MRS. SHUMANA SEN,NOIDA vs. DCIT, NEW DELHI

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,

The above four appeals by the assessee are preferred against the

consolidated order of the Principal Commissioner of Income Tax

[Appeals] - 22, New Delhi dated 30.03.2015 pertaining to assessment

years 2005-06 to 2008-09.

challenge of assumption of jurisdiction u/s 263 of the Income tax Act,

1961 [hereinafter referred to as ‘the Act’ for short], strongly

contending that the order passed by the Assessing Officer is neither

erroneous nor prejudicial to the interest of the Revenue.

the four A.Ys under consideration by a consolidated order and since in

all these appeals the assessee has challenged the assumption of

jurisdiction, these appeals are being disposed off by a common order

for the sake of convenience and brevity.

13.02.2019 moved by one Shri S.K. Srivastava, CIT (A)-I, Nodia

(hereinafter referred to as ‘Applicant’) to be impleaded as necessary

party in these appeals. During appellate proceedings to dispose off

these applications, interim order dated 30.05.2019 was passed by the

Bench framing following question to be decided before proceeding

with the present appeals :-

“as to whether presence of applicant, Shri S.K. Srivastava, in the present appeals is necessary for effective and complete adjudication of the controversy at hand challenging the impugned order of Pr. CIT u/s 263 of the Income-tax Act, 1961?

being represented through Ld. CIT DR, Shri J.K. Mishra to defend the

interest of the Revenue as well as appellant were called upon to file

parawise reply to the applications who have filed the same which is

part and parcel of the judicial file.

applications moved by the Intervener on the grounds inter alia that the

Applicant being a third party has no locus standi to be an Intervener in

the present appeals; that even Hon’ble High Court vide order dated

01.03.2013 in Cont.App.(C) 1/2013 and CM No.854/2013 (stay) in

the case of S.K. Srivastava vs. Shumana Sen & Anr. a connecting

matter has ordered that, “no communication addressed by the

Petitioner qua any issue should be given any cognizance or to be taken

into consideration”; that the Intervener is not an affected party in any

manner as the appeals before the Tribunal are between the

Department and the Appellant only. The Appellant also opposed the

application moved by the Intervener on the almost identical grounds

raised by the Revenue.

filed thereto and the facts and circumstances of the case apparently

prove that except for writing a DO letter/complaint by the Applicant

being CIT (OSD) addressed to CIT-XIV, New Delhi alleging that the

assessee had incurred expenditure on foreign travels along with his

family that was in excess of Rs.3 crores, on the basis of which

proceedings u/s 263 was initiated, the Applicant has no locus standi

whatsoever to be a party in the present appeals. Moreover, the

Revenue Department has already appointed Shri J.K. Mishra, CIT DR to

protect the interest of the Revenue. In these circumstances, we are of

the considered view that when present lis is between Shumana Sen,

appellant and the Revenue Department/ Respondent, the Applicant

being a third party has no interest whatsoever to be intervener in the

present appeals. Even otherwise also, Appellant, being dominus litus

(master) of the present appeals cannot be compelled to litigate against

the third party who is neither a necessary party nor his present is

required for effective and complete adjudication of the controversy at

hand.

made in the intervening application, we are of the considered view

that Shri S.K. Srivastava, Applicant is not a necessary party nor his

presence is required for effective and complete adjudication of the

controversy at hand, hence application under consideration is hereby

dismissed without prejudice to the merits of this case.

of jurisdiction by the PCIT are based upon the complaints made by Shri

S.K. Srivastava. It would not be out of place to refer to the directions

of the Hon'ble High Court of Delhi on 01.03.2013 in an Interim Order in

Appeal [C] No. 1 of 2013 wherein the Hon'ble High Court has observed

with regard to Shri S.K. Srivastava as under:

“No communication addressed by the petitioners qua any issue should be given any cognizance or taken into consideration and further the petitioner should not be entrusted any work in the department as it may affect the public at large...........”

Show cause notice u/s 263 of I.T. Act (For A.Y. 2006-07) “Pursuant to completion of assessment for A.Y. 2006-07 on 31.03.2013, it was reported to this office that there has been serious errors in framing the assessment and those errors have caused substantial prejudice to the interest of revenue. In view of the specific issues of law and facts involved, a factual report was received from the Assessing Officer (A.O.) through the Range in-charge and on the same being received the records of assessment from the Assessing officer were also called for and has been examined.

The concerned A.O. [DCIT Circle 40 (1)], New Delhi and Addl.CIT, Range- 40, New Delhi in their factual report as submitted to undersigned, have raised following issues in the matter of assessment completed by the assessment order dated 31.3.13 passed u/s 147/143(3) in your case for A Y

2006-07 which requires consideration in terms of extant provisions of law:

Act 1961 has been made protectively in the hands of Shri Abhisar Sharma stating for the said addition to be made substantively in the hands of Shumana Sen in A. Y. 2006- 07 on the grounds that the documentary evidence of the actual payments, details of travels to countries, dates and flight nos. of departure and arrival, details of expenses incurred for stay, boarding and lodging etc. were not produced during the course of assessment proceedings.

separately assessed in the A.Y.2006-07 by following Lalji Haridas Vs ITO & Anr.(SC) 43 ITR 387.

