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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
आदेश /O R D E R
PER MAHAVIR SINGH, VICE PRESIDENT:
This appeal filed by the assessee is directed against the Revision order passed by the Principal Commissioner of Income Tax, Chennai-3 vide Revision No.PCIT, Chennai-3/Revision-263/ 100000292500/2021 dated 30.03.2022 u/s. 263 of the Income Tax Act, 1961 (hereinafter the ‘Act’), for the assessment year 2012-13.
2 2. The first jurisdictional issue in this appeal of assessee is against the revision order passed by the PCIT, Chennai-3 u/s.263 of the Act, is bad in law and without foundation as there is no order existed on the date of passing of revision order.
Brief facts are that the assessee is an individual and assessed with ACIT, Non-Corporate Circle 10(1), Chennai. He filed his return of income for the assessment year 2012-13 on 31.03.2013. The case was processed u/s.143(1) of the Act on 07.05.2013 and there was no scrutiny assessment. Subsequently, notice u/s.148 of the Act dated 18.06.2018 was issued after recording reasons by the AO. The said notice was served on the assessee and in response to said notice, the assessee filed return of income on 24.08.2018. Thereafter notice u/s.143(2) of the Act fixing the case of hearing was issued and in response to the same, assessee filed certain details i.e., fresh balance sheet as on 31.03.2012 along with annexures. Consequently, according to Revenue, AO passed an order as under:- “After careful consideration of the facts and circumstances of the case and taking into account the submission filed, the re-assessment proceedings initiated u/s 147 of the Act are hereby dropped u/s 152(2) of the Act.”
3 The PCIT issued a show-cause notice u/s.263 of the Act dated 07.12.2021 calling for explanation from the assessee on merits and for that opportunity of being heard was granted on 17.12.2021, which was replied by assessee. Subsequent to the reply filed by assessee, a revised show-cause notice for revision of assessment u/s.263 of the Act dated 17.03.2022 was issued. The assessee before PCIT filed reply which was considered and the order passed by PCIT vide paras 10 to 12 reads as under:- 10. As stated earlier, the re-opened assessment proceedings were closed by AO u/s 152(2) without any verification on the issue on which the case was re-opened on the basis of reasons recorded by him and approval granted by CIT. The proceedings were closed with only a fresh balance sheet on record and no verification about the difference in figures between the original balance sheet filed along with the returns in 2013 vis-à-vis the fresh balance sheet filed in 2018, was made before dropping the proceedings initiated by issuing the notice u/s 148. The claim of the assessee that the assessing officer examined all the details with respect to assessee's claim, is not substantiated even by producing copies of reply filed by assessee during the course of such assessment proceedings or producing the books of account before the course of the current proceedings. Hence the reliance placed by assessee on various decisions of Courts are not applicable. Further argument of assessee that the section 263 cannot be initiated with a view to start fishing and roving enquiries in the matter of orders which are already concluded, is also against the facts on record since the undersigned is not conducting any roving enquiry and the revised show notice contains only a single issue. Thus the order u/s 152(2) dated 28.12.2019 is to be erroneous and prejudicial to the interests of revenue and calls for action u/s 263 in view of Expl. 2 to sec. 263(1).
Further, the order u/s 152(2) dated 28.12.2019 passed by AO is legally invalid and factually incorrect since Sec. 152(2) applies only when
4 Assessee has not filed appeal against the original assessment order u/s 246 whereas in this case there was no original assessment order itself as the return was only processed u/s 143(1). Assessee makes claim for dropping the proceedings by showing that he had been already assessed on a higher income which even included the proposed additions in the re-assessment proceedings whereas in this case no earlier assessment was there.)
For the reasons stated above, it is found that the order passed u/s. 152(2) of the Income Tax Act 1961 on 28.12.2019 for the Assessment Year 2012- 13 is erroneous in so far as it is prejudicial to the interests of revenue and needs to be revised u/s 263 of the Income tax Act. Hence the order is set aside with a direction to the Assessing Officer to complete the assessment as discussed above after making necessary verification and after giving reasonable opportunity of being heard to the assessee.
Aggrieved, now the assessee came in appeal before the Tribunal.
At the outset, the ld.counsel for the assessee Shri S. Sridhar drew our attention to the revision order passed by PCIT which is dated 30.03.2022 whereas he referred to the alleged order passed by the AO u/s.154 of the Act dated 05.05.2022, wherein the AO passed the order as under:- ORDER UNDER SECTION 154 OF THE INCOME TAX ACT, 1961
Assessment of the case was completed u/s 143(3) r.w.s.147 was dropped on 28/12/2019. This manual order has been passed for uploading in ITBA the setaside proceedings u/s 263.
The ld.counsel for the assessee referred to the above and stated that the alleged order u/s.154 of the Act is dated 05.05.2022, whereas the revision order is much prior i.e., 30.03.2022. The 5 ld.counsel stated that the assessee never received any order passed by the AO u/s.143(3) r.w.s. 147 of the Act or any order as alleged by the Revenue dated 28.12.2019. The ld.counsel for the assessee filed compilation of papers consisting of pages 1 to 16, wherein in pages 1 & 2, he has filed the details of order sheet entries from 18.06.2018 to the date on which notices u/s.148 of the Act was issued. Till the date of 28.12.2019, the alleged date on which the assessment order was passed and uploaded on the website of the Income-tax Department. The ld.counsel took us through the order sheet entries and that is last order sheet entry dated 28.12.2019, wherein the documents transmitted to whom and which documents are left, the columns are left blank. The assessee also filed RTI reply dated 16.12.2022 given by ACIT, Non-Corporate Circle-10, Chennai and the relevant question and answer reads as under:- Q.No. (i) With effect from 01/10/2019 it is mandatory for the Income Tax Department to generate a DIN number. The order was passed on 28.12.2019 and I request you to kindly provide me the DIN number for the closure order passed on 28.12.2019 Reply Copy of letter dated 05.05.2022 along with proceedings dated 05.05.2022 informing that the proceedings u/s 143 rws 147 was dropped on 28.12.2019 with DIN No.ITBA/AST/M/147/2022-23/ 1042951212(1), enclosed. Q.No. (ii) I request you to kindly provide me a copy of the order passed u/s 143(3) r.w.s.147 of the Income Tax Act, 1961 on 28.12.2019 for AY 2012-13 Reply Copy of order sheet notings dated 28.12.2019, dropping the proceedings initiated u/s 147 enclosed. No order in this regard was passed.
