GYAN INFRABUILD PVT. LTD,VARANASI vs. ACIT CENTRAL CIRCLE-03, PATNA

That we had received an order u/s 263 passed by Id Principal Commissioner of Income-tax, Central Circle, Patna on 26.03.2022. 2 I.T.A. No. 175 to 178/Pat/2023 Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited

That based upon our understanding of the matter, an appeal against the said order was filed with Hon'ble High Court of judicature at Patna.

That during the course of arguments, it transpired that the said order is appealable before Hon'ble Income Tax Appellate Tribunal, Patna Bench, Patna. Copy of the order passed by Hon'ble Patna High Court is enclosed as Annexure to this application.

That the petition was hence withdrawn and this present application is being made for condonation on the basis of directions contained in the said order which has been downloaded from the website of Hon'ble Patna High Court. ………………………..”

Thought the Revenue has opposed the request for condonation of delay, we on perusal of the petition, are convinced that the assessee was prevented for reasonable cause from filing these appeals in prescribed time limit. Accordingly, we condone the delay and admit the appeals for hearing on merits.

As the issues raised in the present appeals are identical, they were heard together and are being disposed off by way of this common order. For the sake of convenience, we first take up the assessee’s appeal for Assessment Year 2015-16 and our decisions therein shall apply mutatis mutandis to the rest of the appeals of the assessee for Assessment Year 2016-17 to 2018-19. 4. The grounds of appeal raised by the assessee in the instant appeals are identical for Assessment Year 2015-16 to 2018-19. Therefore, for the sake of convenience, the grounds of appeal for Assessment Year 2015-16 is reproduced below:- “1. For that the grounds hereto are without prejudice to each other. Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited

For that the order passed by Id Principal Commissioner of Income-tax (Central), Patna is bad both in law and on facts.

For that the order passed by Id Principal Commissioner of Income-tax (Central), Patna is based on presumption, surmise and conjectures.

For that the Id Principal Commissioner of Income-tax (Central), Patna passed the order ignoring the fact that all the points which were raised in the notice had duly been examined by the Id AO.

For that the order passed by Id Principal Commissioner of Income-tax (Central), Patna is wholly perverse in as much as the same are contrary to and at variance with material available on record.

For that in any view of the matter, the order passed by the Id Principal Commissioner of Income-tax (Central), Patna to the extent as aforesaid is bad and therefore fit to be set aside.

For that other various grounds which may be urged at the time of hearing.”

Brief facts of the case are that the assessee is a company engaged in the business of building and road construction, sand supply, transportation, equipment supply etc.. A search and seizure operation u/s 132 of the Act and survey operation u/s 133A of the Act were conducted at the business premises of Subhash Prasad Yadav Group which included the assessee. Notice u/s 153A of the Act were issued for furnishing the return to which compliance was made and returns filed on 02/12/2019 declaring income of Rs.1,07,87,910/-. Original return was also filed on 30/09/2015 declaring similar income of Rs.1,07,87,910/-. During the course of scrutiny proceedings u/s 153A r.w.s. 143(3) of the Act carried out by serving notice u/s 143(2) and 142(1) of the Act, submissions were made to the notices and questionnaires along with copies of return, computation of income and point-wise reply of the questionnaire issued by ld. Assessing Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited Officer. All the submissions of the assessee on the relevant issues were duly considered and the returned income was accepted. The assessment order has been passed with the prior approval of JCIT, Central Range-1, Patna, vide letter dt. 27/12/2019. Thereafter, the ld. Pr. CIT, Central Patna, called for the assessment records and invoked the revisionary powers u/s 263 of the Act by issuing notice u/s 263 of the Act on 23/02/2022. 6. The ld. Pr. CIT issued a detailed showcause notice and has referred to various seized materials found during the course of search, reference to the statement of Shri Satyendra Kumar Sharma about various documents and books of account seized. The ld. Pr. CIT also referred to the statement of Shri Atul Kumar Agarwal, part time accountant of the assessee firm. Thereafter, reference has been made to various ledger accounts of the assessee company and the assessee was asked to give reply to the issues raised in the showcause notice because ld. Pr. CIT observed that ld. Assessing Officer has not examined all these documents and that the order of the ld. Assessing Officer is erroneous and prejudicial to the interest of the revenue. In reply, the assessee uploaded the written submission on ITBA Portal on 08/03/2022 and the gist of the reply reads as follows:- “In compliance, the assessee uploaded written submission on ITBA portal on 08.03.2022. The gist of reply of the assessee is as follows:-

