DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR vs. M/S MAYUKH VINIMAY PVT LTD, JAIPUR

PER VIJAY PAL RAO, JM :

This appeal by the revenue is directed against the order dated 21st May, 2018

of ld. CIT (A)-4, Jaipur for the assessment year 2009-10. The revenue has raised

the following grounds :-

“ Whether on the facts and the circumstances of the case and in law the CIT (A) is justified in deleting the addition merely on the basis Hon’ble ITAT has quashed the order u/s 263of the IT Act without discussing the case on merit & ignoring the facts and the department has not accepted the order of Hon’ble ITAT.”

The appellant craves, leave or reserving the right to amend modify, alter add or forego any ground (s) of appeal at any time before or during the hearing of this appeal.

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material on record. The impugned assessment order was passed by the AO in pursuant to the revision order dated 20th March, 2013. We further note that the said

revision order was challenged by the assessee before this Tribunal and this Tribunal vide order dated 4th May, 2018 in ITA No. 2002/JP/2013 has quashed the order

passed under section 263. For sake of completeness, we reproduce the relevant

part of the Tribunal’s order whereby the revision order passed under section 263

was quashed and set aside in para 4 to 6 as under :-

“4. We have considered the rival submissions as well as the relevant material on record. The assessment in the case of the assessee was completed under section 147 read with section 143(3) on 11.3.2011. Subsequently, the ld. CIT-III, Kolkata on perusal of the assessment record issued a show cause notice dated 1st February, 2013 on the issue of share capital issued by the assessee during the year under consideration at a premium of Rs. 370/- per share on the ground that the requisite enquiry was not conducted by the AO. The ld. CIT-III Kolkata has passed the impugned revision order on 20th March, 2013. However, prior to the said order passed under section 263, the ld. CIT-III, Kolkata also passed an order dated 27th February, 2013 under section 127 of the Act whereby various cases including the case of the assessee was transferred from ITO Ward 9(1) Kolkata to ACIT, Central Circle-2, Jaipur. The said order passed under section 127 of the IT Act was with effect from 27th February, 2013. Thus, as on 27th February, 2013 the case of the assessee was transferred from the jurisdiction of ITO Ward 9(1) Kolkata to ACIT, Central Circle-2, Jaipur. This fact of transfer of the case of the assessee has not been

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disputed by the revenue. We further note that transfer of the case is not for any specific purpose but it is a general order and, therefore, it appears that till further order may be passed by the appropriate authority, the assessment of the assessee would be framed by the ACIT Central Circle-2, Jaipur. The revenue has not placed any record before us contrary to the said order dated 27th February, 2013 passed under sec. 127 and also to controvert the fact that the case of the assessee was transferred to the ACIT Central Circle-2, Jaipur and still remains with ACIT, Central Circle-2, Jaipur. Section 127 empowers the authority to transfer the cases to the Assessing Officer and as per the explanation to the said section the term ‘case’ includes any order or direction and all proceedings under this Act in respect of any year which may be pending on the date of such order or direction which may have been completed on or before such date and includes also all such proceedings under the Act which may be commenced after the date of such order. For ready reference, we quote the explanation to section 127 as under :-

“Explanation.—In section 120 and this section, the word "case"62, in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act62 in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year.]”

Thus once the case of the assessee was transferred from ITO Ward 9(1), Kolkata to ACIT Central Circle-2, Jaipur, all the pending proceedings also stood transferred from Kolkata to Jaipur and the jurisdiction of the CIT-III, Kolkata ceases to exist forthwith. The Hon’ble Calcutta High Court in case of ITO vs. Ashoke Glass Works (supra) while dealing with an identical issue, has observed in para 11, 12 and 25 as under :-

