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TMI Blog2019 (11) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... challenged the assumption of jurisdiction, these appeals are being disposed off by a common order for the sake of convenience and brevity. 4. First of all, we would dispose of applications dated 04.02.2019 & 13.02.2019 moved by one Shri S.K. Srivastava, CIT (A)-I, Nodia (hereinafter referred to as 'Applicant') to be impleaded as necessary party in these appeals. During appellate proceedings to dispose off these applications, interim order dated 30.05.2019 was passed by the Bench framing following question to be decided before proceeding with the present appeals :- "as to whether presence of applicant, Shri S.K. Srivastava, in the present appeals is necessary for effective and complete adjudication of the controversy at hand challenging the impugned order of Pr. CIT u/s 263 of the Income-tax Act, 1961? 5. To decide the aforesaid question, Respondent/Revenue, already being represented through Ld. CIT DR, Shri J.K. Mishra to defend the interest of the Revenue as well as appellant were called upon to file parawise reply to the applications who have filed the same which is part and parcel of the judicial file. 6. Respondent/Revenue by filing reply opposed the intervening appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the entire assessment proceedings and assumption of jurisdiction by the PCIT are based upon the complaints made by Shri S.K. Srivastava. It would not be out of place to refer to the directions of the Hon'ble High Court of Delhi on 01.03.2013 in an Interim Order in Appeal [C] No. 1 of 2013 wherein the Hon'ble High Court has observed with regard to Shri S.K. Srivastava as under: "No communication addressed by the petitioners qua any issue should be given any cognizance or taken into consideration and further the petitioner should not be entrusted any work in the department as it may affect the public at large..........." 11. In spite of these binding observations of the Hon'ble High Court of Delhi, the PCIT has acted upon in assuming the jurisdiction u/s 263 of the Act. Be that as it may, assuming the jurisdiction u/s 263 of the Act, the PCIT issued show cause notice u/s 263 of the Act for A.Ys 2005-06, 2006-07 and 2008-09. The sum and substance of the notices for each A.Y is the same and it would suffice to refer to the show cause notice for A.Y 2006-07 which reads as under: Show cause notice u/s 263 of I.T. Act (For A.Y. 2006-07) "Pursuant to completion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses incurred for stay, boarding and lodging etc. were not produced during the course of assessment proceedings. 3. That It is seen from the assessment order of Shri Abhisar Sharma, your spouse in A. Y.2006-07 made on 28.03.2014 that the foreign visits have never been denied by you and since there is no evidence to establish that expenditure incurred in foreign visits for the said assessment year was actually financed by your husband Shri Abhisar Sharma who is a separate assessee with different PAN, addition on account of unexplained expenditure incurred due to such foreign visits has been made of an amount of Rs. 7,51,786/- on substantive and protective basis, since neither Shri Abhisar Sharma nor the assessee has submitted any details whether he funded foreign trips of his wife or not as such 50% of such amount of Rs. 3,75,893/- has been assessed as substantive and the balance amount of Rs. 3,75,893/- is to be assessed on protective basis, as Rs. 3,75,893/- is to be substantively assessed in your hands i.e. Ms. Shumana Sen (PAN AMQPS5036G) who is separately assessed in the A.Y.2006-07 by following Lalji Haridas Vs ITO & Anr.(SC) 43 ITR 387. 4. That the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, it was incumbent upon the Assessing Officer to inquire into the correctness or otherwise of the grounds based upon which assessments were reopened. But the Assessing Officer has failed to inquire into the correctness of those grounds based upon which it was concluded that an income exceeding Rs. 1,00,000/- had escaped assessment in each of the assessment years. In view of that there is both error and prejudice caused to the revenue in so much as tax on income in excess of Rs. 1,00,000/- in each of year has escaped tax and hence assessments are liable to be set aside and to be done de-novo as per law. 3. That the complainant in your case was not allowed to cross-examine you and your witnesses as per facts on record during course of such assessment proceedings while on the other hand the A. O. has recorded the statement of your spouse Shri Abhisar Sharma at your residence but similar opportunity was not offered to the complainant for cross examination. 