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TMI Blog2024 (3) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... er to only enhance or assess the same income which was earlier assessed. Such a proposition would be against the spirit of the law. When an assessment has been set aside or de novo assessment, all the issues in the assessment are open before the AO, assessee as well also gets the right to plead, explain and furnish evidence on each of the issues. The outcome of the fresh assessment order is neither dependent nor can be based on the earlier assessment order which has been held to be erroneous and prejudicial to the interest of the revenue. If in the outcome of the fresh assessment order, the resultant assessed income is less than the earlier assessed income, the said order, by any fiction of law, cannot be termed as erroneous. In the case in hand, AO noting that in the fresh assessment proceedings, the assessed income of the assessee would be less than the earlier assessment income, sought necessary directions from the ld. PCIT-4, Kolkata in this respect and the ld. PCIT-4, Kolkata after considering this aspect has categorically directed the Assessing Officer that if after making necessary enquiries/verifications, even if the assessed income was coming out to be less than the earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Respondent : Shri Abhijit Kundu, CIT-DR ORDER PER SANJAY GARG, JUDICIAL MEMBER: The present appeal has been preferred by the assessee against the revision order dated 14.03.2019 of the Principal Commissioner of Income Tax-4, Kolkata [hereinafter referred to as PCIT ] passed u/s 263 of the Income Tax Act (hereinafter referred to as the Act ). 2. The assessee in this appeal has contested the very validity of the revision order passed by the ld. PCIT. 3. At the outset, the ld. counsel for the assessee has stated the chronological events by stating that the return for the assessment year under consideration i.e. A.Y 2012-13 was filed by the assessee on 01.10.2012 showing an income of Rs. 67,5,030/-. Thereafter, the scrutiny assessment was completed on 19.12.2014 by the ld. DCIT, Circle-10(1), Kolkata u/s 143(3) of the Act, wherein, the income of the assessee was assessed at Rs. 5,05,50,540/-. Thereafter, the ld. CIT-4 exercised his revision jurisdiction u/s 263 of the Act and passed revision order dated 13.06.2016 observing that the assessment order dated 19.12.2014 was erroneous and prejudicial to the interest of Revenue for want of proper enquiries on the part of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns and gone through the record. At the outset, the ld. counsel for the assessee has submitted that the assessment order dated 17.01.2017, pursuant to the directions given by the ld. CIT-4, Kolkata for de novo assessment, was in fact passed by the concerned Assessing Officer after taking approval from the concerned PCIT-4, Kolkata. He in this respect has referred to the letter dated 08.12.2016, the contents of the same, for the sake of ready reference, are reproduced as under: OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-10(1) : KOLKATA. 3 FLOOR, AAYAKAR BHAVAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069. No.DCIT, Cir-10(1) /Kol/Dir-263/2016./4089 Dated : 08-12-2016. To, Pr.CIT-4, Kolkata. (THROUGH PROPER CHANNEL) Sir, Subject : Seeking further directions in the case M/s Chandrani Compliments Export (P) Ltd for the AY: 2012-13 - reg. Kindly refer to the above. I would like to draw your kind attention to the fact that return declaring total income of Rs. 67,95,026/- for the AY 2012-13 was filed by the assessee on 01.10.2012 and subsequently 143(3) Assessment was completed on 19.12.2014 by making the following additions: 1. Bogus credit in the garb of share capital of Rs. 3,65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfactorily except on the issue of delay payment of employees contribution to PF and ESI. Since, the income assessed in de novo assessment proceedings carried out was going to be less than the earlier income assessed vide earlier assessment order dated 19.12.2014, therefore, the necessary directions of the ld. PCIT-4 was sought for. The PCIT, after considering the contents of the said letter dated 15.12.2016 of the DCIT, observed that since the necessary enquiries/verification in the light of directions issued u/s 263 has been properly made in the assessment order has been finalised accordingly, therefore, he directed the Assessing Officer to pass assessment order accordingly. The ld. Assessing Officer after getting approval from the ld. PCIT-4, Kolkata vide letter dated 15.12.2016 passed the impugned assessment order. The contents of the letter dated 15.12.2016 conveying the directions of the ld. PCIT-4, Kolkata, for the sake of ready reference, are reproduced as under: GOVERNMENT OF INDIA OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-10(1) : KOLKATA. 6th FLOOR, AAYAKAR BHAVAN , P-7, CHOWRINGHEE SQUARE, KOLKATA- 700 069. Ph:033-22136434, Fax:033-22136450 F. No-PCIT-4/K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed income should be enhanced or should be the same as in earlier order but should not be less than the earlier assessed income. 7.3 In this case, the earlier assessment order was set aside for de novo assessment which means that all the issues were open before the Assessing Officer. The assessee, under the circumstances, was entitled to furnish explanations and evidences on each of the issue that was open before the Assessing Officer and in relation to which the details were called upon by the Assessing Officer. There was neither any statutory power nor otherwise any other law requiring the Assessing Officer to only enhance or assess the same income which was earlier assessed. Such a proposition would be against the spirit of the law. When an assessment has been set aside or de novo assessment, all the issues in the assessment are open before the Assessing Officer, assessee as well also gets the right to plead, explain and furnish evidence on each of the issues. The outcome of the fresh assessment order is neither dependent nor can be based on the earlier assessment order which has been held to be erroneous and prejudicial to the interest of the revenue. If in the outcome of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. PCIT-4, Kolkata and under such circumstances, the Hon ble Punjab and Haryana High Court in the case of Hari Iron Trading Co. vs. CIT reported in (2003) 263 ITR 437 has, in para 11 of the said order, held as under: 2. These letters fully support the contention of the petitioner that the case was being monitored by the CIT, Rohtak, from time to time and the assessment order had been passed after a draft order along with the survey file had been forwarded to the CIT for his approval. Once the assessment order had been passed with the approval of the CIT, we are afraid that the successor CIT could not possibly say that the matter had been decided without application of mind by the A.O 7.6 Since, in the case in hand also, the impugned assessment order was passed by the Assessing Officer after getting approval of the then PCIT-4, Kolkata, therefore, merely because of successor-PCIT-4, Kolkata did not agree with his predecessor, that does give him right to exercise his revision jurisdiction which would amount to questioning the wisdom of his predecessor, who has not found any fault with the assessment order in question. Such a course of action would, in our view, is impermissible i ..... 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