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TMI Blog2024 (7) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... discernible from the record nor any material has been filed before us in the course of hearing of the appeal, which would reveal that the assessee's claim for deduction u/s. 80P(2)(d) of the Act was raised as regards the interest income earned on its deposits lying with a co-operative bank/banks, therefore, to the said extent, we concur with the CIT that the A.O without carrying out any verification on the aforesaid material aspect had summarily accepted the claim of the assessee society for deduction u/s. 80P(2)(d) of the interest income (restricted in the computation of income i.e. the net taxable income disclosed in the return of income for the subject year). Accordingly, in terms of our aforesaid observations the order of the Pr. CIT to the said limited extent is upheld. Whether AO has after application of mind arrived at plausible view on the issue ? - Nothing is discernible therefrom which would reveal that the seed money of the assessee was lying in the form of deposits with a co-operative bank, which thus, would have entitled it to claim deduction u/s. 80P(2)(d) of the Act. Also, a perusal of the notices issued by the A.O u/s. 142(1) of the Act does not reveal that he h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee society before us. AR's contention that the Pr. CIT had grossly erred in law and facts of the case by passing an order u/s. 263 of the Act without calling for and examining the records of the assessee society - We are of a firm conviction that pursuant to the specific reference of examination of the income tax records of the assessee society by the Pr. CIT in the SCN dated 11.03.2021, and also, similar reference of perusal of the assessment records, financial statements etc. in the body of his order reveals beyond doubt that the case records of the assessee society were called for and examined prior to assumption of jurisdiction by the Pr. CIT u/s. 263 of the Act. In our considered view once the Pr. CIT in the SCN, dated 11.03.2021 had observed that he had examined the records, then it cannot be presumed on the mere say of the assessee that he had without examining the assessment records and application of mind to the same had assumed jurisdiction and issued show cause notice to the assessee u/s. 263 of the Act. Non independent application of mind by CIT - Pr. CIT after receiving the proposal from the ACIT-1(1), Raipur had duly applied his mind to the records before him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of powers vested with him under the said statutory provision. As nothing is provided in Section 263 of the Act, which jeopardizes the exercise of revisional jurisdiction by the Pr. CIT on the ground that a similar mistake in the preceding year had not been set-right and was allowed to perpetuate, therefore, we find no substance in the Ld. AR's contention who based on the same had tried to circumscribe the scope of jurisdiction of the Pr. CIT u/s. 263 of the Act. Also, we cannot loose sight of the fact that as every assessment year is an independent year and the principle of res-judicata is not applicable to taxing statutes, therefore, on the said count also the aforesaid contention of the Ld. AR does not merit acceptance. PCIT has revised the order w/o making or causing to be made any inquiry - We are unable to fathom that now when the assessee society on the one hand had neither provided the requisite details substantiating the genuineness of its claim of deduction and expenditure before the A.O nor in the course of the revisional proceedings before the Pr. CIT, then, what inquiry by the revisional authority in absence of the said complete details was expected. CIT in our vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cas For the Respondent : Shri Debashis Lahiri, CIT-DR ORDER PER RAVISH SOOD, JM: 1. The captioned appeals filed by the assessee, a co-operative society engaged in trading and marketing of minor forest produce, are directed against the orders passed u/s. 263 of the Income Tax Act, 1961 (for short 'the Act'), dated 30.03.2021 29.03.2023 by the Pr. Commissioner of Income-Tax, Raipur-1 (for short Pr. CIT ), which in turn arises from the respective orders passed by the A.O under Sec.143(3) of the Income-tax Act, 1961 (in short the Act ) dated 20.12.2017, 28.12.2018, 23.12.2019 and 27.02.2021 for the assessment years 2015-16, 2016-17, 2017-18 and 2018-19, respectively. As the issues involved in the captioned appeals are inextricably interlinked and interwoven, therefore, the same are being taken up and disposed off by way of a consolidated order. 2. We shall first take up the appeal filed by the assessee society in ITA No.48/RPR/2021 for assessment year 2016-17 and the said order shall mutatis-mutandis apply to the connected issues involved in the remaining appeals. The assessee society has assailed the impugned order passed by the Pr. CIT-1, Raipur u/s. 263 of the Act dated 30. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and marketing of minor forest produce had filed its original return of income for A.Y.2016-17 on 17.10.2016 declaring its income at Rs. Nil. Subsequently, the case of the assessee society was selected for scrutiny assessment u/s. 143(2) of the Act. 4. Original assessment was, thereafter, framed by the A.O u/s. 143(3) of the Act, dated 28.12.2018, wherein the returned income of the assessee society was accepted as such. 5. The Pr. CIT-1, Raipur after culmination of the assessment proceedings called for the assessment record. The Pr. CIT after perusing the assessment record was of a firm conviction that the assessment order passed by the A.O u/s. 143(3), dated 28.12.2018 was erroneous in so far it was prejudicial to the interest of the revenue on multiple issues, which for the sake of convenience are culled out as under: (i) The Pr. CIT observed that a perusal of the record of the assessee society for the subject year revealed that it had earned interest income as under: Interest earned on FDR Rs. 35,89,32,299/- Interest earned on Savings Account Rs. 1,23,00,968/- Interest earned on record from other sources Rs. 65,370/- Interest earned on FFD A/c. Rs. 4,39,52,970/- Interest earned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -17, which reads as under: Similarly, the debit in the Profit Loss account under the head payable to society consisting of Incentive wages of Rs. 1,34,33,10,169/-, to sale purchase processing of Non-nationalized MFP of Rs. 25,18,70,657/-, to revolving fund of Rs. 8,39,56,885/- as discussed in Para 2.2 has also not been enquired further during the assessment proceedings. Hence, this amount needs further verification. (iii) The Pr. CIT on a perusal of the balance sheet of the assessee society, observed that the assessee society was having FDRs with certain banks/cooperative banks. It was observed by him that though the assessee society had claimed deduction of the interest on seed capital u/s. 80P(2)(d) of the Act but had not included the interest income accrued on the balance FDRs in its computation of income for the subject year. Accordingly, the Pr. CIT was of the view that though the interest receipts aggregating to Rs. 2,43,35,41,000/- received by the assessee society from various banks would have formed part of its total income but no details regarding the said issue were called for by the A.O while framing the assessment; AND (iv) The income of Rs. 2,43,35,41,000/- and expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above constraints, but with a view to cooperate with the tax administration we are submitting our reply. We appreciate that amidst the Pandemic Covid 19 the tax administration has been working for nation building and in spite of all constraints, has been proactive in its endeavor. 1. Background of Assessee Federation: 1. Origin and object: In the state of Chhattisgarh around 44% of the area is covered by dense forest. In the forest area there are many forest produce gets grown which are collected by the tribal and villagers residing in such area. It is estimated that approximately fourteen lakhs families are getting their livelihood from collection of the forest produce which are grown in the forest area of Chhattisgarh. These persons do not have management bandwidth to get proper value of forest produce collected by them and in order to get them the monetary benefit of the forest produce collected by them; the State Government initiated a structure of co-operative movement so that entire benefit of the forest produce is passed on the person collecting it from the forest. In earlier regime forest used to be allotted by the State Government, to private Contractors through auction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produce. 1. Organization and working structure The villagers and tribal persons, being member of Primary Cooperative Societies,-engaged in collection of the forest produce are the real owners of such specified forest produce. The Primary Cooperative Societies have been constituted by its members who are local villagers/ tribal's of the area. These members elect their Board of Directors. There after the primary cooperative societies in turn select the director for the District Cooperative Union. Thereafter the District Cooperative Union elects and selects the board of directors of the assessee Federation. Thus so far as the assessee federation is concerned, all its agency related activities are devoted towards the mandate received by the State Government to act for the betterment of villagers and tribal(s). Thus there is a three tier structure as under: 1. Upfront prayer of the Assessee federation : 1. The assessee Federation has its own seed capital and the same is deposited with a Cooperative bank. 2. Interest earned on the seed capital forms part of the income portion of the assessee federation. 3. Under the provisions of section 80P (2) of the Income Tax Act such interest is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject matter of the revisionary power under section 263 of the IT Act. 1. It is respectfully submitted that neither the order of Assessing officer is erroneous nor it is prejudicial to the interest of the revenue. 1. It is further respectfully submitted that notice under section 263 of income tax act is definitely erroneous and this is exhibited by following factual narration: 1. It is mentioned on the first Para of the notice received (Page 1 of 6): On examination of your Income Tax records for the above assessment order, I find that the order passed u/s. 143(3) r.w.s 147 on 28.12.2017 of the Income Tax Act, 1961 is erroneous in so far as it is prejudicial to the interest of revenue in the following manner. It can be seen that while sending a notice it is mentioned that earlier Assessment order was passed under Section 143(3) read with section 147. This is factually incorrect. There was no proceeding initiated under section 147 against the assessee and record would reflect this submission is factually correct. 1. In Para 4 of the notice received (page 5 of 6) it is mentioned that: Hence, there is no application of mind on part of the AO to correctly tax the income of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ullu Gond etc. After considering the submission of the assessee and income declared in the return of income filed for the year under consideration, the returned income of the assessee is found acceptable. Accordingly, income of the assessee, as discussed above, is assessed at Nil. So far as above interest income is concerned in view of the categorical submission made before the learned assessing officer, during the assessment proceeding itself along with the strength of the supporting documentary evidence i.e. copy of order of the Chhattisgarh State Government dated 23-02-2001, it was explained that only the interest income accruing on seed capital invested by the Federation is the income of the Federation and for all other activities carried out by it although separate accounts are to be maintained by it, though the accounts are in the capacity of Federation being the agency and not for its own. Thus out of the interest income mentioned above in the table, only interest earned on Federation seed capital i.e. Rs. 6,02,40,190/- is income of the assessee. This has been duly noted by the learned assessing officer and appropriate deduction under section 80P(2)(d) has been allowed to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2)(d) has been allowed to the assessee and which does not require any revisiting on the issue. 1. Reply for Para 2.2 (Page 3 of 6): In this para, again a factually incorrect statement has been made that the veracity of payable expenses has not been verified during the original assessment. It can be seen that the case was selected for Complete scrutiny under section 143(2). Thereafter the assessing officer has verified complete books of accounts and records maintained by the assessee. As a result of the complete and full verification of all the liabilities, the assessing officer pointed out query on interest income earned which was replied by the assessee to the satisfaction of the learned assessing officer. Hence the statement that it has not been verified is not factually correct and is not based on any evidence on record. 1. Reply for Para 3 (Page 4 of 6): In this Para it is mentioned that on further analysis of Balance Sheet of the assessee, it is found that the FDR has been received from certain banks other than cooperative then a table has been appended. In this regard, it is respectfully submitted that FDR have not been received rather these are made out of the funds availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated above existent in our case are supported by judicial pronouncements in various cases on similar facts and case. The facts and relevant judicial pronouncement are produced below for your honor's kind consideration: 1. It is respectfully submitted that on the points mentioned in the notice u/s 263 an attempt has been made to bring on record that there are two views on the same subject. In this manner a case has been attempted to be made that the order passed by the learned Assessing officer was erroneous and prejudicial. This is not based on facts and circumstance and further more Hon'ble Supreme Court in the case of Commissioner of Income Tax Vs. Max India Ltd. (2007) 213 CTR 0266, (2007) 295 ITR 0282, (2008) 166 TAXMAN 0188 has clearly held that where there are two views possible and ITO has already taken one view with which the Hon'ble CIT does not agrees it cannot be held to be erroneous order or prejudicial to the interest