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TMI Blog2022 (3) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... on, so submitted by the assessee with NSEL during the course of assessment proceedings and therefore, it cannot be held that proper enquiries which should have been made have not been conducted by the A.O. and the findings of the ld. PCIT in this regard are thus set-aside and the assessment order so passed by the A.O. cannot be held erroneous in so far as prejudicial to the interest of the Revenue on this account. Net results of transactions so undertaken by the assessee during the year under consideration, it is also clear that right from the stage of show-cause till passing of the impugned order, the ld. PCIT has maintained a status quo or rather a silence and has blindly gone by the initial figure so stated in the show-cause notice and no efforts have been made even to look at the reconciliation so sought to be made by the assessee. Therefore, even taking into consideration the fresh material/data received from NSEL, which represent a broad, un-reconciled raw data, the said data and the figure cannot be termed as tangible and determinative number by any stretch of imagination and in absence of any specific finding recorded by the ld. PCIT, the same cannot form the basis for h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 143(3) of the Act. 3. That the ld. CIT has erred in concluding proceedings under section 263 of the Act without proper perusal of the assessment record. 4. That the ld. CIT has erred in substituting an alternative view as against the firm view adopted by the ld. A.O. at the time of original assessment under section 143(3) of the Act. 4. Briefly, the facts of the case are that during the year under consideration, the assessee derives income from share trading and other sources and has filed her return of income on 15.09.2016 declaring total income of ₹ 5,08,000/-. Thereafter, the case of the assessee was selected for limited scrutiny under CASS and notices u/s. 143(2) and 142(1) of the Act alongwith questionnaire were issued. In response, the Ld. Counsel for the assessee filed submissions containing information/documentation as called for by the Assessing officer and after examining the same, the returned income was accepted by the Assessing officer. 5. Thereafter, the assessment records were called for and examined by the Ld. Pr. CIT and a show cause dated 09.03.2021 was issued to the assessee u/s. 263 of the Act. In the show cause notice, it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order so passed by the A.O. is erroneous and being prejudicial to the interest of the Revenue. 9. It was further held by the Ld. Pr. CIT that on perusal of the copy of account of M/s. Vikson Securities Pvt. Ltd., it is noted that the assessee has received ₹ 1,32,300/- from M/s. Vikson Securities Pvt. Ltd. on 29.04.2015 and has paid ₹ 25 lacs to M/s. Vikson Securities Pvt. Ltd. on 20.04.2015 and thereafter has received back various amounts from time to time during the course of the year. The Ld. Pr. CIT stated that the investment so made by the assessee by transferring amounts to M/s. Vikson Securities Pvt. Ltd. should have been investigated and questioned by the A.O. However, the A.O. has failed to raise any query in this regard, therefore, the order so passed is erroneous being prejudicial to the interest of the Revenue. 10. It was accordingly held by the Ld. Pr. CIT that the A.O. has neither called for relevant documents, nor examined the documents filed by the assessee, nor considered the legal provisions of the Act. It was also held by the Ld. Pr. CIT that there is failure to make proper enquiries/verification to arrive at the correct and complete facts and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the A.O. has conducted proper enquiries and examined all facts and after thorough scrutiny of the documents so filed, the returned income has been accepted. In support, reliance was placed on the Coordinate Bench's decisions in the case of M/s. Darshan Medicos Vs. CIT (2021) 62 CCH 341 (Chandigarh Trib.), in the case of CIT Vs. Pawan Kumar (2015) 62 Taxmann.com 260 and in the case of CIT Vs. Rajshyama Constructions Pvt. Ltd. (2012) 20 Taxmann.com 251. 12. It was further submitted by the ld. AR that subsequent to the finalization of assessment proceedings, there were certain developments wherein the assessee came to know that there was fraud and mis-management committed by the broker wherein the broker had fraudulently diminished her invested capital and was running a fraudulent scheme of assured returns prohibited by SEBI, pursuant to which the assessee filed complaints before various forums and Courts, and both the parties are currently drawn into protracted litigation both of civil and criminal nature and there is an underline fraud at play against the assessee which is currently sub-judice before various Forums and Courts. It was further submitted that on in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medial action u/s. 263 of the Act. It was submitted that the NSEL data has been collected behind the back of the assessee purposefully to create an action u/s. 263 of the Act and there existed no record with respect to NSEL data which has been merely placed on the file by making a requisition u/s. 133(6) of the Act by Addl. CIT. It was submitted that the evidence which was not available at the time of assessment proceedings nor was lawfully acquired, is being used as the basis for assuming jurisdiction u/s. 263 of the Act, which is clearly beyond legislative mandate, arbitrary and against the spirit of law. 13. It was further submitted that the assessee in a bona fide manner produced the records available with her and the broker has also placed on record its submission confirming the basis of declaration of income by the assessee and the assessee relied upon the broker's statement in order to compute her income and where the broker after the closure of the assessment proceedings claims that such statements are incorrect, the same cannot be mala fide on the part of the assessee and the same was properly investigated and examined by the A.O. It was submitted that invoking of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so on merits of the case where the matter has been properly examined by the Assessing officer. 15. Per contra, the Ld. CIT DR drawn our reference to the provisions of section 263 of the Act and submitted that the Ld. Pr. CIT may call for and examine the records of any proceedings under this Act and if he consider that any order passed therein by the A.O. is erroneous in so far 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 enquiries as he deems necessary, pass such an order thereon as the circumstances of the case justify including setting aside the order as has been done in the present case. It was submitted that the term 'record' has also been defined in Explanation-1 to section 263 of the Act and it has been provided that the record shall include and shall be deemed always to have included all records relating to any proceedings under this Act available at the time of examination by the Ld. Pr. CIT. It was accordingly submitted that the records of the assessee maintained with NSEL are part of the public records and when they were called for and examined by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of the Act and thereafter, it was also held by the Ld. Pr. CIT that there is failure to make proper enquiries/verification to arrive at the correct and complete facts and to apply the correct law and failure thereof makes the assessment order erroneous and prejudicial to the interest of the Revenue. We therefore find that in the context of examining a singular matter i.e., assessee's transactions in the F O Segment and resultant net profit/premium arising therefrom, there are two sets of findings by the ld. PCIT and in the first set of findings, it has been held that it is a case of lack of enquiry or no enquiry on part of the Assessing officer and in the second set of findings, it has been held that there has been failure on the part of the Assessing to make proper enquiries and verification. It can either be a case of lack of enquiry on part of the A.O. or where the enquiries have been conducted by the A.O., proper enquiries have not been conducted by the A.O. and we therefore find these two set of findings by the ld. PCIT as self-contradictory. 18. Having said that, if we examine the facts of the present case where are emerging from records, we find that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant documents nor examined the matter and applied the legal provisions of the Act and it is therefore clearly not a case of no enquiry or lack of enquiry and the findings of the ld. PCIT in this regard are set-aside and the contentions so advanced by the ld. AR are accepted. 19. Now, coming to other findings of the ld. PCIT that proper enquiries which should have been conducted by the A.O. have not been conducted and therefore, the order so passed by the A.O. is erroneous in so far as prejudicial to the interest of the Revenue. The ld. PCIT has referred to details furnished by the NSEL wherein the net premium/profit comes to ₹ 47,41,907/- and it was held that while making the assessment, the differential net premium/profit amounting to ₹ 29,79,543/- remained unverified and which has, therefore, escaped assessment in your case and therefore, the order so passed by the Assessing officer is erroneous in so far as prejudicial to the interest of the Revenue. In other words, the findings of the ld. PCIT rest solely on the information furnished by NSEL as per which apparently, there is difference in net profit/premium reported by the assessee and as per the data which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and there was nothing prima facie abnormal in terms of doubting the facts and figures or for that matter, the authenticity of any documentation so submitted which could have raised any suspicion calling for further or more extensive and deeper examination, we find that there was nothing on record which occasion any further verification or examination by the A.O. in terms of seeking and enquiring facts and figures with NSEL in respect of assessee's transactions so undertaken through the broker. The A.O. has done what all was expected from him and he has carried out necessary examination and verification as was expected from him in terms of discharge of his statutory functions and as a person of reasonable intellect and understanding, nothing more could have been expected in the facts and circumstances of the present case. Therefore, in our considered view, the A.O. was not required to call for information from NSEL nor there were any circumstances which were apparent on record which could have necessitated to verify the information, so submitted by the assessee with NSEL during the course of assessment proceedings and therefore, it cannot be held that proper enquiries which s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , though subsequently to the making of the assessment, cannot be taken into consideration by him. Moreover, in view of the clear words used in clause (c) of the Explanation to section 263(1), it has to be held that while calling for and examining the record of any proceeding under section 263(1) it is and it was open to the Commissioner not only to consider the record of that proceeding but also the record relating to that proceeding available to him at the time of examination. 23. The revisional powers conferred on the ld. PCIT u/s. 263 is therefore of wide amplitude and he can call for and examine the record of any proceeding under the Act available to him at the time of examination and his powers are not restricted to record of any proceeding under the Act as available at the time of examination by the Assessing officer. Both the material which has come on record though subsequent to making of assessment order as well as new material after making or causing to be made an enquiry which has come in his possession, the ld. PCIT would be entitled to take that material into account for the purposes of exercise of jurisdiction u/s. 263 of the Act. In the instant case, we therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lete and cannot be relied upon. It was submitted that said facts were brought to the notice of ld. PCIT during the course of revisionary proceedings, however, without rebutting the submissions so made, the proceedings u/s. 263 have been concluded. We find merit in the contentions so advanced by the ld. AR as evident from the assessee's submissions before the ld. PCIT which also find mention in the impugned order and the same read as under: Para 8. Further, vide our request submitted on e-proceedings on 13/03/2021, your office was very kind to send us consolidated data which is the basis of subject notice. We have painstakingly analyzed the whole data by converting the said data in excel format and segregating the same for relevant assesses. From our detailed scrutiny of the data pertaining to the subject assessee, we have observed that the data received is incomplete as it doesn't tally with the data received through NSEL by us. Your office has not even received financial years, profit loss statement, etc. from NSEL which were necessary to arrive at the correct income earned in the subject year. Without these statements, it is almost impossible to arrive at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PCIT has maintained a status quo or rather a silence and has blindly gone by the initial figure so stated in the show-cause notice and no efforts have been made even to look at the reconciliation so sought to be made by the assessee. Therefore, even taking into consideration the fresh material/data received from NSEL, which represent a broad, un-reconciled raw data, the said data and the figure of ₹ 47,41,907/- cannot be termed as tangible and determinative number by any stretch of imagination and in absence of any specific finding recorded by the ld. PCIT, the same cannot form the basis for holding the assessment order so passed as erroneous in so far as prejudicial to the interest of Revenue. We find that similar view has been taken by the Coordinate Delhi Bench in case of CIT Vs. Rajshyama Constructions Pvt. Ltd. (Supra) wherein the Coordinate Bench has held that in absence of specific material on record, the powers under section 263 have been wrongly exercised by the ld. CIT and only in cases where the ld. CIT is able to bring on record specific material which has not been verified by the Assessing officer, the order so passed by the Assessing officer can be held to be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have existed only if learned CIT is able to bring on record any material to show that apart from the vouchers, which were identified and stated in the assessment order, there were certain other vouchers which were unverifiable. Learned CIT has not brought any such material on record. In the absence of any such material, it is very difficult to hold that the assessment order passed by the A.O. was erroneous. What has been done by learned CIT is that he has simply cancelled the assessment order passed by the A.O. to be made afresh after giving the assessee a reasonable opportunity of hearing. Therefore, it is not a case where assessment order is based on an incorrect assumption of facts. It is not even the case of learned CIT that assessment order is based on an incorrect application of law. Thus, on both accounts, the order of A.O. cannot be said to be erroneous. The A.O., in the assessment order, has identified the vouchers which could not be substantiated by the assessee and the details of those vouchers are mentioned in the assessment order itself on the basis of which the additions have been made by the A.O. If learned CIT was of the opinion that the identification by the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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