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“11. It appears from the judgment that the Commissioner long before, by office order dated September 2, 1963, under s. 123(1) ordered that the IAC mentioned in col. II of the table thereto annexed, was, to the exclusion of all other IACs, to perform the functions as IAC in respect of persons, incomes or classes thereof or areas in respect whereof the ITOs of Districts/Circles mentioned in col. III of the said table would perform his functions. The table indicated that the IAC of Income-tax, Range III, was to perform his functions in respect of area or income or person or classes thereof over which the ITO, District III, would perform his functions as the ITO and similarly the IAC, Range V, was conferred jurisdiction over ITO, District I, renamed Special Circle I. In view of the wide meaning given to the word "case" in the Explanation to s. 127, the learned judge was of opinion that the order of the Commissioner could not be interpreted to include pending cases only, but thereby the ITO, Special Circle I, became seized of jurisdiction in respect of all proceedings under the Act relating to the assessee which were pending on the date of the transfer order as also all proceedings which might be commenced after the date of the transfer. It was held that along with the transfer of the case to the ITO, Special Circle I, since the IACs have no independent jurisdiction, the IAC, Range V, having jurisdiction over the transferee-ITO, acquired jurisdiction over the assessee's file, while the IAC, Range III, on the said date ceased to have jurisdiction over areas and also incomes or persons or classes thereof under the erstwhile jurisdiction of the ITO, "B" Ward, District III(I). The IAC, Range V, under the provisions of s. 129 became entitled to exercise such jurisdiction over the proceedings under s. 271(1)(c) as successor-in-office. 12. In both decisions, orders passed by the Commissioner under s. 127(1) of the I.T. Act transferring cases from one ITO to another, was the subject-matter for consideration. According to Sabyasachi Mukharji J., such transfer under s. 127 could only relate to pending cases and not to cases over which the ITO had no jurisdiction on the day the order for transfer of cases becomes effective. Chittatosh Mukherjee J., on the contrary, held that in view of s. 129, by an order of transfer under s. 127, the transferee-ITO becomes seized of jurisdiction not only of pending cases but of all proceedings under the Act in respect of the assessee. With the transfer of the assessee's case to another ITO, the IAC having jurisdiction over such transferee-officer, acquires jurisdiction over the assessee's file while the erstwhile IAC ceases to have such jurisdiction. Both the learned judges incidentally referred to s. 123(1), Sabyasachi Mukharji J. holding that there is no power under the relevant provisions to transfer a pending case even under the said s. 123(1), while Chittatosh Mookerjee J. noted that the Commissioner could vary, amend or rescind orders of jurisdiction when s. 129 would be attracted in respect of s. 123 as also of s. 127.

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Thus once the jurisdiction of the AO was ceased to exists over the case of the assessee, the jurisdiction of the CIT also ceases to exist to proceed further with the pending proceedings under section 263 of the Act. The Hon’ble Calcutta High Court in a subsequent decision in case of Ramshila Enterprises Pvt. Ltd. vs. Principal CIT (supra) has reiterated its view in para 24 to 31 as under :-

“ 24. We have considered the rival submissions. It is not necessary for us to consider whether the Commissioner had jurisdiction to restrict the order of transfer, for the simple reason that the order of transfer in this case was not a restricted one. Reading the order dated 3rd September, 2012 as a whole, it does not appear that any restricted transfer was sought to be made for any particular year or years or otherwise. The order of transfer, as we have already indicated, was passed in the interest of revenue for better coordination, effective investigative and meaningful assessment. 25. The actual transfer of files may have taken place on 29th July, 2013 but admitted position is that a notice under Section 143(2) by the transferee- assessing officer was issued on 18th March, 2013. The existence of files does not confer the jurisdiction when the same has validly been transferred and also acted upon. The jurisdiction over the subject-matter has to be conferred by law. The jurisdiction in this case had been transferred by the order dated 3rd September, 2012 by no other than the CIT Kolkata- II, Kolkata himself. Once that was done CIT Kolkata - II, Kolkata lost the seisin over the matter. He became 'functus officio'. 26. Reference in this regard may be made to the Stroud's Judicial Dictionary of Words and Phrases, 7th Edition, Page 1085 wherein the following meaning has been expressed:—