4. That It is seen from the assessment order of Shri Abhisar Sharma, your spouse in A. Y.2006-07 made on 28.03.2014 that an addition on account of unexplained expenditure incurred due to such foreign visits has been made of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g any evidence on record that "yearly vacation abroad with family was part of salary package of Sri Abhisar Sharma and similar perquisites were allowed to other employees as well" and M/s NDTV Ltd. has categorically declined vide its letter dated 25.02/12.03.2013 to have ever provided any such perquisite *to your spouse Sri Abhisar Sharma or any other employee and hence the claim on your part in CWP No.-1373 of 2011 of the Delhi High Court appears to be incorrect. 8. That, employment contract of Sri Abhisar Sharma was not examined and considered by the A.O. that the passport was neither produced before the A. O. for verification nor examined by him and the details of expenditure incurred in course of foreign visits were also not examined. Thus, considering the above, the undersigned is of the opinion that the said assessment order dated 31.3.2013 in your case is erroneous and prejudicial to the interest of revenue as such since, no proper enquiry has been conducted and no proper law has been invoked in the said assessment order as the AO failed to conduct proper enquiry and failed to apply proper law leading to said assessment Order being as erroneous as well as prejudicial t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of reports of assessing officer & Additional Commissioner vis-a-vis replies submitted by the assessee, the following new facts emerge which have not been looked into, examined and considered by the A.O. in the orders under review : (14)(A) The AO in the assessee's case has made assessments u/s 148/143(3) for A.Y.s 2005- 06, 2006-07, 2007-08 & 2008-09, by accepting the returned income without conducting proper enquiries and without appreciating the issues raised in the satisfaction for assuming jurisdiction U/s 147/148 of I.T. Act, 1961 which was challenged by the assessee before Hon'ble Delhi High Court in CWP No-4022 of 2012 titled as "Shumana Sen vs. CIT Delhi XIV & Ors," and vide judgment dt. 19.10.2012 stood upheld by Hon'ble Delhi High Court and was accepted by the assessee and has attained finality and unless it was proved by the assessee beyond reasonable doubts that the content and issues of law involved in the satisfaction note of the Assessing Officer was not borne out from record, the same could not have been rejected and as Assessing Officer has not done the same, the Assessment Orders dated. 31.03.2013 are bad in-law and erroneous and have caused prejudice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned vide its letter dated 25.02/12.03.2013 to have ever provided any such perquisite to her spouse, Shri Abhisar Sharma or any other employee and hence the claim on her part in CWP No.-1373 of 2011 of the Delhi High Court appears to be incorrect. The employment contract of Sri Abhisar Sharma was not examined and considered by the A.O. and the passport was neither produced before the A.O. for verification nor examined and the details of expenditure incurred in course of foreign visits were also not examined. 14(F) During the assessment proceedings of assesse's spouse (Sh. Abhisar Sharma), his A.O. was not provided any evidence either by the assessee's spouse or the witnesses examined by the assessee's spouse, to support his claim about receipt of perquisites from the employer/s of assessee's spouse being taxable u/s 17(2)/Form 12BA and Rule 26A/Form-16 regarding assessee's foreign trip to Europe with her spouse and other members of family at the cost of the spouse's employer. Despite not getting any evidence u/s 17 (2) as such, the A.O. of assessee's spouse has made addition in the hands of assessse's spouse as "undisclosed perquisites" provided by M/s NDTV Ltd. to be taxed u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , hence the issues arising out of these facts are not the subject matter of appeal filed by Assessee for A.Y. 2005-06 to A.Y. 2008-09. 14(J) A.O. failed to conduct proper inquiry and failed to apply proper law leading to said assessment orders being erroneous as well as prejudicial to the interest of revenue, and in support, the following case laws exist in support of necessary action u/s 263 of the I.T. Act, 1961 against the assessment orders passed u/s 147/143(3) for A.Y. 2005-06 to A.Y. 2008- 09 in this case: (1) Rampyari Devi Saraogi vs CIT(SC) 67 ITR 84 (2) Malabar Industrial Co. Ltd. Vs CIT(SC) 243 ITR 83 (3) Swarup Vegetable Products Industrial Ltd, 22 CIT(AIL) 187 ITR 412 (4) CIT Vs Eastern Medikit Ltd. (Del) 58 DTR 265; 337 ITR 56. 