However, the ld. CIT(A) was not satisfied with the contention made by the assessee that all the transactions mentioned in the various seized material are documents owned by Shri Satyendra Kumar Sharma. The ld. Pr. CIT came to the conclusion that search and seizure operations were conducted at Gyan Infrabuild Private Limited and accordingly proceedings u/s 153A of the Act were initiated and no search warrant was issued in the name of Shri Satyendra Kumar Sharma. Further, the ld. Assessing Officer erred in not raising any specific query about the seized documents and without making any enquiry, the returned income has been accepted and, therefore, the order of the ld. Assessing Officer dt. 27/12/2019, is not only erroneous but also prejudicial to the interest of the revenue.

Aggrieved, the assessee is now in appeal before this Tribunal.

The ld. Sr. Counsel for the assessee referring to the detailed written submissions as well as the paperbook, made multifold contentions which in brief are:- Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited (i) When the assessment order has been framed u/s 153A of the Act after obtaining necessary approval from Additional Commissioner of Income-tax (ACIT) u/s 153D of the Act, such assessment cannot be revised without revising the directions of the ACIT given u/s 153D of the Act. (ii) The ld. Pr. CIT erred in invoking the revisionary powers without considering the fact that the ld. Assessing Officer has conducted detailed enquiry by issuing questionnaires to the assessee to which compliance has been made by the assessee by way of filing the details along with the copies of returns, point- wise replies addressing all the issues raised in the questionnaire issued u/s 142(1) of the Act. Therefore, once the ld. Assessing Officer has carried out sufficient enquiry and taken one of the possible views in the light of the settled judicial pronouncements, the ld. Pr. CIT cannot assume juri iction u/s 263 of the Act. (iii) Even on merits, the assessee deserves to succeed because firstly there is no prejudice to the revenue because the additions have been made in the hands of Shri Satyendra Kumar Sharma, who has admitted the unaccounted income arising out of the seized material and further the ld. Pr. CIT has referred to certain documents which even do not pertain for the Assessment Year in question and has also referred to certain documents which are in the hand-writing of Shri Satyendra Kumar Sharma and since there was no supporting evidence available for such figures Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited mentioned in the impugned order, it has no relevance at all in the eyes of law for the assessment year in question.

The assessee apart from making the above submissions, has filed written submissions running into 50 pages for all the impugned Assessment Years along with a paper book containing 565 pages, the index of which is reproduced below:- Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited

Per contra the ld. D/R vehemently argued supporting the order of the ld. Pr. CIT and also stated that various seized material referred in the impugned order clearly indicates that they all belong to the assessee company and there is no discussion about these seized documents in the assessment order nor any specific details have been called for by the ld. Assessing Officer with regard to these documents. He further submitted that the ld. Assessing Officer has not carried out Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited any enquiry with respect to the seized material found during the course of search at the assessee’s premises and, therefore, the ld. Pr. CIT was justified in invoking the revisionary powers and holding the assessment order of the ld. Assessing Officer dt. 27/12/2019 as erroneous and prejudicial to the interest of the revenue.

We have heard rival contentions and perused the material placed before us. Search and seizure action u/s 132 and Survey u/s 153A of the Act on 23/02/2018 was carried out at the business premises of Subhash Prasad Yadav Group which included the assessee. Various documents were seized and statements of various persons who were attached with the assessee company were also recorded and this mainly included the statement of Shri Satyendra Kumar Sharma, who is working as Director of the assessee company, and other employees, mainly, Mrs. Muskan Pandey, Shri Hulas Pandey, Shri Atul Kumar Agarwal etc,. Subsequent to search, notice u/s 153A of the Act were issued to the assessee company to which necessary compliances were made and return was filed. However, the returned income as disclosed in the original return filed on 30/09/2015 was again shown as income in the return filed in compliance to notice u/ s 153A of the Act furnished on 02/12/2019. Thereafter the assessee was served with the statutory notices u/s 143(2) & 142(1) of the Act and various questions were raised in the notice u/s 142(1) of the Act as well as during the course of assessment proceedings. In the assessment order framed u/s 153A of the Act, the ld. Assessing Officer has mentioned that the details were filed along with the submissions as well as copies of returns, computation of Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited income and point-wise reply. Further the assessment was completed after taking necessary approval u/s 153D of the Act from JCIT, Central, Range-1, Patna. Finally, the assessment for all the impugned assessment years for Assessment Year 2015-16 to 2018-19 were completed accepting the returned income filed by the assessee. Now, all the four assessment years evenly dt. 27/12/2019 are the subject matter of the revisionary proceedings invoked by the ld. Pr. CIT u/s 263 of the Act, wherein after referring to the seized material and other discussions, all these four assessments have been held to be erroneous and prejudicial to the interest of the revenue.

