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TMI Blog2018 (3) TMI 1744X X X X Extracts X X X X X X X X Extracts X X X X ..... eturns. The same was verified and accepted by the AO, even though, he has not discussed elaborately in the order passed u/s 143(3) We find that the Hon’ble Bombay High Court and Delhi High Court, respectively, came to the conclusion that CIT cannot direct the AO to conduct further enquiry to verify without examining the aspect himself. See DG HOUSING PROJECTS LTD [2012 (3) TMI 227 - DELHI HIGH COURT]and DEVELOPMENT CREDIT BANK LIMITED [2010 (2) TMI 161 - BOMBAY HIGH COURT] - Decided in favour of assessee AO disallowed the difference in sales and claim of excise duty, with regard to difference in sales, assessee has already explained before the AO and also submitted reconciliation statement before us which we found to be in order. With regard to excise duty, it is the method of accounting adopted by the assessee regularly as per the guidance note issued by ICAI with regard to valuation of excisable finished goods. We find that even on merits, both the disallowances are not sustainable. Therefore, the appeal filed by the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay ? The doctrine must be applied in a rational common sense and pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-del iberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. 6. It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so." 4.1 Considering the above decision and reasons for delay in filing the appeal, we cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO u/s 143(3) of the Act is erroneous and prejudicial to the interests of the revenue. Accordingly, he set aside the order to the file of the AO with a direction to examine the correctness of sales admitted and correctness of claim made towards provision for excise duty and MAT credit and decide the issues afresh after providing opportunity of being heard to the assessee. 7. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising the following grounds of appeal: 1. The Ld. CIT, has erred in passing the order u/s. 263 of the Act holding that the assessment order passed u/s. 143(3) dated 23.12.2011 is erroneous in so far as it is prejudicial to the interests of the revenue. 2. The Ld. CIT, erred in passing the order u/ s. 263 of the Act by forming mere, change of opinion and without considering the fact that the original assessment had been completed u/ s 143(3) of the IT Act, 1961 after careful verification of all the relevant information. 3. The Ld. CIT erred in not appreciating that once the AO has applied his mind and concluded an assessment u/s 143(3) of the Act, the provisions of section 263 cannot be invoked on mere change of opinion in the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales adopted in financial statement. He submitted that AO after verification of the above information satisfied with the information submitted by the assessee is proper and, therefore, he formed an opinion, which need not be discussed in the assessment order. For this proposition he relied on the decision in the case Spectra Shares & Scrips (P) Ld., 36 Taxman 348 (AP High Court). Further, he submitted that ld. CIT cannot assign the work of enquiry to the AO. For this proposition, he relied on the decision in the case of Development Credit Bank, 196 Taxmann 329 (Bombay High Court) and in the case of DG Housing Projects Ltd., 20 Taxmann 587 (Delhi). 9. On the other hand, ld. DR submitted that CIT had discussed the issue elaborately in his order, he has already formed an opinion for considering the assessment order as erroneous and in so far as it is prejudicial to the interests of revenue. Therefore, CIT has passed necessary order and remitted the case to the file of AO to verify the genuineness of the claim of the assessee. 10. Considered the rival submissions and material on record. We find that during the course of assessment proceedings, AO has asked for the information relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 263. In the order of assessment, the AO had after making an enquiry and eliciting a response from the assessee come to the conclusion that the assessee was entitled to depreciation to the extent of ₹ 622.39 lakhs on the value of securities held on the trading account. In the absence of any tangible material to the contrary, the CIT could not have treated this finding to be erroneous or to be prejudicial to the interest of the Revenue. The observation of the CIT that the AO had arrived at his finding without conducting an enquiry was erroneous, since an enquiry was specifically held with reference to which a disclosure of details was called for by the AO and made by the assessee. We have adverted earlier to the directions which have been issued by the CIT to the AO with regard to the holding of a fresh enquiry. Before us it is common ground between counsel that the first and the second issues therein relating to the capital gain of ₹ 1.26 crores and depreciation of ₹ 622.39 lakhs constitute the basis of the view of the revisional authority and the others follow in consequence. Once we come to the conclusion that the revisional authority was not justified in exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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