Rampyari Devi Saraogi vs CIT(SC) 67 ITR 84 1. Malabar Industrial Co. Ltd. vs CIT(SC) 243 ITR 83 2. Swarup Vegetable Products Industries Ltd. vs CIT(AIL) 3. 187 ITR 412 CITvs Eastern Medikit Ltd. (Del) 58DTR 265; 337 ITR 4. 56. "

In view of the above errors reported by the Assessing Officer and also the Addl. CIT, the undersigned has called for and examined the relevant assessment records for AY 2005-06 to 2008-09 in your case to find out if the Assessment Order dated 31.03.2013 as passed for A.Y. 2006- 07 is erroneous and prejudicial to the interest of revenue and whether undersigned is required to assume jurisdiction u/s 263 of the I.T. Act, 1961 qua the Assessment Order, dated 31.03.2013for the A. Y. 2006-07 and do the needful.

On examining the assessment records in your case, it is found:

That the AO has made assessments u/s 148/143(3) for 1. A. Y.2006-07 by accepting the returned income without conducting proper enquiries and without appreciating the issues raised in its satisfaction for assuming jurisdiction U/s 147/148 of I.T. Act, 1961 was challenged by you before Hon'ble Delhi High Court in CWP Nc-4022 of 2012 titled as "Shumana Sen vs. CIT Delhi XIV & Ors." and vide judgment dt. 19.10.2012 stood upheld by Hon'ble Delhi High Court and was accepted by you and has attained finality and unless it was proved by you beyond reasonable doubts that the content and issues of law involved in the satisfaction note of the Assessing Officer was not borne out from record, the same could not have been rejected and as Assessing Officer has not done the same, the Assessment Order dated. 31.03.2013 is bad in law and is erroneous and has caused prejudice to revenue.

That based upon material available on record the 2. assessments for A. Y. 2005-06 onwards and upto 2008-09 were reopened on the conclusion that an income exceeding Rs. 1,00,000/- in every assessment year had escaped assessment and the same had on being challenged before Hon'ble Delhi High Court been upheld by Order dt. 19.10.2012. Thus, it was incumbent upon the Assessing Officer to inquire into the correctness or otherwise of the grounds based upon which

assessments were reopened. But the Assessing Officer has failed to inquire into the correctness of those grounds based upon which it was concluded that an income exceeding Rs. 1,00,000/- had escaped assessment in each of the assessment years. In view of that there is both error and prejudice caused to the revenue in so much as tax on income in excess of Rs. 1,00,000/- in each of year has escaped tax and hence assessments are liable to be set aside and to be done de-novo as per law.

assessed in the hands of assessee's wife Ms. Shumana Sen (PAN AMQPS5036G) who is separately assessed in the A.Y. 2006-07 by following lalji Haridas Vs ITO & Anr.(SC) 43 ITR 387.

Thus, considering the above, the undersigned is of the opinion that the said assessment order dated 31.3.2013 in your case is erroneous and prejudicial to the interest of revenue as such since, no proper enquiry has been conducted and no proper law has been invoked in the said assessment order as the AO failed to conduct proper enquiry and failed to apply proper law leading to said assessment Order being as erroneous as well as prejudicial to the interest of revenue, and in support, the following case laws are quoted for necessary action u/s 263 of the IT Act, 1961 against the assessment order dated 31.3.13 passed u/s 147/143(3) for AY 2006-07 in your case. Rampyari Devi Saraogi vs CIT(SC) 67ITR 84 (1) Malabar Industrial co. Ltd. vs CIT(SC) 243 ITR (2) 83 .Swarup Vegetable Products industries ltd. vs (3) CIT(AIL) 187 ITR 412 1 (4) CIT vs Eastern Medikit Ltd. (Del) 58DTR 265; 33 7 ITR 56.

In view of the above facts and circumstances and the law governing the issues involved undersigned is of the considered view that, prima-facie, the Assessment Order dated 31.03.2013 as passed by the Assessing Officer for AY 2006- 07 in your case, appears to be erroneous and prejudicial to the interest of revenue and as such assumption of jurisdiction u/s 263 of the Act by undersigned in the case of the said assessment order is required to protect the interest of

revenue.

You are hereby required to show cause as to why the action u/s 263 should not be taken against the said assessment order dated 31.3.13 in your case for A Y 2006-07.”

notices stating that the assumption of jurisdiction by the PCIT is bad in

law as it is merely a change of opinion. The assessee strongly relied

upon the judgment of the Hon'ble Supreme Court in the case of

Malabar Industrial Company Ltd 243 ITR 83.

by the Assessing Officer during the course of assessment proceedings

and brought to the notice of the PCIT that all the allegations made by

him have already been verified by the Assessing Officer during the

assessment proceedings itself. Therefore, by assuming jurisdiction,

the PCIT is changing the opinion of the Assessing Officer by his own.

the assessee, the PCIT held as under:

“14. I have considered the reports of the A.O. and the Addl. CIT, the submissions of the assessee, made in response to the notices u/s 263 of the I.T. Act, 1961, the facts of the case vis-a-vis the statutory provisions u/s 263 of the I.T. Act, the judicial views taken and rulings given on the relevant issues. On examination of assessment records for Assessment Year 2005-06 to A.Y, 2008-09 in the case of the assessee and on perusal of reports of assessing officer & Additional Commissioner vis-a-vis replies submitted by the assessee, the following new facts emerge which have not been looked into, examined and considered by the A.O. in the orders under review :

