263 of the Act, we are of the considered opinion that the claim of deduction in the initial assessment year i.e. 2011-12 was justified and, therefore, the same cannot be disturbed in the subsequent assessment year when the facts are identical and law has not changed. Before parting, the ld. DR has also heavily relied upon Explanation 2 to section 263 of the Act. In our considered opinion, the said Explanation is applicable only when there is no enquiry made by the Assessing Officer whereas in the case in hand, as demonstrated elsewhere, the Assessing Officer had made ample enquiries before framing the order u/s 143(3) of the Act. - Decided in favour of assessee. - ITA No. 3376/DEL/2017 - - - Dated:- 18-2-2019 - SHRI N.K. BILLAIYA ACCOUNTANT MEMBER, And SMT BEENA A. PILLAI, JUDICIAL MEMBER Assessee by: Shri Ronak Doshi, CA Revenue by: Ms. Nidhi Srivastava, CIT- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nternational Cargo Terminal, IGI Airport, New Delhi-II0037 Sir, Sub.: Show cause notice for proceedings u/s 263 of the I.T Act, 1961 for the A.Y. 2012-13 reg.- I draw your kind attention to the assessment proceeding u/s 143(3) of the I.T. Act, 1961 for the A.Y. 2012-13-dated 05.12.2014 of M/s Celebi Delhi Cargo Terminal Management India Pvt. Ltd. The assessment order u/s 143(3) dated 05.12,2014 was framed by DCIT Circle 5(2), New Delhi wherein the A.O. referred to the income declared in the return filed digitally on 30.11.2012 declaring a income of Rs, 1,43,69,780/- and the deduction claimed u/s 80IA stood at ₹ 15,48,63,614/- In para 3 of the assessment order the A.O. has specified as under:- The assesses company is engaged in the business of Infrastructure Facilities Provider. The A.O. had failed to discuss the nature of actual business activities conducted by the company during the Financial Year 2011-12. The return income of Rs. I, 43, 69,780/- was accepted as the income of the company for the year, The disallowance made was for a sum of ₹ 2,07,83,557/- being an amount not added back by the company for the purpose of section 115JB of the J.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent--if the order of the Income-tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue-- recourse cannot be had to section 263(1) of the Act. The provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous . 11. On 12.09.2014, the Assessing Officer issued notice u/s 142(1) of the Act which was a questionnaire having 36 questions. The relevant queries for our consideration read as under: 1. Please furnish a detailed note on the business of the assessee giving the whole background of business since the incorporation of the company and various revenue streams of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. The Principal Officer M/s Celebi Delhi Cargo Terminal Management India Pvt. Ltd. Room No. CE-05, First Floor, Import Building-II, I SI Airport, New Delhi Sir/Madam, Sub:- 1) Scrutiny assessment Proceedings U/s 143(2) of The I.T. Act, 1961 for the Ay. 2012-13-reg:- 2) Intimation of New Jurisdiction -reg- In pursuance to cadre restructuring of the Income Tax Department Delhi Region, your present jurisdiction lies with Circle-5(2) [ Room No. 390, 3rd Floor, C. R. Building, I.P. Estate, New Delhi- 110002]. In consequent to the change of jurisdiction, notice u/s 143(2) of the I. T. Act, 1961 is hereby enclosed herewith for assuming the jurisdiction over your case. New Circle New Range CIT Charge CCIT Charge Circle-5(2) Range-5 Pr. CIT-II CCIT-DELHI-II In continuation of the pending assessment proceedings in your case, you are hereby accorded Last Final Opportunity to file the following information/ details which are given as under SI No. Details required Remarks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the year the ratio of refund to TDS is high. We have not claimed the depreciation at higher rates / higher additional depreciation 3. At the time of filing of ITR the Form 26AS was showing a balance of ₹ 8,24,64,091/- which we have claimed (copy of first and last page is attached) and the variation is on account of revision in TDS returns by our customers. 4. The detailed Trail Balance is attached as Annexure 1 We trust you will find the aforesaid in order and shall be happy to provide further information as may be required in this regard. 15. From the above facts, it can be seen that not once, but three notices were issued by the Assessing Officer and in all the three replies, the assessee has furnished complete detail on the claim of deduction u/s 80IA of the Act alongwith detailed report in Form No. 10CCB. 16. The Revenue alleges that the assessment order is cryptic as the Assessing Officer has not given any clear finding on the claim of deduction u/s 80IA of the Act and, therefore, assessment order is erroneous and in so far as it is prejudicial to the interest of the Revenue. 17. The Hon'ble Bombay High Court in the case of Gabriel India Ltd 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. It may be said in such a case that in the opinion of the Commissioner the order in question is prejudicial to the interests of the Revenue. But that by itself will not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, viz., that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the interests of the Revenue, then also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also must be fulfilled. 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 impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Officer to re-examine the matter. That, in our opinion, is not permissible. Hence the provisions of section 263 of the Act were not applicable to the instant case and, therefore, the commissioner was not justified in setting aside the assessment order. 