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TMI Blog2019 (5) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... ndorsed the offer of the assessee without making any enquiry. Therefore, it is a case of lack of enquiries on the part of AO before accepting the offer of the assessee in the instant case. - Decided against assessee. - ITA No. 2287 And 2288/Del/2015 - - - Dated:- 21-5-2019 - Shri Amit Shukla, Judicial Member And Shri L.P. Sahu, Accountant Member For the Appellant : Sh. Naveen Gupta, Advocate For the Respondent : Ms. Nidhi Srivastava, CIT/DR ORDER PER L.P. SAHU, A.M.: These two appeals have been filed by the assessee against the orders padded by the CIT, Rohtak dated 27.03.2015 for the assessment years 2010- 11 and 2011-12. Since the issue involved in both the appeals is identical, therefore, for the sake of convenience, we decide both the appeals by this consolidated order and take the appeal for A.Y. 2011-12 first, the decision on which shall equally apply to the appeal for A.Y. 2010-11. The grounds raised in appeal for A.Y. 2011-12 read as under : 1. That the order of the Ld. CIT is against law and facts. 2. That the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in ICICI bank as his turnover and offered income on it @ 8% amounting to ₹ 2,09,732/-. The assessee had already shown income from cash collection activities of ₹ 1,28,700/-. Therefore, the difference of ₹ 81,032/- was offered for taxation. Later on, the ld. CIT, after assuming the revisionary jurisdiction u/s. 263, issued show cause notice on 12.03.2015. The AR of the assessee submitted its reply. The CIT after considering the facts of the case, assessment order and submissions of the assessee, set aside the assessment order finding it as erroneous in so far as prejudicial to the interest of revenue and directed the Assessing Officer to make fresh assessment after making certain enquiries as mentioned in the impugned order. Aggrieved, the assessee is in appeal before the Tribunal. 3. The ld. AR reiterated the submissions made before the CIT. He submitted that the Assessing Officer had done adequate enquiry in respect of the amount deposited in the bank account and the profit shown by the assessee on the bank deposits. He further submitted that where two views are possible and the Assessing Officer has taken one possible view, no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll records relating to any proceeding under the Act available at the time of examination by the [Principal Commissioner] Commissioner Explanation 2- For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of revenue, if in the opinion of the Principal Commissioner or Commissioner- (a) The order is passed without making inquiries or verification which should have been made; (b) The order is passed allowing any relief without inquiring into the claim (c) The order has not been made in accordance with any order ,direction or instruction issued by the Board under section 119 or (d) The order has not been passed in accordance with any decision which is prejudicial to the assesse, rendered by the jurisdictional High Court or supreme Court in the case of the assesse or any other person. This is a clear-cut case wherein no inquiry has been made by the AO and is hence erroneous within the meaning of clause (a) of explanation 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Co. vs. S.P. Jain. 31 ITR 872 (Calcutta), can only mean that the orders of assessment challenged are such as are not in accordance with law, in consequence whereof the lawful revenue due to the State has not been realized or cannot be realized. In this case the Pr CIT has rightly invoked revisional jurisdiction under the provisions of section 263 of the Act as the Commissioner on examining the records came to the conclusion that the earlier finding of the AO was erroneous and prejudicial to the interest of the revenue and that fresh determination of the assessment was necessary. There was adequate material to justify the Commissioner's finding that the order of the assessment was erroneous insofar as it was prejudicial to the interest of the Revenue. The term prejudice contemplated under section 263 is prejudice to the income-tax administration as a whole. Pratap Footwear v. ACIT [2003] SOT 638 (Jabalpur) (Trib.).ln the case of CIT v. Bhagwan Das [2005] 272 ITR 367 (AII.)(HC), the High Court held that non application of mind by the Assessing Officer was prejudicial to the interest of the revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s DG Housing Projects Limited, (2012) 343 ITR 329 (Delhi). It has been observed in Nagesh Knitwears Private Limited (Supra): 10. Section 263 has been enacted to empower the CIT to exercise power of revision and revise any order passed by the Assessing Officer, if two cumulative conditions are satisfied. Firstly, the order sought to be revised should be erroneous and secondly, it should be prejudicial to the interest of the Revenue. The expression 'prejudicial to the interest of the Revenue' is of wide import and is not confined to merely loss of tax. The term erroneous' means a wrong/incorrect decision deviating from law. This expression postulates an error which makes an order unsustainable in law. The Assessing Officer is both an investigator and an adjudicator. If the Assessing Officer as an adjudicator decides a question or aspect and makes a wrong assessment which is unsustainable in law, it can be corrected by the Commissioner in exercise of revisionary power. As an investigator, it is incumbent upon the Assessing Officer to investigate the facts required to be examined and verified to compute the taxable income. If the Assessing Officer fails to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that in the circumstances of the case the Income-tax Officer should have made further inquiries before accepting the statements made by the assessee in his return. 