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TMI Blog2019 (12) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... y connected with construction of assessee s plant would be capital receipt. A further reply was filed on 19.02.2016 giving the details of capital work in progress and treatment of amounts received from NRDA this reply is placed at pages 299 to 302 of the PB. Considering these plethora of evidences it cannot be said that no enquiry was made by the AO during the course of the assessment proceedings. There remains nothing for the PCIT to assume jurisdiction u/s 263 of the Act to say that assessment order is not only erroneous but prejudicial to the interest of the Revenue. We are of the considered view that the PCIT has wrongly assumed the jurisdiction u/s 263 of the Act. Hence, his order for both the assessment years under consideration deserves to be set aside. We, accordingly, set aside the order of the PCIT and restore that of the AO. - Decided in favour of assessee. - I.T.A Nos.1102 & 1103/Del/2018 - - - Dated:- 28-11-2019 - Shri N.K. Billaiya, Accountant Member And Ms. Suchitra Kamble, Judicial Member For the Assessee : Sh. Rohit Jain, Advocate, Sh. Divyam Mittal, CA For the Revenue : Ms. Shefali Swaroop, Sr. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed in the agreement. In consideration of the appellant accepting the concession, the appellant was entitled to receive concession payment of ₹ 84 lakhs per quarter from Commercial Operations Date. As increased on account of collection efficiency as prescribed in the agreement. The details of financial assistance received along with expenditure incurred from AY 2010-11 to 2014-15 is as under: Particulars Assessment Year 2010-11 2011-12 2012-13 2013-14 2014-15 Total Financial Assistance received [A] - 18,40,00,000 52,10,00,000 18,50,00,000 6,48,80,000 95,48,80,000 Expenditure incurred [B] 14,64,893 28,36,30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... storage in the water storage reservoir by installing plant and equipment the financial assistance is a capital receipt and has been rightly accepted by the AO. It is the say of the Counsel that the view taken by the AO is a plausible view and, therefore, proceedings u/s 263 of the Act are unwarranted and deserves to be set aside. The Counsel further stated that it is incumbent upon the PCIT before setting aside the assessment he is required to record the prima facie finding on the merits of the matter after conducting necessary enquiries and the PCIT is not empowered to blanketly set aside the assessment order. Strong reliance was placed on several judicial decisions which are in the form of case law paper book. 10. Per contra, the DR strongly supported the findings of the PCIT. It is the say of the DR that the AO did not make necessary enquiries and has accepted the returned income of the assessee and the entire assessment order is devoid of enquiry. 11. We have given a thoughtful consideration to the rival contentions. The nature of business activity of the appellant has already been mentioned elsewhere along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed at page 364 of the PB and the reply has placed at page 361 of the PB dated 08.10.2015 in which the assessee specifically explained the treatment of receipts from NRDA and pointed out that the nature of receipts has already been explained in not on business activities. By another reply dated 30.10.2015 which is placed at page 356 of the PB the assessee explained that the financial assistance received from NRDA is in the nature of capital receipt and cannot be considered as Revenue receipt. It was specifically explained that financial assistance if received for creation of an asset is not taxable being capital receipt. It was pointed out that any receipt which is intrinsically connected with construction of assessee s plant would be capital receipt. A further reply was filed on 19.02.2016 giving the details of capital work in progress and treatment of amounts received from NRDA this reply is placed at pages 299 to 302 of the PB. Considering these plethora of evidences it cannot be said that no enquiry was made by the AO during the course of the assessment proceedings. In fact while framing the assessment order u/s 143(3) of the Act AO has concluded as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue in question, the ld. CIT cannot invoke section 263 of the Act merely because he has different opinion. Relevant observation of the High Court reads as under: 63. We find the Hon'ble Delhi High Court in the case of Vikas Polymer reported in 341 ITR 537 has held as under: We are thus of the opinion that the provisions of s. 263 of the Act, when read as a composite whole make it incumbent upon the CIT 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 circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 263 of the Act. In view of the above discussion, we hold that the assumption of jurisdiction by the DIT u/s 263 of the Act is not in accordance with law. We, therefore, quash the same and grounds raised by the assessee are allowed. 33. In yet another case, Jubilant Energy [P] Ltd ITA No. 3927/DEL/2016 order dated 04.07.2018, the co-ordinate bench under similar facts and circumstances, has held as under: 19. The Hon'ble Bombay High Court in the case of Gabriel India Ltd 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 imposed. 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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