of the revenue unless the view taken by ITO is unsustainable in law. In our case the view taken by AO is very much sustainable in law as it is based on facts and circumstances of the case. We have already depicted it in detail that all the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAX vs. Ramesh Singh. While delivering the judgment honorable High Court had also relied upon various other and circumstances the Division Bench decision of the Bombay High Court in Commissioner of Income Tax Vs. Gabriel India Limited (1993) 203 ITR 108 (Bombay) had held that the interference in the present case with the assessment order was not justified. The said case was also referred in Commissioner of Income Tax Vs. M/s Associate Food Products Pvt. Limited, Jabalpur, which was decided on 21.11.2005 in which the above judgment of the Bombay High Court was followed and it was held that it is clear as Crystal that before exercise of power under section 263 of the Act, two requisites are imperative to be present. In the absence of such foundation exercise of a suo motu power is impermissible. It should not be presumed that initiation of power under Suo motu revision is merely an administrative act. It is an act of a quasi judicial authority and based on formation of an opinion with regard to existence of adequate material to satisfy that the decision taken by the Assessing Officer is erroneous as well as prejudicial to the interest of the Revenue. 1. It is respectfully submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K LTD. vs. PRINCIPAL COMMISSIONER OFINCOME TAX by Hon'ble ITAT NAGPUR in (2016) 48 CCH 0359 Nag Trib that in such a situation exercise of jurisdiction by CIT was not valid. While giving this decision Hon'ble ITAT relied upon the decision of apex court in the case of CIT vs. Max India Ltd. 295 ITR 282. Similar decision has also been given by ITAT Nagpur in case of HARIHAR HOUSING AGENCY vs. COMMISSIONER OF INCOME TAX (2015) 45 CCH 0541 Nag Trib. 1. It is respectfully submitted that we had given all detailed explanation and requisite information with respect to various issues during the assessment proceedings. These have been duly examined by the learned AO before completing the assessment and the AO has taken up the matter and the order was passed by him. This cannot be regarded as to erroneous or prejudicial to the interest of revenue in the absence of any further material on record. It was also held by the than jurisdictional Tribunal ITAT Nagpur in the case of INDO LAHARI BIO POWER LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX. 1. In case of KAILASHCHAND AGRAWAL vs. PRINCIPAL COMMISSIONER OF INCOME TAX (2016) 48 CCH 0361 Nag Trib, ITAT Nagpur held that It is settled law t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escaping assessment. The revision power under section 263 cannot be exercised in respect of a matter which falls within the power to assess escaped income. The revising authority, in order words, should not trench upon the powers which are expressly reserved to the Assessing Officer under section 147. The Commissioner, in exercise of its revision jurisdiction, should not ignore such specific power. 1. It was decided in Garden Silk Mills Ltd. V. CIT, (1996) 221 ITR 861, 865, 866-67 (Guj) that no power to ignore binding decisions. In passing an order of revision under section 263, the Commissioner is not empowered to ignore the binding decisions rendered by the Supreme * Court or even by the jurisdictional High Court. Merely because the Department is contemplating to file a special leave petition, the Commissioner cannot refuse to follow or cannot ignore such binding decision when the Court has settled the law in question. In that view of the matter, when the assessing Officer has passed an order in consonance with the law laid down by the binding decision; it cannot to said that the Assessing Officer's order is erroneous so as to entitle the Commissioner to exercise his revision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the matter, the Tribunal has been held justified in law in holding that the Commissioner was not empowered under section 263 to direct the Assessing Officer not to allow deduction under section 35CCA on the basis of the withdrawal of approval of the payee-society by a subsequence order, which was purported to be given retrospective effect. 1. It was decided in Dawjee Dadabhoy Co. v. S.P. Jain (1957) 31 ITR 872 (Cal); Add CIT v. Mukur Corporation, (1978) 111 ITR 312 (Guj); CIT v. Gabriel India Ltd., (1993) 203 ITR 108, 115, 116 (Bom); CIT v. Smt. Minalben S. Parikh, (1995] 215 ITR 81, 86-87 (Guj) that prejudicial to the interest of the revenue.- The words prejudicial to the interests of the revenue have not been defined, but they must mean that the orders of assessment challenged are such as are not in accordance with law, in consequence where of the lawful revenue due to the State has not been realized or cannot be realized. 1. In other words, the two conditions must be satisfied before the Commissioner can exercise power under section 263, namely, the order of the Assessing Officer must be found to be erroneous and further it must also be found to be prejudicial to the intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oneous, then it cannot be prejudicial to the interests of the Revenue. In the case of the assessee no error has been pointed out in the notice hence the notice is liable to be quashed as there is nothing erroneous and therefore nothing prejudicial to the interests of the revenue. 1. As is evident from the assessment order under consideration, all the requisite information / evidence in support of the return, had been furnished and it was only after satisfying himself that the information furnished, explains the returns of income, that the assessing officer had framed assessment. 1. Thus, the impugned assessment was not made in undue haste. Hence it is neither erroneous nor prejudicial to the revenue. Since the impugned assessment having been completed in accordance with law, cannot be regarded as erroneous, let alone be prejudicial to the interest of the revenue. It is axiomatic that any assessment, which is in accordance with law cannot, at the same breath, be regarded as erroneous and if the assessment is erroneous, it cannot be prejudicial to the interests of the revenue or for that matter to the interests of the assessee as well. This is on the principle that nothing can be pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the CIT u/s 263 as the law does not envisage that the CIT can impose upon the A.O. to make an assessment as the CIT likes. Powers of assessment are vested with the A.O. and not with the CIT who simply holds supervisory powers to ensure that the interests of both the parties is not adversely affected. 1. It is respectfully submitted that it was held in Russell Properties Pr. Ltd. v. Addl. CIT, (1977) 109 ITR 229, 245 (Cal) that in order to exercise the power under section 263(1), there must be material for the Commissioner to consider that the order passed by the Assessing Officer was erroneous in so far as it is prejudicial to the interests of the revenue. It is true, unlike section 147/148, for the initiation of proceeding under section 263(1), no conditions precedent are required to be fulfilled but when a statutory authority proceeds to act by virtue of the power conditions precedent are given under a statutory enactment, exercise of which is dependent upon the existence of certain objective factors and when a challenge is thrown that such objective factors are not present and such challenge is made by placing before the court factors which the statutory authority considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id down the extent and limitations of the rules of natural justice applicable to section 263. 