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TMI Blog2023 (7) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 263 is not permissible merely because PCIT may entertain a different view on the issue. Case of the assessee was selected for scrutiny for specific purpose for verification of refund claim and income from house property and, therefore, there cannot be any presumption of lack of enquiry more particularly when the detailed questionnaire was issued by the AO during the assessment proceedings and in this regard the assessee had also furnished all the details alongwith decision of Chennai Properties Investments Ltd. [ 2015 (5) TMI 46 - SUPREME COURT ] Therefore, it cannot be presumed that there was lack of enquiry on the part of the AO. Assessment in the present case of the assessee firm for the year under consideration was carried out in the faceless manner by NFAC. It is a fact that any faceless assessment is carried out through a teamwork of assessment unit, technical unit, review unit, verification unit etc. Since different units are headed by Principal Commissioner of Income Tax, therefore, in a faceless regime, normally there cannot be a case of prejudice of lack of enquiry for the reason that there is application of mind by multiple officers of Department and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... document also shows that the said property has been leased to Vibrant Academy (India) Pvt. Ltd. on similar terms and conditions as per any other property the income from which income is chargeable to tax as rental income. Thus the income from property under reference is in the nature of rental income and not business income. 11. The assessee has not submitted release agreement signed with Patanjali IAS Classes Pvt. Ltd. 12 Thus the assessee has shown income from the property under reference as income from business profession and charge the same to tax under the presumptive tax scheme outlined in section 44AD of the Act instead of rental income. The income of the assessee is not covered by the Circular No.16/2017 dated 25.04.2017. Therefore, the rental income of the assessee from aforesaid concems was required to be taxed under the head Income from House Property but the AO failed to do so. 13 As discussed above, the AO failed to apply his mind and failed to invoke the applicable provisions of law. This in turn has resulted in passing of an erroneous order by the AO in the case due to nonapplication of mind to relevant material and an incorrect assumption of facts which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rically provided for carrying on the business of leasing, managing, and maintaining the property. 1.4. During the course of assessment proceedings, a detailed questionnaire was issued by Id. AO vide notice u/s 142(1) dated 20.11.2020 [PB 5-6] seeking pinpointed queries about the nature of business activities as well as verification of such receipts. The same was done, obviously, to verify the issue for which the case was selected for scrutiny. 1.5. The detailed reply to the said notice was furnished by the assessee firm vide its letter dated 06.12.2020 [PB 7-10]. The nature of the business was explained, partnership deed was submitted (PB 11-18], and complete explanation was rendered regarding income falling under the head Income from business and profession . 1.6. Reference was also drawn to CBDT Circular No. 16/2017 dated 25.04.2017 and also the fact of department having accepted the judgement in the case of CIT vs. Information Technology Park Ltd [2014] 47 taxmann.com 239 (Karnataka) wherein, instructions were given to lower authorities, that the business of lease rent received from letting out the properties along with other amenities was chargeable to tax under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Case Laws Assessment was completed by AO on the basis of exhaustive enquiries and detailed submissions filed by the assessee firm and even otherwise Explanation 2 to Section 263, inserted vide Finance Act, 2015, cannot override the basic requirements of sub-section (1) of Section 263 1. Torrent Pharmaceuticals Ltd. [2018) 173 ITD 130 (Ahd.- Trib) 2. Eveready Industries India Ltd.[2020] 181 ITD 528 (Kolkata Trib) 3. M/s. Smira Pune Food Pvt. Ltd(ITA No.3205/DEL/2017, ITAT Delhi Bench. 4. Shri Narayan Tatu Rane, ITA No2690/Mum/2016, ITAT Mumbai Bench Case was selected for scrutiny for specific purpose for verification of refund claim and income from house property and therefore, there cannot be any presumption of lack of enquiry Smt. Lala Phulwani ITA No246/JP/2020 Where AO has exercise the quasi judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be considered erroneous simply because the PCIT does not feel satisfied with the conclusion. Provisions of Section 263 nowhere allows to challenge th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v CIT (2003) 263 ITR 101 (Ker) 6. CIT v Arvind Jewellers (2003) 259 ITR 502 (Guj) 7. CIT v Hastings Properties (2002) 253 ITR 124 (Cal) 8. CIT v Goal (JP) (HUF) (2001) 247 ITR 555 (Cal) 1.17 From the facts on record (PB 22-27), it is crystal that the order was passed by AO after full enquiries and therefore, the case is not falling within clause (a) and (b) of Explanation 2 to Section 263. In view of the above factual and legal position, ld. PCIT has grossly erred in assuming jurisdiction u/s 263. Thus, the entire order by ld.PCIT deserves to be quashed. 