The assumption of juri iction u/s 263 of the Act holding the assessment order as erroneous and prejudicial to the interest of the revenue is in challenge before us. As Section 263 of the Act has a direct bearing on the controversy, therefore, it is pertinent to take note of this section. It reads as under:- "263(1) The 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 interest 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. Explanation- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation- In computing the period of limitation for the purposes of sub- section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded."

A bare perusal of sub section-1 would reveal that powers of revision granted by section 263 to the learned Commissioner have four compartments. In the first place, the learned Commissioner may call for and examine the records of any proceedings under this Act. For calling of the record and examination, the learned Commissioner was not required to show any reason. It is a part of his administrative control to call for the records and examine them. The second feature would come when he will judge an order passed by an Assessing Officer on culmination of any proceedings or during the pendency of those proceedings. On an analysis of the record and of the order passed by the Assessing Officer, he formed an opinion that such an order is erroneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The learned Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited Commissioner would issue a show cause notice pointing out the reasons for the formation of his belief that action u/s 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. He may set aside the order and direct the Assessing Officer to pass a fresh order. At this stage, before considering the multi-fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the ld. Pr. CIT taken u/s 263. 14. Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC) has laid down following ratio with regard to provisions of section 263 of the Act: “There can be no doubt that the provision 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 that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the revenue’ has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue 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 ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO 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 ITO 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 - Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC)”.[Emphasis Supplied]

In the light of the provisions of section 263 of the Act and a settled position of law, powers u/s 263 of the Act can be exercised by the Pr. Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited Commissioner/Commissioner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and also prejudicial to the interest of the Revenue. By 'erroneous' is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry.

The ITAT in the case of Mrs. Khatiza S. Oomerbhoy vs. ITO, Mumbai, 101 TTJ 1095, analyzed in detail various authoritative pronouncements including the decision of Hon'ble Supreme Court in the case of Malabar Industries 243 ITR 83 and has propounded the following broader principle to judge the action of CIT taken under section 263: “(i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated as prejudicial to the interests of the Revenue and if the AO has adopted one of the courses permissible under law or where two views are possible and the AO has taken one view with which the CIT does not agree. If cannot be treated as an erroneous order, unless the view taken by the AO is unsustainable under law (vi) If while making the assessment, the AO examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determine the income, the CIT, while exercising his power under s 263 is not permitted to substitute his estimate of income in place of the income estimated by the AO. (vii) The AO exercises quasi-judicial power vested in his and if he exercises such power in accordance with law and arrive at a conclusion, such conclusion cannot be termed to be erroneous simply because the CIT does not fee stratified with the conclusion. Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited (viii) The CIT, before exercising his juri iction under s. 263 must have material on record to arrive at a satisfaction. (ix) If the AO has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation by a letter in writing and the AO allows the claim on being satisfied with the explanation of the assessee, the decision of the AO cannot be held to be erroneous simply because in his order he does not make an elaborate discussion in that regard.”