6 The assessee filed compilation consisting of 8 pages and the screenshots mentioned before us, which are enclosed at pages 6 & 7 of the assessee’s paper-book and the relevant entry of screenshot at Sl.No.3, which was particularly drawn attention, wherein there is no mention of attachment of order but even today it is not opening. The ld.counsel for the assessee during the course of hearing opened the portal of the Income-tax Department Website and stated that this order is not on the website. The ld.counsel for the assessee also stated that the AO in his reply under RTI has admitted that no order in regard to assessment framed u/s.147 r.w.s. 143(3) is passed. In term of the above, the ld.counsel stated that once there is no order available, no revision order can be passed on non- existent order. The ld.counsel for the assessee drew our attention to the main provisions of section 263 of the Act and for ready reference, the same is being reproduced as under:- 263. Revision of orders prejudicial to revenue.—(1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.
7 In term of the above, the ld.counsel stated that the provisions of section 263 of the Act is very clear that revision can be done in any order if available but in the present case there is no order available till time of passing of the revision order u/s.263 of the Act. Hence, he requested that on this very jurisdictional issue that preliminary objection be decided and revision order be quashed.
On the other hand, the ld.CIT-DR drew our attention to the revision order and stated that on 28.12.2019, the AO passed dropping the reassessment proceedings, which is noted by us in the above para 3. The ld.CIT-DR also relied on the provisions of section 292B of the Act, wherein it is mentioned that return of income not to be invalid on certain grounds and stated that the provisions of section 292B of the Act covers the issue.
We have heard rival contentions and gone through facts and circumstances of the case. We have perused the records including the assessee’s paper-book consisting of pages 1 to 16 and the information obtained under Right To Information Act from the ACIT, Non-Corporate Circle 10, Chennai dated 16.12.2022. The assessee being an individual filed his return of income for the relevant assessment year 2012-13 with ACIT, Non-Corporate Circle 10(1),
8 Chennai on 31.03.2013. Admittedly, this return was processed u/s.143(1) of the Act on 07.05.2013. Subsequently, notice u/s.148 of the Act dated 18.06.2018 was issued and said notice was served on the assessee and in response to the same, the assessee filed his return of income on 24.08.2018. Thereafter notice u/s.143(2) of the Act was issued and assessee filed certain details. Now contended by assessee before us that no order was passed by the AO and for this, assessee relied on the case history notings of proceeding u/s.147 of the Act carried out by the Revenue and dropping of proceedings u/s.152(2) of the Act dated 28.12.2019, which are enclosed in assessee’s paper-book pages 1 & 2. We noticed that on 28.12.2019 as per computerized order sheet details, the column of documents is left blank. Further, the AO while giving information under RTI Act, 2005, order u/s.7(1), the AO categorically admitted that no order dropping the proceedings u/s.147 of the Act dated 28.12.2019 was passed. The relevant information given by the AO i.e., ACIT, Non-Corporate Circle-10(1), Chennai dated 20.09.2022, which is enclosed in assessee’s paper- book at page 4, states as under:- “Grievance Raised: My Income tax assessment was completed under section 143(3) r.w.s.147 on 28/12/2019 according to the website. Till date neither the order has been served on me nor am I able to download from the IT portal. I am enclosing the copy of screen shot taken on various dates and I request I may please be served a copy of the order passed on 28/12/2019.
9 The reply of the above is as under:- “The resolution for your grievance application: The order dropping the proceedings initiated u/s 147 of the Act was dropped by AO on 28.12.2019 and no order in this regards was passed.”
Even the ACIT, Non-Corporate Circle 10, Chennai while replying under Right to Information dated 16.12.2022 also admitted that no order in regard to dropping of proceedings u/s.147 of the Act was passed. The relevant question No.2 and reply is reproduced in para 4 at page 5 of this order. It means that there is no order passed by the AO qua the above proceedings carried out by the Department u/s.147 of the Act after recording of reasons and notice u/s.148 of the Act.
6.1 When these facts were confronted to ld.CIT-DR, he could not produce any evidence that ever any order was passed by Revenue. Even during the course of hearing before us, the ld.counsel for the assessee drew our attention to relevant screenshot of the website of the Income-tax Department and during the course of hearing, he opened the portal of Income-tax Department website and demonstrated before bench that there exists no order as such in the portal. In view of the above, we are of the view that the pre- condition or prerequisite for exercising the powers u/s.263 of the Act by the Commissioner is that there should be proceedings under 10 the Act and in such proceedings, the AO must have passed an order and if these two conditions fulfills then comes the third i.e., Commissioner should consider that the said order is erroneous and prejudicial to the interest of Revenue. Reference to the provisions of section 292B of the Act by the ld.CIT-DR is without any basis because revision proceedings u/s.263 of the Act cannot take place if there is no order passed by the assessing authority or there is no proceedings under the Act on which any order is passed. In our view, once there is no order, as in the present case, the PCIT cannot exercise revisional powers u/s.263 of the Act. Hence, we quash the revision order and allow the appeal of assessee.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 31st July, 2023 at Chennai.