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TMI Blog2021 (2) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... as wrongly assumed jurisdiction u/s 263 of the Act on these issues. Allegation of not conducting any enquiry regarding ESOP - We find the year under consideration is A.Y. 2005-06 and there was no provision in the Act to treat the ESOPs as perquisites in the hands of the assessee. The amendment in Section 17(2)(vi) of the Act was w.e.f. 01.04.2010 and prior to such amendment ESOPs were treated as capital receipts in the hands of the recipient and were taxable only after the sale of the shares. We find merit in the argument of assessee that the observation of the PCIT that the AO did not conduct any enquiry regarding tax on receipt arising out of ESOPs received from employer is not in accordance with law. Therefore, the PCIT, in our opinion, is not justified in assuming jurisdiction u/s 263 on the issue of non-examination of taxability of receipts of ESOPs from the employer. In the instant case, the AO after examining the facts on record and after conducting all possible enquiries had passed the order by making certain additions. Therefore, merely because the ld. PCIT does not agree with the order of the AO cannot make the order erroneous as long as the same was passed aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total ₹ 2,02,919/- 3. Subsequently, on 24.07.2013 the CIT-16, Delhi, called for a report from the AO regarding errors in assessment of the assessee and his wife Smt. Shumana Sen. An order u/s 127 of the Act was passed by the ld.CIT-16 on 27.08.2013 transferring the jurisdiction over the assessee s case from DCIT/ACIT, Circle 47(4), Delhi to DCIT/ACIT, Circle 40(1), Delhi. The DCIT, Circle 40(1) sent a report on 10th February, 2014 which was forwarded by the Addl.CIT, Range-64 to the CIT on 11th February, 2014, giving his comments as called for by the CIT. Subsequently, a report by the Addl. CIT, Range-40, Delhi, dated 31.03.2014 was forwarded to the CIT, wherein he stated that no proper enquiry was conducted by the AO in the case of the assessee for A.Y. 2005-06 and the AO has not considered the application of provisions u/s 68 or 69C of the IT Act for making assessment of undisclosed income arising out of unexplained expenditure due to foreign visits. The DCIT, Circle 40(1), in his report also stated that no proper enquiry has been made by the AO on account of the foreign visits. 4. On the basis of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) That there were contradiction between the stand taken by M/s NDTV Ltd. about nature that company on your foreign trips with family, your own stand about the same where expenditure incurred by you was the cost to the company and the stand taken by your i abroad with your other family members, was personal trip and in view of the contradictions in the stand of you and your witnesses, your stand should not have been accepted by the Assessing Officer without weighing the relative merit of version of the each of the witnesses examined in the case. 3.) That the complainant in your case was neither examined by the Assessing Officer nor was allowed to cross-examine the witnesses examined by you in support of your stand/claims and against the stand of the complainant as per facts on record and being in violation of directions under section 144A of the IT Act, 1961 given by the Addl. CIT to the concerned AO during course of such assessment proceedings and therefore in terms of CBDT instructions a applicable, the assessment framed in your case is erroneous and because of such error, has caused serious prejudice to the interest of revenue. 4.) That, statutory directions u/s 144 A o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that the same was personal trip and in view of the contradictions in the stand of you and your witnesses, your stand should not have been accepted by the Assessing Officer without weighing the relative merit of version of the each of the witnesses examined in the case. 3. The A.O. while passing the assessment order on dated 28.3.13 for AY2005-06 in your case did not follow the directions by the then Addl. CIT u/s 144A of the IT Act, was neither examined nor was allowed to cross-examine the witnesses examined by you in support of your claims and against the stand taken by the complainant though the same was specifically and statutorily directed. 4. That, since statutory directions u/s 144 A of I. T. Act, 1961 issued by the Additional CIT were not fully carried out by Assessing Officer thereby causing errors in the said assessment order and because of such errors has caused serious prejudice to the interest of the revenue, as it cannot pass the muster of appeals. 5. That besides the above errors and prejudice to revenue another aspect that has not been examined by the AO is the ESOPs. It is seen from the NDTV s letter dated 1.7.2006 and 30.6.2005 as employer of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 11F were not properly examined and no conclusive findings were arrived at by the AO in the assessment order for the A.Y. 2005-06. Therefore, amounts taxable have escaped assessment either in the hands of this assessee or if evidences point out otherwise, in the hands of any other assessee as the case may be. Therefore, to this extent the order passed by the AO u/s 147/143(3) dated 28th March, 2013 is erroneous and prejudicial to the interest of the Revenue. He, therefore, set aside the order passed by the AO u/s 147/143(3) by invoking the revisionary power u/s 263 of the Act and directed the AO to make the assessment denovo after examining the entirety of the issues considered in the revision order u/s 263 after giving due opportunity of being heard to the assessee. The relevant observation of the PCIT from para 11-13 of his order read