1. It is respectfully submitted that it was held in Hindu ank Karur Ltd. v. Addl. CIT, (1976) 103 ITR 553 (Mad) that the words erroneous in so far as they are prejudicial to the interests of the revenue have to be taken together and require to be widely construed. 2. It is respectfully submitted that it was held in Jai Kumar Kankaria v CIT [2001] 251 ITR 707 (Cal.) that the term 'erroneous' will be looked into from the facts and circumstances and the materials which were placed before the Assessing Officer at the time of assessment. Therefore is no scope under section neither 263 to reopen an assessment on subsequent event nor any new material. 1. It is respectfully submitted that it was held in H.H. Maharaja Rja Pawer Dewas v. CIT [1982] 138 ITR 518 (MP) that the two essential pre- requisites two pre-requisites must be present before the Commissioner can exercise the revisional jurisdiction conferred on him. First is that the order passed by the ITO must erroneous. Second is that the error must be such that it is prejudicial to the interests of the revenue. If the order is erroneo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F INCOME TAX (2019) 55 CCH 0086 HydTrib it was held that In terms of s. 263, CIT shall not stop merely on finding that order was erroneous but also had to establish that order of AO was prejudicial to interests of Revenue. 1. In the case of COLORS TEXTILES LIMITED vs. INCOME TAX OFFICER (2018) 54 CCH 0300 Chd Trib it was held that Mere suspicion cannot be the basis for holding that the enquiry conducted by the AO was insufficient and the order consequently passed was erroneous for the purpose of assuming jurisdiction u/s 263. 1. In the case of LINERS INDIA LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX (2018) 54 CCH 0211 Vishakapatnam Trib it was held that Invocation of revisionary power u/s 263 is not justified where AO has called for all the details necessary before allowing the deduction and there was no error in the assessment order. 2. In the case of SANSPAREILS GREENLANDS PVT. LTD. vs. COMMISSIONER OF INCOME TAX (2018) 54 CCH 0486 Del Trib it was held that Commissioner's exercise of revisional jurisdiction under provisions of s. 263 could not be based on whims or caprice. It was trite law that it was a quasi-judicial power hedged in with limitation and not an unbridled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of assessment proceedings and in the course of revisional proceedings before him, observed that the A.O while framing the assessment had not conducted proper enquiries regarding the genuineness of the contentions that were raised by the assessee society. Accordingly, the Pr. CIT based on his aforesaid observations, concluded that the assessment order passed by the A.O was erroneous in so far it was prejudicial to the interest of the revenue as per the mandate of Explanation 2 to Section 263 of the Act, and thus, directed the A.O to verify the assessee's claim for deduction of the interest received from the banks on FDRs, FFD and savings banks interest etc. u/s. 80P(2)(d) of the Act AND verify its claim of expenditure. Accordingly, the Pr. CIT set-aside the assessment order and remanded it back to the file of the A.O for fresh adjudication of the issues after conducting necessary enquiries and allowing adequate opportunity of being heard to the assessee society. 9. The assessee society being aggrieved with the order passed by the Pr. CIT u/s. 263 of the Act, dated 30.03.2024 has carried the matter in appeal before us. 10. We have heard the ld. authorized representativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o were actually collecting the same. Considering the fact that the tribals/villagers were not being properly compensated for the value of the forest produce by the private contractors the assessee society was brought into existence under the provisions of Chhattisgarh Sahkari Society Adhiniyam, 1960 read a/w. Chhattisgarh Sahkari Society Rules, 1962. As observed by us hereinabove, as per the order dated 23.02.2001, bearing No.454/2001 issued by the State Government, Forest Environment and Cultural Department, the role of the assessee society was to act as an agency to facilitate collection, storage, processing and disposal of the specified forest produce in the State of Chhattisgarh against a remuneration of Re.1/- (Rupee one) per annum. As per the mandate the assessee society was not supposed to have any income other than the nominal amount of Re.1/- as consideration for having been appointed as an agent under the provisions of Chhattisgarh Vanopaj (Vypar Viniyam) Adhinayam, 1964 read with Section 4 of the said Act. As such, the role and object of the assessee society was to act as a coordinator, whereby the collection of the major forest produce was to be arranged in a transparen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses incurred in respect of its aforesaid activities as an agent was left with a net surplus/profit of Rs. 167.91 crore (approx.) which was to be distributed/payable to the members of the society in the ratio 80 : 15 : 5 as it was the income of the primary co-operative societies. The Ld. AR explaining the basis for distribution/payment of the surplus in the aforesaid ratio, i.e. 80 : 15 : 5 had taken us through the order dated 03.11.2009 of the Government of Chhattisgarh, Forest Environment and Cultural Department, marked as No. F. 13-31/2009/10-2 which contemplated distribution of net profit of Tendu leaf business in the aforesaid ratio, i.e. 80 : 15 : 5. For the sake of clarity, the aforesaid order dated 03.11.2009 (supra) is culled out as under (Page 103 of APB): The Ld. AR submitted that income of the assessee society which was comprised of interest income on seed capital of Rs. 6,02,40,190/- (supra) and Re. 1/- that was received as commission for rendering its services as an agent to the State Government were duly accounted for as income in its return of income for the year under consideration. 15. The Ld. AR to fortify his claim that the various aspects based on which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e debatable in nature while framing the assessment, therefore, the Pr. CIT could not have stepped in and dislodged such plausible view in exercise of powers vested with him u/s. 263 of the Act. 17. The Ld. AR had further assailed the validity of the jurisdiction assumed by the Pr. CIT u/s. 263 of the Act for the reason that he had while exercising his revisionary jurisdiction failed to cumulatively satisfy the pre-conditions set out in the said statutory provision. Elaborating on his contention, the Ld. AR submitted that a cursory glance of Section 263(1) of the Act reveals that it is incumbent on the part of the Pr. CIT to call for and examine the records for any proceeding under the Act, and it is only if he considers that the order passed by the A.O is erroneous in so far it is prejudicial to the interest of the revenue that he may assume jurisdiction under the said statutory provision. 