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TMI Blog2022 (7) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT/CIT is not justified in setting aside the order u/s. 263 of the Act. Ld PCITs stand to set aside the case back to the files of AO on count of the limitation of time is not acceptable. PCIT s action to initiating proceedings u/s 263 are not according to law and was not able to establish that the order of AO was erroneous and prejudicial to the interest of revenue, therefore order passed u/s 263 for the AY 2011-12 is not sustainable, hence quashed. Assessee stated regarding order u/s 263 by the Ld PCIT for AY 2010-11 is a copy paste of the order for the AY 2011-12 of the same assessee - We have perused the material available and observed that the order u/s 263 of the was passed for AY 2010-11 by the Ld PCIT is entirely akin to the order passed for AY 2011-12 and hence cannot be considered as a valid order, therefore not sustainable, accordingly quashed. Appeal of assessee allowed. - ITA No. 299 & 300/CTK/2019 - - - Dated:- 6-7-2022 - SHRI C. M. GARG , JM And SHRI ARUN KHODPIA , AM Assessee by : Shri B. Panda , Sr. Adv. B. R. Panda , Advocate Revenue by : Shri M. K. Gautam , CIT-DR ORDER Per Arun Khodpia , AM : These are appeals filed by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the AO while passing the assessment order: i) Irregular allowance of capital loss as Business loss. So the claim of Rs. 14,44,631/- shown as loss on sale of share and was allowed though it was a capital loss. The claim ought to have been disallowed U/s.37 of the I.T. Act. ii) Non addition of excess claim of inventory. The assessee has shown the value of land as on 31.03.2010 at Rs.85,86,400/- and purchased two pieces of land during financial year 2010-11 Rs.2,79,30,000/- so the value of land as on 31.03.2011 should be at Rs.3,65,15,400/- but it had shown at Rs.3,76,14,326/- so the excess value of land exhibited at Rs. 10,97,926/-implies the lands were purchased from undisclosed sources. 7. The Ld PCIT further observed and decided as under:- 3. A notice was issued to the assessee to show cause as to why the assessment order dated 28.12.2016 passed u/s.153C of the Act should not be revised as per the provisions of section 263 to consider the issues mentioned above. The case was fixed for hearing on 25.03.2019. On 25.03.2019, Sri Punam Pandia, director of the assessee-company filed a letter in this office and sought time of three days to submit the details. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AD therefore a show cause notice U/s.263 of the IT. Act issued to the AssesseeAppellant with following reasons:- i) Irregular allowance of capital loss as Business loss. So the claim of Rs.14,44,631/- shown as loss on sale of share and was allowed though it was a capital loss. The claim ought to have been disallowed U/s.37 of the IT.Act. ii) Non addition of excess claim of inventory. The assessee has shown the value of land as on 31.03.2010 at Rs.85,86,400/- and purchased two pieces of land during financial year 2010-11 Rs.2,79,30,000/-- so the value of land as on 31.03.2011 should be at Rs.3,65,15,400/- but it had shown at Rs.3,76,14,326/- so the excess value of land exhibited at Rs.10,97,926/- implies the lands were purchased from undisclosed sources. 4. That the appellant in pursuance to the show cause notice fixing the date for compliance on 25.03.2019 filed a time petition through its Director seeking time of three days to submit the details, but the Id. CIT did not considered the time petition because of the case is getting time barred and simple set aside the case to the AO to verification of the matter afresh after cancelling the earlier order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner. Therefore the order passed U/s.263 of the IT Act in confused and hastily is liable to be quashed and vacated. 8. That the view taken by the AO was one of the possible views and the assessment order passed by the AO could not be held to be erroneous and prejudicial. It is for the AO to decide the extent of enquiry to be made as it is his satisfaction as what is required under the law. The Pr. CIT adopted principles holding that the assessment order passed without verification and some deficiency are there for reopen of the matter U/s.263 of the LT. Act is liable to be quashed entirely as in the case of CIT -Vs- Leisure Wear Exports Pvt. Ltd. reported in 341 ITR 166 (Delhi) The power of revision is not meant to be exercised for the purpose of directing the Assessing Officer to hold another investigation without describing as to how the order of the Assessing Officer is erroneous. From this it also follows that where the assessment order has been passed by the Assessing Officer after taking into account the assessee's submissions and documents furnished by him and no material whatsoever has been brought on record by the Commissioner which showed that there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the files of AO with directions to verify and pass a fresh assessment order as per law. 11. Our considered view on this issue is that, if Pr. CIT/CIT is of the view that any enquiry is necessary in the matter, then he should either himself make such enquiry or may get such enquiry conducted. For the purpose of exercising jurisdiction u/s 263 of the Act, the conclusion that the order of the AO is erroneous and prejudicial to the interest of the revenue has to be preceded by some minimal enquiry by Pr. CIT/CIT. If the Pr. CIT/CIT is of the view that the AO did not undertake any enquiry, it becomes incumbent on the Pr. CIT/CIT to conduct such enquiry. If the Pr. CIT/CIT does not conduct such basic exercise then the Pr. CIT/CIT is not justified in setting aside the order u/s. 263 of the Act. Ld PCITs stand to set aside the case back to the files of AO on count of the limitation of time is not acceptable. 12. Further, legal position as explained in the case of CIT Vs Leisure Wear Exports Pvt. Ltd. reported in 341 ITR 166 (Delhi) it is held that: Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue - Assessment year 2001-02 - Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no mention in the assessment order about the inquiries made by the Assessing Officer about the discrepancy in stock. That was not the correct approach as was evident from the provisions of sub-section (1) of section 263. A perusal of section 263 shows that the Commissioner can exercise powers under sub-section (1) of section 263 only after examining the record of any proceedings under the Act . The expression record has also been defined in clause (b) of the Explanation so as to include all records relating to any proceedings available at the time of examination by the Commissioner. Thus, it was not only the assessment order but the entire record which had to be examined before arriving at a conclusion as to whether the Assessing Officer had examined any issue or not. The assessee had no control over the way an assessment order was drafted. The assessee on its part had produced enough material on record to show that the matter had been discussed in detail by the Assessing Officer. The least that the Tribunal could have done was to refer to the assessment record to verify the contentions of the assessee. Instead of doing that, the Tribunal had merely been swayed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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