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TMI Blog2023 (5) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 17.03.2022 and pertains to assessment year 2017-18. 2. The assessee has raised the following grounds of appeal: "1. The Order U/s.263 dated 17.03.2022 of the CIT-3, Chennai in ITBA/REV/F/REVS/2021-22/1040929827{1) setting aside the assessment order passed u/s 143(3) for the limited purpose is contrary to facts and opposed to law and untenable. 2. The Learned CIT-3, Chennai did not have jurisdiction to pass the order U/s263 against the order u/s 143(3), as the issue related to increase in Capital, Deposits of cash and the claim of bad debts are examined in detail by the Assessment proceedings by the Ld AO and cannot be brought within the jurisdiction of Sec 263 for revision. 3. The order U/s 263 is bad in law, as the Learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of section 115JB of the Act. The assessment has been completed u/s. 143(3) of the Act, on 30.12.2019 and accepted income declared by the assessee in the return of income filed for the relevant assessment year. 4. The case has been, subsequently taken up for revision proceedings by the PCIT, Chennai-3 and show cause notice u/s. 263 of the Act, dated 21.02.2022 has been issued and served on the assessee. In the said show cause notice, the PCIT has taken up three issues for revision proceedings and opined that the assessment order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, on the issue of non-consideration of increase in share premium to the extent of Rs. 1,00,82, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidering relevant submissions of the assessee and also taken note of relevant facts opined that the assessment order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, because the Assessing Officer failed to verify increase in share premium in light of provisions of section 56(2)(vii) of the Act. The Assessing Officer had also failed to verify source for cash deposits made during demonetization period and the explanation of the assessee that, in the business of micro finances, source for cash deposits is out of receipts from borrowers is not satisfactory. The Assessing Officer, has further failed to examine the claim of the provision for bad and doubtful debts in light of provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. CIT-DR, supporting the order of the PCIT submitted that the Assessing Officer admits that the assessee has furnished incomplete details. Further, the Assessing Officer issued notice u/s. 142(1) of the Act, dated 26.12.2019 and assessee has not filed any details which is evident from the findings recorded in the assessment year. Although, no reply was received from the assessee, the AO has completed assessment on 30.12.2011 and accepted income declared by the assessee, without following SOP issued by CBDT for verification of cash deposits made during demonetization period and also failed to examine historical cash transactions of the assessee. The PCIT, after considering relevant facts has rightly invoked their jurisdiction and set asi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue. In order to assume jurisdiction u/s. 263 of the Act, the PCIT must satisfy that the assessment order passed by the Assessing Officer caused prejudice to the interest of the revenue. In other words, in order to invoke jurisdiction u/s. 263 of the Act, twin conditions embedded therein must be satisfied. The first and foremost condition is assessment order passed by the Assessing Officer must be erroneous and secondly it should be prejudicial to the interest of the revenue. In light of above legal position, if you examine assessment order passed by the Assessing Officer u/s. 143(3) dated 30.12.2019, we are of the considered opinion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther noted that in response to notice dated 26.12.2019, the assessee has not furnished any details called for. From the above observations of the Assessing Officer, it is very clear that although the assessee did not furnished relevant details called for by the Assessing Officer with reference to increase in share premium, cash deposit during demonetization period and provision for bad and doubtful debts, but the Assessing Officer has completed the assessment on the basis of available information on record and accepted income declared by the assessee for the relevant assessment year. In our considered view, even though the assessee has not furnished any details with regard to three issues taken up by the PCIT for revision proceedings, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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