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TMI Blog2020 (8) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... verification and proper analysis which needs to be examined properly), has been examined by the assessing officer properly. Therefore, when the order of the Assessing Officer is not erroneous, section 263 cannot be invoked to direct the Assessing Officer to hold another investigation [Infosys Technology Ltd. v. JCIT [ 2005 (6) TMI 211 - ITAT BANGALORE-B] . Therefore, so far this first ground is concerned, the ld PCIT was not right in exercising the jurisdiction under section 263 of the Act. AO had failed to tax the undisclosed income as per provisions of section 115BBE - whether business receipts/business turnover is taxable under section 115BBE of the Act? - HELD THAT:- As per the intention of legislature, the burden to apply section 115BBE and section 68 to section 69D of the Act rest on revenue shoulder. That burden cannot be discharged on the basis of assumption and presumption made by the assessing officer. Having gone through the section 115BBE, as noted above, we are of the view that business activity related income may not ordinarily get placed u/s 68 to section 69D. We note that assessing officer in his assessment order has also treated the undisclosed amount in ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/Gau/2019 for assessment Year 2014-15 (in case of Shri Abdul Hamid, Tinsukia) have been taken into consideration for deciding the above appeals en masse. 3. Grievances raised by the assessee in ITA No. 46/Gau/2019, for A.Y. 2014-15 are as follows: 1. For that the order of the learned Principal Commissioner of Income-tax (PCIT) passed under section 263 of the I.T. Act, 1961 (the 'Act') is bad in law, facts and procedure. 2. For that on the facts and circumstances of the case, the Id. PCIT erred in considering that undisclosed business income of ₹ 3,65,933/- assessed by the Id. AO ought to have been treated and taxed by the Id. AO as per provisions of section 115BBE of the Act and assuming jurisdiction u/s 263 of the Act on that basis. 3. For that on the facts and circumstances of the case, the Id. PCIT has erred in arbitrarily and whimsically considering that the Net Profit estimated by the Id. AO on the undisclosed business turnover was without any verification and proper analysis and assuming jurisdiction u/s 263 of the Act on that basis. 4. For that the assumption of jurisdiction by the Id. PCIT in the instant case being without satisfaction of pre-r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis that needs to be examined properly. 7. In response, the assessee submitted a letter dated 24-04-2018 raising objection that the Assessing officer after making detailed enquiry and examination of books of account and other records took a possible view and completed the assessment. Now, since the opinion formed by the AO was a possible view, therefore, any action invoking the provisions of section 263 of the Act shall tantamount to change of opinion which is not permissible under the provisions of section 263 of the Act . 8. Having gone through the above reply of the assessee, ld PCIT held that the Assessing officer had 'made some partial application of mind' relating to point no. 3(ii) mentioned above/and regarding point no. 3(i) mentioned above, the assessment order passed on 30-12-2016 u/s 143(3) of the Act was erroneous in so far as prejudicial to the interests of the revenue. Therefore, ld PCIT restored the matter back to the file of the Assessing Officer to tax the undisclosed income of ₹ 3,95,933/- as per provisions of Section 115BBE of the Income-tax Act, 1961. 9. Aggrieved by the order of the ld. PCIT, the assessee is in appeal before us. 10. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r essential condition, which is prejudicial to the interest of Revenue, hence the Commissioner has to satisfy twin conditions that is, there must be an error in the assessment order, and it must be prejudicial to the interest of Revenue. We note that the proceedings under section 263 of the Act are quasi-judicial character. The statute requires the Commissioner of Income-Tax to make such enquiries as he deems necessary, to give the assessee an opportunity of being heard and then to pass such orders as the circumstances of the case justify. This introduces the principle of natural justice. It is open to the assessee, inter alia, to question the validity of the revision proceedings initiated by the Commissioner. It is also clear from various judicial precedents that when the order of the Assessing Officer is not erroneous, section 263 cannot be invoked to direct the Assessing Officer to hold another investigation [Infosys Technology Ltd. v. JCIT 286 ITR (AT) 211 (Bang.)] The law with regard to exercise of jurisdiction u/s.263 of the Act on the ground that the AO failed to make enquiries which he ought to have made in the given circumstances of a case is well settled. The Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Branch 1. 