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"FUNCTUS OFFICIO. An arbitrator or referee cannot be said to be functus officio when he has given a decision which is held to be no decision at all (Davies v Howe Spinning Co Ltd, 27 B.W.C.C. 207). Where a judge has made an order for a stay of execution which has been passed and entered, he is functus officio, and neither he nor any other judge of equal jurisdiction has jurisdiction to vary the terms of such stay (Re V.G.M. Holding Ltd [1941] 3 All E.R. 417). An arbitrator or umpire who has made his award is functus officio, and could not by common law alter it in any way whatsoever; he could not even correct an obvious clerical mistake. See Mordue v Palmer, 6 Ch. App. 22; Henfree v Bromley, 6 East, 309; Brooke v Mitchell, 6 M. & W.473. See now Arbitration Act 1950 (c.27), s.17." 27. Reference may also be made to the judgement in the case of V.G.M. Holdings Ltd., In re [1941] 3 All ER 417 wherein the following views were expressed:— "I think that it would be a strange position if a judge were at liberty to reconsider his decision and grant a stay of execution after he had made an order refusing it. I think that, when a judge has made an order such as that in the present case, the only remedy for the respondent, if he is dissatisfied with the order, is to go to the Court of Appeal…" 28. A special bench in the case of Komal Chand v. State of Madhya Pradesh AIR 1966 MP 20 opined in this regard as follows:— 'Section 35 of the Stamp Act, inter alia, says that no instrument chargeable with duty shall be registered by any public officer unless such instrument is duly stamped. This provision thus casts a duty on the registering officer to examine whether an instrument presented for registration is duly stamped. If, as section 36 says, an instrument chargeable with duty shall not be registered unless such instrument is duly stamped, then it follows that the registering officer must perform the duty of seeing whether an instrument presented for registration is or is not duly stamped before admitting it to registration and not afterwards. If he finds that the document is not duly stamped, then he must impound it under Section 33 of the Act. Neither in the Registration Act nor in the Stamp Act is there any provision giving to the registering officer any power to examine whether an instrument already registered was or was not duly stamped and to impound it. As soon as the registering officer registers a document presented to him for registration, the function in the performance of which the document was produced before him is over and thereafter becomes functus officio having no power under section 33 to impound the instrument. The matter is really concluded by the decision of the Supreme Court in Govt. of Uttar Pradesh v. Mohammad Amir Ahmad Khan, AIR 1961 SC 787. That was a case where the question arose whether the Collector has any power to impound an instrument sent to him for adjudication under section 31 of the Stamp Act. The Supreme Court held that under that section the Collector had no such power, as the provision gave him the power only to give his opinion as regards the duty with which in his judgment the instrument was chargeable

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and when that function was performed by the Collector he became functus officio. It was observed by the Supreme Court that the power to impound only exists when an instrument is produced before judicial officers or other officers performing judicial functions as evidence of any fact to be proved, or before other public officers who have to perform any function in regard to those instruments as, for example, registration. The Supreme Court also approved the decisions in Collector, Ahmednagar v. Rambhau, AIR 1930 Bom 392 (FB); Paiku v. Gaya, ILR [1948] Nag 950 : (AIR 1949 Nag 214) and Panakala Rao v. Kumaraswami, AIR 1937 Mad 763 where the doctrine of functus officio was applied and it was held that the Court had no power to recall and impound a certificate of sale after executing it and delivering it to the purchaser, or to reopen a case and impound documents proved after signing the decree, or to impound an instrument admitted in evidence after delivery of judgment. Here, when the Sub-Registrar had registered the document in question on 31st October, 1950 he became functus officio on that date and thereafter he had no power to impound the same. In the present case, the Sub-Registrar purported to act under paragraph 232 of the Registration Manual when he made a report to the Collector that the 'Takseemnama' was not duly stamped. But on reading paragraphs 231 and 232 it is clear that they do not say that after a document is admitted to registration, the registering officer can make a report to the Collector that it was not sufficiently stamped on the other hand, paragraph 231 expressly lays down a direction that before taking any further action, that is to say, in the matter of registration, the registering officer must see that the document is duly stamped. The words "after registering the document" occurring in paragraph 232 obviously refer to the entry of the document in the Register maintained of documents presented for registration. They do not mean that the registering officer can make a report about insufficiency of stamp after the document has been admitted to registration.' 29. In the case of SBI v. S. N. Goyal [2009] 8 SCC 92 the following views were expressed:- 'It is true that once an authority exercising quasi-judicial power takes a final decision, it cannot review its decision unless the relevant statute or rules permit such review. But the question is as to at what stage an authority becomes functus officio in regard to an order made by him. P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Edn., Vol. 2, pp. 1946-47) gives the following illustrative definition of the term "functus officio": Thus a judge, when he has decided a question brought before him, is functus officio, and cannot review his own decision." Black's Law Dictionary (6th Edn., p. 673) gives its meaning as follows: "Having fulfilled the function, discharged the office, or accomplished the purpose, and therefore of no further force or authority."

