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TMI Blog2024 (7) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... udicial to the interests of the revenue as the PCIT has not been able to prove non-application of mind by the AO particularly considering the fact that the order of Kapil Romanna was passed on 29.09.2021 and that the order of the appellant u/s 147 was passed on 24.03.2022 after considering the order of Kapil Romanna. It has been stated by the AO of Kapil Romanna in the said order passed u/s 153A that he has failed to identify the parties from whom the unsecured loan was raised. It is also mentioned that no PAN No, address and other details were furnished by Kapil Romanna. Consequently, Kapil Romanna has never identified the parties from whom the loan was raised, and the addition has been made in his hands u/s 68. Mere allegation that the AO has passed the order without application of mind would not be legally justified to set aside the assessment order by way of invoking section 263 of the Act. Considering the factual matrix and the judicial precedents, we do not concur with the PCIT that the AO did not verify the transactions appearing in the ledger account seized during search on Homeland group and that the order was passed without application of mind. Accordingly, we hold that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That the order passed u/s 263 is bad in law since the PCIT has failed to conduct his own inquiry before passing order u/s 263. 7. That the order passed u/s 263 is bad in law since the Ld. PCIT has erred in not appreciating that powers of revision u/s 263 cannot be invoked merely because the Assessing Officer did not write specific reasons for accepting the explanation of the assessee. 8. That the Ld. PCIT has erred in invoking explanation 2 of section 263(1) as the explanation does not authorize unfettered powers to the CIT to revise each and every order passed by the AO if in his opinion the same has been passed without making enquiries/ verification which should have been made. 3. Briefly, the facts of the case are that the assessee is a pediatrician doctor by profession, in Bathinda and he is serving the community through his establishment, The Chandigarh Children Maternity Hospital. The assessee had filed its income tax return for the AY 2017-18 on 14.10.2017 declaring income of Rs. 61,92,130/- There was a search operation conducted u/s 132 of the Act in the case of Homeland Group on 26.02.2020. During the search, a copy of the ledger account of Sh. Jagjeet Singh was found and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oup).Subsequently, notice u/s 143(2) was issued on 25.06.2021 and the assessee was provided with the copy of reasons recorded for the purpose of reopening of the case u/s 148. The assessee filed his objections against the reasons recorded vide letter dated 23.09.2021 which were disposed off vide order dated 29.12.2021. Further, the appellant was issued notice u/s 142(1) on 23.11.2021 and the appellant furnished his reply on 14.12.2021 in which he submitted documents namely; income tax return, copies of bank statements, copy of audit report, copy of cash book, etc. That the appellant further clarified that he had no connection with the transactions mentioned in the reasons recorded for reopening the case and he denied giving any cash loan to Mr. Kapil Romana (Homeland Group) in any of the years. Objections were raised to the reasons recorded and it was categorically stated that the appellant has nothing to do with transactions appearing on the ledger account seized from the premises of Kapil Romanna. It was also submitted that the transactions do not include any cheque amount and as such, it cannot be presumed that the transactions were entered into by the appellant. 8. The Ld. AR s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, VIJAYAWADA 10.2 From the copy of reasons recorded (APB, Pgs. 7), it is evident that the reasons recorded are indeed unsigned. Furthermore, the cases relied upon by the counsel of the assessee were perused and have been found appropriate in the present case. 11. Apropos ground no 4, the AR of the appellant raised legal ground that the revision order passed u/s 263 was bad in law on the basis of the fact that the original order passed u/s 147 r.w.s 144B was non-jurisdictional in as much as the assessment was framed by considering material found during search on Homeland Group and the proper course of action was u/s 153C and not section 147. It was also submitted that if original proceedings are bad in law, then the subsequent proceedings are invalid 11.1 The Ld. AR submitted that assessment order under section 147 is framed based on material allegedly discovered during a search and the reasons recorded (APB, Pg. 7). The AR contended that in view of the assessment having been framed based on material found during search, the assessment proceeding in the case of the assessee could only be initiated in accordance with the provisions of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 199 (Allahabad - Trib.) IN THE ITAT ALLAHABAD BENCH Hari Mohan Das Tandon (HUF) v. Principal Commissioner of Income tax, All. g) 2004 (6) TMI 258 - ITAT COCHIN Other Citation: ITD 094, 131, TTJ 098, 440, [2005] 94 ITD 131 (COCH.) PAUL JOHN, DELICIOUS CASHEW CO. VERSUS INCOME-TAX OFFICER. h) [2021] 133 taxmann.com 188 (Raipur - Trib.) Minimax Commerce (P.) Ltd v. ACIT i) 2017 (5) TMI 631 - ITAT KOLKATA M/S. CLASSIC FLOUR FOOD PROCESSING PVT. LTD. VERSUS C.I.T., KOL-IV, KOLKATA 11.3 The cases relied upon by the counsel of the assessee are perused and have been found appropriate in the present case. From the reasons recorded as well as from the show cause notice issued u/s 263, it is noticed that the whole case has been framed based on the material found during the search and in our view, the course of action was required to be taken u/s 153C and not u/s 148 of the Income Tax Act 1961. 12. Apropos Ground no 1, 2 and ground No 8, the learned counsel, Mr. Rohit Kapoor further pointed out that invoking section 263 was unwarranted as the assessment order was not prejudicial to the interest of the revenue. 12.1 The Ld. Counsel submitted that appellant has no connection with the transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings. The AR argued that for the purpose of invoking provisions of section 263, it is necessary that the assessment order is erroneous and prejudicial to the interests of the revenue. 12.6 It is pertinent to mention here that the view of Ld. AO being a plausible view, the assessment order could not be considered erroneous or prejudicial to interest of revenue. In this regard, the assessee has relied upon the case of CIT v/s Max India Ltd. (2007) 295 ITR 282 (SC) to support the contention that in order to invoke section 263, it is a judicial requirement to satisfy twin conditions as per statute as under: (i) The order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If any one of them is absent i.e. if the assessment order is not erroneous but it is prejudicial to the Revenue, Sec.263 cannot be invoked. 12.7 Meaning thereby that, the provision u/s 263 cannot be invoked to correct each, and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous as also prejudicial to revenue s interest, then the provision will be attracted. An incorrect assumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case has not been able to prove as to how the order passed by the Assessing officer was erroneous and prejudicial to the interests of the revenue as the PCIT has not been able to prove non-application of mind by the AO particularly considering the fact that the order of Kapil Romanna was passed on 29.09.2021 and that the order of the appellant u/s 147 was passed on 24.03.2022 after considering the order of Kapil Romanna. It has been stated by the AO of Kapil Romanna in the said order passed u/s 153A that he has failed to identify the parties from whom the unsecured loan was raised. It is also mentioned that no PAN No, address and other details were furnished by Kapil Romanna. Consequently, Kapil Romanna has never identified the parties from whom the loan was raised, and the addition has been made in his hands u/s 68. In our view, mere allegation that the AO has passed the order without application of mind would not be legally justified to set aside the assessment order by way of invoking section 263 of the Act. 15. Considering the factual matrix and the judicial precedents, we do not concur with the PCIT that the AO did not verify the transactions appearing in the ledger accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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