9911796707
TMI Blog2019 (11) TMI 1608X X X X Extracts X X X X X X X X Extracts X X X X ..... anded the matter back to the file of the Assessing Officer for passing of the assessment order afresh. The above action of the Ld. PCIT cannot be held to be justified. PCIT has failed to pin-point as to how the assessment order was erroneous and prejudicial to the interest of Revenue without pointing out as to why the claim of the assessee of the aforesaid expenditure was not allowable and as to what further investigations were required to be carried out. Merely because the Assessing Officer has not discussed in detail is no ground to hold that the order of the Assessing Officer is erroneous and prejudicial to the interest of Revenue especially when the claim of expenditure by the assessee apparently is an allowable expenditure. - Decided in favour of assessee. - ITA No. 772/C HD /2017 - - - Dated:- 13-11-2019 - SHRI SANJAY GARG AND Ms. ANNAPURNA GUPTA, JJ. Assessee by : Shri Tej Mohan Singh, Advocate Revenue by : Shri. G.S. Phani Kishore, CIT DR Order Sanjay Garg, J. The present appeal has been preferred by the assessee against the order dated 28.08.2014 of the Pr. Commissioner of Income Tax, Chandigarh [hereinafter referred to as PCIT ] agitating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... validly initiated the proceedings u/s 263 of the Act (copies enclosed for reference): a. Assam Tea House [2012] 25 taxmann.com 93 (P H)- Relevant part of the order is extracted below: .....The Commissioner could have proceeded under section 263 of The Act if the Assessing Officer had made assessment without application of mind. The Commissioner held that as per the order sheet no record was produced while in the order a contrary statement was made. The order of the Assessing Officer did not show the verification of closing stock, purchases and transportation and other items mentioned above. These reasons were valid reasons for exercise of power under section 263 of the Act. The Tribunal held that the Assessing Officer was not required to discuss these aspects in its order and that the Assessee had explanation to the points made by the Commissioner. This approach of the Tribunal cannot be sustained. [Para 10]. .....In Malabar's case [2000] 243ITR 83 (SC), it was observed (page 87), it was observed (page 87 and 88): The phrase prejudicial to the interests of the Revenue is not an expression of art and is not defined in the Act. Understood in its ordinary meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion is to correct an order passed by the Assessing Officer which is erroneous and prejudicial to the interests of the Revenue as the Department has no remedy of appeal against the assessment order. Whether a revisional order fulfills the requirements of section 263 of the Act, depends upon facts of each case. [Para 12] d. Gee Vee Enterprises 99 ITR 375 (Delhi) - Relevant part of the order is extracted below: ... The reason is obvious. The position and function of the Income-tax Officer is very different from that of a civil court. The statements made in a pleading proved by the minimum amount of evidence may be accepted by a civil court in the absence of any rebuttal. The civil court is neutral. It simply gives decision on the basis of the pleading and evidence which comes before it. The Income- Tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of the return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. The meaning to be given to the word erroneous in section 263 eme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. 6. The sum and substance of the above reproduced section 263(1) can be summarized in the following points: 1) The Commissioner may call for and examine the record of any proceeding under the Act; 2) If he considers that the order passed by the AO is (i) erroneous; and (ii) is prejudicial to the interest of Revenue; 3) He has to give an opportunity of hearing in this respect to the assessee; and 4) He has to make or cause to make such enquiry as he deems necessary; 5) He may pass such order thereon as the circumstances of the case justify including, (i) an order enhancing or, (ii) modifying the assessment or (iii) cancelling the assessment and directing a fresh assessment. 7. In our view, as per the provisions of section 263 as enumerated above, after getting the explanation from the assessee, the Ld. CIT was supposed to examine the contention of the assessee. Before passing an order of modifying, enhancing or cancelling the assessment, he wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were required to be carried out. Merely because the Assessing Officer has not discussed in detail is no ground to hold that the order of the Assessing Officer is erroneous and prejudicial to the interest of Revenue especially when the claim of expenditure by the assessee apparently is an allowable expenditure. 9. It is pertinent to mention here that a deeming fiction has been created in section 263 of the Act by the amendment made by Finance Act, 2015 w.e.f. 01.06.15 wherein it has been mentioned that where the Commissioner is of the opinion that the AO had passed the order without making enquiries or a claim has been allowed without enquiring into the claim or that the same is not in accordance with any order or direction or instruction issued by CBDT, that shall be deemed to be erroneous in so far as its prejudicial to the interest of Revenue. The said deeming provisions, in our view, are not applicable for the assessment year under consideration. Even the Coordinate Mumbai Bench of the Tribunal in the case of Narayan Tatu Rane vs Income Tax Officer (2016) 70 taxman.com 227 (Mum) has observed as under:- Further clause (a) of Explanation states that an order shall be de ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
