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TMI Blog2020 (4) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... on afresh as per law. The same stands affirmed therefore. Suffice to say, the Assessing Officer s consequential assessment shall be framed after affirming adequate opportunity of hearing to this taxpayer who shall be at liberty to raise all factual legal pleas in support of the impugned LTCL set off claim. - Decided against assessee. - ITA No.699/Kol/2018 - - - Dated:- 22-1-2020 - Shri J.Sudhakar Reddy, Accountant Member And Shri S.S.Godara, Judicial Member For the Appellant : Shri Goutam Banerjee, FCA For the Respondent : Shri A.K. Nayak, CIT-DR ORDER PER S.S.GODARA, JUDICIAL MEMBER:- This assessee s appeal for assessment year 2012-13 arises against the Principal Commissioner of Income Tax-4, Kolkata s order dated 28.02.2018, involving proceedings u/s 263 of the Income Tax Act, 1961; in short the Act . 2. We have heard both the parties. Case file perused. We advert to the basic relevant facts. This assessee-company is a manufacturer of steel products. It also derives income from house property / rental income and carries out investment business. The assessee had filed its original return on 26.09.2012 declaring total income at ₹501,410/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of hearing on 21-02-2018. In response to this notice Shri Gautam Banerjee, the AIR of the assessee appeared and sought adjournment and case was adjourned to 26-02-2018. Shri Gautam Banerjee, the AIR of the assesse appeared and filed written submission. The relevant portion of the written submission of the assessee is extracted below:- .. ... This has reference to your notice dated 04.12.2017 in course of proceedings u/s. 263 for A.Y. 2012-13 against the above assessee. The assessee submitted Return of Income showing income of ₹ 501,410 as per normal calculation. The assessee's tax u/s 115JB was higher at ₹ 14,32,311 and this tax was paid. The assessment was reopened and income reassessed at ₹ 81,17,907 after set- off of long term capital loss of ₹ 40,31,675. This set-off of LTCL arises from transfer of share/M.F., the income of which qualify for exemption u/s. 10(38). Your objection is that the LTCG u/s. 10(38) being exempt, the corresponding L TCL cannot be allowed to be carried forward or set-off against income of succeeding years. The figures are undisputed and the only legal issue to decide is whether LTCL arising from transfer of sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appears that the nature of loss for A.Y. 2005-06 and A.Y. 2010-11 claimed as set-off in this A.Y. are not known to you since you felt that this needs to be verified. Unless after causing enquiry and after consideration of the impugned order, there is no certain finding about the set-off of loss of A.Y. 2005-06 and A.Y. 2010-11, the same cannot be covered u/s. 263 at present. It is also mentioned that the assessment order passed u/s. 147/143(3) dated 16.03.2014 is not an order which can be held to be erroneous as per Explanation 2 of S. 263. The processing of the return of income for A.Y. 2012-13 having been completed on 26.09.2012, it is submitted that the 263 proceedings is not valid due to effluxion of time and could be made only before 31.03.2015. It is submitted that the assessment order passed u/s. 147/143(3) dated 16.03.2016 for A.Y. 2012-13 is assailed in appeal before CIT(A)-4 on the ground jurisdiction u/s. 147/148 as well as of determination of assessed long term capital gains. This matter of set-off of capital loss against LTCG is associated with the assessed income and the issue being contested in appeal, cannot now be the subject matter in proceedings u/s. 263. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned ground. 5. The power of revision by the CIT u/s 263 of the Act is very wide and it is in the nature of supervisory jurisdiction. The power u/s 263 can be exercised even in cases where the issue is debatable and such power is not comparable with the power of rectification of mistake u/s 154 of the Income Tax Act. It is well settled that incorrect assumption of facts or application of law satisfies the requirement of law i.e. order being erroneous prejudicial to the interest of revenue. The order passed by the A.O. without application of mind or order showing apparent error of reasoning or the order where the A.O simply accepts where the assessee stated in his return of income and fails to make the enquiries which are called for in the facts and circumstances of the case will also call for intervention u/s 263 of the Act by the CIT/Pr.CIT. It is a trite law that the disclosure of facts by the assessee in the return of income and / or in the course of assessment proceedings cannot give immunity from revisional jurisdiction of the CIT/Pr.CIT u/s 263. In this context, it may be mentioned here that in the case of Commissioner of Income tax, Central-l Kolkata Vs Maithan Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite inquiries will satisfy the requirement of the order being erroneous and pre-judicial to the interest of the revenue within the meaning and scope of Section 263 of the Income Tax Act, 1961. The aforestated decisions postulate that when the officer is expected to make an inquiry of a particular item of income and if he does not make an inquiry as expected, that would be a ground for the Commissioner to interfere with the order passed by the Officer since such an order passed by the Officer is erroneous and prejudicial to the interests of the Revenue ( K.A. Ramaswamy Chettiar V. CIT , (1996) 220 ITR 657). 6. I have carefully considered the material available on record and found that the issues pointed out in the show cause needs verification as merely accepting submission without calling for relevant material / evidences during the course of assessment proceedings the A.O. failed to examine the above referred issue. After having considered the position of law and facts and circumstances of the instant' case, I am of the considered opinion that the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of revenue in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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