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We may first refer to the position with reference to civil courts. Order 20 of the Code of Civil Procedure deals with judgment and decree. Rule 1 explains when a judgment is pronounced. Sub-rule (1) provides that the court, after the case has been heard, shall pronounce judgment in an open court either at once, or as soon thereafter as may be practicable, and when the judgment is to be pronounced on some future day, the court shall fix a day for that purpose of which due notice shall be given to the parties or their pleaders. Sub-rule (3) provides that the judgment may be pronounced by dictation in an open court to a shorthand writer [if the Judge is specially empowered (sic by the High Court) in this behalf]. The proviso thereto provides that where the judgment is pronounced by dictation in open court, the transcript of the judgment so pronounced shall, after making such corrections as may be necessary, be signed by the Judge, bear the date on which it was pronounced and form a part of the record. Rule 3 provides that the judgment shall be dated and signed by the Judge in open court at the time of pronouncing it and when once signed, shall not afterwards be altered or added to save as provided by Section 152 or on review. Thus, where a judgment is reserved, mere dictation does not amount to pronouncement, but where the judgment is dictated in open court, that itself amounts to pronouncement. But even after such pronouncement by open court dictation, the Judge can make corrections before signing and dating the judgment. Therefore, a Judge becomes functus officio when he pronounces, signs and dates the judgment (subject to Section 152 and power of review). The position is different with reference to quasi- judicial authorities. While some quasi-judicial tribunals fix a day for pronouncement and pronounce their orders on the day fixed, many quasi- judicial authorities do not pronounce their orders. Some publish or notify their orders. Some prepare and sign the orders and communicate the same to the party concerned. A quasi-judicial authority will become functus officio only when its order is pronounced, or published/notified or communicated (put in the course of transmission) to the party concerned. When an order is made in an office noting in a file but is not pronounced, published or communicated, nothing prevents the authority from correcting it or altering it for valid reasons. But once the order is pronounced or published or notified or communicated, the authority will become functus officio. The order dated 18- 1-1995 made on an office note, was neither pronounced, nor published/notified nor communicated. Therefore, it cannot be said that the appointing authority became functus officio when it signed the note dated 18- 1-1995.' 30. Applying the law laid down in S.N. Goyal's (supra) case we are reinforced, in our opinion that the CIT Kolkata - II, Kolkata had become functus officio prior to 18th March, 2013 because the transferee - assessing officer had assumed jurisdiction without which the notice dated 18th March, 2013 under Section 143(2) could not have been issued. Therefore, the order of transfer was duly published/ notified and/or communicated and thereafter acted upon by the transferee-assessing officer. 31. We are, as such of the opinion that the issuance of the notice dated 18th March, 2013 under Section 263 and the consequent order dated 26th March,

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2013 passed under Section 263 of the Income Tax Act were acts without jurisdiction and therefore a nullity.”

In view of the above facts and circumstances of the case as well as the decisions cited supra, we hold that the ld. CIT-III Kolkata ceased to exercise his jurisdiction under section 263 once the order dated 27th February, 2013 was passed under section 127 transferring the case of the assessee from ITO Ward 9(1) Kolkata to ACIT Central Circle-2, Jaipur. When the AO ceased to have any jurisdiction over the assessee then the CIT who is having the jurisdiction over the ITO also ceased to have jurisdiction in the case of the assessee and consequently the order passed after the transfer of the case is without jurisdiction and not sustainable in law. Accordingly, the impugned order is not valid as passed without jurisdiction and consequently liable to be quashed.

Ground No. 2 is regarding the jurisdiction exercised by the CIT is not proper as the AO has conducted the due enquiry while completing the assessment under section 147 read with section 143(3).

