SHRI PREMRAJ DHANRAJ BAFNA,PUNE vs. PR. COMMISSIONER OF INCOME-TAX -5, PUNE

This appeal by the assessee against the order dated 18-02-2020 passed by the Pr. Commissioner of Income Tax-5, Pune (“Pr. CIT”) for assessment year 2010-11.

The assessee raised three grounds of appeal amongst which the only issue emanates for our consideration is as to whether the Pr. CIT is justified in invoking jurisdiction u/s. 263 of the Act.

Heard both the parties and perused the material available on record. The ld. AR submits that Pr. CIT invoked jurisdiction u/s. 263 of the Act on the proposal submitted by the Addl. CIT, Range-9, Pune which is bad under law. He submits that the Pr. CIT should have exercised his jurisdiction on its own but not by the proposal sent by the Addl. CIT. He drew our attention to the order of this Tribunal in the case of Alfa Laval Lund AB Vs. CIT reported in 215 TTJ (Pune) 814 and submits that this Tribunal quashed the order passed u/s. 263 of the Act on the proposal sent by the AO to the CIT. We note that the Tribunal, held the CIT passing the order u/s. 263 of the Act on the proposal sent by the AO is a case of jurisdiction deficit which resulting into vitiating the impugned order. For better understanding, the relevant part at para 5 of the said decision is reproduced hereunder : “5. It is trite that a power which vests exclusively in one authority, can’t be invoked or cause to be invoked by another, either directly or indirectly. Section 263 of the Act confers power on the CIT to revise an assessment order, subject to certain conditions. Instantly, we are confronted with a situation in which the revision was initiated on the basis of the AO sending a proposal to the CIT and not on the CIT suo motu calling for and examining the record of the assessment proceedings and thereafter considering the assessment order erroneous and prejudicial to the interests of the revenue. The AO recommending a revision to the CIT has no statutory sanction and is a course of action unknown to the law. If AO, after passing an assessment order, finds something amiss in it to the detriment of the Revenue, he has ample power to either reassess the earlier assessment in terms of section 147 or carry out rectification u/s 154 of the Act. He can‟t usurp the power of the CIT and recommend a revision. No overlapping of powers of the authorities under the Act can be permitted. As the revision proceedings in this case have triggered with the AO sending a proposal to the ld. CIT and then the latter passing the order u/s 263 of the Act on the basis of such a proposal, we hold that it became a case of jurisdiction deficit resulting into vitiating the impugned order. Without going into the merits of the case, we quash the impugned order on this legal issue itself.”

In the light of the above finding, as discussed above admittedly, the Pr. CIT-5, Pune initiated proceedings u/s. 263 of the Act on the proposal sent by the Addl. CIT, Range-9, Pune which is evident from para 2 of the impugned order, and not suo motu calling for and examining the record of the assessment proceedings. Therefore, revision jurisdiction exercised by the Pr. CIT u/s. 263 of the Act fails and it is set aside. Thus, the grounds raised by the assessee are allowed.

In the result, the appeal of assessee is allowed.