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TMI Blog2024 (1) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) and Ld. AO duly noted the cash deposit made by the assessee in its bank accounts. After considering material on record as well as submissions filed by the assessee, AO chose to make addition on account of trading result and thought it fit not to make any addition on the issue of cash deposit. Assessment was framed on best judgment basis since the assessee failed to file the requisite details. In such a case, the assessment has been made to the best of judgment of AO and therefore, that judgment of AO could not be held to be erroneous though it may be prejudicial to revenue. Once the assessment is on best judgment basis, CIT could not substitute the judgment of AO and impose another view on him. The second pertinent fact is that the assessee has assailed the reassessment proceedings before first appellate authority which was pending for adjudication at the time of revision of the order. As decided in Smt. Renuka Philip [ 2018 (12) TMI 129 - MADRAS HIGH COURT] when larger issue was pending before CIT(A), the revisionary authority could not exercise jurisdiction u/s 263. Following this decision, similar ratio has been laid down in CIT vs. VAM Resorts and Hotels Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the arguments of Ld. AR and submitted that the issue, for which the return of income was scrutinized, was not examined by Ld. AO and therefore, the revision was justified. The Ld. CIT-DR sought distinction in the facts of cited decision of Tribunal. Having heard rival submissions and after perusal of case records, our adjudication would be as under. Assessment Proceedings 3.1 From the records, it emerges that the assessee filed return of income on 31.10.2017 declaring income of Rs. 1.05 Lacs. The return was subjected to scrutiny since it transpired that the assessee deposited cash in various bank accounts during the period of demonetization between 09.11.2016 to 30.12.2016. The cash in hand as on 08.11.2016 was Rs. 40.06 Lacs but the assessee deposited cash of Rs. 128 Lacs, Accordingly, the case was reopened and notice u/s 148 was issued on 31.03.2021. Since the assessee did not file return of income in response to notice u/s 148, the assessment was completed on best judgment basis u/s 144. The assessee also failed to furnish supporting documents as well as requisite details as called for by Ld. AO. Only partial submissions were made wherein certain discrepancies were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Ld. AO. When an assessment is opened primarily for one reason i.e., cash deposits during demonetization period, by not making any addition on this issue but meandering into other issues and making addition on that issue alone is not valid in the eyes of law. By not assessing the income for which reassessment was initiated and assessing on some other heads of income, has rendered the assessment order as erroneous and prejudicial to the interest of the revenue. Therefore, the assessment was to be revised to remedy the said error. Accordingly, the assessment was set aside denovo. The Ld. AO was directed to examine the cash deposits and also any other issues that may arise in the course of scrutiny assessment proceedings after satisfying himself in accordance with law. Aggrieved as aforesaid, the assessee is in further appeal before us. Our findings and Adjudication 5. From the stated facts, it emerges that an assessment was framed in the case of the assessee on best judgment basis u/s 144 since the assessee failed to file the requisite details as called for by Ld. AO. The assessee only filed partial details. The case was reopened to verify the issue of cash deposit dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, the Commissioner could not exercise power under Section 263 of the Act on account of the statutory bar. Therefore, on this ground also, the assumption of jurisdiction under Section 263 of the Act was wholly erroneous. 24. As noticed above, the Assessing Officer while completing the re-assessment proceedings has assigned certain reasons for coming to a conclusion that the assessee is entitled for deduction under Section 54F and not under Section 54 of the Act. This reason assigned by the Assessing Officer has been found by us to show due application of mind. As observed, we cannot expect an Assessing Officer to write a judgment. In such circumstances, the view taken by the Commissioner in his order under Section 263 of the Act has to be termed as a change of opinion, or in other words, the Assessing Officer adopted one of the two views possible and in such circumstances, it cannot be stated that the order is prejudicial to the interest of the Revenue as well as erroneous. For the purpose of exercise of jurisdiction under Section 263 of the Act, the twin tests are to be satisfied and even assuming, the re-assessment order is to be held as erroneous, it cannot be sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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