as under:- (11) I have considered the reports of the A.O. and the Addl. Commissioner, the submissions of the assessee made in response to the notices u/s 263 of the I.T. Act, 1961, the facts of the case vis-a-vis the statutory provisions u/s 263 of the I.T. Act, the judicial views taken and rulings given on the relevant issues. On examination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complainant though the same was specifically and statutorily directed. (11)(E) Since above stated facts are fresh new arising during assessment proceedings, but A.O. did not conduct any inquiry to find out veracity of such facts, hence the issues arising out of these facts are not the subject matter of Appeal filed by Assessee for A.Y. 2005-06. (11)(F) A.O. failed to conduct proper inquiry and failed to apply proper law leading to said assessment order being erroneous as well as prejudicial to the interest of revenue, and in support, the following relevant judicial views exist for supporting necessary action u/s 263 of the IT Act, 1961 against the assessment order dated 28.03.2013 passed u/s 147/143(3) for A.Y 2005-06 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. CIT (AIL) 187 ITR 412 (4) CIT vs Eastern Medikit Ltd. (Del) 58 DTR 265; 337 ITR 56. (12) As against the above noted findings, It is observed from the written submissions made by assessee that objections on the following points, relevant to the notice u/s 263 and the issues raised therei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout demonstrating such claim. In the case of Malabar Industrial Co. Ltd. Vs CIT, the Hon ble Supreme Court held that the Commissioner has to be satisfied of twin conditions for taking revisionary action u/s 263, namely: (i) That the order A.O. sought to be revised is erroneous; and (ii) That it is prejudicial to the interests of the Revenue. The Hon ble Apex Court in the ruling has opined that an incorrect assumption of fact or an incorrect application of law, or orders passed without applying the principles of natural justice or without application of mind, will satisfy the requirement of the order being erroneous. As regards prejudice to interest of revenue, the Hon ble Court has ruled that t is of wide import and not confined to loss of tax. If due to an erroneous order of the ITO, the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of revenue. However, the Apex Court has clarified that where two views are possible, and the ITO has taken one view which the Commissioner does not agree to, the order cannot be erroneous and prejudicial to interests of revenue unless the view taken by the ITO is unsustainable in law. It is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived from employer - M/s NDTV Ltd since it is seen from the NDTV Ltd s letter dated 01.07.2006 and 30.06.2005, as employer of the assessee filed during the course of assessment proceedings in A.Y. 2005-06, the assessee was granted ESOPs vide AGM held in Sept. 2004 totalling 3,750 shares of NDTV valued at ₹ 7,50,000/- accrued in FY 2004- 05 (A.Y. 2005-06). As has been admitted by the assessee in his submission, the relevant material regarding the ESOP was on record, which has clearly been over looked by the A.O. as to whether they were taxable in the hands of the assessee in this year, thus constituting a new fact of matter which has not been examined by the AO which in itself is adequate enough to justify revision u/s 263. (12)(F) Issue regarding inspection of records:- As regards inspection of records, it is not the case of the assessee that any issue, from any part of the records, which is being used against his for review, has not been forwarded to him along with the show cause u/s 263. Neither is it the case of the assessee that the present order u/s 263 is based upon any issue, in any part of the records which are not confronted to the assessee in the notice u/s 263, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revision order u/s 263 as per the findings given in paras-ll(A) to 11(F) 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 caused to revenue as fper 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. 6. Aggrieved with such order of the PCIT, the assessee is in appeal before the Tribunal by raising the following grounds:- (1) That the order passed under section 263 of the Act by the Principal CIT-22, New Delhi is arbitrate, biased and bad in law and in facts and circumstances of the case. (2) That learned Principal C1T has grossly erred in assuming jurisdiction under section 263 of the Act which is illegal and had in law. (3) That learned Principal CIT has grossly erred in holding that the order passed by the Assessing Officer was erroneous and also prejudicial to the interest of revenue on the issues directed to be re-examined under section 263 of the Act despite the Assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the decision dated 11.10.2019 of the Delhi Bench of the Tribunal in the case of the spouse of the assessee in ITA No.3281 to 3284/Del/2015. He submitted that in the case of the assessee s spouse also, the case was reopened u/s 147/143(3) on the basis of the complaint of Shri S.K. Srivastava, CIT-OSD and further against the order u/s 147/143(3) of the Act action was taken u/s 263 by the PCIT which was set aside by the Tribunal. He submitted that when the appeal of the assessee was pending before the CIT(A) , the ld. PCIT could not have invoked the jurisdiction u/s 263 of the IT Act. He submitted that the addition of ₹ 1,12,756/- made by the AO u/s 17(2) of the Act was the subject matter of appeal before the CIT(A). Relying on various decisions, he submitted that as per Explanation 1(c) to section 263(1) of the Act wherein order referred to in the sub-section and passed by the AO had been the subject matter of any appeal filed on or before or