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TMI Blog2022 (7) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... the revisionary powers u/s 263. In the instant case, on perusal of the assessment order, it is clear that the enquiry was made by the Assessing Officer, and accordingly, the assessment order was concluded. The shortfall of enquiry or inadequacy of enquiry cannot be termed as total lack of enquiry. Hence, the order of the assessment cannot be held to erroneous. On identical facts, the Pune Bench of the Tribunal in the case of Alfa Laval Lund AB [ 2021 (11) TMI 327 - ITAT PUNE] had held that when revisionary proceedings have been triggered by the A.O. by sending a proposal to the PCIT and then the latter passing the order u/s 263 of the I.T.Act, there is jurisdictional deficit resulting into vitiating the impugned order. Thus we hold that the PCIT is not justified in passing the impugned order u/s 263 - Decided in favour of assessee. - ITA No.466/Bang/2020 - - - Dated:- 19-7-2022 - Shri George George K, JM And Ms.Padmavathy S, AM For the Appellant : Sri.Ravi Shankar, Advocate For the Respondent : Sri.Srinivas T.Bidari, CIT-DR ORDER PER GEORGE GEORGE K, JM : This appeal at the instance of the assessee is directed against Principal Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally explained), ought to have been taxed at the rate of 60% under the provisions of section 115BBE of the I.T.Act. Further, the PCIT was also of the view that penalty u/s 271AAC of the I.T.Act is required to be levied. The assessee filed objections vide reply dated 05.03.2020. It was submitted that cash seized was declared as unaccounted business sales. It was further stated that to avoid litigation and to have peace of mind, he agreed to declare the entire amount as unaccounted business receipts. It was submitted that the A.O. had called for the details and after his satisfaction the assessment order was passed u/s 143(3) r.w.s. 153A of the I.T.Act. Therefore, it was submitted that the assessment order was not erroneous nor prejudicial to the interest of the revenue warranting interference u/s 263 of the I.T.Act. 6. The PCIT, however, rejected the contentions of the assessee and passed the impugned order u/s 263 of the I.T.Act on 08.03.2020. The PCIT after extracting the deposition of assessee recorded u/s 131 of the I.T.Act, held that the assessee himself admits that Rs.21,70,550 represented unaccounted cash of his business, hence, the same ought to be brought to tax u/s 69A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T.Act was passed, wherein PCIT held that the entire amount was required to be taxed u/s 69A r.w.s. 115BBE of the I.T.Act. The PCIT also directed the A.O. to initiate penalty u/s 271AAC of the I.T.Act. 9.1 As mentioned earlier, the cash seized was admittedly part of the sales turnover and included in the VAT return. The return filed by the assessee was accompanied by 3CB, 3CD report and Form VAT 240 as well. The A.O. accepted the explanation of assessee that cash seized was his business receipt and thereafter assessment was concluded u/s 143(3) r.w.s. 153A of the I.T.Act. Therefore, the sale proceeds being cash seized shall not be subject to the rigor of section 69A of the I.T. Act and application of section 115BBE of the I.T.Act for the rate purpose. Moreover, section 271AAC of the I.T.Act gives discretion to the A.O. to levy or not to levy penalty. The A.O. had exercised his discretion in not initiating the penalty under the said section. The Chandigarh Bench of the Tribunal in the case of Amarjeet Dhall v. CIT reported in (2014) 46 taxmann.com 168 (Chandigarh-Trib.) had held that when A.O. has discretionary power to initiate penalty proceedings and not levied the penalty, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eported in (2007) 295 ITR 282 (SC). The Hon ble Delhi High Court in the case of CIT v. Sunbeam Auto Limited reported in (2011) 332 ITR 167 (Delhi) had held that lack of inquiry or inadequate inquiry by the A.O. cannot be a reason to invoke the revisionary powers u/s 263 of the I.T.Act. The relevant finding of the Hon ble Delhi High Court reads as follows:- .. therefore one has to see from the record whether there was application of mind before allowing the expenditure in question as revenue expenditure. If there was an enquiry, even inadequate that would not by itself give occasion to the CIT to pass order u/s 263, merely because he has different opinion in the matter. It is only in cases of lack of enquiry that such a course of action would be open. (p14a 12 to 15) . In sum and substance the accounting practice of the assessee is questioned .It is clear that view taken by the A.O. was one of the possible views and therefore, the assessment order passed by the A.O. could not be held to be prejudicial to the Revenue. Thus from whatever angle the matter is to be looked into, the conclusion could be that the order of the Tribunal does not call for any interference (paras 16, 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revision in the extant case has been laid on the bedrock of receipt of the proposal from the AO. At this stage, it would be worthwhile to have a glance at sub-section (1) of section 263 of the Act, which runs as under:- The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he, may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems 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. 4. Sub-section (1) of section 263 of the Act is an enabling provision which confers jurisdiction on the CIT to revise an assessment order which he considers erroneous and prejudicial to the interests of revenue. The process of revision u/s 263 of the Act initiates only when the CIT calls for and examines the record of any proceeding under this Act and considers that any order passed by the AO is erro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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