Apart from above stated broader principles, one more principle needs to be added in view of the judgment of Hon’ble Delhi High Court in the case of ITO vs. D.G. Housing Projects Ltd. [2012] 343 ITR 329 (Delhi) that the ld. CIT has to examine and verify the issue himself and give a finding on merits and form an opinion on merits that the order passed by the AO is erroneous and prejudicial to the interest of the Revenue. Relevant extract is reproduced below: “In the present case, the findings recorded by the Tribunal are correct as the CIT has not gone into and has not given any reason for observing that the order passed by the Assessing Officer was erroneous. The finding recorded by the CIT is that "order passed by the Assessing Officer may be erroneous". The CIT had doubts about the valuation and sale consideration received but the CIT should have examined the said aspect himself and given a finding that the order passed by the Assessing Officer was erroneous. He came to the conclusion and finding that the Assessing Officer had examined the said aspect and accepted the respondent’s computation figures but he had reservations. The CIT in the order has recorded that the consideration receivable was examined by the Assessing Officer but was not properly examined and therefore the assessment order is "erroneous". The said finding will be correct, if the CIT had examined and verified the said transaction himself and given a finding on merits. As held above, a distinction must be drawn in the cases where the Assessing Officer does not conduct an enquiry; as lack of enquiry by itself renders the order being erroneous and prejudicial to the interest of the Revenue and cases where the Assessing Officer conducts enquiry but finding recorded is erroneous and which is also prejudicial to the interest of the Revenue. In latter cases, the CIT has to examine the order of the Assessing Officer on merits or the decision taken by the Assessing Officer on merits and then hold and form an opinion on merits that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. In the second set of cases, CIT cannot direct the Assessing Officer to conduct further enquiry to verify and find out whether the order passed is erroneous or not.”

In the light of the above, we would like to examine the fact of the instant case. Before us, the first contention made by the ld. Counsel for the assessee is that the impugned revisionary proceedings are not valid in the eyes of law because only the order framed u/s 153A of the Act has been held to be erroneous and prejudicial to the interest of the Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited revenue but the same cannot be held to be justified until and unless the approval given u/s 153D of the Act has also been held to be erroneous and prejudicial to the interest of the revenue. Now, under Chapter 14 of the procedure for assessment, so far as the assessments relating to search cases are concerned, separate procedures have been laid down. Starting from Section 153A for assessments in the case of search or acquisition, Section 153B for time limit for completion of assessment u/s 153A, Section 153C for assessment of income of any other person and Section 153D i.e., prior approval necessary for assessment in case of search or acquisition. So far as Section 153D of the Act is concerned, the same reads as follows:- “153D. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of [sub-section (1) of] section 153A or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner:]

Now, on perusal of the above Section which states that a prior approval is necessary for assessment in case of assessment search or acquisition, it is specifically mentioned that no order of assessment or re-assessment shall be passed by an Assessing Officer below the rank of JCIT except with the prior approval of the Joint Commissioner. Before us, the ld. Counsel for the assessee stated that for the search assessment cases whatever seized material are found belonging/pertaining to the assessee, a copy of complete set is also kept with the authority who has to provide the approval of the assessment or re-assessment. He also stated that during the course of assessment proceedings, the ld. Assessing Officer has to update about Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited the proceedings to his senior who has to finally grant the approval u/s 153D of the Act. Even after preparation of the draft assessment order, the same is sent to the ld. Joint Commissioner and he/she after thorough examination of the seized material vis-à-vis the draft assessment order prepared by the ld. Assessing Officer and after being satisfied with the correctness of such draft assessment order or in case required can suggest certain changes in the said assessment order finally grants approval. Only after receiving such approval u/s 153D of the Act, the ld. Assessing Officer passes the final assessment order u/s 153A r.w.s. 143(3) of the Act. In short, the assessment order u/s 153A of the Act is incomplete without the approval u/s 153D of the Act. Now, whether action of the ld. Pr. CIT of assuming juri iction u/s 263 of the Act holding only the order u/s 153A of the Act is erroneous so far as prejudicial to the interest of the revenue and not the order u/s 153D of the Act, as erroneous insofar as prejudicial to the interest of the revenue, can be held to be justified.

Before us, the ld. Counsel for the assessee, has referred to plethora of decisions whether the revisionary order u/s. 263 of the Act has been quashed, where only the order u/s 153A of the Act is revised without revising order u/s 153D of the Act.