after the first day of June, 1988, the powers of the PCIT or CIT under this sub-section was explained and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. In other words, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n i.e., A.Y. 2005-06, there was no provision in the Act to treat the ESOPs as perquisites in the hands of the assessee. He submitted that the amendment in section 17(2)(vi) of the Act was w.e.f. 01.04.2010. He submitted that prior to such amendment ESOPs were treated as capital receipts in the hands of recipient and were taxable only after the sale of the shares. Therefore, the observation of the PCIT that the AO did not conduct any enquiry regarding tax on receipt arising out of ESOPs received from employer is not in accordance with law. So far as the allegation that the AO did not follow the direction in examination of the complaint and his cross-examination by the assessee in support of his claims and against the stand taken by the complainant through the same, he submitted that these allegations are contrary and are in excess of scope in view of order of the Hon ble High Court dated 1st March, 2013 in the case of S.K. Srivastava vs. Shumana Sen and Anr. In Cont. App. (C) 1/2013 and CM No.854/2013 (Stay). He submitted that the said order enclosed with CBDT letter dated 6th March, 2013 bearing letter No. HRD/AD/882/2/2012-13/3878 forwarded to the AO vide letter dated 15th March, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l information including bank statement of the assessee, passport of the assessee and his family, information from employer have been furnished/collected in the course of assessment proceedings. Referring to the assessment order dated 28th March, 2013 passed u/s 147/143(3), he submitted that the order is neither erroneous nor prejudicial to the interest of the Revenue since it is not based on either incorrect information of law or fact or non-application of mind. There is nothing to show that the income assessed is not in accordance with the law. He submitted that the assessee during the course of assessment proceedings had given detailed explanation and the AO, on the basis of enquiries conducted by him and after examination of the reply given by the assessee had passed the order and, therefore, the said order cannot be held to be erroneous and, therefore, the provisions of section 263 cannot be applied. The ld. Counsel also relied on the following decisions:- i) CIT vs. Vikas Polymers, 341 ITR 537 (Del); ii) CIT vs. Sunbeam Auto Ltd., 332 ITR 167 (Del); iii) CIT vs. DLF Ltd., 350 ITR 555 (Del); iv) CIT vs. Max India Ltd., 295 ITR 282; v) ITO vs. DG Housing Projects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther decisions, the ld. Counsel submitted that section 263 of the Act cannot be invoked to make deeper enquiry. The ld. Counsel also relied on various other decisions placed in the synopsis and submitted that proceedings u/s 263 cannot be initiated for inadequate enquiry, but, only for lack of enquiry which is distinct from inadequate enquiry. He accordingly submitted that the order passed by the CIT u/s 263 setting aside the assessment order passed u/s 147/143(3) is liable to be set aside and the grounds raised by the assessee be allowed. 14. The ld. DR, on the other hand, strongly relied on the order of the PCIT. He submitted that the ld. PCIT, after giving valid reasons has set aside the order passed by the AO u/s 147/143(3) since the order passed by the AO was both erroneous as well as prejudicial to the interests of the Revenue. The ld. CIT has given detailed finding as to how the order passed by the AO is erroneous and prejudicial to the interest of the Revenue. Therefore, the order passed by the PCIT should be upheld and the grounds raised by the assessee should be dismissed. 15. We have considered the rival arguments made by both the sides, perused the orders of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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........... .. 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 expenditure incurred by the spouse of the assessee. The PCIT is of the firm belief that the Assessing Officer failed to conduct proper enquiry and failed to apply proper law leading to the said assessment order being erroneous as well as prejudicial to the interest of the revenue. 16. Let us now see what happened during the course of assessment proceedings. Pursuant to the Tax Evasion Petition, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 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 nondisclosure of information about expenditure incurred by the assessee in the returns of income stands made out which primafacie appears to have escaped the incidence of tax because of nondisclosure and non- inclusion in the taxable income of the assessee. The assessee in the affidavit filed before Hon'ble Delhi High Court and in her letter dated 17/10/2011 before Departmental Authorities has claimed stated that the expenditure involved on her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is 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 this the A. Y. 2004-2005 is no longer open for reopening in terms of provision U/s 149 of the Income Tax Act, 1961 but the remaining four years are capable of being reopened U/s 14n and where notice can he issued U s 148 of the Income Tax Act. 1961 to bring the income escaped from tax to tax It is therefore proposed that all these four assessment years may be re-opened together for prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 to our decision we have kept in view only the material before t)avAO on basis of which he recorded reasons and issued notice u/s 148 18. Subsequently, the reassessment proceedings were started. In the questionnaire, the assessee was required to submit the following information: A) AS Per Tax Evasion Petition filed in your case it has been alleged that you have incurred un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 emoluments, TDS and the value of perquisites in terms of section 17(2) of the Income-tax Act. during the period 1/472003 to 31/3/2008 in the case of each employee who was provided with the perquisite of annual vacation abroad for self and family. 