(14)(A) The AO in the assessee’s case has made assessments u/s 148/143(3) for A.Y.s 2005- 06, 2006-07, 2007-08 & 2008-09, by accepting the returned income without conducting proper enquiries and without appreciating the issues raised in the satisfaction for assuming jurisdiction U/s 147/148 of I.T. Act, 1961 which was challenged by the assessee before Hon'ble Delhi High Court in CWP No-4022 of 2012 titled as "Shumana Sen vs. CIT Delhi XIV & Ors," and vide judgment dt. 19.10.2012 stood upheld by Hon'ble Delhi High Court and was accepted by the assessee and has attained finality and unless it was proved by the assessee beyond reasonable doubts that the content and issues of law involved in the satisfaction note of the Assessing Officer was

not borne out from record, the same could not have been rejected and as Assessing Officer has not done the same, the Assessment Orders dated. 31.03.2013 are bad in-law and erroneous and have caused prejudice to revenue.

14(B) Based upon material available on record, the assessments for A.Y.s 2005-06, 2006- 07, 2007-08 & 2008- 09 were reopened on the conclusion that an income exceeding Rs. 1,00,000/- in every assessment year had escaped assessment and the same had, on being challenged before Hon'ble Delhi High Court, been upheld by Order dt. 19.10.2012. Thus, it was incumbent upon the Assessing Officer to inquire into the correctness or otherwise of the grounds based upon which assessments were reopened. But the Assessing Officer has failed to inquire into the correctness of those grounds based upon which it was concluded that an income exceeding Rs. 1,00,000/- had escaped assessment in each of the assessment years. In view of the fact that there is both error and prejudice caused to the revenue in so much as tax on income in excess of Rs. 1,00,000/- in each of the four years has escaped tax and hence assessments are liable to be set aside and to be done de-novo as per law.

(14)(C) The complainant in the assessee’s case for A.Y.2005- 06, 2006-07, 2007-08 & 2008- 09, was not allowed to cross- examine the assessee and her witnesses as per facts on

record, during course of such assessment proceedings, while on the other hand the A.O. has recorded the statement of her spouse Shri Abhisar Sharma but similar opportunity was not offered to the complainant for cross examination.

(14)(D) There were contradictions found between the stand taken by employer of assessee’s spouse, M/'s NDTV Ltd., about nature of expenditure incurred by that company on assessee’s foreign trips with family, assessee’s own stand about the same, where assessee herself stated that the expenditure incurred by her spouse was the cost to the company and the stand taken by assessee’s spouse, who also travelled abroad with other family members, that it was a personal trip. In view of the contradictions in the stands taken by the assessee and her witnesses, her stand should not have been accepted by the Assessing Officer without weighing the relative merit of versions of the each of the witnesses examined in the case.

14(E) The assessee has failed to bring any evidence on record that yearly vacation abroad with family was part of the salary package of her spouse, Sri Abhisar Sharma and similar perquisites were allowed to other employees as well and M/s NDTV Ltd. has categorically declined vide its letter dated 25.02/12.03.2013 to have ever provided any such perquisite to her spouse, Shri Abhisar Sharma or any other employee

and hence the claim on her part in CWP No.-1373 of 2011 of the Delhi High Court appears to be incorrect. The employment contract of Sri Abhisar Sharma was not examined and considered by the A.O. and the passport was neither produced before the A.O. for verification nor examined and the details of expenditure incurred in course of foreign visits were also not examined.

14(F) During the assessment proceedings of assesse’s spouse (Sh. Abhisar Sharma), his A.O. was not provided any evidence either by the assessee’s spouse or the witnesses examined by the assessee’s spouse, to support his claim about receipt of perquisites from the employer/s of assessee’s spouse being taxable u/s 17(2)/Form 12BA and Rule 26A/Form-16 regarding assessee’s foreign trip to Europe with her spouse and other members of family at the cost of the spouse’s employer. Despite not getting any evidence u/s 17 (2) as such, the A.O. of assessee’s spouse has made addition in the hands of assessse’s spouse as "undisclosed perquisites" provided by M/s NDTV Ltd. to be taxed u/s 17 (2). There is no evidence available either from M/s NDTV Ltd. or from Sh. Abhisar Sharma to substantiate the "un-explained perquisite" as held by the Assessing Officer to be taxed as such, because there is no provision in the I.T. Act. 1961 for taxing "unexplained perquisite" and the unaccounted expenditure that was incurred by the assessee on the trips abroad of the assessee

and her family was to be dealt with only u/s 69C of the Income Tax Act, 1961, which was not done by the AO and because of such error on the part of Assessing Officer, addition on account of "unexplained perquisite" in the hands of assesse’s spouse is patently wrong application of law which needs to be corrected in that case and necessary addition u/s 69C of the I T Act needs to be made in the assessee’s hands if evidences are found to exist for such unexplained expenditure on foreign travel.

14(G) It is seen from the assessment order of Shri Abhisar Sharma (assessee’s spouse), in A.Y.2006-07 made on 28.03.2014 that an addition on account of unexplained expenditure incurred due to such foreign visits has been made of an amount of Rs.7,51,786/- partly on substantive and partly on protective basis. Since Shri Abhisar Sharma, has not submitted any details whether he funded foreign trips of his spouse ( the assessee) , therefore Rs.3,75,893/- is to be substantively assessed in the hands of the assessee, Ms. Shumana Sen , in A.Y. 2006-07 following Lalji Haridas Vs ITO & Anr.(SC) 43 ITR 387 and similar amounts are also required to be determined and additions to be made in the assessee’s hands after necessary enquiries in A.Y. 2005-06, A.Y. 2007- 08 and A.Y. 2008-09 also on similar grounds by following Lalji Haridas .(SC) 43 ITR 387 in these years too if evidences are found to exist of such unexplained expenditures.