Reliance is placed on the following judicial pronouncements: i. Smt. Abha Bansal v. Principal Commissioner of Income-tax [2021] 132 taxmann.com 231 (Delhi - Trib.) - "9.4 It is evident from the plain reading of the *— aforesaid Explanation that an Order passed on or before or after 1 st Day of June, 1988 by the A.O. shall include (/) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (if) an order made by Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General or Principal Commissioner or ' Commissioner authorised by the Board in this behalf under section 120. It may be noted that Order of assessment passed with the approval of JOT under section 153D of the I.T. Act, 1961 could not be revised under section 263 of the I.T. Act, 1961. The Ld. D.R. has, however, relied upon the Order of ITAT, Panaji Bench, but, has not explained whether the Judgment of Hon'ble Allahabad High Court in the case of Dr. Ashok Kumar (supra) or different Benches of the Tribunal have been considered in this case by the Panaji Bench. It is not decided in this case that assessment order cannot be revised without revising the approval under section 153D of the I.T. Act and Explanation 1 to section 263 of the I.T. Act has also not been considered. Therefore, this decision relied upon by the Ld. D.R. would not apply to this case. Further the Judgment in the case of Param Transport (P.) Ltd. (supra), of Hon'ble Chhattisgarh High Court (supra) is not with regard to approval obtained under section 153D of the I.T. Act because in this case it was held that revisional power under section 263 of the I.T. Act is applicable to assessments under search and seizure. However, it is not explained by the Ld. D.R. whether in this case the approval under section 153D have been revised by the Learned PCIT. It may also be noted that it is well settled Law that if two views are possible, then the view which is in favour of the assessee should be made applicable. We rely upon Judgment of Hon'ble Supreme Court in the case of CITv. Vegetable Products Ltd. R9731 88 ITR 192. It may also be noted here that the Hon'ble Allahabad High Court is one of the juri ictional High Court of Delhi Bench, therefore, preference shall have to be given to the Judgment of the Hon'ble Allahabad High Court as reproduced above. In the totality of the facts and circumstances of the case and following the decisions referred to above, we are of the view that the Learned PCIT was not having juri iction to proceed under section 263 of the I.T. Act, 1961 in the matter in issue and as such the Order passed by the Learned PCIT is nullity and void ab initio. We therefore, decide this issue in favour of the assessee. ii) Surendra L. Heera Nandani v. Pr.CIT [IT Appeal No.3226/Mum./2017 etc., date. 14-2-2018]

Since in the instant case also the Assessing Officer has passed the order after obtaining necessary approval from Addl. CIT u/s.l53D of the I.T. Act, therefore respectfully following the above-mentioned decisions of the Coordinate Benches o the Tribunal we are of the considered opinion that the CIT has no power to revise the order u/s.263 Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited of the I.T. Act in the instant case since the same has been passed with the approval of the Addl. CIT U/S.153D of the I.T. Act. We respectfully following the decision of ACIT Vs. Dr. Ashok Kumar, ITA 192 of 2000. We find that in the instant case the original approval 25 ITA No3226- 3232.M.17 A.Y.2008 09 to 2014-15 was granted by Addl. CIT and this assessment order is cannot b< revise without approval of Add. CIT.

Referring to the decision of the Hyderabad Bench of the Tribunal in the case of M/s. Trinity Infra Ventures Ltd. Vs. DCIT vide ITA Nos. 584 to 589/H/2015 order dated 04-12- 2015 for A.Yrs. 2005- 06 to 2010-11 he submitted that the Tribunal in the said decision, following various decisions including the decision of Hon'ble Allahabad High Court in the case of CIT Vs. Dr. Ashok Kumar vide Income Tax Appeal No. 192/2000 order dated 06-08-2012, has held that assessment order approved by the Addl.CIT U/S.153D cannot be subjected to revise u/s.263 of the I.T. Act.

We have considered the rival arguments made by both the sides, perused the orders of the AO and the Ld.CIT and the paper book filed on behalf of the assessee.

We find merit in the above submission of the Ld. Counsel for the assessee. We find the Lucknow Bench of the Tribunal in the case of MehtabAlam Vs. ACIT vide ITA Nos.288 to 294/Lkw/2014 order dated 18-11-2014 while deciding an identical issue has observed as under.

1 We find the Hyderabad Bench of the Tribunal in the case of CH. Krishna Murthy Vs. ACIT vide ITA No.766/Hyd/2012 order dated 13-02- 2015 following the decision of the Lucknow Bench of the Tribunal in the case of MehtabAlam (Supra) held that CIT is not justified in assuming juri iction u/s.263 when the order has been passed in terms of section 153D of the Act.

2 We find the Hyderabad Bench of the Tribunal in the case of M/s. Trinity Infra Ventures Ltd. (Supra) had an occasion to decide an identical issue and it held that the assessment order approved by the Addl. CIT U/S.153D cannot be subject to revision u/s.263 of the I.T. Act.

