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TMI Blog2024 (8) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal is allowed. - Shri M Balaganeh, Accountant Member And Shri Vimal Kumar, Judicial Member For the Assessee : Shri Ved Jain, Adv. Shri Aman Garg, CA For the Department : Shri P N Barnwal, CIT-DR ORDER PER VIMAL KUMAR, JUDICIAL MEMBER: The assessee s appeal is against order dated 25.03.2019 of Learned Principal Commissioner of Income-Tax, Karnal (herein after referred as the Ld. PCIT ) under Section 263(1) of the Income Tax Act, 1961 (hereinafter referred as the Act ) arising out of assessment order dated 07.12.2016 of the Assessing Officer/ITO, Ward-5, Karnal (hereinafter referred as the Ld. AO ) for the Assessment Year 2014-15. 2. Brief facts of the case are that the appellant/assessee e-filed return of income-tax on 30.10.2014 declaring income of Rs. 18,19,390/- for the assessment year 2014-15. The case was selected for complete scrutiny assessment through CASS. Notice under Section 143(2) of the Act dated 28.08.2015 was issued. On change of jurisdiction w.e.f. 16.05.2016, notice under Section 143(2) and 142(1) of the Act along with detailed questionnaire were issued on 14.06.2016 for 29.06.2016. On 29.06.2016, Shri. Viney Goel, CA for the appellant/assessee appeared and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the appellant/assessee submitted that learned Pr. CIT has erred both on facts and in law in rejecting the contention of appellant/assessee that the issue of expenditure on account of freight and octroi/clearing and sawing were before the Learned Assessing Officer and were allowed by him after due application of mind, as such the same could not be a matter of revision under Section 263 of the Act. 9. Learned Authorised Representative for appellant/assessee submitted that learned Pr. CIT has erred in rejecting contentions of appellant/assessee that the issue of security premium reserve was before Learned A.O. and was allowed as such same could not be for revision. 10. Learned Authorised Representative for the appellant/assessee submitted that learned Pr. CIT erred in rejecting the contention of the appellant/assessee that the issue of verification of sundry creditors/sundry debtors were before the Assessing Officer and allowed as such same could not be the subject matter for revision under Section 263 of the Act. 11. The Learned Authorised Representative for the appellant/assessee submitted that learned Pr. CIT erred in invoking the appellant/assessee s contention that proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y not a case of no enquiry , Ld. PCIT himself has to carry out enquiry so as to demonstrate order being prejudicial to the interest of the Revenue, according to following judicial pronouncements:- (a) COMMISSIONER OF INCOME-TAX VERSUS SUNBEAM AUTO LTD., 2009 (9) TMI 633-DELHI HIGH COURT, Dated.- September 11, 2009 (b) INCOME TAX OFFICER VERSUS DG HOUSING PROJECTS LTD, 2012 (3) TMI 227 - DELHI HIGH COURT, Dated.- March 1, 2012 (3) PR. COMMISSIONER OF INCOME TAX -2, DELHI VERSUS M/S. CLIX FINANCE INDIA PVT. LTD, 2024 (3) TMI 157- DELHI HIGH COURT, Dated.- March 1, 2024 (4) PRINCIPAL COMMISSIONER OF INCOME TAX-4 VERSUS KLAXON TRADING PVT. LTD, 2023 (12) TMI 36-DELHI HIGH COURT, Dated.- November 29, 2023 15. Learned Authorised Representative for appellant/assessee submitted that to exercise revisionary power under section 263 of the Act Ld. PCIT must undertakes some minimal enquiry and give reasons for coming to the conclusion that assessment order was erroneous and prejudicial to the interest of the Revenue, as per by the following judicial pronouncements- (a) PR. COMMISSIONER OF INCOME TAX 3, NEW DELHI VERSUS DELHI AIRPORT METRO EXPRESS PVT. LTD., 2017 (9) TMI 529 DELHI HIGH COURT, D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LTD. VERSUS PCIT, CIRCLE-2, KOLKATA, 2024 (5) TMI 696-ITAT KOLKATA, Dated.- May 13, 2024 (4) SOURABH SHARMA JAIPUR VERSUS PCIT, JAIPUR-2, 2024 (2) TMI 660-ITAT JAIPUR, Dated.- November 22, 2023. 18. Learned Authorised Representative for the Revenue submitted that the Assessing Officer did not make proper inquiries during assessment proceeding. The order of learned Pr. CIT is well reasoned. Hon'ble Supreme Court of India in the case of Deniel Merchants (P) Ltd. vs. ITO reported in [2018] 95 taxmann.com 366 (SC) has held that Commissioner had passed an order under Section 263 with observations that Assessing Officer did not make any proper inquiry while making assessment and accepting explanation of assessee insofar as receipt of share application money was concerned High Court upheld order of revision Whether there was no reason to interfere with order of High Court and, thus, SLP was to be dismissed. 19. From the examination of record in light of aforesaid rival contentions, it is crystal clear that Ld. PCIT issued show cause notice dated 07/02/2019 u/s 263 which is at page 269 -274 of the PB. Regarding assessee s claim of receipt of application money/share premium from three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, the said Clause or any other condition laid down in Explanation 2 does not warrant recording of the said enquiry or verification in its entirety in the assessment order. 21. Admittedly, in the instant case, the questionnaire dated 02.11.2004, which has been annexed and brought on record in the present appeal, would manifest that the AO had asked for the allowability of the claims with respect to the issues in question. Consequently, the respondent-assessee duly furnished explanations thereof vide replies dated 09.12.2004, 20.12.2004 and 06.01.2005. Thus, it is not a case where no enquiry whatsoever has been conducted by the AO with respect to the claims under consideration. However, this leads us to an ancillary question whether the mandate of law for invoking the powers under Section 263 of the Act includes the cases where either an adequate enquiry has not been made and the same has not been recorded in the order of assessment or the said authority is circumscribed to only consider the cases where no enquiry has been conducted at all. 22. Reliance can be placed on the decision of this Court in the case of CIT v. Sunbeam Auto Ltd. [2009] SCC OnLine Del 4237], wherein, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in the category of Commissioner having a different opinion. Paragraph 8 of the said decision reads as under.- 8. In view of the above discussion, it is apparent that the Tribunal arrived at a conclusive finding that, though the assessment order does not patently indicate that the issue in question had been considered by the Assessing Officer, the record showed that the Assessing Officer had applied his mind. Once such application of mind is discernible from the record, the proceedings under section 263 would fall into the area of the Commissioner having a different opinion. We are of the view that the findings of facts arrived at by the Tribunal do not warrant interference of this court. That being the position, the present case would not be one of lack of inquiry and, even if the inquiry was termed inadequate, following the decision in Sunbeam Auto Ltd. (2011) 332 ITR 167 (Delhi) (page 180): that would not by itself give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has a different opinion in the matter. No substantial question of law arises for our consideration. 24. In Ashish Rajpal as well, this Court was of the view that the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income Tax Officer is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the Revenue. (See Rampyari Devi Saraogi v. CIT [(1968) 67 ITR 84 (SC)] and in Tara Devi Aggarwal v. CIT [(1973) 3 SCC 482: 1973 SCC (Tax) 318: (1973) 88 ITR 323J.) [Emphasis supplied] 26. Recently, the Hon'ble Supreme Court in the case of CIT v. Paville Projects (P) Ltd. [2023 SCC OnLine SC 371], while relying upon Malabar Industrial Co. Ltd., has discussed the sanctity of twofold conditions for the purpose of in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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