14(H) The A.O., while passing the assessment orders for A .Y.s 2005-06, 2006-07, 2007- OS & 2008-09 in this case, did not follow the directions by the then Addl, CIT u/s 144A of the I.T. Act, 1961 about the examination of the complainant and his cross examination by the assessee in support of assessee’s claims and against the stand taken by the complainant though the same was specifically and statutorily directed.

14(I) Since above stated facts are fresh & new arising during assessment proceedings, but A.O.. did not conduct any inquiry to find out veracity of such facts, hence the issues arising out of these facts are not the subject matter of appeal filed by Assessee for A.Y. 2005-06 to A.Y. 2008-09.

14(J) A.O. failed to conduct proper inquiry and failed to apply proper law leading to said assessment orders being erroneous as well as prejudicial to the interest of revenue, and in support, the following case laws exist in support of necessary action u/s 263 of the I.T. Act, 1961 against the assessment orders passed u/s 147/143(3) for A.Y. 2005-06 to A.Y. 2008- 09 in this case:

Rampyari Devi Saraogi vs CIT(SC) 67 ITR 84 (1) Malabar Industrial Co. Ltd. Vs CIT(SC) 243 (2) ITR 83 Swarup Vegetable Products Industrial Ltd, (3)

CIT(AIL) 187 ITR 412 CIT Vs Eastern Medikit Ltd. (Del) 58 DTR (4) 265; 337 ITR 56.

15(A) In the first place, as regards the “Preliminary Objections” raised by the assessee by her letter dated 20.03.2015 (received by speed post on 23.03.2015), the following ,. observations are made:

“The proceedings u/s 263 in this assessee’s case have been taken up by the predecessors of the undersigned since the initial show cause notice was issued to the assessee on 22.08.2014 containing all the issues in question. These proceedings were continuing and are barred by the limitation date on 31.03.2015 before which the final orders have to be passed by this office. The undersigned took over the additional charge of this office (Principal Commissioner of

Income Tax-22, Delhi) on 30.01.2015 and after that the next notice to this assessee, in this case, has been issued on 13.02.2015, affording the assessee opportunity of being heard by the undersigned in this case. If these objections were received earlier, these could have been considered by the higher authorities in due time for suitable action in this regard. Therefore, it appears that these “Preliminary Objections” have been raised by the assessee too late in the day, as on the date of receipt of these objections, there were only six working days left to take consequential action on these objections by the authorities concerned and any new incumbent to take over, issue fresh notices, allow service and response time, conduct hearings of the case, take a view and pass an order u/s 263 before the statutory time bar of 31.03.2015 expires for orders to be passed in this case. In spite of such time constraints, the assessee’s “Preliminary Objections” have been referred to the higher authorities on 23.03.2015 itself, for a suitable view to be taken on these objections. In any event, the “Preliminary Objections” raised by the assessee could not perceivably have had any impact on the issues raised in the proceedings u/s 263 in this case in view of the fact that, these issues had already been raised in show cause notices issued during the tenure of the predecessors of the undersigned, based upon reports of the lower authorities, much before the undersigned took over this additional charge of PCIT-22, Delhi on 30.01.2015 and took up

the matter in view of the expiry of the time bar of 31.03.2015 in this case. Needless to mention here the plethora of judgements against raising such technical objections with a specific purpose of stalling the proceedings and to divert the focus from substance to the form, Although the issues involved in these proceedings u/s 263, in the case of the assessee, have nothing to do with the period of her service tenure under the charge of the undersigned that the assessee has alluded to, in the “ Preliminary Objections”, still the “ Preliminary Objections” raised by the assessee at the time of conclusion of proceedings have been considered, deliberated upon and kept in mind while adjudicating on the main issues discussed hereafter only to ensure a clinical analysis of material available on record. Having observed thus, these orders are now being passed with full awareness of the objections raised by the assessee and with full consciousness of the responsibility cast upon the undersigned in this matter which is being considered with as robust a sense of objectivity as is in command of the undersigned.

15(B) Validity of notice u/s 263- the notice u/s 263 is validly issued based on findings from the assessment order and the reports of A.O/Addl. CIT extracted above so as to afford the assessee opportunity of being heard before proceedings u/s 263 are finalized in the case as the order of the A.O. was

found to be erroneous and prejudicial to the interest of revenue The issues raised in the notice u/s 263 elaborately indicate adequate errors in the assessment order causing prejudice to the interest of revenue.