The Ld. Counsel for the assessee has further submitted that the assessment under section 143(3) read with section 153C was passed after getting approval of Addl. CIT under section 153D of the I.T. Act and therefore such an assessment cannot be revised without revising the directions of the Addl. CIT under section 153D of the I.T. Act. The Ld. Counsel for the assessee, has relied upon the decisions of this Tribunal in the case of Ch. Krishna Murthy vs. ACIT, C.C. 3, Hyderabad in ITA No. 766/Hyd/2012 dated 13.02.2015 and also the decision of Lucknow Bench of ITAT in the case of MehtabAlam 288/Luck/2014 dated 18.11.2014 in support of this contention. He has also placed reliance upon the decision of Hon'ble

From going through the above decisions, wherein it has been consistently held that without revising the approval u/s 153D of the Act, the ld. Pr. CIT cannot revise the assessment order u/s 153A of the Act. Even in case of Surendra L. Heera Nandani (supra) it was held that ld. Pr. CIT has no power to revise the order u/s 263 of the Act since the same has been passed with the approval of the Addl. CIT u/s 153D of the Act.

Therefore, in the light of the above decisions, so far as the first limb of legal argument of the ld. Sr. Counsel for the assessee is concerned, we find merit that ld. Pr. CIT erred in assuming juri iction u/s 263 of the Act by revising order u/s 153A r.w.s. 143(3) of the Act without considering that prior approval already accorded to ld. Assessing Officer u/s 153D of the Act and secondly when orders u/s 153A of the Act has been passed after receiving approval u/s 153D of the Act, Ld. PCIT erred in revising order u/s 153A of the Act without first revising the order u/s 153D of the Act as which means that no defect has been observed by ld. Pr. CIT in approval u/s 153D of the Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited Act. Thus the action of the ld. Pr. CIT assuming juri iction u/s 263 of the Act cannot be held to be tenable, the impugned proceedings deserves to be quashed on this grounds itself.

As regards the second limb of argument is concerned that detailed enquiry has been conducted and one of the view legally permissible has been taken, we, in view of the judgment in the case of Malabar Industrial Co. Ltd. vs. CIT (supra) and of Income-tax Officer v. D.G. Housing Projects Ltd. (supra) note that the assessments in question before us are search assessments. There is a separate procedure for carrying out the assessment for search cases. Though we have referred to the procedure in the preceding paragraphs, we will like to observe that prior to issuing of notice u/s 153A of the Act, complete seized material are available with the ld. Assessing Officer and a copy is also made available to the Senior Officer who has to grant the approval u/s 153D of the Act. Under the search assessment, the assessee has to be confronted with all the seized material belonging to the assessee. In the instant case there were certain documents which were owned by Shri Satyendra Kumar Sharma, in the statement recorded on oath where, he has categorically stated that these documents belong to him and were maintained by him and on the basis of such documents, additions have been made in the hands of Shri Satyendra Kumar Sharma also. Now, reference has been made to the very same set of documents which have been owned by Shri Satyendra Kumar Sharma and the ld. Pr. CIT has observed that the ld. Assessing Officer ought to have conducted enquiry about these documents. We fail to find any merit in such action of the ld. Pr. CIT because the seized materials Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited available with the ld. Assessing Officer which belonged to the assessee company have been examined, queries have been raised by issuing questionnaire. Detailed reply has been received along with necessary documents and after recording all these facts in the assessment order, ld. Assessing Officer has completed the assessment. So, it is not a case of no enquiry. However, it may be a case that intense enquiry as referred by the ld. Pr. CIT in the impugned order might not have been conducted but that cannot give power to the ld. Pr. CIT to revise the assessment order because the ld. Assessing Officer has conducted reasonable enquiry and taken one of the legally permissible view under the Act.

Further, the ld. D/R failed to rebut this fact that the ld. Assessing Officer is not the only person who is involved in completing the assessment and along with him, the ld. JCIT is also part of the assessment proceedings because once the draft assessment order is prepared by the ld. Assessing Officer, he/she has to approach the Joint Commissioner for prior approval, who again examines the seized material with the draft assessment order framed by the ld. Assessing Officer and after being satisfied, either suggests necessary changes or he accords the approval after which, the ld. Assessing Officer passes the final assessment order.

We also observe that learned PCIT u/s 263 of the Act before initiating the revisionary proceedings was required to carry out necessary enquiry in support of his assumption that the documents belongs to the assessee or that the ld. Assessing Officer has not enquired. The Hon'ble High Court of Delhi in the case of Income-tax Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited Officer v. D.G. Housing Projects Ltd. reported in [2012] 343 ITR 329 has held that “in cases of wrong opinion or finding on merits, the CIT has to come to the conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under Section 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because the order passed is not sustainable in law and the said finding must be recorded. CIT cannot remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous.” Further the Hon’ble Apex Court in its judgment in the case of CIT vs. Electro House reported in 82 ITR 824, had held that “the CIT before reaching his decision and not before commencing his enquiry is to give the assessee an opportunity of being heard and make or cause to make such enquiry as he deems necessary”. We note that in the instant case the learned PCIT before reaching his decision that the documents found, belongs to the assessee had made no enquiry whatsoever. Thus learned PCIT failed to appreciate that before he could have considered the assessment order to be erroneous and prejudicial to the interest of the revenue, he ought to have brought material on record to show that the documents belongs to the assessee and not by merely referring to those very documents which already stood examined by the ld. Assessing Officer and considering the statement of Shri Satyendra Kumar Sharma, for coming to the conclusion that the documents cannot be said to be belonging to the assessee.

We observe that in the case of Ramji Dayawala & Sons Pvt. Ltd. vs. Invest Import, AIR 1981 SC 2085, the Hon'ble Apex Court has held that if the truth of the facts stated in a document is in issue, mere proof of Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited the handwriting and execution of the document would not furnish evidence of the truth of the facts or contents of the document. The truth or otherwise of the facts or contents so stated would have to be proved by admissible evidence i.e. by the evidence of those persons who can vouchsafe for the truth of the facts in issue. Further reliance is placed on the following judicial pronouncements: i. Mohammed Yusuf vs. D. &Ors., AIR 1968 (Bom.) 112. ii. I.T.A. No. 175 to 178/Pat/2023 Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited held to be valid and tenable in the eyes of law and thus the impugned proceedings u/s 263 of the Act, deserves to be quashed.

So far as the merits of the case is concerned, we, taking strength of the judgment of the Hon’ble Delhi High Court in the case of Income- tax Officer v. D.G. Housing Projects Ltd. (supra), find that the ld. Pr. CIT has merely referred to the seized material but has not made any further enquiry about the correctness of such documents, as to whether they belong to the assessee, or pertain to the year under consideration.

We find that the learned PCIT in his show cause notice has referred to documents which even does not pertains to AY 2014-15 or 2015-16 but had been prepared thereafter and as such, it is evident that the order passed by ld PCIT apparently are without application of mind. The ld. Counsel for the assessee has referred to GIB-11 Page 8 which is in handwriting of Shri. Satyendra Kumar Sharma, is not a document for the AY 2015-16 or even AY 2016-17. In fact, there was no supporting evidence available for such figures and thus had no relevance at all in the eye of law for the assessment year either for AY 2015-16 or for AY 2016-17. 29. We note that the Learned CIT has committed a factual error observing at page 19 of his order, that the LD ACIT has committed an error by not examining the discrepancies pointed out by the DDIT(Inv) in his notice date 18.05.2018 in respect of the transactions with M/s Broadson Commodities Pvt Ltd.

However, it is an admitted fact that the Learned ACIT had duly examined each of the allegations stated in the notice under section 263 Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited as is evident from the notice of the Learned ACIT issued under section 142(1) of the Act dated 11-11-2019, a copy thereof is placed at pages 24- 27 of the PB-I for the assessment year 2015-16. In fact in respect of all the allegation regarding the alleged discrepancy in respect of the transaction with M/s Broadson Commodities Pvt Ltd at item number 19, the AO had called for the assessee' explanation which was in respect of the advances made to M/s Broadson Commodities Pvt. Ltd. The assessee in response to said notice had duly explained the same, vide its response dated 24-12-2019 a copy of which has been placed at page 28 to 364 of the PB-I, wherein at para 18 the alleged discrepancy had duly been explained (at page 76-79). Further, on perusal of the said response which is running into 337 pages, we note each of the issues had been duly explained. Thus, we note that the Learned CIT while revising the order under section 263 has completely overlooked the assessee's response as also the order sheet entries made by ld. Assessing Officer in the assessment file of the assessee. We note that the Learned CIT has also overlooked that the Learned ACIT had examined Shri Baban Singh, Director, of M/s Broadson Commodities Pvt Ltd under section 133(6)/131 of the Act which is evident from the Order Sheet entry dated 25/12/2019 of the assessment file.