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passed the impugned order after conducting the enquiry, therefore, the said order cannot be termed as erroneous without giving the finding by the CIT that the order is against the law. He has further contended that in the garb of exercising the power under section 263, the Commissioner cannot initiate proceedings with a view to conduct a fishing and roving enquiry in the matter or orders which are already concluded. In support of his contention, he has relied upon the decision of Hon’ble Calcutta High Court in the case of CIT vs. Hastings Properties, 253 ITR 124 (Cal.) as well as the decision of Hon’ble Madras High Court in case of CIT vs. Smt. D. Valliammal, 230 ITR 695 (Mad.). The ld. A/R has further submitted that during the course of assessment proceedings, the assessee produced all the relevant documents and evidences which were examined by the AO and, therefore, it cannot be said that there was a lack of enquiry on the part of the AO. He has also relied upon the decision of the Hon’ble Jurisdictional High Court in the case of CIT vs. Ganpat Ram Vishnoi, 296 ITR 292 (Raj.) and submitted that once the AO has reached a conclusion on the basis of the enquiry conducted, then without pointing out to anything how and why the enquiry conducted by the AO was not in accordance with law, the invocation of jurisdiction by the Commissioner was not valid. The ld. A/R has referred to the explanation to section 263 and submitted that the said amendment has brought into the Statute with effect from 01.06.2015 and, therefore, the same is not applicable in the proceedings in this case. Hence, the ld. A/R has submitted that even otherwise the CIT-III Kolkata has passed the impugned order without jurisdiction as no material was available with the Commissioner to hold that the assessment order passed by the AO is erroneous and prejudicial to the interest of the revenue. 5.1. On the other hand, the ld. D/R has relied upon the impugned order of the Commissioner and submitted that when the AO has not

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examined the creditworthiness and source of the payment of the huge premium by the share applicants then the said order is erroneous and prejudicial to the interest of the revenue and, therefore, the CIT-III Kolkata is justified in invoking the provisions of section 263 and passing the impugned revision order. 6. We have considered the rival submissions as well as relevant material on record. The assessment in the case of the assessee was completed under section 147 read with section 143(3) of the Act on 11.3.2011. It appears that the assessment was reopened on the reason of allotment of shares by the assessee by issuing 2,70,500 shares having face value of Rs. 10/- with a premium of Rs. 390/- per share. The AO thus proposed to assess the income on account of receiving the share application and premium amount being income escaped assessment while initiating the proceedings under section 147/148 of the Act. The AO has recorded the facts regarding the enquiry conducted on the issue in para 1 of the order as under :-

“ The Return declaring Income of Rs. 1,477 had been filed on 27/07/2009 which was processed u/s 143(1) of the I.T. Act, 1961. The notice/s 148 was duly served after recording the reason. Consequently, the notice u/s 143(2) was duly served on the assessee. Afterwards, u/s 142(1) & 142(2) of the I.T. Act 1961, was issued and duly served. In compliance to the notice, the ld. A/R S. Jhunjhunwala appeared with authorization to explain the return fo income on behalf of the assessee. The company allotted 2,70,500 shares @ Rs. 10 per share with a premium of Rs. 390 per share. The notice u/s 133(6) were issued and served on Share-holders on random basis. Their replies received are found to be in conformity with the records.”

Further, the AO has also conducted an enquiry in respect of the ROC fee paid by the assessee and accordingly a sum of Rs. 48,700/- was disallowed as preliminary expense under section 35D of the Act. Thus it is apparent that the AO conducted an enquiry and examined the relevant record as well as the explanation of the assessee. Further,