15. As against the above noted findings, It is observed from the written submissions made by the assessee that objections on the following points, relevant to the notice u/s 263 and the issues raised therein, have been made in written submissions filed before this office (for the sake of brevity, the written submissions of the assessee on these issues are not being repeated, as these have already been extracted above verbatim, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention here the plethora of judgements against raising such technical objections with a specific purpose of stalling the proceedings and to divert the focus from substance to the form, Although the issues involved in these proceedings u/s 263, in the case of the assessee, have nothing to do with the period of her service tenure under the charge of the undersigned that the assessee has alluded to, in the " Preliminary Objections", still the " Preliminary Objections" raised by the assessee at the time of conclusion of proceedings have been considered, deliberated upon and kept in mind while adjudicating on the main issues discussed hereafter only to ensure a clinical analysis of material available on record. Having observed thus, these orders are now being passed with full awareness of the objections raised by the assessee and with full consciousness of the responsibility cast upon the undersigned in this matter which is being considered with as robust a sense of objectivity as is in command of the undersigned. 15(B) Validity of notice u/s 263- the notice u/s 263 is validly issued based on findings from the assessment order and the reports of A.O/Addl. CIT extracted above so as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and Comphor Works, report in (1988) 231 ITR 53, it is observed by the Hon'ble Apex Court that the revisionary power conferred on the Commissioner of Income Tax is of wide amplitude. Hon'ble Apex Court in the case of Smt. Tara Devi Aggarwal Vs. CIT(1973) 88 ITR 232 has held that the Commissioner may consider an order of the Assessing Officer to be erroneous not only if there is some apparent error of reasoning or of law or of fact but also where it is a stereotyped order which simply accepts what the assessee has stated in his return and fails to make inquiries which are called for in the circumstances of the case and it is not necessary for the Commissioner to make further inquiries before cancelling the assessment order of Assessing Officer. The facts of the present case, if judged on the touchstone of above legal position propounded by the Hon'ble Apex Court, and section 263 per se unmistakably establish that the order of the A.O. was erroneous and prejudicial to the interest of Revenue. 15(D) Case for review u/s 263 of A.O s order. As against the submissions made by the assessee, there is a valid case for review u/s 263 of) T Act in view of the erroneous order of the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S 2008-09 completed u/s 147/143(3) on 31.03.2013 are hereby cancelled and restored to the Assessing Officer to make assessments denovo after examining the entirety of the issues considered in this revision order u/s 263 in assessee's case after affording reasonable opportunity of being heard to the assessee. The A.O. is directed to make all necessary inquiries with the concerned agencies to ensure that all the issues which are subject matter of this revision order u/s 263 as per the findings given in paras-(14)(A) to (14)(J) above, are properly examined vis -a-vis the evidences collected and required to be collected, the claims made by the assessee regarding such evidences and the position of law, so as to ensure that the errors pointed out in this order and the prejudices erased to revenue as per this order are eliminated and the amounts involved in these issues are taxed in the hands of the assessee or in any other hands as per law." 15. We have given thoughtful consideration to the orders of the authorities below. A perusal of the aforementioned findings of the PCIT show that the entire quarrel is in respect of travel of the assessee alongwith her spouse abroad and the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual Harassment, New Delhi wherein also Mrs. Sumana Sen has admitted that she had travelled abroad several times at the time of her husband's employment with M/s NDTV Ltd. before, during and after her stint in Circle-13(1). New Delhi. Pursuant to the receipt of the copy of the TEP the matter was independently examined in exercise of independent quasijudicial discretion by the undersigned. It was found that the Returns of Income of Mrs. Sumana Sen an existing assessee in this office for the relevant period i.e. A.Y. 2004-2005, 2005- 2006, 2006-200 7, 200 7-2008 & 2008- 2009 relevant for F. Y. 2003- 2004, 2004- 2005, 2005-2006, 2006-2007 Si 2007-2008 does not disclose in any manner whatsoever the details and other particulars of her foreign travelling and the expenditure incurred on that including the source thereof, the quantum thereof the status of that amount of money a tut taxability of the same, in view of the fact that the particulars pertaining to the expenditure incurred on foreign travels has been admitted before Hon'ble Delhi High Court and also before the departmental authorities, prima-facie, a case of non-disclosure of information about expenditure incurred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and her family during the period F.Y. 2003-2004 to F. Y. 2007-2003. The sources of expenditure incurred by the assessee on her foreign travels during the above mentioned period required to be verified to ascertain the correct and full tax payable by the assessee on her taxable income. In view of the facts and circumstances stated hereinabove and the material available on the record of this office. I have reasons to believe that income far in excess of the limit prescribed in law and much more than the limit of Rs. One lakh prescribed in section 149/1 Kb) of the Income Tax Act. 1961 has escaped assessment diming A. Y. 2005-2006,2006-2007, 2007-2008 & 2008-2009 and to bring the escaped income to tax, re-assessment proceedings are required to be initiated for A. Y. 2005-2006, 2006-2007. 