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TMI Blog2022 (4) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 to 31.03.2011. We find an amount of ₹ 2 lakhs was withdrawn by Smt. Pooja Gupta from her bank account on 22.11.2020 and the cash gift was made on 23.11.2010. Under these circumstances, when the A.O. had made full enquiry, in our opinion, the same cannot be considered as lack of enquiry or lack of investigation. Further the view taken by the A.O. after considering various details furnished by the assessee during the course of assessment proceedings cannot be termed as unsustainable in law. The A.O. in the instant case has taken a plausible view. Since in the instant case the AO has conducted due enquiry and after being satisfied, accepted the returned income and passed the order under section 143(3)/147 therefore, the order cannot be called as an erroneous order. Therefore, even if the order is prejudicial to the interests of Revenue, but, the same not being erroneous, the twin conditions are not satisfied and, therefore, the Ld. PCIT is not justified in invoking the provisions of Section 263 - Decided in favour of assessee. - ITA.No.17/DDN/2021 - - - Dated:- 12-4-2022 - Shri R.K. Panda, Accountant Member And Shri Anubhav Sharma, Judicial Member For the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Hosiery is the proprietary concern of Sh. Punit Gupta, who is the younger brother of the assessee. The assessee had taken loan from Sh. Punit Gupta partly prior to FY 2008-09 and then partly in FY 2008-09. As on 01.04.2010, outstanding loan amount was ₹ 14,81,000/-, out of which, a sum of ₹ 8,51,000/- was repaid back during FY 2010-11 through Bank and the remaining balance of ₹ 6,30,000/- is to be payable by the assessee to his younger brother. The assessee filed copy of the audited balance sheet of M/s Garhwal Hosiery, of which, Sh. Punit Gupta is the proprietor wherein he has shown ₹ 8,51,000/- in his capital account which amount was repaid by the assessee to him during the year. It was explained that it was added to his capital account as prior to this Mr. Punit Gupta was having no books of account where he could show the outstanding loan to be taken from Sh. Nitin Gupta. Therefore, the amount of ₹ 8,51,000/- cannot be treated as business income of the assessee as he has not received business income, but, has repaid the amount against the amount borrowed earlier. 2.3. So far as the gift of ₹ 2 lakhs is concerned, it was submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count No.919897160006 held with Axis Bank Ltd and that the gift is supported by Gift Deed. However, it is seen that the assessee had given unsecured and interest free loan of ₹ 8,51,000/- via Axis Bank A/c No. 21641 to his wife. The AO had not enquired into the genuineness of transaction and the explanation given by the assessee vide reply dated 08.03.2021 needs further verification. 3. Aggrieved with such order of the Ld. PCIT the assessee is in appeal before the Tribunal by raising the following grounds : 1. That order dated 18.3.2021 u/s 263 of the Act by learned Principal Commissioner of Income Tax, Dehradun has been made without satisfying the statutory preconditions contained in the Act and is therefore without jurisdiction and thus, deserves to be quashed as such. 2. That since neither the initiation of proceedings u/s 147 of the Act and, nor order of assessment u/s 147/143(3) of the Act was in accordance with law, therefore the impugned order made u/s 263 of the Act is also void-ab- initio. 2.1. That since the notice u/s 148 of the Act had been issued mechanically without application of mind much less independent application of mind and wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the conclusion of the learned Commissioner of Income Tax that the case of assessce is squarely covered under clause (a) of the Explanation (2) of section 263( 1). Therefore assessment order for Assessment year 2011 -12 dated 28.12.2018 passed u/s 147 read with section 143(3) of the Income Tax Act, 1961 is accordingly cancelled, being erroneous and prejudicial to the interest of the revenue as discussed above is otherwise to factually incorrect, legally misconceived, and untenable apart from being manifestly, misconceived. Prayer : It is, therefore prayed that, impugned order dated 18.3.2021 under section 263 of the Act be held to be without jurisdiction and, therefore be quashed and appeal of the appellant be allowed. 4. Learned Counsel for the Assessee strongly challenged the order of the Ld. PCIT assuming jurisdiction under section 263 of the I.T. Act, 1961. He submitted that the A.O. in the instant case has passed the assessment order after making all possible enquiries and it is not a case of lack of enquiry or lack of investigation wherein Commissioner is empowered to exercise his revisional powers by calling for and examining the records of any proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SSESSING OFFICER HAS PASSED ORDER AFTER MAKING ALL POSSIBLE ENQUIRIES AND IS NOT A CASE OF LACK OF ENQUIRY OR LACK OF INVESTIGATION WHEREIN COMMISSIONER IS EMPOWERED TO EXERCISE HIS REVISIONAL POWERS BY CALLING FOR AND EXAMINING THE RECORDS OF ANY PROCEEDINGS UNDER THE ACT AND PASSING ORDERS THEREON 341ITR 537 (Del) CIT v. Vikas Polymers 332 ITR 16 (Del) CIT v. Sunbeam Auto Ltd. 343 ITR 329 (Del) ITO v. D.G. Housing Projects Ltd. 2 THAT WHERE TWO VIEWS ARE POSSIBLE AND THE LEARNED ASSESSING OFFICER HAS TAKEN A VIEW WITH WHICH THE LEARNED PR. CIT DOES NOT AGREE, THE SAID ORDER CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE LEARNED ASSESSING OFFICER IS UNSUSTAINABLE IN LAW 350 ITR 555 (Del) CIT v. DLF Ltd. ITA No. 2519/D/2017 dated 18.4.2018 Garg Brothers (P) Ltd. v. DCIT 437 ITR 285 (Del) Pr. CIT v. Brahma Centre Development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 (P H) CIT vs. Sohana Woolen Mills ITA No. 690/Chd/2010 A.Y. 2005-06 dated 9.3.2012 Sh. Jaswinder Singh vs. CIT ITA No. 367/Chd/2012 A.Y. 2007-08 dated 7.3.2013 Aarti International vs. CIT 384 ITR 147 (Del) CIT vs. G G Pharma India Ltd ITA no. 7785/2015 (Del) dated 13.10.2015 Pr. CIT vs. Rakam Money Matters (P) Ltd 7 THAT SECTION 263 OF THE ACT CANNOT BE INVOKED TO MAKE DEEPER ENQUIRY: 341 ITR 166 (Del) CIT v. Leisure Wear Exports Ltd. 357 ITR 388 (Del) DIT v. Jyoti Foundation 332 ITR 167 (Del) CIT v. Sunbeam Auto Ltd. 341 ITR 537 (Del) CIT v. Vikas Polymers ITA No. 7265/D/2017 dated 27.1.2020 M/s Klaxon Trading (P) Ltd. vs. PCIT ITA No. 1781/D/2016 dated 24.4.2019 Sanjeev Singh vs. PCIT 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Ltd vs Pr CIT. ITA No. 3498/ Mum/2017 dated 02.01.2018, Shri Anil L. Todarwal. ITA No. 1007/D/2019 dated 25.9.2019 Rekha Gupta v. Pr. CIT 10. EXPLANATION 2 TO SECTION 263 INSERTED W.E.F. 01.06.2015 OPERATES PROSPECTIVELY AND AS SUCH SHALL NOT APPLY IN RESPECT OF ORDERS FOR ASSESSMENT YEAR 2009-10 ITA No. 3125/Mum/2017 dated 19.01.2018 M/s Indus Best Hospitality Realtors Pvt Ltd vs Pr CIT 86 taxmann.com 128 (Mum-Trib.) Metacaps Engineering and Mahendra Construction Co. (J.V.) vs. CIT ITA No. 3469/M/2010 dated 6.11.2015 A.V. Industries vs. ACIT ITA No. 3259/M/2017 dated 6.10.2017 Reliance Money Infrastructure Ltd. v PCIT 70 taxmann.com 227 (Mum) Narayan Tatu Rane v. ITO ITA No. 3498/ Mum/2017 dated 02.01.2018, Shri Anil L. Todarwal. 