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notices under section 133(6) were issued and served on the share holders on random basis. Their replies were received and found to be in conformity with the records. This statement and observation of the AO in the assessment order clearly manifest that the AO conducted an enquiry on the issue and only on satisfaction of the out-come of the enquiry, the AO accepted the claim of the assessee on the very issue on which the assessment was reopened. It is pertinent to note that the scope of enquiry in the reassessment proceedings is very limited only to the extent of material which is available with the AO on the basis of which the AO has formed his belief that income assessable to tax has escaped assessment. The proceedings under section 147 cannot be used for roving and fishing enquiry but the AO has to confine his enquiry only on the material available with the AO. However, in the case of the assessee when the AO has conducted an enquiry by issuing the notice under section 133(6) and also examined the necessary details and evidence as produced by the assessee as well as the shareholders in response to notice under section 133(6), then it cannot be a case of lack of enquiry which would certainly render the order of the AO erroneous and prejudicial to the interest of the revenue. Once the case does not fall in the category of lack of enquiry, then the Commissioner cannot exercise his jurisdiction under section 263. Only when the order of the AO is found to be absolutely against the provisions of law or is based on impossible view on the issue, the CIT can invoke the provisions of sec. 263 of the I.T. Act. The Commissioner is not permitted to exercise the jurisdiction under section 263 in case when the AO has taken a possible view and the Commissioner does not agree with the view of the AO. Once the AO has taken a possible view and which is not in contradiction of law then merely because the Commissioner does not agree with the view of the AO, would not confer the jurisdiction under section 263. Even otherwise, the Commissioner under section 263 cannot resort to the

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roving and fishing enquiry and further expanding the scope of assessment proceedings already completed under section 147 read with section 143(3). In the case in hand, the Commissioner has passed the impugned revision order and directed the AO to conduct a fresh enquiry on the issue and to examine the various other material and record. The concluding part of the impugned order of the Commissioner dated 20th March, 2013 is as under :-

“ I have considered the facts of the case and the decisions of the superior Courts cited above. I am of the opinion that the A.O. by not pursuing the inquiries to their logical end has made the order erroneous and prejudicial to the interest of revenue. The order is, therefore, set aside and the A.O. is directed to carry out through & detailed enquiries in the case. He should carry out inquiries about the various layers through which the share capital has been rotated. The A.O. is also directed to summon the present & past Directors of the assessee company and the subscriber companies and examine them. The A.O. should also examine as to when this company was sold. At that point of time the fictitious assets such as shares in other companies or loans given to other companies is converted back into cash by credit in the assessee company’s bank account. The source of this money also needs to be examined. The a.O. is also directed to look into the investment in shares or stock of shares, as the case may be with a view to verify as to whether the assessee’s name appears in the list of share holders of those companies whose shares the assessee is holding. Further, information should be sent to the A.Os of the subscriber companies and to the other companies through which the capital has been rotated regarding the findings of the A.O. subsequent to the inquiries & verification of all relevant aspects of the case, the A.O. should pass a speaking order after providing adequate opportunity to the assessee.”

Thus while passing the impugned revision order, the Commissioner himself was not sure about the correctness of the claim of the assessee and, therefore, has not given a concluding finding whether the order of the AO allowing the claim of the assessee after conducting an enquiry is absolutely against the provisions of law. Once it is not a case of absolute lack of enquiry on the part of the AO, the said order cannot be held erroneous unless the Commissioner holds and records

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the reason why it is erroneous. The pre-condition for invoking the jurisdiction under section 263 is that the Commissioner must come to the conclusion that the order is erroneous and is unsustainable in law. Though an order can be held erroneous for want of an enquiry, however, when it is not a case of lack of enquiry then it is incumbent upon the CIT to give a concluding finding and reasons that the order is not sustainable in law. Accordingly once the AO has made an enquiry and taken a permissible/possible view, then the said order cannot be treated as erroneous and prejudicial to the interest of the revenue unless the view taken by the AO is found to be unsustainable in law. It is evident from the record that the assessee produced the relevant record and the AO has also conducted an enquiry and only on the satisfaction of out-come of the enquiry, the AO accepted the claim of issuing the shares by the assessee. Since it is a case of reassessment under section 147, therefore, the order passed by the Commissioner under section 263 cannot expand the scope of enquiry and scrutiny in the proceedings under section 147. The Hon’ble Jurisdictional High Court in the case of CIT vs. Ganpat Ram Vishnoi (supra) had the occasion to deal with an issue in para 7 to 12 as under :-