2195697434 BRANCH, TINSUKIA CENTRAL BANK OF INDIA TINSUKIA MAI BR. CODE : 3 2. 3230057000 CENTRAL BANK OF INDIA - 3. 3228067513 CENTRAL BANK OF INDIA - 4. 2195698018 -do- - However, it is seen from the details collected that the assessee didn't disclose the transactions reflected in the bank account no. 2195697434 maintained in the bank CENTRAL BANK OF INDIA. The assessee was asked vide this office letter dated 08/12/2016 to explain as to why the cash deposits made in the said account shall not be treated as undisclosed sale of the assessee. On being confronted the assessee made submission on 27/12/2016 stating that out of aggregate deposits of ₹ 95,33,717/- made in the said bank account A/c No. 2195697434 ₹ 91,48,326/-was his business receipt, ₹ 3,73,870/- are matu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 95,33,717). The AO also made addition on account of interest on saving bank account at ₹ 11,521/-.Therefore, the bank account A/c No. 2195697434 has been verified by the assessing officer and on being confronted, during the assessment proceedings, the assessee made submission on 27/12/2016 before the assessing officer stating that out of aggregate deposits of ₹ 95,33,717/- made in the said bank account A/c No. 2195697434, ₹ 91,48,326/-was his business receipts, and ₹ 3,73,870/- was maturity proceeds of daily deposit accounts and ₹ 11,521/- was interest income on savings account. The assessee also informed to the assessing officer that after his father's death, the assessee had started doing business and using the above said bank account in question, which was not reflected in his Return of income. Therefore, one of the grounds on which the ld PCIT had exercised jurisdiction (that the net profit of ₹ 3,65,933/- considered by the Assessing officer on the undisclosed business turnover of ₹ 91,48,326/-was without any verification and proper analysis which needs to be examined properly), has been examined by the assessing officer pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat deposits of ₹ 91,48,326/- in bank account No. 21956697434, were business receipts. The relevant para of the assessment order is reproduced below: On being confronted the assessee made submission on 27/12/2016 stating that out of aggregate deposits of ₹ 95,33,717/- made in the said bank account A/c No. 2195697434 ₹ 91,48,326/-was his business receipt, ₹ 3,73,870/- are maturity proceeds of daily deposit accounts and ₹ 11,521/- was interest Income on savings account. After his father's death, the assessee was started doing business using the above bank account in question, which was not reflected in his Return of income. 15. We note that assessing officer in his assessment order has also treated the undisclosed amount in bank account as undisclosed business receipts/turnover. We reproduce the relevant para of assessment order where assessing officer treated the undisclosed amount as undisclosed business receipts/turnover: Accordingly, the amount of ₹ 91,48,326/-, which was not accounted for gross turnover in the profit loss account in the Return of Income of the assessee, has been considered as undisclosed business receipt or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d found during the course of search. The assessee is in the business of diamond trade and such stock was part of the business affair of the company. Therefore, since income declared is in the nature of business income, the same is not taxable under any of the section referred above and accordingly section 115BBE has no application in case. At the cost of repetition we state that while making the original assessment under section 143(3) dated 30-12-2016, the assessing officer has treated undisclosed amount in bank account as undisclosed business receipts/turnover. The ld PCIT while exercising jurisdiction under section 263, vide his order dated 11-12-2018, treated undisclosed amount in bank account as undisclosed business receipts/turnover. The assessing officer while giving appeal effect of the order of ld PCIT under section 263 of the Act, vide order under section 143(3)/263 of the Act dated 28-11-2019, treated undisclosed amount as undisclosed business receipts/turnover. Since the Department itself accepting the undisclosed amount of assessee in his bank account as undisclosed business receipts/turnover, therefore, section 115BBE does not attract here and hence order passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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