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TMI Blog2024 (6) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim of the assessee, he was supposed to make a prima-facie opinion which may not be a concluding opinion to hold that the order of the AO in his view was erroneous so far as it was prejudicial to the interest of Revenue. The opinion of the Commissioner that the AO had not made proper enquiries or verifications should be based on his objective satisfaction and not a subjective satisfaction from the assessment order. Merely because, the assessment order in question is not a detailed order that itself, does not mean that the AO had not made enquiries in this respect. Admittedly, the AO asked the assessee to furnish the necessary details from time to time which were duly furnished by the assessee and after considering the same the AO passed the assessment order. A perusal of the revision order passed by the ld. Pr. CIT shows that the ld. Pr. CIT has not pointed out any error or discrepancy in the explanations and details furnished by the assessee and without examining such evidence and without counter questioning the assessee on the relevant points and even without considering the submission of the assessee furnished in reply to the show-cause notice, the ld. Pr. CIT, in our view, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee submitted its reply before the LD Pr. CIT on 04.01.2023, wherein, the assessee cited a factual error in the show cause notice of the LD Pr. CIT by stating that the LD Pr. CIT has only considered the short-term capital gain reported under 'Note 12: Other Income' of the Audited Financial Statement but has completely ignored the Short-Term Capital Loss of Rs 76,37,68,695/- reported under 'Note 16: Other Expenses' of the Audited Financial Statements. The assessee therein also submitted the details/calculation of net short-term capital loss of Rs 1,36,35,922/-. A copy of the reply filed by the assessee is placed on pages 68 to 72 of the paper book. The ld. Pr. CIT-1, Kolkata then issued a revised show-cause notice on 03.02.2023 requiring the assessee to submit complete details regarding long-term capital gain, short-term capital loss and dividend income by way of a questionnaire. The assessee submitted its reply wherein, the assessee submitted all the information/documents as required by the ld. Pr. CIT. Thereafter, a final show-cause notice was issued by the ld. Pr. CIT on 24.02.2023, wherein, the ld. Pr. CIT asked the assessee to again furnish complete details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38) of the IT Act, and had also shown Dividend Income of Rs. 74,60,38,466/- which was claimed as exempt u/s. 94(7) of the IT Act and short term capital loss of Rs. 76,37,68,696/-. All these issues were not examined by the Assessing Officer during the course of the assessment proceedings. In view of this, various notices were issued to the assessee vide this office's letter dated 19.12.2022, 02.01.2023, 09.01.2023 and 03.02.2023. The assessee had filed necessary details during the course of proceedings u/s. 263 of the Act. The submission of the assessee and the facts of the case have been carefully perused. From the assessment records it is observed that the long term capital gain, short term capital gain, the short term capital loss and the dividend income earned by the assessee have not been investigated and enquired upon by the A.O. There has been no application of mind and the assessment order has been passed without the necessary and required enquires. 3. The ld. Pr. CIT relying upon certain case laws held that the order passed by the Assessing Officer was erroneous and prejudicial to the interest of the revenue. He, therefore, set aside the assessment order for de novo ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing] Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he, may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. 9.2. The sum and substance of the above reproduced section 263(1) can be summarized in the following points: 1) The Commissioner may call for and examine the record of any proceeding under the Act; 2) If he considers that the order passed by the AO is (i) erroneous; and (ii) is prejudicial to the interest of Revenue; 3) He has to give an opportunity of hearing in this respect to the assessee; and 4) He has to make or cause to make such enquiry as he deems necessary; 5) He may pass such order thereon as the circumstances of the case justify including, (i) an order enhancing or, (ii) modifying the assessment or (iii) cancelling the assessment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same the AO passed the assessment order. 7. It is pertinent to mention here that a deeming fiction has been created in section 263 of the Act by the amendment made by Finance Act, 2015 w.e.f. 01.06.15, wherein, it has been mentioned that where the Commissioner is of the opinion that the AO had passed the order without making enquiries or a claim has been allowed without enquiring into the claim or that the same is not in accordance with any order or direction or instruction issued by CBDT, that shall be deemed to be erroneous in so far as it is prejudicial to the interest of Revenue. However, a perusal of the revision order passed by the ld. Pr. CIT shows that the ld. Pr. CIT has not pointed out any error or discrepancy in the explanations and details furnished by the assessee and without examining such evidence and without counter questioning the assessee on the relevant points and even without considering the submission of the assessee furnished in reply to the show-cause notice, the ld. Pr. CIT, in our view, was not justified in setting aside the order, simply stating that in his view more enquiries were needed to be carried out by the AO. The ld. Pr. CIT, taking shelter in E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e called for which ever additional documents/materials or issued summons or issued notices and collected those facts which according to Second Ld. Pr. CIT, the AO omitted to collect and then demonstrated that those actions/documents which he collected in that process gave result to a different finding of fact which will turn upside down the claim of the assessee and thus able to show that the actions/omission of AO in conducting the investigation was erroneous, which unfortunately is not the case before us. And equally bad is the bald allegation/fault that second AO has not collected total facts cannot be accepted being vague and based on conjectures and surmises and so meritless. Since the assessee company has discharged its onus as discussed supra, and still if the Second Pr. CIT had to find the order of Second AO erroneous for lack of enquiry or for not collecting the entire facts, then the Second Pr. CIT ought to have called for the additional facts which he thinks that the Second AO has not collected from the assessee or the shareholders and then explained in his impugned order as to what effect those additional documents would have made on the second assessment order/reassess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to be satisfied strictly before assumption of revisional jurisdiction. Be that as it may be, as discussed above, we find that the Second Ld. Pr. CIT without satisfying the condition precedent u/s 263 of the Act has invoked the revisional jurisdiction (second time), so all his actions are ab initio void. 9. Further, the Coordinate Mumbai Bench of the Tribunal in the case of Narayan Tatu Rane v. ITO reported in [2016] 70 taxmann.com 227 (Mum. Trib.) has held that Explanation 2(a) to section 263 of the Act does not authorise or give unfettered power and to revise each and every order on the ground that the Assessing Officer should have made more enquiries and verifications. The relevant part of the order of the Tribunal is reproduced as under: 20. Further clause (a) of Explanation states that an order shall be deemed to be erroneous, if it has been passed without making enquiries or verification, which should have been made. In our considered view, this provision shall apply, if the order has been passed without making enquiries or verification which a reasonable and prudent officer shall have carried out in such cases, which means that the opinion formed by Ld Pr. CIT cannot be t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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