15(C) Judicial Views - the assessee in her submissions has cited the ruling of Hon’ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs CIT (2000) 243 ITR 83 (SC) and has claimed that the case of the assessee is squarely covered by the ruling without demonstrating such claim. In Malabar Industrial Co. Ltd, Vs CIT, the Hon’ble Supreme Court held that the Commissioner has to be satisfied of twin conditions for taking revisionary action u/s 263, namely: (i) That the order of the A.O. sought to be revised is erroneous; and (ii) That it is prejudicial to the interests of the revenue. The Hon’ble Apex Court in the ruling has opined that an incorrect assumption of fact or an incorrect application of law. or orders passed without applying the principles of natural justice or without application of mind, wall satisfy the requirement of the order being erroneous. As regards prejudice to interests of revenue, the Hon’ble Court has ruled that it is of wide import and not confined to loss of tax. If due to an erroneous order of the ITO, the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of revenue. However, the Apex Court has

clarified that where two views are possible, and the ITO has taken one view which the Commissioner does not agree to, the order cannot be erroneous and prejudicial to interests of revenue unless the view taken by the ITO is unsustainable in law. It is therefore difficult to perceive as to how this ruling of the Apex Court would help the case of the assessee as in the assessee’s case there were no two views possible. Moreover, the order has been passed with incorrect assumption of facts, incorrect application of law. violating the principles of natural justice and without application of mind which is unsustainable in law as demonstrated in the paras above Therefore, errors have crept into the order as pointed out in the notice u/s 263 which have caused prejudice to the interests of revenue. In the case of CIT vs. Shree Manjuathesware Trading Products and Comphor Works, report in (1988) 231 ITR 53, it is observed by the Hon’ble Apex Court that the revisionary power conferred on the Commissioner of Income Tax is of wide amplitude. Hon’ble Apex Court in the case of Smt. Tara Devi Aggarwal Vs. CIT(1973) 88 ITR 232 has held that the Commissioner may consider an order of the Assessing Officer to be erroneous not only if there is some apparent error of reasoning or of law or of fact but also where it is a stereotyped order which simply accepts what the assessee has stated in his return and fails to make inquiries which are called for in the circumstances of the case and it is not necessary for the

Commissioner to make further inquiries before cancelling the assessment order of Assessing Officer. The facts of the present case, if judged on the touchstone of above legal position propounded by the Hon’ble Apex Court, and section 263 per se unmistakably establish that the order of the A.O. was erroneous and prejudicial to the interest of Revenue.

15(D) Case for review u/s 263 of A.O s order. As against the submissions made by the assessee, there is a valid case for review u/s 263 of) T Act in view of the erroneous order of the A.O. which is prejudicial to the interests of revenue as has been elaborately clarified in the paras above while pointing out errors in the assessment order and the new facts which remain to be examined by the A.O. Therefore, the assesssee’s plea that the findings in the show cause notice have already been examined and are in the ambit of “change of opinion” does not appear to be substantiated.

15(E) Issue regarding inspection of records:- As regards inspection of records, it is not the case of the assessee that any issue from any part of the records, which is being raised against the assessee, has not been forwarded to her along with the show cause notice u/s 263 Neither is it the case of the assessee that the present notice u/s 263 is based upon any issue in any part of the records which are not confronted

to the assessee in the notice u/s 263, before proceedings u/s 263 are finalized. Therefore, it is difficult to perceive justification for inspection of records for filing the responses to the notice u/s 263 itself.

15(F) Issue regarding transfer of case to another charge:- As regards assessee’s request to transfer her case to any other officer, it is observed that there are no valid grounds for any transfer presently, as there is no lacuna that exist in the jurisdiction of this office or of the r AO’s office over the assessee’s case

2008-09 of the A O. in this case are erroneous and also pic;ud!cm! m the interest of the revenue and" are liable to Te set-aside Accordingly in the exercise of revisionary power u/s 263 of the Income Tax Act, 1961, the assessment orders of A.Y.s 2005-06. 2006-07, 2007 08 S 2008-09 completed u/s 147/143(3) on 31.03.2013 are hereby cancelled and restored to the Assessing Officer to make assessments de- novo after examining the entirety of the issues considered in this revision order u/s 263 in assessee's case after affording reasonable opportunity of being heard to the assessee. The A.O. is directed to make all necessary inquiries with the concerned agencies to ensure that all the issues which are subject matter of this revision order u/s 263 as per the findings given in paras-(14)(A) to (14)(J) above, are properly examined vis -a-vis the evidences collected and required to be collected, the claims made by the assessee regarding such evidences and the position of law, so as to ensure that the errors pointed out in this order and the prejudices erased to revenue as per this order are eliminated and the amounts involved in these issues are taxed in the hands of the assessee or in any other hands as per law.”

alongwith her spouse abroad and the expenditure incurred by the

spouse of the assessee. The PCIT is of the firm belief that the Assessing Officer failed to conduct proper enquiry and failed to apply proper law

leading to the said assessment order being erroneous as well as

prejudicial to the interest of the revenue.

proceedings. Pursuant to the Tax Evasion Petition, the case of the assessee was reopened u/s 148 of the Act for Assessment Years 2005-06

to 2008-09.The reasons recorded for initiating the reassessment proceedings for all the four Assessment Years read as under:

“2 "This office received a copy of DO. letter from Sh. S. L Srivastava, CIT(OSD). Delhi addressed to CIT. Delhi- XIV' New Delhi disclosing details of concealment of income and resultant evasion of fax of huge amount during the period 2003-2004 onwards and upto F. Y. 2007-2008 by Mrs. Sumana Sen. IRS currently working in the rank of JC/T in the department. It also contains details of expenditure incurred on foreign travels by Mrs. Sumana Sen along with her aunty stated to be in excess of Rs. 3 crores. Reliance was also placed on the copy of an affidavit sworn by Mrs. Shumana Sen and filed before Hon'ble Delhi High Court in Writ Petition (C) no. 1373 of 2011 wherein she

admitted to have traveled abroad with her family several times during that period.