18. Carrying his contention further, the Ld. AR submitted that a conjoint perusal of the SCN dated 11.03.2021 issued by the Pr. CIT u/s. 263 of the Act read along with the reasons recorded for revision of the order u/s. 263 of the Act by the ACIT- 1(1), Raipur, Page 175 to 178 of APB (Volume-IV), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f notice u/s. 263 of the Act on the basis of a proposal made by the ITO would be void ab initio. Also, the Ld. AR had drawn support from the order of the ITAT, Ahmedabad in the case of M/s. Shantai Exim Ltd. Vs. CIT (2016) 178 TTJ 451 (Ahd.). 20. The Ld. AR has further assailed the order passed by the Pr. CIT u/s. 263 of the Act for the reason that he had though set-aside the order passed by the A.O u/s. 143(3), dated 28.12.2018 by treating the same as erroneous in so far it was prejudicial to the interest of the revenue u/s. 263 of the Act but had failed to carry out independent inquires, based on which, he had concluded that the assessment order was erroneous and prejudicial to the interest of the revenue. The Ld. AR vehemently submitted that the Pr. CIT while exercising his jurisdiction u/s. 263 of the Act was statutorily required to arrive at a conclusion that the assessment order was erroneous by conducting necessary inquires, if required, before passing order u/s. 263 of the Act. Elaborating further on his contention, the Ld. AR submitted that as held in the various judicial pronouncements the revisional authority cannot remand the matter to the file of the A.O to decide whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pies of the respective assessment orders wherein the income disclosed by the assessee society was accepted by the then A.O's u/s. 143(3) of the Act, Page 213 to 260 of APB. The A.R had specifically drawn our attention to the assessment orders passed u/s. 143(3) of the Act for the respective years wherein, the A.Os had categorically observed that the assessee society was functioning as an agent for collection and trading of minor forest produce as per the mandate of the order of the State Government of Chhattisgarh for a commission of Re.1/- only. Also, the Ld. AR had drawn our attention to the observations of the A.Os wherein they had observed that except for the commission of Re.1/- and interest earned on the seed money from the co-operative banks which was eligible for deduction u/s. 80P(2)(d) of the Act the remaining income disclosed in the agency's trading/profit and loss account of the assessee society belonged to the co-operative societies. Carrying his contention further, the Ld. AR submitted that now when the department had consistently after scrutinizing the returns of income of the assessee society in the backdrop of its financial statements for the preceding year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT had wrongly assumed jurisdiction without calling for and examining the records of the assessee society, and had merely endorsed the reasons as were recorded by the ACIT-1(1), Raipur for revising the order u/s. 263 of the Act, i.e. without any application of mind to the material facts emanating therefrom, the Ld. DR submitted that the same was factually incorrect and misconceived. 24. The Ld. DR further assailed the contention of the assesse's counsel that as the A.O had framed the assessment vide his order u/s. 143(3) of the Act, dated 28.12.2018 after making due inquiries and necessary verification on the various aspects, therefore, the Pr. CIT in the garb of powers vested with him u/s. 263 of the Act had wrongly assumed jurisdiction for seeking substitution of his view as against that arrived at by the A.O. Elaborating on his contention, the Ld. DR submitted that as the A.O had failed to carry out the bare minimum verifications and inquiries on certain issues which ought to have been done by him while framing the assessment, therefore, the Pr. CIT had rightly stepped in and set-aside his order with a direction to him to re-adjudicate the same after affording a reasonable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (ii) assessee's claim for expenses; therefore, the order so passed by him was erroneous in so far it was prejudicial to the interest of the revenue in view of Explanation 2(a) to Section 263 of the Act. The Ld. DR submitted that the Pr. CIT after considering the reply of the assessee society in the backdrop of the queries raised in the SCN, and drawing support from a host of judicial pronouncements, had after due application of mind to the facts before him validly revised the assessment order u/s. 263 of the Act. 26. The Ld. DR submitted that as it was a case of a failure on the part of the A.O to carry out necessary verifications and inquiries while framing of the assessment, a fact which was glaring on the very face of it, therefore, the Pr. CIT taking cognizance of the aforesaid serious lapse of the A.O, after drawing support from a host of judicial pronouncements had rightly held the order passed by him as erroneous in so far it was prejudicial to the interest of the revenue u/s. 263 of the Act. It was, thus, averred by the Ld. DR that it was incorrect on the part of the assessee society to claim that the Pr. CIT while revising the order u/s. 263 of the Act had failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 190/- u/s. 80P of the Act. 32. Admittedly, as observed by the Pr.CIT the interest of Rs. 6,02,40,190/- (supra) was earned by the assessee society during the year on its seed capital. On further perusal of the record, it transpires that the assessee society had claimed to have received interest income on its FDR (sourced out of its seed capital) with Apex bank . In so far the entitlement of a co-operative society for deduction u/s. 80P(2)(d) of the interest income received on deposits lying with a co-operative bank is concerned, we find that the said issue is squarely covered by the order of the ITAT, Mumbai in the case of M/s. Solitaire CHS Ltd. Vs. Pr. Commissioner of income Tax-26, Mumbai, ITA No.3155/MUM/2019 dated 29.11.2019. The Tribunal after deliberating at length on the various facets of the issue in hand, i.e. entitlement of a co-operative society for claiming deduction of interest on deposits lying with a co-operative bank u/s. 80P(2)(d) of the Act, had observed as under: 6. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income; On a perusal of Sec. 80P(2)(d), it can safely be gathered that interest income derived by an assessee co-operative society from its investments held with any other co-operative society shall be deducted in computing its total income. We may herein observe, that what is relevant for claim of deduction under Sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other co-operative society. We are in agreement with the view taken by the Pr. CIT, that with the insertion of sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co- operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. However, at the same time, we are unable to subscribe to his view that the aforesaid amendment would jeopardise the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of its intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome earned by the assessee on its investments with a co-operative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. Still further, we find that the CBDT Circular No. 14, dated 28.12.2006, also makes it clear beyond any scope of doubt that the purpose behind enactment of sub-section (4) of Sec. 80P was that the co- operative banks which were functioning at par with other banks would no more be entitled for claim of deduction under Sec. 80P(4) of the Act. Insofar the reliance placed by the Pr. CIT on the judgment of the Hon ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd. vs. ITO (2010) 322 ITR 283 (SC) is concerned, we are of the considered view that the same being distinguishable on facts had wrongly been relied upon by him. The adjudication by the Hon ble Apex Court in the aforesaid case was in context of Sec. 80P(2)(a)(i), and not on the entitlement of a co- operative society towards deduction under Sec. 80P(2)(d) on the interest income on the investments/deposits parked with a co-operative bank. Although, in all fairness, we may herein observe that the Hon'ble High Court of Karnataka in the case of Pr. CIT Vs. Totagars co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 263, had dislodged the view that was taken by the A.O as regards the eligibility of the assessee towards claim of deduction under Sec. 80P(2)(d), we set aside his order and restore the order passed by the A.O under Sec. 143(3), date 14.09.2016. 10. Resultantly, the appeal filed by the assessee is allowed. 33. Although, we are principally in agreement with the Ld. AR that the interest income received by a co-operative society on its deposits with a co-operative bank would be entitled for deduction u/s. 80P(2)(d) of the Act, but at the same time, we find from a perusal of the record that the A.O while framing the assessment had at no stage verified the authenticity of the claim of the assessee society that the deduction raised by it u/s. 80P(2)(d) of the Act pertained to the interest income on its deposits parked with a co-operative bank/banks. As nothing is discernible from the record nor any material has been filed before us in the course of hearing of the appeal, which would reveal that the assessee's claim for deduction u/s. 80P(2)(d) of the Act was raised as regards the interest income earned on its deposits lying with a co-operative bank/banks, therefore, to the said exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying in the form of deposits with a co-operative bank, which thus, would have entitled it to claim deduction u/s. 80P(2)(d) of the Act. Also, a perusal of the notices issued by the A.O u/s. 142(1) of the Act does not reveal that he had in the course of the assessment proceedings on any occasion raised any query on the aforesaid material aspect and verified, i.e. whether the interest income of Rs. 6.02 crore (approx.) on seed capital which was claimed as deduction u/s. 80P(2)(d) was earned from its funds parked with a co-operative bank/banks. Accordingly, to the said extent, we are unable to concur with the Ld. AR that as specific queries to the extent relatable to its entitlement for deduction u/s. 80P(2)(d) of the Act were raised by the A.O in the course of the assessment proceedings and were duly answered by the assessee society, therefore, the Pr. CIT in the garb of his powers u/s. 263 of the Act had wrongly assumed jurisdiction and set-aside the order of the A.O. 38. We shall now deal with the Ld. AR's contention regarding the second facet of the observation of the Pr. CIT, based on which, the order of the A.O had been set-aside u/s. 263 of the Act. The Pr. CIT had, inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est on the deposits of the funds of the primary co-operative societies, and the same had been transferred as it belonged to the primary co-operative societies, but nothing was queried into by the A.O as to what was the basis for bifurcating the aforementioned amount under various heads, viz. (i) to Incentive Wages; (ii) to sale purchase processing of Non-Nationalized MFP; and (iii) to revolving fund. Also, we find that the Pr. CIT vide SCN, dated 11.03.2021 had, inter alia, observed that the veracity of certain expenses claimed by the assessee as payable to society appearing on the debit side of the profit and loss account were not verified in the course of the original assessment proceedings. However, the assessee society instead of coming forth with any plausible explanation as regards the nature as well as veracity of the payable expenses had simply stated before the Pr. CIT that the same were verified during the course of the original assessment proceedings. For the sake of clarity, the reply of the assessee society on the aforesaid aspect is culled out as under: I. Reply for Para 2.2 (Page 3 of 6): In this para, again a factually incorrect statement has been made that the vera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her filed in the course of the assessment proceedings or before the Pr. CIT (despite a specific query) nor was forth coming despite a specific query to the said affect raised by the Bench. Rather, the only reply forthcoming was that as the aforementioned expenses which had scaled down the gross receipts from trading of tendu leaves and interest income on deposits pertained to the primary co-operative societies, therefore, the same were not liable to be looked into in the case of the assessee society. We are unable to comprehend the aforesaid explanation of the assessee society. Admittedly, the assessee society pursuant to the order of the State Government of Chhattisgarh under the provisions of Chhattisgarh Vanopaj (Vypar Viniyam) Adhinayam 1964 read with Section 4 of the said Act is an agent of the 901 primary co-operative societies. As the assessee society being an agent, i.e. a representative assessee of the aforesaid 901 primary co-operative societies as per Section 161 of the Income Tax Act, 1961 was subjected to the same duties, responsibilities, liabilities, as if the subject income was the income received by or accruing to or in its favour beneficially, therefore, the A.O w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respective returns of income for the subject year. 40. Also, as observed by us hereinabove, the assessee society had adopted an evasive approach before the Pr. CIT and despite specific directions had not come forth with any explanation much the less any material which would substantiate the authenticity of the aforesaid expenses. Based on our aforesaid deliberations, we find that neither the claim of expenses in the agency profit and loss account of the assessee society, which had resulted to scaling down of the distributable amount to the primary cooperative societies to Rs. 167.91 crore (approx.) had been verified by the A.O nor the basis of allocation of the aforesaid balance distributable/payable amount to the primary co-operative societies under various heads was queried by him while framing the assessment. Further, the Pr. CIT had rightly observed that the A.O had not verified as to whether the aforesaid payables were paid by the assessee society in the subsequent year, and also, not looked into the reasons of its recurrence in various years. We, thus, based on the aforesaid facts concur with the Pr. CIT that failure of the A.O to carry out necessary verification on the afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Elaborating