2007- 2008 & 2008-2009 U/s 147 of the Income Tax Act, 1961 and notice U s 148 is to be issued welt within the limitation period. It is further highlighted that the complainant in his Tax Evasion Petition has alleged evasion of tax and concealment of income during the period October. 2003 to October, 2007 which is material for A. Y. 2004-2005. 2005-2006. 2006-2007, 2007-2008 & 2008-2009. Out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arma and thereby it is clear that expenditure incurred on the vacation abroad of Ms Shumana Sen was not the salary of Sh. Abhisar Sharma but bribe and illegal gratification received by Ms. Shumana Sen ay DCIT Cir. 13(1), for favouring M/s NDTV Ltd. illegally." 17. The reopening vis a vis notices u/s 148 of the Act was challenged by the assessee before the Hon'ble High Court of Delhi by way of writ petition and the said writ petition was disposed of by the Hon'ble High Court vide order dated 19.10.2012 in WP(C) No. 4022/2012 CM Appeal 8436-8438/2012. The Hon'ble High Court held as under: "In the circumstances, we are not inclined to accept the submissions of the petitioner. We accordingly hold that the notice issued on 28 03' 2012 u s 148 of the Act for AY 2005- 06 was within the jurisdiction of the Assessing officer. The AO is directed to dispose off the objections filed by the petitioner within a reasonable time and at any rate not later than 30/11/2012, if not disposed off We refrain from expressing any opinion on the various allegations and counter allegations which were exchanged between the petitions and respondent No 4 in other proceedings. In coming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Sharma was employed by M/s NDTV Ltd. during October 2003 to October 2007, i.e. financial year 2003-04,2004- 05,2005-06,2006-07 and 2007-08. You are requested to provide the following information u/s 133(6) of the Income-tax Act, 1961 In the above mentioned financial years for the period October 2003 to Oct, 2007, there are five financial years involved i.e.2003- 04 to 2007-08, you are therefore required to provide authenticated copies of: 1. The employment contract of Sh. Abhisar Sharma with M/s NDTV Ltd. for this period i.e. from Oct. 2003 to Oct. 2007. 2. Copy of Form No. 16 issued to Sh. Abhisar Sharma for this period. 3. Copy of Form No. 12BA( Rule ( 26a(2) ) provided to Sh Abhisar Sharma, month wise break up salary, showing the amount of salary actually paid, tax deducted and value of perquisites included in total emoluments for each month separately. 4. Amount of expenditure incurred by you on the annual vacation abroad for each year and amount of TDS thereon. 5. List of employees other than Directors of the Company who were provided the perquisite of annual vacation abroad for self and family during the period 1-4-2003 to 31.3.2008. 6. Amount of gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial year 2004-05 2005-06 2006-07 and 200^-08, whether you have gone to foreign trip during the financial year 2004-05. 2005-06. 2006-07 and 2007-08. What is the source of the expenditure incurred, and how much expenditure you have actually incurred with documentary evidence? Ans: As per the allegation made by Sh. S.k Srivastava is concerned, the same is completely false, baseless and malicious. They are also unsubstantiated, without any evidence or any basis. 1 would like to point out here that Sh. S.K Srivastava has been in the habit oj making such allegations. Consequently, he had to tender an apology before the Hon.hie High Court of Delhi for making such unsubstantiated allegations and had withdrawn the same, with the undertaking that he would desist from repeating such allegations In fact, he has been sentenced to 15 days of imprisonment by the Hon.ble High Court of Delhi for contempt of Court which arose out of the fact that he repeated such allegations. It is categorically denied that I had incurred an expenditure of Rs. 3 Crores and above on such trips. In the Assessment Year 2005-06, there was no foreign trip undertaken by me. I undertook trips to UK and Australi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment proceedings." 