| The Tax Publishers2020 TaxPub(DT) 1705 (Ind-Trib) INCOME TAX ACT, 1961
Section 263
Under the given facts and in law the view taken by the AO in the order passed under section 143(3) dated 24-3-2015 seems to be reasonable and plausible which cannot be held as legally unsustainable and not in accordance with law and it was passed with complete application of mind and thus, it can neither be held as erroneous nor prejudicial to the interest of revenue.
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Revision under section 263 - Erroneous and prejudicial order - One of possible view taken by AO. -
Assessee was subject to survey under section 133A on 24-9-2011 and during the course of survey proceedings he admitted the discrepancies of unsecured loans given to various persons and offered Rs. 7 crores as undisclosed unaccounted income for tax for assessment year 2011-12. Assessee had disclosed the surrendered income in the return of income and offered it to tax. As regards cash deposited in the bank account during the financial year 2011-12 at Rs. 7,34,79,097 the assessee claimed that he received amount on maturity of hundis during the year along with interest the details of which were also available with the AO and the principal amount and interest received there on was sufficient enough to explain the cash deposited in the bank account. The AO was not satisfied with this submission. Even though the details of hundis with specific interest amount were available on record but AO rather than linking the source of cash deposited from hundis treated it as unaccounted income from 'Vyapam scam'. Pr. CIT after assuming the jurisdiction under section 263 had observed that the order of the AO was erroneous in so far as it was prejudicial to the interest of the revenue and needs to be assessed afresh after making proper enquiries and investigations. Held: In the light of the reply filed by the assessee, information called by the AO and the finding in the assessment order under section 143(3) dated 24-3-2015 seems to be reasonable and plausible which cannot be held as legally unsustainable and not in accordance with law. It was passed with complete application of mind and thus it can neither be held as erroneous nor prejudicial to the interest of revenue. Pr. CIT under the given facts and circumstances of the case erred in assuming jurisdiction under section 263 since the AO had made sufficient enquiry by way of questionnaire to which detailed reply have been filed from time to time and the AO in the interest of revenue have also made addition of Rs. 7,74,12,941 to the income disclosed by the assessee. It clearly appears that the AO had applied his mind and therefore, the assessment order was not vitiated on the ground that the order was erroneous and prejudicial to the interest of revenue because no enquiry were undertaken. Accordingly there was merit in the contention of the assessee and PCIT had grossly erred in invoking the provisions of section 263 on the basis of issues raised in the show cause notice. Thus the order of Pr.CIT of setting aside the assessment order under section 143(3) under consideration were beyond the scope of section 263 and hence not valid and accordingly quash the relevant order passed by Pr. CIT under section 263 dated 30-3-2017 and restore the assessment order under section 143(3) dated 24-3-2015.
Relied:Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC), H.H. Maharaja Raja Power Dewas (1983) 15 Taxman 363 (MP) : 1982 TaxPub(DT) 0891 (MP-HC), ITO v. D.G. Housing Projects Ltd. (2012) 343 ITR 329 (Del) : 2012 TaxPub(DT) 1727 (Del-HC), V.G. Krishnamurthy (1985) 20 Taxman 65 (Karn) : 1985 TaxPub(DT) 0408 (Karn-HC), CIT v. Nagesh Knitwears (P.) Ltd. (2012) 345 ITR 135 (Delhi) : 2012 TaxPub(DT) 2040 (Del-HC), CIT v. Amalgamations Ltd. (1999) 238 ITR 963 (Mad) : 1999 TaxPub(DT) 0571 (Mad-Trib), Addl. CIT v. Gee Vee Enterprise (1975) 99 ITR 375 (Del) : 1975 TaxPub(DT) 267 (Del-HC), CIT v. Sunbean Auto Ltd. (2011) 332 ITR 167 (Del) : 2011 TaxPub(DT) 88 (Del-HC), CIT v. DLF Ltd. (2013) 350 ITR 555 (Del) : 2013 TaxPub(DT) 340 (Del-HC) and Arvind Jewellers (2003) 259 ITR 502 (Guj.) : 2003 TaxPub(DT) 342 (Guj-HC).
REFERRED : CIT v. Gabriel India Ltd. (1993) 203 ITR 108 (Bombay-HC) : 1993 TaxPub(DT) 1357 (Bom-HC), Pr. CIT v. Delhi Airport Metro Express Pvt. Ltd. [ITA No. 705/2017] : 2017 TaxPub(DT) 4058 (Del-HC), Pr. CIT v. Modicare Limited [ITA No. 759/2017] : 2017 TaxPub(DT) 4212 (Del-HC), DIT v. Jyoti Foundation (2013) 357 ITR 388 (Del) : 2013 TaxPub(DT) 2463 (Del-HC), CIT v. Sunbeam Auto Ltd. (2010) 332 ITR 167 (Del) : 2011 TaxPub(DT) 0088 (Del-HC), Cadila Pharmaceuticals Ltd. (Ahd-Trib, Madhusudan Industries Ltd. (Ahd-Trib), Pr. CIT v. Narayan Balmukund Dubey (2017) 30 ITJ 335 (MP), Director of Income Tax v. Jyoti Foundation (2013) 357 ITR 388 (Del) : 2013 TaxPub(DT) 2463 (Del-HC), (v) CIT v. Ratlam Coal Ash. Co (1988) 171 ITR 141 (MP) : 1988 TaxPub(DT) 0529 (MP-HC), CIT v. Mehrotra Brothers (2004) 270 ITR 157 (MP) : 2004 TaxPub(DT) 0443 (MP-HC), CIT v. International Travel House Ltd. (2010) 344 ITR 554 (Del) : 2010 TaxPub(DT) 2245 (Del-HC), Amira Pure Foods Pvt. Ltd. (Del-Trib), Narayan Tatu Rane ((Mum-Trib) and M/s. Narayan Tatu Rane (ITAT Mumbai Delhi), T. Ashok Pai v. CIT (2007) 292 ITR 0011 (SC) : 2007 TaxPub(DT) 1251 (SC).
FAVOUR : In assessee's favour.
A.Y. : 2012-13
INCOME TAX ACT, 1961
Section 68
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