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TMI Blog2023 (11) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... ure-C. Thus both the ingredients i.e. order must be erroneous in nature; and the error must be such that it is prejudicial to the interest of Revenue are present in a given case, it is not legally permissible for a Commissioner to initiate suo motu proceeding under section 263 of the Act, the same has been upheld in case of Malabar Industrial Co. Ltd.-Vs-CIT [ 2000 (2) TMI 10 - SUPREME COURT] Assessment cannot be revised if there is no jurisdictional error in the order or if it has been passed after due application of mind or in case where PCIT has a view different from that taken by A.O. Therefore we have no hesitation in quashing the Revision order passed by the Ld. PCIT - Decided in favour of assessee. - Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : Shri S.N. Soparkar, A.R. And Shri Parin Shah, A.R. For the Revenue : Shri Kamlesh Makwana, CIT-DR ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against Revision order dated 29.03.2023 passed by the Principal Commissioner of Income Tax, Ahmedabad-1 arising out of the assessment order passed under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its books of account. Thus the assessee requested to drop the Revision proceedings. 3.1. The above reply was considered by Ld. PCIT and was not satisfied with the same since the A.O. has not adequately verify the facts and not examined the issue properly. Thereby Ld. PCIT held that the assessment order passed by the A.O. is erroneous and prejudicial to the interest of Revenue, as per Explanation 2 to Section 263 of the Act and thereby set aside the assessment to the file of the Assessing Officer with a direction to pass fresh assessment order in accordance with law by giving the assessee reasonable opportunity of being heard. 4. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal: 1. Ld. Pr. CIT Ahmedabad-1 erred in law and on facts revising a scrutiny assessment order which is neither erroneous nor prejudicial to the interest of revenue. The action of Id. Pr. CIT revising an order passed after verification of the details on record is without any justification to invoke revisional jurisdiction. 2. Ld. Pr. CIT erred in law and on facts holding order erroneous and prejudicial to the interest of revenue on the alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Projects ltd. has not offered the reimbursement of bank guarantee commission in its annual report. Therefore the claim of expenditure u/s. 37 was denied to the assessee, by revising the assessment u/s. 263 of the Act. It is seen from Page 42 of the Paper Book various queries have been raised by the Assessing Officer in his notice u/s. 142(1) dated 14.12.2020 wherein Serial No. 5 as follows: ..5. Justify the bank guarantee commission expenses of Rs. 42,10,986/-. 7.1. In response, the reply given by the assessee are as follows: .7. Since Joint venture does not have any sanctioned non fund based limit from banks, hence bank guarantee had been issued by Madhav Infra Projects Limited on request of the Joint Venture for this Road Project. Commission on these Bank Guarantees had also been paid by Madhav Infra Projects Limited, hence the same had been reimbursed by the assessee to Madhav Infra Projects Limited. All details including list of Bank Guarantees, BG number, BG Commission and all other details related to expense booked in assessment year under consideration is enclosed as per Annexure-C. 7.2. Thus the very same issue what was considered by the Ld. A.O. in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that it was a case where a view had been taken by Assessing Officer after making proper enquiry and, thus, Tribunal was justified in setting aside impugned revisional order Whether Special Leave Petition filed against impugned order was to be dismissed. Held, yes [Para 2] [In favour of assessee] (b) Commissioner of Income-tax Vis Arvind Jewellers [2002] 124 Taxman 615 (Gujarat) Section 263 of the Income-tax Act, 1961 Revision Of orders prejudicial to interests of revenue Assessment year 1981-82 - Whether provisions of section 263 cannot be invoked to correct each and every type of mistake or error committed by Assessing Officer and it is only when an order is erroneous that section will be attracted and incorrect assumption of facts or an incorrect application of law will satisfy requirement of order being erroneous Held, yes In pursuance of notices issued under sections 142(1) and 143(2), assessee produced relevant material and offered explanation ITO had raised all possible enquiries in view of a search conducted under section 132 After considering those materials and explanation, ITO came to a definite conclusion and made certain additions - However, Commissioner did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer being plausible, it was not open for Commissioner to take such order in revision Held, yes [Para 16] [In favour of assessee] (e) Decision of Gujarat High court in case of CIT Vs. Mehsana District Co-Operative Milk Producers Union Ltd. 263 ITR 645 whereby court has held as under: The provisions of section 263(1) of the Income-tax Act, 1961, cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, and it is only when the order is erroneous that the section will be attracted. The phrase prejudicial to the interests of the Revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. When two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law. The powers of the Commissioner under sub-section (1) of section 263 extend to such matters as have not been considered and decided in appeal. The revisional powers under section 263 do not extend to matters on which the appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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