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TMI Blog2022 (12) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 is void ab initio and without jurisdiction in as much as the re-assessment proceedings initiated vide Notice dated 28th March, 2017 issued under Section 148 of the Income Tax Act, 1961 and the resultant order dated 28th December, 2017 passed under section 143(3)/147 of the Income Tax Act, 1961 where itself initiated/passed on non-existing, unlawful ground and without authority of law. iii. That the assessment order dated 28th December, 2017 passed by the Ld. Income Tax Officer, Ward-15(1), Kolkata under section 143(3)/147 of the Income Tax Act, 1961 was neither erroneous nor prejudicial to the interest of Revenue within the meaning of section 263 of the Act and therefore Ld. Principal Commissioner of Income Tax 5 Kolkata erred in assuming jurisdiction under section 263 of the Act and thereby directing to set aside the aforesaid order dated 28th December, 2017 passed under section 143(3)/147 of the Act. iv. That the Ld. Principal Commissioner of Income Tax 5 Kolkata erred in assuming jurisdiction under section 263 of the Act and trying to substitute his own opinion to that of the Assessing Officer on the very same issue which was Examined by Assessing Officer and after all n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication of mind and that revision cannot be made on the ground of inadequate enquiries. Moreover, the ld. PCIT did not conduct any enquiry for coming to the conclusion that the order requires revision. Such lack of enquiry and non-application of mind by ld. PCIT makes the order bad in law. Besides that the ld. AO in the reassessment order dated 28.12.2017 has not made any addition passed on the order relatable to the reasons on which the revision was made and therefore, such assessment order is bad in law and consequently, the revision of such reassessment order is bad in law. The ld. DR, on the other hand, submitted that the ld. AO has not examined the matter and has completed the assessment without due enquiry and verification. Hence the order passed was erroneous and prejudicial to the interest of revenue. Therefore, he is relying on the order of ld. PCIT. 4. We have heard the rival contention and perused the material on record. We observe from the order passed by ld. PCIT that the issues proposed to be raised, were already examined by the AO. We note that the AO in the reassessment examined these issues by specifically calling the information from the assessee. The fact of hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y's explanation about the credentials of transactions which were not convincing. The transfer had no logic to support the act of layering. By these modus operandi the assessee brought back his unaccounted income in his regular books of accounts. In this situation further investigation is required as per provision of I.T Act for the benefit of revenue as the assessee brought back loss of Rs. 41,33,000/-to reduce its income. In view of the above reason recorded as per order sheet, your case has been reopened u/s 147." 5. Thereafter, the AO asked the assessee to produce relevant documents as per notice u/s 142(1) of the Act. After this exercise, the AO has not made any addition in the order passed u/s 143(3) r.w.s. 147 of the Act on 28.12.2017. The ld. PCIT proposed the revision of reassessment order dated 16.03.2020 by giving show cause notice dated 28.01.2020 following para of this notice as under: "In order to judge the merit of the order passed by the Assessing Officer, the assessment records were perused. The records available reveled that your company brought bogus loss of Rs. 41,33,000/- (difference of total buying & selling) which were not at all examined/verifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, are the same and based on the same material. The allegation in this show cause notice issued u/s 263 of the Act, is that the Assessing Officer has failed to examine and that no enquiry was conducted into the veracity of the loans by the Assessing Officer, is factually incorrect. It is well settled that inadequate enquiry cannot be a ground for exercising of revisionary power u/s 263 of the Act. It is for the Assessing Officer to determine the extent of enquiry and investigation to be done on a particular issue. From the papers on record it is clear that the Assessing Officer had conducted enquiries both with the assessee as well as with the third parties and on receipt of all the information, copies of which are placed from pages 43 to 72 of the paper book, has accepted these loans as genuine. The ld. Pr. CIT cannot substitute his opinion for that of the Assessing Officer. It is also seen that the ld. Pr. CIT has not conducted any verification or prima facie investigation on his own to come to a conclusion that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue. He also failed to notice that enquiries were in fact made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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