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TMI Blog2023 (11) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order passed by the AO to be erroneous and prejudicial to the interest of the Revenue are to be cumulatively satisfied by the CIT alone. The use of the word `and between the two expressions amply demonstrates that the calling for and examining the record by the CIT should precede and his such examination should culminate in getting satisfied that the order passed by the AO is erroneous and prejudicial to the interest of the Revenue . If one of these conditions gets negated, that is, either he does not call for and examine the record or such examination does not lead him to satisfying the assessment order erroneous etc., the jurisdiction u/s. 263 is not activated. Revision u/s. 263 is concerned, it is the sole prerogative of the Pr. CIT, who needs to take suo motu action on calling for and examining the record of any proceedings under this Act and on the basis of such examination considering the assessment order erroneous and prejudicial to the interest of the Revenue. It is evident from the show cause notice that the ld. PCIT initiated revisionary proceedings just on the basis of the AO s report without carrying out any independent examination of the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal. 3. We have heard the rival submissions and gone through the relevant material on record. The ld. PCIT issued show cause notice dated 29-05-2018, which is reproduced as under: Sub : Show cause notice u/s. 263 A.Yrs. 2012-13 and 2013-14 reg. Please refer to the above. 02. During the course of assessment proceedings of A.Yr.2014- 15, it was observed that you had credited an amount of Rs. 405.68 crores and Rs. 38.36 crores respectively as Government Grant Capital and Government Grant Revenue under the head Other Income being an amortization of deferred income. In your statement of computation of income for the year, this amount has been deducted claiming to be capital in nature. 03. You had contended that the amount of amortization of deferred income, though credited to P L account as revenue income is actually a capital receipt not chargeable to tax. In this regard, you were asked to justify your claim along with documentary evidences. You had contended that subsidy was received by you for setting up of an industry itself and not for day-to-day operation in view of SC decision in the case of PJ Chemicals. 04. Your contention was found to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue . In last para of the show cause notice, he records that: In view of the facts noted above, the order passed by the Assessing Officer for A.Yrs. 2012-13 and 2013-14 . is erroneous and prejudicial to the interest of the revenue . Thus, it is apparent from the entire show cause notice that the initiation of revision is premised only on the report submitted by the AO requesting for the revision of the assessment order. During an earlier hearing, the ld. DR was directed to produce the said report of the AO forming part of the show cause notice. The ld. DR produced the file in original containing the AO s letter dated 22-03-2018 requesting for the revision of the assessment order and such request having been routed through the range JCIT with his own letter dated 27-03-2018. Pursuant to such letter of the AO, the ld. PCIT issued the above show cause notice on 29-05-2018. It is apparent that the entire foundation of the revision is based on the AO requesting the ld. PCIT to revise the assessment order. 5. At this juncture, it is relevant to note the mandate of section 263(1) of the Act providing that: The Commissioner may call for and examine the record of any proceeding u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of assessment proceedings rendering the assessment order amenable to revision. It goes without saying that if some lacunae is left in the assessment order, which comes to the notice of the AO, he has ample power to take corrective measures either by way of rectification u/s. 154 or revision u/s. 147. Insofar as the revision u/s. 263 is concerned, it is the sole prerogative of the Pr. CIT, who needs to take suo motu action on calling for and examining the record of any proceedings under this Act and on the basis of such examination considering the assessment order erroneous and prejudicial to the interest of the Revenue. It is evident from the show cause notice that the ld. PCIT initiated revisionary proceedings just on the basis of the AO s report without carrying out any independent examination of the record followed by independently satisfying himself that the assessment order required revision. 7. The ld. AR relied on certain orders of the Tribunal, including the order dt. 02-11-2021 passed by the Pune Tribunal in Alfa Laval Lund and AB Vs. CIT (ITA No.1287/Pun/2017), holding the initiation of revision proceedings, based only on the proposal sent by the AO fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... himself that it is a case where he ought to exercise his revisional power . Again, it is manifest that there is no bar on the AO placing certain information or material before the CIT justifying the invocation of power u/s. 263, but ultimately, it is the CIT who must apply his independent mind to such material and satisfy that the revision is warranted. What should follow from the examination of material, including that placed by the AO, is the independent satisfaction of the CIT, after due application of mind, that the assessment order was erroneous and prejudicial to the interest of the Revenue requiring revision. If such satisfaction of the CIT, which is crucial and sine qua non, is missing and the notice is based simply on the proposal sent by the AO for revision, as is the case under consideration, the revision cannot take-off. 9. In view of the foregoing discussion, we are satisfied that the ld. PCIT exercised his jurisdiction to initiate the revision proceedings in a wrongful manner, which, ergo, cannot be accorded our imprimatur. 10. Before parting with this appeal, we would like to record that this legal issue was raised by the ld. AR by means of an additional gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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