on his contention, the Ld. AR submitted that as per Section 263(1) of the Act it is statutorily required on the part of the Pr. CIT to call for and examine the records for any proceedings under the Act, and it is only if he considers that the order passed by the A.O is erroneous in so far as it is prejudicial to the interest of the revenue that he may assume jurisdiction under the said statutory provision. Carrying his contention further, the Ld. AR submitted that the Pr. CIT in the present case, had not called for and examined the records of the assessee society and had mechanically acted upon the reasons recorded for revision of the order u/s. 263 of the Act by the ACIT-1(1), Raipur, Page 175 to 178 of APB (Volume-IV). The Ld. AR based on his aforesaid contention had tried to impress upon us that as the Pr. CIT had failed to call for and examine the records of the assessee society, and further failed to apply his independent mind on the said record, therefore, he had wrongly assumed jurisdiction and passed the order u/s. 263 of the Act. The Ld. AR in order to fortify his aforesaid contention had drawn support from the fact that the reasons for revision u/s. 263 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng manner . (emphasis supplied by us) 45. Also, a perusal of the order passed by the Pr. CIT u/s. 263 of the Act dated 30.03.2021, reveals that he had at the very thresold made a mention that subsequent to the culmination of the assessment u/s. 143(3) of the Act dated 28.12.2018, he had perused the records of the assessee for the subject year. For the sake of clarity, the observation of the Pr. CIT is culled out as under: (relevant extract) 1. On subsequent perusal of the record of the assessee for the F.Y.2014-15, it is found that the assessee had earned interest income, as under .. (emphasis supplied by us) Also, a reference of perusal of the financial statements of the assessee society can be traced in Para-3 of the order passed by the Pr. CIT u/s. 263 of the Act. Further, the Pr. CIT while concluding that the order passed by the A.O was erroneous in so far it was prejudicial to the interest of the revenue in view of Explanation-2 to Section 263 of the Act, had observed at Para 5 of his order that he had gone through the case records. For the sake of clarity, the relevant observations of the Pr. CIT are culled out as under: 5. I have gone through the case record and submission o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subjective satisfaction and the language of the (Annexure - 4) would show that on the basis of the document produced before the Joint Commissioner, he was convinced of the fact that such approval would be necessary as the statute mandate. 6. From perusal of the language of the letter (Annexure - 4), we cannot presume that there was no application of mind as the approval need not be a detailed assessment order. The presumption under Section 114 of the Evidence Act would follow when such official Act has been done in accordance with official procedure and will lead to presumption that due diligence was followed. Even otherwise, the order of the ITAT would reflect that the case of appellant was remanded back to the Assessing Officer for fresh adjudication of the issue. Further the liberty was given to the assessee to raise all such issues before the Revenue Authorities and furnish necessary information/evidences in support of his contention. When such right has already been reserved in favour of the assessee, to raise grounds, we do not find that any prejudice has been caused and in fact the ITAT has principally accepted the contention of the appellant and in furtherance to advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, observed that the A.O while framing the assessment had failed to carry out proper verifications. Also, the Pr. CIT referring to the facts as were narrated in the SCN dated 11.03.2021, had observed that as there was no application of mind by the A.O to correctly bring the income of the assessee society to tax, therefore, assessment order so passed by him was rendered as erroneous in so far it was prejudicial to the interest of the revenue. The Pr. CIT after referring to the facts, based on which, the order passed by the A.O u/s. 143(3) dated 28.12.2018 was sought to be revised had called upon the assessee society to explain as to why the said order may not be suitably revised in exercise of powers vested with him, which, inter alia, included the power to set-aside such order. The Pr. CIT had, thereafter, afforded an opportunity to the assessee society to explain its case based on details, documents and necessary evidences along with a word of caution that in case of absence of furnishing of requisite details it would be presumed that it had no objection to the proposed action which shall be accordingly finalized. We are of a firm conviction that though the Pr. CIT had incor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT to the records before him, which is indispensably required for valid assumption of jurisdiction u/s. 263 of the Act, but the material or information, i.e. the record that would be available before him for examination may come from any source, which would also include details provided by the A.O. It is incomprehensible that the Pr. CIT in exercise of his revisional jurisdiction would be expected to gather the entire material or information on his own and cannot act upon any such material or information that is shared with him by the assessment unit. If the Ld. ARs view is to be accepted, then it would lead to a situation wherein it would be practically impossible for the Pr. CIT to assume jurisdiction u/s. 263 of the Act. In fact, what is required as per the law is that if the Pr. CIT after calling for and examining the records of any proceeding under the Act, considers that any order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue, then, he can validly assume jurisdiction to revise the said order after affording a reasonable opportunity of being heard to the assessee. 50. In case, any bottlenecks are placed restricting the sources fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proposal from the ACIT-1(1), Raipur had duly applied his mind to the records before him for arriving at a view that due to certain failure of the A.O to carry out necessary inquiries/verifications the assessment order passed by him u/s. 143(3) of the Act dated 28.12.2018 was rendered as erroneous in so far it was prejudicial to the interest of the revenue and thus, validly assumed jurisdiction u/s. 263 of the Act; and (ii) that there was no restriction on the Pr. CIT to have acted upon material placed before him by the A.O for arriving at a prima facie view that the order so passed u/s. 143(3) of the Act being erroneous and prejudicial to the interest of the revenue was amenable for revision u/s. 263 of the Act, thus are unable to concur with the aforesaid contentions advanced by the Ld. AR. RE : Pr. CIT HAD TAKEN AN INCONSISTENT VIEW AS AGAINST THAT TAKEN BY THE A.O IN THE PRECEDING YEARS. 