11 THAT NOTICE ISSUED BY THE LEAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1990) 1 SCC 193 Sushil Kumar Mehta v. Gobind Ram Bohra (2015) 3 SCC 712. Indian Bank v. Manilal Govindji Khona AIR 1975 SC 2065 Superintendent of Taxes v. Onkarmal Nathmal Trust AIR 1974 SC 2089 Dasa Muni Reddy v. Appa Rao (2004) 8 SCC 706 Balwant N. Viswamitra and Others v. Yadav Sadashiv Mul (dead) through IRS and Others 284 ITR 80 (SC) CIT vs. Varas International (P) Ltd. 424 ITR 1 (SC) Basir Ahmed Sisodia v. ITO 341 ITR 240 (Del) CIT v. Software Consultants ITA No. 466/2017 dated 2.5.2017. Pr. CIT v. Kaizen Products (P Ltd. presently known as Aas Research Solutions (P) Ltd. Tax Appeal No. 8/2017 dated 17.4.2015 M/s Mavany Brothers v. CIT 276 ITR 154 CIT v. Kalyan Solvent Extraction Ltd. 238 ITR 694 Keshav Narayan Banerjee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 Assessment Year 2013-14 dated 6.9.2019 Shri Ravindra Khemka vs. DCIT. 13 THAT INITIATION OF PROCEEDINGS IS BASED ON NON APPLICATION OF MIND MUCH LESS INDEPENDENT APPLICATION OF MIND: 384 ITR 147 (Del) CIT v G G Pharma India Ltd. 393 ITR 157 (Del) Amsa India (P) Ltd. v. CIT 395 ITR 677 (Del) Pr. CIT v. Meenakshi Overseas (P) Ltd. v. ITO 395 ITR 255 (Del) Rajiv Agarwal vs. ACIT 396 ITR 5 (Del) Pr. CIT v. RMG Plyvinyl (I) Ltd. 398 ITR 198 (Del) Sabh Infrastructure Ltd. v. ACIT W.P. (C) 7601/2017 dated 29.8.2017 (Del) R.P. Foam Home (P) Ltd. v. ITO 372 ITR 762 (Bom) CIT v. M/s Jet Speed Audio (P) Ltd. 93 taxmahn.com 153 (Bom) PCIT vs. Shodiman Investments (P) Ltd. ITA No. 1372/D/2015 dated 28.10.2015 Unique Metal Industries v. IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inally completed by the A.O. under section 143(3) of the Act accepting the returned income of ₹ 8,39,850/- wherein the A.O. had examined the copy of the bank statements, cash flow statement, source of cash deposits and supporting evidence etc. We find the Ld. PCIT observing that the account of M/s. Garhwal Hosiery, Rishikesh in the books of the assessee was squared-up at the end of the relevant assessment year whereas the confirmation of accounts from the books of M/s. Garhwal Hosiery reveals that there was a closing debit balance of ₹ 8,51,000/- at the end of the previous year to the assessee s credit and the A.O. has not examined the same properly and further considering the fact that assessee has not filed the requisite documents to substantiate the gift of ₹ 2 lakhs received from his wife Smt. Pooja Gupta issued notice under section 263 of the Act. Rejecting the various explanations given by the assessee, the Ld. PCIT cancelled the assessment passed under section 147/143(3) of the I.T. Act, 1961 on the ground that the same is erroneous as well as prejudicial to the interests of revenue. It is the submission of the Learned Counsel for the Assessee that the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns namely (1) the order is erroneous and (2) order is prejudicial to the interests of revenue must be satisfied. Absence of any one of the above does not empower the Ld. PCIT to assume jurisdiction under section 263 of the Act. 6.3. We find the Hon ble Delhi High Court in the case of CIT vs., Vikas Polymers reported in 342 ITR 537 (Del.) held as under : 13. It is also trite that there is a fine though subtle distinction between lack of inquiry and inadequate inquiry . It is only in cases of lack of inquiry that the Commissioner is empowered to exercise his revisional powers by calling for and examining the records of any proceedings under the Act and passing orders thereon. In Gabriel India Ltd. (supra), it was expressly observed:- The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Act is to levy and collect tax in accordance with the provisions^! the Act and this task is entrusted to the revenue. If due to an erroneous order of the Income Tax Officer, the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the revenue. The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the assessing officer. Every loss of revenue as a consequence of an order of assessing officer cannot be treated as prejudicial to the interests of the revenue, for example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income 'Fax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the Income Tax Officer is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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