19. Simultaneously, information u/s 133(6) of the Act was called from the following parties : a). From ACIT (Finance) o/o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpletely 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 ₹ 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 Australia in A. Y 2006-07. the cost incurred on which was ₹ 80,000/ to I Lakh as far as trip to UK is concerned and the expenditure incurred was from the salary and savings of my spouse Sh. Abhisar Sharma. For the trip to Australia, an approximate cost of ₹ 1,25,000/- to ₹ 1,35,000/- was incurred by the entire family. consisting of my spouse, my m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en H o Sh. Abhisar Sharma have incurred expenditure to the tune of ₹ 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 ₹ 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 evidence? Ans.8 The details are as under:- There was no foreign visit with family for A. Y. 2005-06. I. In April 2005. A.Y. 2006-07 A visit was made to the U.K. for tourism purpose. The expenditure incurred was approx. ₹ 80,000/- to Rs. I lac. The source of the same was my salary, wherein two tickets and 1000 do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see 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 ACIT, Circle 47(1), New Delhi who is the Assessing Officer of Shri Abhisar Sharma, husband of the assessee. Information provided by the concerned Assessing Officer reads as under: a) Details of foreign travel incurred by Abhisar Sharma and his family from FY.2003-04 to FY.2008-09, alongwith rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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- 10 days. c) In AY.2006-07 another trip was undertaken to Australia for 7- lO days. Source was stated to be foreign Travel allowance of ₹ 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. Abhisar Sharma and their daughter whose age was lyear 1 Omonths at that point of time. d) . In August 2006 relevant to AY. 2007-08 a foreign travel was undertaken to U.K and Republic of Ireland for 7 to lOdays by assessee, her husband and her daughter. Source was foreign travel allowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee 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 savings. No adverse inference in hands of the assessee is drawn. Assessed In view of the above Returned Income at ₹ 1,8Tv85/- is accepted issue necessary forms. 28. A conspectus reading of the assessment order vis a vis the issues raised by the PCIT would show that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 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 59 supplied by the assessee, we are unable to accept such a condition. In that view of the matter, the observation of the Tribunal that the Assessing Officer having made inquiries and when two views are possible, revisional powers could not be exercised, called for no interference. Since with respect to computation and assertions of other aspec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 61 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 Revenue, the CIT may pass revisional orders. If, on the other hand, the CIT is satisfied, after hearing the assessee, that the orders are not erroneous and prejudicial to the interest of the Revenue, he may choose not to exercise his power of revisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 erroneous application of legal principles . 12. From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 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 66 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 objective facts, the authority before exercising such power must have materials on record to satisfy it in that regard. If the action of the authority is challenged before the court it would be open to the courts to examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the ld. counsel for the Revenue are also misplaced and need no separate discussion. 39. Considering the facts of the case in hand, in totality, in the light of judicial decisions discussed hereinabove, suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 263 of the Act have been initiated apparently to victimize the appellant, to proceed against the guilty officials under Rules and to further frame the guidelines to deal with such abuse of powers by the senior officers, so that such incident should not reoccur. 42. In the result, all the four appeals of the assessee in ITA Nos. 3281 to 3284/DEL/2015 are allowed. 17. Since the facts of the instant case are identical to the facts of the case already decided by the Tribunal in the case of the spouse of the assessee, namely, Mrs. Shumana Sen in so far as allegation no. (a), (c) and (d) of para 15 of this order, therefore, respectfully following the decision of the Tribunal in the case of the spouse of the assessee Mrs. Shumana Sen (supra), we hold that the PCIT has wrongly assumed jurisdiction u/s 263 of the Act on these issues. 18. So far as the allegation of not conducting any enquiry regarding ESOP is concerned, we find the year under consideration is A.Y. 2005-06 and there was no provision in the Act to treat the ESOPs as perquisites in the hands of the assessee. The amendment in Section 17(2)(vi) of the Act was w.e.f. 01.04.2010 and prior to such amendment ESOPs we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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