“ 7. In this connection, it would be relevant to refer to the material which was relied by the Tribunal to set aside the order of the CIT. The Tribunal noticed that as per the record of the proceedings; on 16-10- 1995, the Assessing Officer required the assessee to produce documents or material in relation to 10 different items, which included the details of capital contributed by partners, details of purchases made in excess of Rs. 20,000 with evidence, confirmation of unsecured loans, amongst other matters, which the Assessing Officer desired to enquire into. The assessee has produced desired information by 15-11-1995. There-after, the case was adjourned to 22-11-1996 and 1-12-1995. On 5-12-1995, the Assessing Officer studied the sundry creditors, unsecured loans and desired to furnish affidavits of unsecured loans and details of interest paid and the case was adjourned to 19-1-1996. On 19-1-1996, the Assessing Officer again required the assessee to furnish the details of partners capital accounts and also to produce voucher for expenses and the matter was adjourned for 23-1- 1996. On 23-1-1996, the case was discussed and finalised. After that,

15 ITA No. 928/JP/2018. M/s. Mayukh Vinimay Pvt. Ltd., Jaipur. assessment was completed by passing assessment order. These matters clearly indicate that the Assessing Officer particularly made reference to the matters, which the CIT has opined were not inquired. Thus, according to the Tribunal, the foundation to exercise power under section 263 of the Income-tax Act, was not existing. 8. We are of the opinion in the aforesaid circumstances on the finding reached by the Assessing Officer, no question of law really arises for consideration in this appeal. 9. It is true that in a given case not holding of any enquiry, which is relevant for assessment may indicate non-application of mind by Assessing Officer or furnish the ground for taking action under section 263 by the CIT. In this connection, reference may be made in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 831 (SC), wherein the CIT opined that the ITO has passed the order of "nil" assessment without application of mind. The High Court accepted this part of the assertion made by the CIT in his order that the ITO has failed to apply his mind to the case in all perspectives and the order passed by him was erroneous. The High Court has also found that the assessment order was passed without application of mind. The High Court rightly held that the exercise of jurisdiction by the CIT under section 263(1) was justified. 10. From the record of the proceedings, in the present case, no presumption can be drawn that the Assessing Officer had not applied its mind to the various aspects of the matter. In such circumstances, without even prima facie laying foundation for holding that assessment order is erroneous and prejudicial to interest in any matter merely on spacious ground that the Assessing Officer was required to make an enquiry, cannot be held to satisfy the test of existing necessary condition for invoking jurisdiction under section 263 of the Income-tax Act. 11. Undoubtedly, the jurisdiction under section 263 is wide and is meant to ensure that due revenue ought to reach the public treasury and if it does not reach on account of some mistake of law or fact committed by the Assessing Officer, the CIT can cancel that order and require the concerned Assessing Officer to pass a fresh order in accordance with law after holding a detailed enquiry. But when enquiry in fact has been conducted and the Assessing Officer has reached a particular conclusion, though reference to such enquiries has not been made in the order of the assessment, but the same is apparent from the record of the proceedings, in the present case, without anything to say how and why the enquiry conducted by the Assessing Officer was not in accordance with law, the invocation of jurisdiction by the CIT was unsustainable. As the exercise of jurisdiction by the CIT is founded on no material, it was liable to be set aside. Jurisdiction under section 263 cannot be invoked for making short enquiries or to go into the process of assessment again and again merely on the basis that more enquiry ought to have been conducted to find something. 12. The finding of the Tribunal that the ITO had passed assessment order after relevant enquiries and considering the aspects of the matter required by the CIT to be considered by him is a finding of fact and on the basis of which, the

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jurisdiction assumed by the CIT being non-existent must be held to be not sustainable. Consequently, the appeal fails and is hereby dismissed.”

In view of the above discussion as well as the facts and circumstances, we hold that the impugned revision order passed under section 263 is not sustainable. Accordingly, the same is quashed.”

We further note that the ld. CIT (A) has deleted the additions made by the AO on

the ground that the revision order itself was quashed by this Tribunal. Since the order of the Tribunal dated 4th May, 2018 is neither stayed nor reversed, therefore,

we do not find any merit or substance in the present appeal of the revenue.

Order is pronounced in the open court on 17/12/2018.

Sd/- Sd/- (foØe flag ;kno) (fot; iky jkWo ½ (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Jaipur Dated:- 17/12/2018. Das/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

17 ITA No. 928/JP/2018. M/s. Mayukh Vinimay Pvt. Ltd., Jaipur.