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TMI Blog2022 (8) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... any appeal against such order of the CIT u/s.263 of the Act nor it had given any explanation as to why he did not file appeal against the order u/s.263 of the Act nor any exceptional circumstances were shown to persuade the Hon‟ble High Court to depart from normal rule that writ petition complaining against order of Commissioner would not be entertained in absence of such adequate explanation by petitioner. As in absence of any enquiry done by the ld. Pr.CIT, the order passed u/s.263 of the Act by the Pr.CIT would not survive See Orissa State Police Housing Welfare Corporation Ltd [ 2022 (4) TMI 1395 - ORISSA HIGH COURT] - Appeal of the assessee is allowed. - ITA No. 223/CTK/2019 - - - Dated:- 29-8-2022 - SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER For the Appellant : None For the Respondent : Shri M.K.Gautam, CIT-DR ORDER Per Bench : This is an appeal filed by the assessee against the order of the ld. Pr.CIT, Sambalpur, passed in PCIT/SBP/263/67/2018-19, dated 29.03.2019, for the assessment year 2009-2010. 2. None represented on behalf of the assessee even the case was called for second round of hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emium as income for the relevant assessment years. It was the submission that as the AO had not made the said addition of Rs.2,05,00,000/- in the assessment year 2009-2010 but had on the observation that there was no nexus established between the assessee and Hira Group of Companies, no addition has been made. It was the submission that a clear error in the order of AO had been noticed by the ld. Pr.CIT and the ld. Pr.CIT has rightly invoked his powers u/s.263 of the Act directing the AO to re-examine the issue. 5. During the course of hearing, in reply to a specific query by the Bench as to what happened to the consequential assessment to the order passed u/s.263 of the Act, it was submitted by the ld. CIT-DR that out of eight bogus share capital, share application money received from the bogus share applicants, it was noticed that seven of the share application money received was during the assessment year 2008-2009 and no addition thereon had been made. In regard to one share applicant, being Gupta Global Resources Pvt. Ltd., on the ground that the said company did not have the sources to make the share application, the same had been added. It was the submission that he has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Special Bench of ITAT in the case of Rajalakshmi Mills Ltd. Vs. ITO, reported in 121 ITD 343 (Chennai-SB), wherein it has been held as follows :- It is not necessary for the Commissioner to make further enquiries before canceling the assessment order of the Assessing Officer. The Commissioner can regard the order as erroneous on the ground that in the circumstances of the case the Assessing Officer should have made further inquiries before accepting the statements made by the assessee in his return. The reason is obvious. Unlike the civil court which is neutral to give a decision on the basis of evidence produced before it, an Assessing Officer is not only an adjudicator but is also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further enquiry. 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 emerges out of this context. The word erroneous‟ in that section includes cases where there has been failure to make the necessary inquiries. It is incumbent on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 263 of the Act, shows that, (i) the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner has to (a) call for the record of any proceeding under this Act. This means the initiation should be from the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. The initiation cannot come from any other point other than the persons mentioned in the provisions of Section 263 of the Act; (b) Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner has to examine the record, which he has called for. The records would include any and all documents in relation to the assessee and in respect of the assessee which are available with the revenue; (c) once Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner has initiated by calling for the records and on his examination of the records, he finds that there is an error in such records which has been passed by the AO or the TPO, as the case may be is; (d) erroneous and prejudicial to the interest of revenue. It should be both erroneous and prejudicial to the interest of reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO was erroneous and prejudicial to the interest of revenue, there has been no enquiry by him nor he has caused any enquiry to be done before he has passed the order u/s.263 of the Act. This is not a case of inadequacy of enquiry. It is a case of absence of enquiry. On this ground alone, the order passed u/s.263 of the Act by the ld. Pr.CIT is liable to be annulled and we do so. 13. The decision relied on by the ld. CIT-DR in the case of M/s Kalinga Mining Corporation Pvt. Ltd. (supra), wherein the coordinate bench of this Tribunal has relied upon the decision of the Hon‟ble Delhi High Court in the case of Gee Vee Enterprises (supra) would not apply, insofar as that was not a case where the Hon‟ble Delhi High Court has given any findings that enquiry to be made or caused to be made by the Pr.CIT. That was a case in respect of the issue as to whether the AO has made a proper enquiry or not, so also in the decision in the case of the Special Bench of the ITAT in the case of Rajalakshmi Mills Ltd. (supra). 14. It must be mentioned here that in the decision of the coordinate bench of the Tribunal in the case of M/s Kalinga Mining Corporation Pvt. Ltd., (supra), in p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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