SHRI IQBAL SINGH ,MOGA vs. PRINCIPAL COMMISSIONER OF INCOME TAX -1, LUDHIANA

This appeal has been filed by the assessee against the order of the Ld. Pr. Commissioner of Income Tax, Ludhiana-1 dated 31.03.2022 in respect of Assessment Year 2014-15.

2. The assessee has raised the following grounds of appeal:

Iqbal Singh v. Pr. CIT “1. That the order u/s 263 passed by the Learned Principal Commissioner of Income Tax, Ludhiana-1 is illegal, unjustified & arbitrary and is liable to be quashed.

3. That the Learned Pr. CIT-Ludhiana-1 has erred in exercising the power of revision for the purpose of directing the AO to hold another investigation when the AO has complied with the directions of the predecessor Pr. CIT, Ludhiana-3 in the preceding order u/s 263 passed on 25.03.2019.

4. That the Ld Pr. CIT, Ludhiana-1 has erred in the eyes of law by not giving the opportunity of being heard as mandated u/s 263. Hence, the order deserves to be quashed.

5. That the Ld Pr. CIT, Ludhiana-1 has erred in finding that assessment already framed was erroneous & prejudicial to the interest of revenue as the assessment was framed by the AO after thorough investigation & proper application of mind.

6. That the Ld Pr. CIT, Ludhiana-1 has erred in applying the (Explanation 2) to section 263 inserted w.e.f 01.06.2015 as the concerned Assessing Officer had duly made appropriate enquiries and applied his mind and assessed the income.

7. That in any case the order of the Learned Pr. CIT Ludhiana -1 passed u/s 263 is against the law and deserves to be quashed.

8. That the Appellant craves leave for permission to add, amend or alter any ground of appeal at the time of hearing.”

3. At the outset, the Ld. Counsel submitted that the Learned Pr. CIT- Ludhiana-1 has exercised the power of revision u/s 263 of the Act, directing the AO to carry out another investigation in the present case where the AO

Iqbal Singh v. Pr. CIT has complied with the directions of the predecessor Pr. CIT, Ludhiana-3 in the passing assessment order u/s 143(3) r.w.s. 263 on 25.03.2019. Thus, the appellant assesse has challenged the 2nd revision order passed u/s 263 dated 31.03.2022 by the Ld. Pr. CIT, Ludhiana-1 in respect of the same assessment year on identical issue as void ab-initio, as there is no power under the statute to invoke section 263 qua order passed in consequence to first revision order u/s 263 of the Act on identical issue and accordingly, prayed that the same deserve to be quashed. The Ld. AR has filed a paper book as per the index listed in tabular form as under:

Sr. No. Particulars Pages 1. Copy of ITR & Computation of Income 1-3 Assessment Order u/s 143(3) dated 16.11.2016 4-6 2.

Iqbal Singh v. Pr. CIT 31.03.2022 by the Ld. Pr. CIT, Ludhiana-1 in respect of the same assessment year on identical issue.

"From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an income tax officer acting in accordance with the law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order, unless the decision is held to be erroneous. Cases may be visualised where the Income tax officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Iqbal Singh v. Pr. CIT Commissioner, on perusal of records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income tax officer. That would not vest the Commissioner with power to examine the accounts and determine the income himself at a higher figure. It is because the Income tax officer has exercised the quasi judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. . . . There must be some prima facie material on record to show that the tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed."