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TMI Blog2023 (10) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... to assume jurisdiction u/s 263 of the Act is highly debatable issue, and therefore wrongly assumed jurisdiction u/s 263. Assessment order cannot be alleged as erroneous and prejudicial to the interest of the Revenue by way of picking up the debatable issue. Assessee appeal allowed. - Sh. G. S. Pannu, President And Shri Chandra Mohan Garg, Judicial Member For the Assessee : Shri Ruchesh Sinha, Adv. For the Revenue : Shri Zafarul Haque Tanweer, CIT-D.R. ORDER PER CHANDRA MOHAN GARG, JM : This appeal filed by the assessee is directed against the order of the Pr. Commissioner of Income Tax (PCIT) - Rohtak dated 22.03.2022 for Assessment Year 2017-18. 2. Assessee has challenged invocation of revisionary provision of Section 263 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) with following grounds of appeal : 1. That on the facts and circumstances of the case, the Pr. CIT has erred in law in invoking the provisions of section 263 of the Income tax Act, 1961. 2. That on the facts and circumstances of the case, the Pr. CIT has erred, both on facts and in law, in forming the view that the income surrendered by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quashed. The learned Counsel submitted that the issue is squarely covered in favour of the assessee by the orders of ITAT, Delhi Benches in the cases of Balvinder Singh vs. PCIT (supra) and Yogesh Kumar vs. PCIT (supra). 4. Replying to the above, the learned CIT-DR supported the order of revisionary order and submitted that the provision of Section 115BBE of the Act is applicable to the A.Y. 2017-18 under consideration onwards. Therefore, not charging higher rate of interest u/s 115BBE of the Act by the AO has made the assessment order erroneous and prejudicial to the interest of the Revenue. Therefore, the learned PCIT rightly invoked revisionary provision of Section 263 of the Act. 5. On careful consideration of the above submissions, first of all, we note that identical issue was placed before ITAT A Bench in the case of Balvinder Singh vs. PCIT (supra). The Tribunal adjudicated the issue in favour of the assessee quashing the revisionary order u/s 263 of the Act with following observations and findings: 4. Briefly stated, the facts of the case are that the assessee filed return of income on 23.03.2018 declaring income of Rs. 1,64,10,680/ . Return was selected for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statute. In our considered opinion, this is a highly debatable issue, which cannot be subject matter of assumption of jurisdiction under section 263 of the Act. Moreover, a perusal of the assessment order clearly shows that the assessing officer has nowhere invoked the provisions of sections 68/69 of the Act to impute the tax rate of section 115BBE of the Act. 11. A perusal of section 115BBE of the Act shows that where the total income of the assessee includes any income referred to in sections 68, 69, 69A, 69B, 69C or 69D, the income tax payable shall be @ 30% on income so referred to in the said sections. Further, in terms of amended provisions of section 115BBE of the Act by Taxation Laws, Second Amendment Act 2016, it provides that where the total income of the assessee includes any income referred to in sections 68, 69, 69A, 69B, 69C, and 69D and reflected in the return of income furnished under section 139 or total income of the assessee determined by the assessing officer, any income referred to in sections 68, 69, 69A, 69B, 69C, or 69D if such income is not reflected in the return of income furnished under section 139 of the Act, income tax payable shall be @ 60% on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue of the order being erroneous prejudice has been caused to the interests of the Revenue. It has, therefore, to be considered firstly as to when an order can be said to be erroneous. We find that the expressions erroneous , erroneous assessment and erroneous judgment have been defined in Black's Law Dictionary. According to the definition, erroneous means involving error; deviating from the law . Erroneous assessment refers to an assessment that deviates from the law and is, therefore, invalid, and is a defect that is jurisdictional in its nature, and does not refer to the judgment of the Assessing Officer in fixing the amount of valuation of the property. Similarly, erroneous judgment means one rendered according to course and practice of court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal principles . 12. From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We have already held what is erroneous. It must be an order which is not in accordance with the law or which has been passed by the Income-tax Officer without making any enquiry in undue haste. We have also held as to what is prejudicial to the interests of the Revenue. An order can be said to be prejudicial to the interests of the Revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised. There must be material available on the record called for by the Commissioner to satisfy him prima facie that the aforesaid two requisites are present. If not, he has no authority to initiate proceedings for revision. Exercise of power of suo motu revision under such circumstances will amount to arbitrary exercise of power. It is well-settled that when exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on record to satisfy it in that regard. If the action of the authority is challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma Chemical Works Ltd. 309 ITR 67 has observed as under: if assessment order were to incorporate the reasons for upholding the claim made by an assessee, the result would be an epitome and not an assessment order. In this case, during the assessment proceedings for both the Assessment Years, the Assessing . A.Y. 2009-10 Officer issued a query memo to the assessee, calling upon him to justify the genuineness of the gifts. The Respondent-Assessee responded to the same by giving evidence of the communications received from his father and his sister i.e. the donors of the gifts along with the statement of their Bank accounts. On perusal, the Assessing Officer was satisfied about the creditworthiness/capacity of the donors, the source from where these funds have come and also the creditworthiness/ capacity of the donor. Once the Assessing Officer was satisfied with regard to the same, there was no further requirement on the part of the Assessing Officer to disclose his satisfaction in the Assessment Order passed thereon. Thus, this objection on the part of the Revenue cannot be accepted. 29. We find that the Hon'ble Delhi High Court in the case of CIT Vs Sunbeam Auto rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-. As per learned PCIT, the AO should have charged tax at maximum tax rate of 60% as prescribed u/s 115BBE of the Act on the amount surrendered during the survey proceedings on 17.08.2016. Undisputedly, the assessee had surrendered an amount of Rs. 30,00,000/- during the course of survey proceedings and offer it to tax as normal business income by way of inclusion in the return of income and assessee had also paid due taxes etc. thereon before filing return of income. It is also not undisputed that the AO has not made any addition either u/s 68 of the Act or Section 69 of the Act as the surrendered amount was already included by the assessee in his return of income. From the findings of learned PCIT in the impugned order, it is clear that the learned PCIT has also not specified any specific charging section under which charging section the AO should have treated the surrendered amount. It is also pertinent to mention that nothing has been stated either in the pre-amended or in the post-amended provisions of section 115BBE of the Act that where the assessee surrendered undisclosed income during search action for the relevant year, the tax rate has to be charged as per provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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