The said affidavit was enclosed alongwith the D.O. letter of Sh. S. K. Srivastava.

The said TEP alleged that the assessee received gratification by way of expenditure incurred on her foreign travels alongwith her family by Ms. NDTV Ltd. during the period under consideration in lieu of favors granted by her to .YTs. NDTV Ltd. as it's assessing officer being AC IT. Circle-13(1), New Delhi. As per the TEP the estimated value of such gratification and corresponding expenditure involve in the region of about Rs. 3-5 crores.

The Add/ CIT. Range-40. New Delhi vide his letter dated 02 12 2011 forwarded to TEP and letter of CIT, Delhi-XlV. New Delhi in the case of Mrs. Sumana Sen an existing assessee in this charge to take necessary action as per applicable law.

The complainant being an IRS officer of 1087 batch and holding the rank of Commissioner of Income Tax subsequently also provided a copy of the letter dated 17/10/2011 written by Mrs. Sumana Sen to the Chairperson, Complaint Committee on Sexual Harassment, New Delhi wherein also Mrs. Sumana Sen has admitted that she had travelled abroad several times at the time of her husband's employment with M/s NDTV Ltd. before, during and after her stint in Circle-13(1). New Delhi.

Pursuant to the receipt of the copy of the TEP the matter was independently examined in exercise of independent quasi- judicial discretion by the undersigned. It was found that the Returns of Income of Mrs. Sumana Sen an existing assessee in this office for the relevant period i.e. A.Y. 2004-2005, 2005- 2006, 2006-200 7, 200 7-2008 & 2008- 2009 relevant for F. Y. 2003- 2004, 2004- 2005, 2005-2006, 2006-2007 Si 2007-2008 does not disclose in any manner whatsoever the details and other particulars of her foreign travelling and the expenditure incurred on that including the source thereof, the quantum thereof the status of that amount of money a tut taxability of the same, in view of the fact that the particulars pertaining to the expenditure incurred on foreign travels has been admitted before Hon'ble Delhi High Court and also before the departmental authorities, prima-facie, a case of non-disclosure of information about expenditure incurred by the assessee in the returns of income stands made out which prima- facie appears to have escaped the incidence of tax because of non- disclosure and non- inclusion in the taxable income of the assessee.

The assessee in the affidavit filed before Hon'ble Delhi High Court and in her letter dated 17/10/2011 before Departmental Authorities has claimed stated that the expenditure involved on her foreign travels was par! of yearly vacation abroad with family of the salary package of Sh. Abhisar Sharma, her spouse, from the employer of Sh. Abhisar Sharma i.e. M/s. NDTV Ltd. It was further

stated by the assessee that similar perquisites were given by M/s. NDTV Ltd. from time to time to other employees of that company as well as pen t of their salary package.

The copy of employment contract of Sh. Abhisar Sharma with M/s. NDTV Ltd. or any other document is not available on file to corroborate the claim of source of expenditure on foreign travel. Nor is there any documentary evidence available to show inclusion of the expenditure involved on her foreign travels in taxable income of her spouse namely Sh. Abhisar Sharma who is an existing assessee in charge of AC IT, Circle 48( I), New Delhi.

The expenditure on foreign travel of assessee, if it is a part of salary package of Sh. Abhisar Sharma received/receivable from M/s, NDTV Ltd. is taxable perquisite U/s 17 of the Income Tax Act, 1961. Upto A. Y. 2007-2008 it was required to be disclosed in return of income and form no. 16 issued by the employer. These particulars were also required to be furnished inform no. 12 BA issued by the employer to the employee. This was to be furnished by the employer with his/her return of income alongwith form no. 16 and in addition to the form no. 16. The provisions of Rule 26(2)(b) is being relied upon.

The assessee while claiming that the expenditure incurred by her on her foreign travels alongwith her family was part of the salary package of her Spouse Sh. Abhisar Sharma has not made any mention oj the above refer red to statutory documents which are

mandatorily to be submitted by the concerned assessee nor has included any of these documents either with the affidavit filed by her before Hon’ble Delhi High Court nor with official letter dated 17/10 2011.

In view of the above facts there is an admitted position about expenditure incurred on foreign travels of the assessee and her family during the period F.Y. 2003-2004 to F. Y. 2007-2003. The sources of expenditure incurred by the assessee on her foreign travels during the above mentioned period required to be verified to ascertain the correct and full tax payable by the assessee on her taxable income.

In view of the facts and circumstances stated hereinabove and the material available on the record of this office. I have reasons to believe that income far in excess of the limit prescribed in law and much more than the limit of Rs. One lakh prescribed in section 149/1 Kb) of the Income Tax Act. 1961 has escaped assessment diming A. Y. 2005-2006,2006-2007, 2007-2008 & 2008-2009 and to bring the escaped income to tax, re-assessment proceedings are required to be initiated for A. Y. 2005-2006, 2006-2007. 2007- 2008 & 2008-2009 U/s 147 of the Income Tax Act, 1961 and notice U s 148 is to be issued welt within the limitation period.

