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TMI Blog2020 (10) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act dated 23.12.2016. When the PCIT issued the show cause notice dated 13.11.2018 calling upon the assessee to explain with regard to the increase in capital and also conversion of preference shares during the relevant years, the assessee gave a reply dated 02.1.2019. This has been extracted by the Tribunal in paragraph 3.2 of the impugned order. We find the explanation to be cogent and in fact, the factual matrix was appreciated by the Tribunal to hold that the PCIT could not have invoked the revisionary jurisdiction u/s 263 mainly on the ground that substantial increase in capital investment reflected by the assessee in his balance sheet as compared to the preceding year. Entire issue is factual and no substantial question of law flow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y when the Assessing Officer had passed the order without making proper enquiries and had merely accepted the return filed by the assessee ? 3. We have elaborately heard Mrs.R.Hemalatha, learned Senior Standing Counsel appearing for the appellant Revenue. In view of the limited nature of the order we propose to pass, the appeal itself is taken up for final disposal without ordering notice to the respondent. 4. The original assessee an individual died before even the order dated 03.1.2009 was passed by the Principal Commissioner of Income Tax, Chennai-1 (for brevity, the PCIT) under Section 263 of the Act. His wife the legal heir had come on record and pursued the matter by filing an appeal before the Tribunal, which was allowed by the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the PCIT had explicitly brought out in his order under Section 263 of the Act that the Assessing Officer failed to adequately verify the source for increase in capital in the finances of the assessee and that this would be sufficient to hold that the assessment order was erroneous and prejudicial to the interest of the Revenue. 8. In support of her contentions, the learned Senior Standing Counsel appearing for the appellant Revenue has placed reliance on (i) the decision of the Hon'ble Division Bench of the Calcutta High Court in the case of CIT Vs. Maithan International [reported in [2015] 56 Taxmann.com 283]; (ii) the decision of the Hon'ble Division Bench of this Court in the case of Ashok Leyland Ltd. Vs. CIT [repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies with the limited company where the assessee held shares, the Assessing Officer came to the conclusion. Thus, we find that both the issues, which were the basis for exercise of the powers under Section 263 of the Act, were, in fact, the issues, which were considered by the Assessing Officer in the limited scrutiny culminating in the order of assessment under Section 143(3) of the Act dated 23.12.2016. 12. When the PCIT issued the show cause notice dated 13.11.2018 calling upon the assessee to explain with regard to the increase in capital and also conversion of preference shares during the relevant years, the assessee gave a reply dated 02.1.2019. This has been extracted by the Tribunal in paragraph 3.2 of the impugned order. We find the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered the factual position and held that the assessment order was passed without application of mind by the Assessing Officer. In the case on hand, no such finding has been recorded by the PCIT in the order dated 03.1.2019. Therefore, this decision cannot be applied to the facts of the present case. 15. The decision of the Hon'ble Division Bench of this Court in the case of South India Shipping Corporation Ltd., was on a slightly different issue though the matter travelled to the Tribunal from an order passed under Section 263 of the Act. However, the ratio of this decision was with regard to the manner, in which, the Commissioner of Income Tax (Appeals) has to record his final conclusion. In the instant case, the assessment order is a s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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