We find that the learned PCIT has failed to appreciate that the learned AO in given circumstances had framed the assessment with proper application of mind by making necessary enquiry and examining the seized material which in ld. Assessing Officer’s view were belonging to the assessee and thus learned PCIT had acted without juri iction in setting aside the order of the ld AO and holding Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited the same as erroneous being prejudicial to the interest of the revenue. We draw support from the following judicial pronouncements: 100 ITD 441 (Kol) Al-Haz Amir Hasan Properties Pvt. Ltd. vs. Asst. CIT iii. 203 ITR 108 (Bom) CIT vs. Gabriel India Ltd iv. 171 ITR 141 (MP) CIT vs. Ratlam Coal Ash Co

We also find that learned CIT has erred in holding the assessment order as erroneous, a condition precedent and that the fact for holding the order was erroneous he has not made any enquiry whatsoever but proceeded on the basis of his own opinion. Where more than one view is possible, the order cannot be said to be erroneous as has been held by the Apex Court in the case of Malabar Pr. CIT has taken no action to cancel/revise the said assessments made in the case of Shri Satyendra Kumar Sharma.

Thus, in the light of the settled judicial precedents referred supra and on our examination of the facts of the case including the enquiries conducted by the ld. Assessing Officer regarding the transactions Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited carried out during the impugned year as well as examining the seized material, and then getting necessary approval u/s 153D of the Act and also observing that the ld. Pr. CIT did not make any specific enquiry prior to assuming juri iction, find the impugned revisionary proceedings as bad in law and deserves to be quashed on account of the following:- a) that when there is an approval u/s 153D of the Act, it has been held consistently by the Hon’ble Courts (referred supra) that revisionary power u/s 263 of the Act cannot be exercised. b) even otherwise, without revising the order u/s 153D of the Act, and finding them to be erroneous and prejudicial to the interest of the revenue, revisionary powers cannot be invoked for the assessment order framed u/s 153A/143(3) of the Act after getting approval u/s 153D of the Act. c) that when the ld. Assessing Officer has conducted detailed enquiry, examined the seized records, made necessary observations in the assessment order, referred to various statements filed by the assessee and having taken one of the legally permissible view, then in such circumstances, the revisionary powers cannot be exercised just on the ground that adequate enquiry has not been done. d) that revisionary proceedings cannot be held to be justified unless ld. Pr. CIT had carried out independent enquiry specifically dealing with the details in his possession, for the issues raised in the showcause notice u/s 263 of the Act. e) that when the Assessing Officer, based on his observations and examination of records had made addition in the hands of another Assessment Year: 2015-16 to 2018-19 Gyan Infrabuild Private Limited assessee, the ld. Pr. CIT without revising the assessment order of other assessee, which has been framed by the same Assessing Officer cannot revise the assessment order in the case of the assessee and directing to make the additions as the same would tantamount to double addition. f) that the finding on merit of the ld. Pr. CIT contains various mistakes as the documents referred are not for the assessment year in dispute and some of the documents are not belonging to the assessee.

Thus, in view of our discussion (supra) and our examination of the facts, as the order of the Assessing Officer is neither erroneous nor prejudicial to the interest of revenue, there was no scope for the ld. Pr. CIT to revisit the order of the ld. Assessing Officer. Therefore, the impugned order u/s 263 of the Act is quashed and assessment order framed u/s 153A/143(3) of the Act dt. 26/03/2022, is restored. The effective grounds raised by the assessee are hereby allowed for Assessment Year 2015-16. As discussed earlier, our decision for Assessment Year 2015-16 quashing the order u/s 263 of the Act is applicable mutatis mutandis to the appeals of the assessee for Assessment Year 2016-17 to 2018-19. 34. In the result, all the appeals of the assessee for Assessment Year 2015-16 to 2018-19 are allowed. Order pronounced in the Court on 13th May, 2024 at Kolkata. (SONJOY SARMA) ACCOUNTANT MEMBER Kolkata, Dated 13/05/2024 *SC SrPs

""यथ" / The Respondent 3. संबंिधत आयकर आयु" / Concerned Pr. CIT 4. आयकर आयु" अपील ( ) / The CIT(A)- 5. िवभागीय "ितिनिध अिधकरण अपीलीय आयकर पटना /DR,ITAT, Patna, , , 6. गाड" फाईल /Guard file. आदेशानुसार/ BY ORDER,