It is further highlighted that the complainant in his Tax Evasion Petition has alleged evasion of tax and concealment of income during the period October. 2003 to October, 2007 which is material for A. Y. 2004-2005. 2005-2006. 2006-2007, 2007-2008 & 2008-2009. Out of this the A. Y. 2004-2005 is no longer open for reopening in terms of provision U/s 149 of the Income Tax Act, 1961 but the remaining four years are capable of being re- opened U/s 14n and where notice can he issued U s 148 of the Income Tax Act. 196! to bring the income escaped from tax to tax It is therefore proposed that all these four assessment years may be re-opened together for proper and effective inquiry in the matter and the statutory approval for the same is solicited from Add I. C1T, Range-40, New Delhi.

In view of the facts and circumstances stated hereinabove, the necessary approval of Add I CAT, Rcmge-40, New Delhi is being solicited in terms of statutory requirement of section 147 of the Income Tax Act, 1961 and other enabling provisions of law to assume jurisdiction U/s 147 and issue notice u/s 148 in terms of requirements of section 149 of Income Tax Act. 1961 for A Y. 2005-2006 ,2006- 2007, 2007-2008 & 2008-2009 relevant for F. Y. 2004- AMQPS5036G. "

1 "In writ petition filed before Hon'ble Delhi High Court the assessee has claimed that her trip to Europe arose because of yearly vacation abroad with family being part of salary package of Sh. Abhisar Shanna, her spouse and an employee of NDTV Ltd. 2 The trip of Europe by Ms. Shumana Sen and Shri Abhisar Sharma during F.Y. 2005-06 ( April 12th 2005 to April 20th 2005) by British Airways Flight BA 142 and BA 143. cost NOT I Ltd about Rs 1.00,00.000 – and by that yardstick, Ms. Shumana Sen and Shri Abhisar Sharma have evaded the taxable income during the period 2003 to Oct. 2007 in the range of Rs. 3.00.00.000 - to Rs 5,00.00.000/-.

3 Apart from that, claim oj Shumana Sen is incorrect in so much expenditure incurred on the trip was Bribe paid to Ms Shumana Sen DCIT, Cir. 13(1) and Assessing Officer of NDTV Ltd. at the material time, the entire amount of expenditure incurred on yearly vacation abroad by Sh. Abhisar Sharma and Shumana Sen. paid by employer of Sh. Abhisar Sharma it/ 17 of the I T Act, 1961 being the income oj the assessee.

4 M/s NDTV Ltd. has also not included the expenditure incurred on vacation abroad of Ms Shumana Sen in the salary of Sh. Abhisar Sharma . and has not deducted any tax on that nor has included any perquisite in the Form of 16 issued by NDTV Ltd. to Sh.

Abhisar Sharma and thereby it is clear that expenditure incurred on the vacation abroad of Ms Shumana Sen was not the salary of Sh. Abhisar Sharma but bribe and illegal gratification received by Ms. Shumana Sen ay DCIT Cir. 13(1), for favouring M/s NDTV Ltd. illegally.”

“In the circumstances, we are not inclined to accept the submissions of the petitioner. We accordingly hold that the notice issued on 28 03' 2012 u s 148 of the Act for AY 2005- 06 was within the jurisdiction of the Assessing officer. The AO is directed to dispose off the objections filed by the petitioner within a reasonable time and at any rate not later than 30/11/2012, if not disposed off

We refrain from expressing any opinion on the various allegations and counter allegations which were exchanged between the petitions and respondent No 4 in other proceedings. In coming to our decision we have kept in view only the material before t)avAO on basis of which he recorded reasons and issued notice u/s 148"

"A) AS Per Tax Evasion Petition filed in your case it has been alleged that you have incurred unaccounted expenditure to the tune oj Rs. 3 crores on such foreign travels. In this connection you are hereby asked to submit a detailed reply on this allegation alongwith supporting evidence, if any, for the year under consideration

B) Statement of your taxable Income for the year under consideration.

C) A copy of your Bank Account in which the salary was being credited for the relevant accounting period and all other bank accounts in your name or in joint name for the relevant period.

D) A copy of your Passport

E) Details in respect of Foreign tours performed by you individually and collectively with your family during the relevant period, the date of travel, places travelled, purpose of travel, ticket expenses, boarding & lodging expenses, sight-seeing expenses, shopping for each such foreign travel alongwith sources of incurring such expenditure and documentary evidence in support thereof Plus reply should pertain to foreign travel incurred during

the F. Y. 2004-05.

F) A copy of form no. 16 along with a copy of the return of Income if already filed by your goodself for the assessment year 2005- 06, with supporting evidence.

G) A Photocopy of Return of Income of Shri Abhisar Sharma for the Asstt. Year 2005-06, alongwith copy of Form No. 16 and a copy of his Passport.

H) Moveable or Immovable property sold or purchased, individually or jointly, during the relevant period i.e F Y2004- 05 alongwith the sale purchase Deed and source of such expenditure or utilization of sale proceeds received if any Photocopy of immovable property declared in your office for the relevant period"

information was called for:

“Sh. Abhisar Sharma was employed by M/s NDTV Ltd. during October 2003 to October 2007, i.e. financial year 2003-04,2004- 05,2005-06,2006-07 and 2007-08. You are requested to provide the following information u/s 133(6) of the Income-tax Act, 1961

In the above mentioned financial years for the period October 2003 to Oct, 2007, there are five financial years involved i.e.2003- 04 to 2007-08, you are therefore required to provide authenticated copies of:

a). From ACIT (Finance) o/o CCIT-I, New Delhi regarding bank a/cs

of the assessee.

b) From ACIT Circle 47(1), New Delhi regarding copies of ITR's and FormNo 16 of Sh. Abhisar Sharma for AY.2005-06 to 2008- 09.

c) From ACIT(HQ)(Personnes) O/o CCIT-1, New Delhi regarding intimations given by the assessee and permissions accorded for foreign travel.