2.3 On the other hand, the ld. DR supported the order of the ld. PCIT and also filed the submission alongwith case laws in which main thrust of the case law was on the decision of Hon ble Madras High Court dated 11-11-2014 in the case of Keyaram Hotels (P) Ltd. vs DCIT, Circle-II(4), Chennai, 373 ITR 494 and also the decision of Hon ble Supreme Court in the case of Keyaram Hotels (P) Ltd. vs DCIT, Circle-II(4), Chennai [2-15] 63 taxmann.com 301(SC). 2.4 We have heard both the parties and perused the materials available on record. The Bench noted that Scope of revision jurisdiction under section 263 is very sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed the SLP in the following words: The Special Leave Petitions are dismissed It is pertinent to mention that mere dismissal of SLP without commenting on the correctness or otherwise of the order from which leave to appeal is sought what the court means is that it does not consider it to be a fit case for exercise of its jurisdiction under Article 136 of the Constitution. Therefore, to argue that the order of the Hon ble Madras High Court has been upheld by the Hon ble Supreme Court is wrong. Reliance is placed on the following judicial pronouncements: 1. V.M. Salgaocar Bros. (P) Ltd. and ors. v. CIT [2000] 160 CTR (SC) 225. 10. Different considerations apply when a special leave petition under article 136 of the Constitution is simply dismissed by saying 'dismissed' and an appeal provided under article 133 is dismissed also with the words 'the appeal is dismissed'. In the former case it has been laid by this court that when special leave petition is dismissed this court does not comment on the correctness or otherwise of the order from which leave to appeal is sought. But what the court means is that it does not consider it to be a fit case for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Supreme Court. It has been further held that the effect of a non-speaking order of dismissal of a Special Leave Petition without anything more indicating the grounds or reasons of its dismissal must, by necessary implication, be taken to be that the Supreme Court had decided only that it was not a fit case where Special Leave Petition should be granted. In Union of India v. All India Services Pensioners Association. this Court has given reasons, for dismissing the Special Leave Petition. When such reasons are given, the decision becomes one which attracts Article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. It, therefore, follows that when no reason is given, but a Special Leave Petition is dismissed simliciter, it cannot be said that there has been a declaration of law by this Court under Article 141 of the Constitution. Thus the AO, after adequate enquiry, has taken a judicious view. Revision under section 263 is not permissible merely because ld. PCIT may entertain a different view on the issue. The stand adopted by ld. AO is one which is plausible supported by CB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in placing a restrictive interpretation to CBDT Circular No. 16/2017 dated 25-04-2017 wherein the ld. PCIT has missed the principal enumerated in the said circular. The said circular emphasizes that lease rent received by the assessee from letting out the building alongwith other amenities in a Software Technology Park would be chargeable to tax under the head Income from House Property . Therefore, in this way, every case of letting out buildings alongwith other amenities would automatically fall in the income from business and it will not be merely restricted to Software Technology Park only as has been wrongly understood by ld. PCIT. It is important to mention here that the AO after detailed enquiries and verification on completed the assessment u/s 143(3) dated 15-02-2021 at the return income of Rs. 6,68,250/-. However, the assessment order was revised by the ld. PCIT by placing restrictive interpretation to CBDT Circular No. 16/17 dated 25-04-2017 by holding that the said circular is only applicable in the case of Software Technology Park. We also noticed that during the course of proceedings u/s 263 of the Act before ld PCIT, the decision of Hon ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at where the AO has exercised the quasi judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be considered erroneous simply because the ld. PCIT does not feel satisfied with the conclusion. In this regard, we take into consideration the decision of Hon ble Rajasthan High Court in the case of CIT vs Ganpat Ram Vishnoi, 296 ITR 292. Even otherwise, provisions of Section nowhere allow to challenge the judicial wisdom of the AO or to replace the wisdom in the guise of revision unless the view taken by the AO is not at all sustainable in law. We are of the view that extent of enquiry cannot be stretched to any level by forcing the AO to go through the assessment process again and again. We have also gone through the decisions of the Coordinate Bench in the cases Annu Agrotech Private Ltd. (ITA No. 9/JP/2021), apropos assumption of jurisdiction u/s 263 by the ld. PCIT laid down the following ratio:- 1.14 (i). Every loss of Revenue as a consequence of the order of the AO cannot be treated as prejudicial to the interest of the Revenue. If the AO has adopted one of the two or more courses permissible in law and it has resulted in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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