52. We shall now deal with the contention of the Ld. AR that as the view taken by the A.O while framing the assessment for the subject year, i.e. A.Y.2016-17, was in conformity with that arrived at by his predecessor(s) while framing the assessments for the preceding years u/s. 143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly comprises of commission of Re.1/- (Rupee one) a/w. interest earned on the seed money from co-operative banks which was eligible for deduction u/s. 80P(2)(d) of the Act, had throughout been accepted by the department, therefore, there was no justification for the Pr. CIT to have arrived at a contrary view based on the same set of facts as were there in the preceding years. 54. We have thoughtfully considered the aforesaid claim of the Ld. AR and are unable to persuade ourselves to subscribe to the same. Admittedly, as per the principle of consistency, there is no justification for the department to take a view other than that arrived at based on same set of facts in the preceding years. At the same time, a mistake cannot be allowed to perpetuate in light of the consistency. Also, there is nothing provided u/s. 263 of the Act which restricts the Pr. CIT from exercising his powers u/s. 263 of the Act for the reason that a wrong claim raised by the assessee in the preceding years was not dislodged by the department. All that is required as per Section 263 of the Act is that in case if the Pr. CIT finds that the order passed by the A.O is found to be erroneous in so far it is prejud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . carrying out either on his own or through the A.O any such inquiries as he deemed necessary before holding the order passed by the A.O as erroneous in so far it was prejudicial to the interest of the revenue u/s. 263 of the Act. As observed by us hereinabove, the Ld. AR had claimed that though the Pr. CIT while exercising jurisdiction u/s. 263 of the Act was statutorily required to arrive at a conclusion that the assessment order was erroneous by conducting necessary inquiries, if required before passing order u/s. 263 of the Act, but he had in the present case failed to do so. Elaborating on his contention, it was the claim of the Ld. AR that the Pr. CIT could not have remanded the matter to the file of the A.O to decide whether the findings recored in the order passed by his predecessor were erroneous. The Ld. AR had stated that it is only where the Pr.CIT conducts inquiries and verification and is able to establish and show that error or mistake had crept in the order passed by the A.O making the same unsustainable in law; or the facts on record per-se justified making of further inquiries or investigation but the A.O had wrongly not undertaken the same, it is only then after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usal of the order passed by the Pr. CIT u/s. 263 of the Act dated 30.12.2018, we find that he had after validly putting the assessee society to show cause as regards the issues on which he was of the prima-facie view that the order passed by the A.O u/s. 143(3) of the Act dated 28.12.2018 was erroneous and prejudicial to the interest of the revenue, had after considering the reply filed by the assessee, which as observed by us hereinabove did not divulge the complete details on both the subject issues, on which, the order had been revised, viz. (i) entitlement of the assessee society for claiming deduction u/s. 80P(2)(d) of the Act of the interest on deposits of seed capital claimed to have been made with co-operative bank/banks; and (ii) verification of the assessee's claim of expenditure; therefore, we are unable to comprehend as to what inquiry the Pr. CIT was expected to have either carried out on his own or got done from the A.O when the assessee society itself was hesitant to come forth with the complete details. We are of the view that as per Section 263 of the Act the pre- conditions of making of an inquiry by the revisional authority before passing an order of the revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The Pr. CIT in our view after considering the circumstances of the case, in all fairness, remanded the matter for fresh adjudication on the aforesaid issues. We, thus, in terms of our aforesaid observations, finding no substance in the claim of the Ld. AR that the Pr. CIT without carrying out any inquiry had wrongly held the order passed by the A.O u/s. 143(3) of the Act dated 28.12.2018 as erroneous in so far it was prejudicial to the interest of the revenue u/s. 263 of the Act, reject the same. RE : PR CIT HAD PASSED THE ORDER WITHOUT APPLYING HIS MIND TO THE SUBMISSION FILED BY THE ASSESSEE SOCIETY BEFORE HIM 60. We shall now advert to the contention of the Ld. AR that as the Pr. CIT had passed the order u/s. 263 of the Act dated 30.03.2021 without applying his mind regarding the issues, on which, the assessment order dated 28.12.2018 had been set-aside by him, therefore, the same is liable to be set-aside on the said count itself. 61. As observed by us hereinabove, the Ld. AR had submitted that as the order passed by the Pr. CIT is bald, bland and blind in the backdrop of the reply that was filed by the assessee society in response to the SCN dated 11.03.2021, i.e. had pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may not be revised u/s. 263 of the Act. The Pr. CIT had initially sought to revise the assessment order on multiple issues, but thereafter considering the reply of the assessee and perusing the records had confined the revision of the order to only two issues, viz. (i) entitlement of the assessee society for claiming deduction u/s. 80P(2)(d) of the Act of the interest on deposits of seed capital claimed to have made with co-operative bank/banks; and (ii) verification of the assessee's claim of expenditure. In our view, the very fact of initially seeking revising of the assessment order on multiple issues, but thereafter, limiting the same to only two issues in itself reveals due application of mind by the revisional authority. As the assessee society regarding the aforesaid two issues, on which, the Pr. CIT had held the order passed by the A.O u/s. 143(3) of the Act dated 28.12.2018 as erroneous in so far it was prejudicial to the interest of the revenue had not only failed to provide the requisite details to support genuineness of its claim of deduction u/s. 80P(2)(d) of the Act of interest income on deposits and claim for deduction of expenditure in the course of the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer, (2018) 95 taxmann.com 366 (SC), where the A.O had not made any inquiry while making the assessment and had summarily accepted the explanation of the assessee, the CIT was held to have rightly set-aside such assessment order u/s. 263 of the Act. As in the present case before us, the Pr. CIT by drawing support from the powers vested with him under Explanation 2(a) to Section 263(1) of the Act which vested with him the jurisdiction to hold the order passed by the A.O as erroneous and prejudicial to the interest of the revenue, if the same had been passed without making any inquiries which should have been made, had set-aside the assessment order, therefore, the exercise of jurisdiction by him in the backdrop of our aforesaid deliberations does not suffer from any infirmity. For the sake of clarity, Explanation 2(a) to Section 263 of the Act is culled out as under: (relevant extract) Explanation 2. For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner, (a) the order is passe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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