22. Proceeding further, the Assessing Officer issued summons u/s 131 of the Act to Shri Abhisar Sharma, husband of the assessee whose statement was recorded on oath on 29.03.2013. The relevant part of the statement reads as under: "Q No 7 As per Tax Evasion Petition, Sh. S.I< Srivastava alleged to Ms Shumana Sen H o Sh. Abhisar Sharma have incurred expenditure to the tune of Rs. 3 crores or more on such foreign travels during the financial year 2004-05, 2005- 06, 2006- 07 and 2007-08 . Whether you have gone to foreign trip during the financial year 2004-05, 2005-06, 2006-07 and 2007-08. Whether these trips are official or personal? Ans All allegations made by Sh. S.K. Srivastava are false, baseless and malicious. No expenditure of Rs. 3 crores or more were incurred on these trips. The detail of the expenditure actually incurred have been given to my A.O. vide letter dated 24.2.2012. These trips were personal in nature. Q.No. 8.As you have told in your Answer of O.No.7 that you have travelled personally, please give details with expenditure incurred on tickets, fooding & lodging, on local site seen and other expenses etc.7 Also provide documentary e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was part of my salary package. The same is evident from the submissions made by me in my reply above in Q No. 8 " Copy of bank statement of Abhisar Sharma with Standard Bank also examined to verify the withdrawals for foreign trip." 23. During the course of assessment proceedings, the assessee brought to the notice of the Assessing Officer that the allegation pertaining to her misdemeanor regarding NDTV Ltd allegations have been examined in detail by the Vigilance Directorate of Income Tax Department and the file has been closed. To confirm the facts mentioned by the assessee, the Assessing Officer called for information u/s 133(6) of the Act from the DIT [Vigilance]-II, New Delhi, who, vide letter No. 07116 dated 30.03.2013 informed as under: "In this regard I am directed to submit that the compliant concerning NDTV Ltd made by Sh. S.K. Srivastava against Ads Shumana Sen was registered as FCR-A/sd/NZ/56/13 and same has been dosed by DGIT(Vig.) on 15/02/2013 in absence of any Vigilance angle and in view of Hon'ble Delhi High Court's order/directions." 24. Proceeding further, the Assessing Officer once again called for information u/s 133(6) of the Act from the AC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of these foreign Travels by undersigned and ACIT Circle 47(1), New Delhi 27. On the basis of the aforesaid enquiries, the Assessing Officer finally concluded as under; "As a result of above mentioned investigations conducted the following facts emerge:- a) . Sh. Abhisar Sharma was given two economy tickets and US $ 1000 towards travel allowance for AY.2005-06 by M/s NDTV Ltd. was for Europe trip. However foreign trip was undertaken in AY.2005-06 by assessee and her family. b) . This foreign trip was undertaken in April 2005 relevant to AY2006-07. Sources of the same was stated to be salary savings of Abhisar Sharma and two tickets alongwith us $ 1000 provided by M/s NDTV Ltd. Boarding and lodging was provided by assessee's aunt in UK. The duration of stay was 7-10days. c) In AY.2006-07 another trip was undertaken to Australia for 7- lO days. Source was stated to be foreign Travel allowance of Rs. 1,32,996/- of Sh. Abhisar Sharma. Cheqes for this purpose have been issued from bank a/c of Sh. Abhisar Sharma with Standard Chartered Bank for purchase of tickets, visa fees, boarding/lodging etc. This trip was undertaken by the assessee, her husband i.e. Sh. Abhisa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... New Delhi has confirmed this fact that foreign travels were undertaken through his sources and savings and his wife and daughter accompanied him as family members. Reference is drawn to this letter dated 13/02/2013 and his statement recorded on 04/03/2013. Similarly the assessee reiterated the same before ACIT, Circle 47(1), New Delhi in his statement recorded on 11/03/2013. o). There was no foreign trip undertaken for AY 2005-06 and AY.2008-09. p). No evidence could be gathered in these investigations that the assessee had incurred unaccounted expenditure for these foreign travels. q). The genuineness of the expenditure shown for these foreign travels can only be ascertained by the Assessing officer of Sh. Abhisar Sharma because Sh. Abhisar Sharma has owned up the entire expenditure incurred on these foreign travels. The statements recorded of Sh. Abhisar Sharma on this issue shall be forwarded to AC1T Circle 47(1), New Delhi for information and action, as deemed fit. r). Hence, It is concluded that the assessee accompanied her husband during these foreign trips and sources such foreign trips was out of foreign travel allowance provided to her husband and his savin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n facts in upholding the order passed by the CIT under section 263 of the Act on merits and still storing the issue of allowability of deduction under section 54 of the Act to the file of Assessing Officer even though the working of allowability of deduction under section 54F is available in the order under section 263 which is not disputed by the assessee before ITAT." 30. And the Hon'ble High Court, after considering the facts, held as under:- "6. It can thus be seen that though final order of assessment was silent on this aspect, the Assessing Officer had