18. The Hon'ble High Court of Gujarat in the case of CIT vs. Nirma Chemical Works Ltd. 309 ITR 67 has observed as under: if assessment order were to incorporate the reasons for upholding the claim made by an assessee, the result would be an epitome and not an assessment order. In this case, during the assessment proceedings for both the Assessment Years, the Assessing . A.Y. 2009-10 Officer issued a query memo to the assessee, calling upon him to justify the genuineness of the gifts. The Respondent- Assessee responded to the same by giving evidence of the communications received from his father and his sister i.e. the donors of the gifts along with the statement of their Bank accounts. On perusal, the Assessing Officer was satisfied about the creditworthiness/capacity of the donors, the source from where these funds have come and also the creditworthiness/capacity of the donor. Once the Assessing Officer was sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s adherence to the principles of natural justice by granting to the assessee an opportunity of being heard before passing an order under Section 263. [See Electro House (supra)]. (vii) If the Assessing Officer acts in accordance with law his order cannot be termed as erroneous by the Commissioner, simply because according to him, the order should have been written more elaborately . Recourse cannot be taken to Section 263 to substitute the view of the Assessing Officer with that of the Commissioner. [See CIT vs Gabriel India Ltd (1993) 203 ITR 108(Bom)] (viii) The exercise of statutory power under Section 263 of the Act is dependent on existence of objective facts ascertained from prima facie material on record. The evaluation of such material should show that tax which was lawfully exigible was not imposed. [See Gabriel India Ltd (supra)] In the instant case, it was quite clear that after the assessee had filed his return on 31.10.2002, a notice under Section 143(2) of the Act was issued for the purposes of carrying out a scrutiny in respect of the return of income filed by the assessee. In the course of scrutiny, as indicated in the impugned judgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect to transactions carried out by the assessee. The fact that there was an enquiry can also be demonstrated with the help of the material available on record with the Assessing Officer. The material, to which a reference has been made in the impugned judgment, would show that there was no undue haste in examining the material prior to the passing of the assessment order dated 24.03.2005. At least four letters dated 27.04.2004, 22.02.2005, 28.02.2005 and 18.03.2005 were addressed by the assessee to the Assessing Officer giving details, documents and information pertaining to various queries raised by the Assessing Officer. These have been examined by the Tribunal. We have no reason to believe that examination was less than exacting. Therefore, the conclusion of the Commissioner that there was lack of proper verification is unsustainable. 17. Further, the notice dated 11.05.2006 issued by the Commissioner before commencing the proceedings under Section 263 of the Act referred to four issues, the final order dated 18/19.01.2007 passed referred to nine issues, some of which obviously did not find mention in the earlier notice and hence resulted in the proceedings being vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.2005 to 28.06.2006. A perusal of those entries would clearly demonstrate that there is nothing on record which would show that the assessee was given an opportunity to respond to these discrepancies which formed part of the order-in-Revision dated 18/19.01.2007 but were not part of notice dated 11.05.2006. This was put to the learned counsel for the Revenue, who in response fairly conceded that there was nothing on record which would establish the contrary. It was, however, urged by the learned counsel for the Revenue Mr Sanjeev Sabharwal that the assessee would have his opportunity to give satisfactory replies to the discrepancies raised in the Revisional Order before the Assessing Officer and that such an opportunity would meet the requirements of the provision. We are afraid that that is not the position envisaged in law. If one were to permit correction of such a grievous error in the manner suggested it would tantamount to, in a manner of speaking, closing the stable doors after the horse has bolted. The assessments, unless reopened by paying faithful obeisance to statutory provisions and conditionalities provided therein, attain finality on their conclusion. The provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w not meet the mandate the Section 263 of the Act. If such an interpretation is accepted it would make light of the finality accorded to an assessment order which cannot be reopened unless due adherence is made to the conditionalities incorporated in the provisions of the Act in respect of such powers vested in the Revenue. 18. In view of our discussion above, we are of the opinion that impugned judgment passed by the Tribunal deserves to be sustained. The findings returned by the Tribunal are pure findings of fact. No substantial question of law has arisen for our consideration. Resultantly, the appeal is dismissed. No order as to cost. 20. The ld. DR strongly stated that the Assessing Officer has not examined the claim of deduction in detail, therefore, the ld. PCIT was justified in exercising the power conferred upon him by section 263 of the Act. 21. In our considered opinion, the ld. DR is given by the Hon'ble Jurisdictional High Court in the case of Sunbeam Auto Ltd 332 ITR 167 wherein the Hon'ble High Court was considering the aspect, when there is no proper or full verification and it has held as under: We have considered the rival submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss the Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Our view is fortified by the decision of Hon'ble High Court of Bombay in the case of CIT vs. Nirav Modi, [2016] 71 Taxmann.com 272 (Bombay) . 24. In view of the above discussion on the facts vis a vsi the judicial pronouncements on the subject, we set aside the order of the ld. PCIT and restore that of the Assessing Officer dated 14.03.2104 framed u/s 143(3) of the Act. 25 Before closing, on identical set of facts, the ld. PCIT issued a similar notice u/s 263 of the Act as he found that the assessment order framed u/s 143(3) of the Act dated 14.03.2014 was erroneous, in as much as it was prejudicial to the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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