14. The aforesaid observations have to be understood in the factual background and matrix involved in the said two cases before the Supreme Court. In the said cases, the Assessing Officer had not conducted any enquiry or examined evidence whatsoever. There was total absence of enquiry or verification. These cases have to be distinguished from other cases (i) where there is enquiry but the findings are incorrect/erroneous; and (ii) where there is failure to make proper or full verification or enquiry. 361 ITR 505 (Delhi) COMMISSIONER OF INCOME TAX (CENTRAL-II) vs. GOETZE (INDIA) LIMITED HIGH COURT OF DELHI Reliance is also placed on the following recent judgements of ITAT, Delhi: NUT v CIT (Central) [2015] 60 taxmann.com 313 (Delhi) 28.2.... An inquiry which is just a farce or mere pretence of inquiry cannot be said to be an inquiry at all, much less an inquiry needed to reach the level of satisfaction of the AO on the given issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income. It is only through a self serving statement filed along with his submission dated 25.10.2013; where the income offered under the head Income from other sources is claimed to be out of income from cash collection activity. When the facts of the case are same for both assessment years i.e. the transactions are related to cash deposits and withdrawals made through the same bank account, which was found as undisclosed bank account, how the treatment would be different in next assessment year. By adjusting the income shown in the return of income and later on claimed to be earned as cash collection activity should not have been adjusted against the Income taken as 8% of the total cash deposit made in the undisclosed bank account. Examination to ascertain the nexus between the nature of so-called activity of collection of payments on commission basis and cash deposits made in the bank account has never been attempted by the AO. It is submitted in one of the submission during the assessment proceedings for AY 2010-11 that more than 300 transactions have taken place and cash has been deposited on these occasions but assessee failed to bring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard to bank account in which substantial cash was deposited, AO is directed to conduct independent inquiry in this regard. (ii) Assessee had declared that he is involved in investment of shares. Thorough enquiry should be conducted by obtaining all De-mat accounts in his name to ascertain the instances of capital gain. Source of investments for doing such activity should also be examined. (iii) Assessee claims that no vehicle is maintained by him during the year under consideration. Since assessee has furnished inaccurate particulars in regard to undisclosed bank accounts, independent inquiry should be made from the office of RTO to find out the correct facts. If any vehicle, either in his own name or in the name of other family members/firm etc. is found, source of investment should be examined. Insurance premium and running expenses should also be taken into consideration. (iv) Similar enquires are required to be conducted in regard to the expenses on account of telephone and mobile. It is hard to accept that the assessee i:. doing activities of collection of payment on commission basis without having a personal phone. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, the assessee states that different parties deposited cash in assessee s account so as to facilitate the payments by withdrawing the same through ATM while at other place, the assessee admitted the entire deposit as his business turnover and offered it for taxation @ 8%. The Assessing Officer had, however, not made any enquiry as to the actual business of the assessee. He has also failed to investigate the source of deposits in assessee s bank account, but straightway accepted the contention of the assessee without ascertaining the truth behind the cash deposits. The Assessing Officer has only endorsed the offer of the assessee without making any enquiry. Therefore, it is a case of lack of enquiries on the part of Assessing Officer before accepting the offer of the assessee in the instant case. The case laws relied by the assessee do not render any help to the assessee on account of distinguishing facts. However, the decisions relied by the ld. CIT and by ld. DR in its written submissions go to support the conclusion of the ld. CIT. We, accordingly, do not find any justification to interfere with the impugned order. Accordingly, the appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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