carried out inquiries about the nature of sale of land and about the validity of the assessee's claim of deduction under section 54F of the Act. Learned counsel for the Revenue however submitted that these inquiries were confined to the claim of deduction under section 54F of the Act in the context of fulfilling conditions contained therein and may possibly have no relevance to the question whether the sale of land gave rise to a long term capital gain. Looking to the tenor of queries by the Assessing Office and details. A.Y. 2009-10 supplied by the assessee, we are unable to accept such a condition. In that view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before exercising revisional powers to : (i) call for and examine the record, and (ii) give the assessee an opportunity of being heard and thereafter to make or cause to be made such enquiry as he deems necessary. It is only on fulfilment of these twin conditions that the CIT may pass an order exercising his power of revision. Minutely examined, the provisions of the section envisage that the CIT may call for the records and if he prima facie considers that any order passed therein by the AO is erroneous insofar as it is prejudicial to the interest of the Revenue, he may after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. The twin requirements of the section are manifestly for a purpose. Merely because the CIT considers on examination of the record that the order has been erroneously passed so as to prejudice the interest of the Revenue will not suffice. The assessee must be called, his explanation sought for and examined by the CIT and thereafter if the CIT still feels that the order is erroneous and prejudicial to the interest of the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 203 ITR 108 has held as under: "The power of suo motu revision under subsection (1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue of the order being erroneous prejudice has been caused to the interests of the Revenue. It has, therefore, to be considered firstly as to when an order can be said to be erroneous. We find that the expressions "erroneous", "erroneous assessment" and "erroneous judgment" have been defined in Black's Law Dictionary. According to the definition, "erroneous" means "involving error; deviating from the law". "Erroneous assessment" refers to an assessment that deviates from the law and is, therefore, invalid, and is a defect that is jurisdictional in its nature, and does not refer to the judgment of the Assessing Officer in fixing the amount of valuation of the property. Similarly, "erroneous judgment" means "one rendered according to course and practice of court, but contrary to law, upon mistaken view of law; or upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act there must be material before the Commissioner to consider that the order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We have already held what is erroneous. It must be an order which is not in accordance with the law or which has been passed by the Income-tax Officer without making any enquiry in undue haste. We have also held as to what is prejudicial to the interests of the Revenue. An order can be said to be prejudicial to the interests of the Revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised. There must be material available on the record called for by the Commissioner to satisfy him prima facie that the aforesaid two requisites are present. If not, he has no authority to initiate proceedings for revision. Exercise of power of suo motu revision under such circumstances will amount to arbitrary exercise of power. It is well-settled that when exercise of statutory power is dependent upon the existence of certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or information u/s 133(6) of the Act from various parties mentioned elsewhere. 36. Similar is the fate of the decision in the case of Rajmandir Estates 386 ITR 162 wherein the Assessing Officer did not make any enquiry in respect of huge premium collected by the assessee with a small amount of authorised share capital and, therefore, it was held that the commissioner was justified in treating the assessment order as erroneous and prejudicial to the interest of the revenue. 37. Another decision relied upon by the ld. DR which is in the case of Manjunathesware Packing Products and Camphor Works 231 ITR 53, would, in fact, do good to the assessee because in that case, the Hon'ble Supreme Court held that the word "record" used in Sec. 263 (1) of the Act would mean the record as it stands at the time of examination by the Commissioner, but not as it stands at the time the order was passed by the Assessing Officer. 38. Records which were examined by the PCIT, had it been examined by due application of mind, the PCIT would have known the fate of frivolous complaints made by Shri S.K. Srivastava and his conviction by the Hon'ble High Court. The other decisions relied upon by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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