From British Airways regarding journeys conducted abroad by the assessee from AY.2008-09 to AY.2008-09 vide their carriers.”

a) ACIT (Finance) informed that salary of the assessee is credited into Syndicate Bank account No 90672010049291 in CR Building. New Delhi. w.e.f. March 2009. b) ACIT Circle 47(1), New Delhi provided Form Nol6 of Sh. Abhisar Sharma for AY. 2005-06, 2007-08 and 2008-09. Copy to Form No 12BA for AY2005-06 submitted by NDTV Ltd. was also provided. c) ACIT(HQ)(Personnel) O/o CCTT-1, New Delhi informed that assessee was permitted to travel abroad during AY 2005-06.

d) M/s British Airways stated that they don't have record beyond 3years on their system. No information was provided by them due to this reason.”

The relevant portion reads as under:

“In response to Summon u/s 131 of the l.T. Act, 1961, the asses see eel the ease on 25/3/2013 and statement on Oath was recorded. The relevant portion is as under:-

"08. As per Tax evasion petition. Sh S.K Srivastava alleged that you have incurred expenditure to the tune of Rs. 3 Crores or more on such foreign travels during the financial year 2004-05 2005-06 2006-07 and 200^-08, whether you have gone to foreign trip during the financial year 2004-05. 2005-06. 2006-07 and 2007-08. What is the source of the expenditure incurred, and how much expenditure you have actually incurred with documentary evidence?

Ans: As per the allegation made by Sh. S.k Srivastava is concerned, the same is completely false, baseless and malicious. They are also unsubstantiated, without any evidence or any basis. 1 would like to point out here that Sh. S.K Srivastava has been in the habit oj making such allegations. Consequently, he had to tender an apology before the Hon.hie High Court of Delhi for making such unsubstantiated allegations and had withdrawn the same, with the undertaking that he would desist from repeating such allegations In fact, he has been sentenced to 15 days of imprisonment by the

Hon.ble High Court of Delhi for contempt of Court which arose out of the fact that he repeated such allegations.

It is categorically denied that I had incurred an expenditure of Rs. 3 Crores and above on such trips. In the Assessment Year 2005-06, there was no foreign trip undertaken by me. I undertook trips to UK and Australia in A. Y 2006-07. the cost incurred on which was Rs. 80,000/ to I Lakh as far as trip to UK is concerned and the expenditure incurred was from the salary and savings of my spouse Sh. Abhisar Sharma. For the trip to Australia, an approximate cost of Rs. 1,25,000/- to Rs.1,35,000/- was incurred by the entire family. consisting of my spouse, my minor daughter and myself. As stated above, the source of the same was salary and savings of my husband. In the A Y 2007-08, 1 took a trip with my family to Ireland & UK. The cost incurred therein was approximately Rs 90,000/-. The source was the salary and savings of my husband "

Q.9 Sh. S.K Srivastava the complainant submitted documentary evidence in support of his statement exhibit I to exibit 36 and yearwise details of unaccounted and unexplained income, expenditure and investment submitted, for the A. Y 2005- 06 . Point Ao. l, 2,3 and 4, for the A.Ys 2006-0"- point No I to 6. 2007-08-point no 1 to 6 and 2008-09- Point no I to 4. What is your reply on these allegations7

Ans It is wrong on your part to say that Sh. Srivastava has submitted documentary evidence. A perusal of the documents that you are referring to clearly show that these are not in the nature of any evidence Rather, these are again either repititions of the vulgar and baseless allegations that Sh. S K Srivastava is in the habit of making or are new allegations leveled by him which are equally baseless and scurrilous. My averments in reply 8 above are reiterated. In this regard, my detailed reply in my letter dated 11703/2013, which gives point wise reply to each and every allegations leveled, along with the facts and the documentary evidence where ever applicable have been provided.

10 In your reply dated 11/03/2013, in para 1 you have 0. replied that all such allegations made had been examined by the Vigilance directorate of the department as well as seniors and file had been closed pursuant to the same. So, have you any documentary evidence for this verification?

Ans: I have no documents in my possession regarding the same However, as had been requested by my letter dated 11/03/2013. a copy of the report may be sought from the concerned authorities. Without prejudice to the same, it Is stated that these allegations have been withdrawn by the complainant as already been stated above by me and

therefore have no bearing to the impugned assessment proceedings.”

Ans All allegations made by Sh. S.K. Srivastava are false, baseless and malicious. No expenditure of Rs. 3 crores or more were incurred on these trips. The detail of the expenditure actually incurred have been given to my A.O. vide letter dated 24.2.2012. These trips were personal in nature. Q.No. 8.As you have told in your Answer of O.No.7 that you have travelled personally, please give details with expenditure incurred on tickets, fooding & lodging, on local site seen and other expenses etc.7 Also provide documentary evidence?

Ans.8 The details are as under:-

There was no foreign visit with family for A. Y. 2005-06.

I. In April 2005. A.Y. 2006-07

A visit was made to the U.K. for tourism purpose. The expenditure incurred was approx. Rs. 80,000/- to Rs. I lac. The source of the same was my salary, wherein two tickets and 1000 doller were provided to me by my ex-employer and also I had substantial savings at that time. Boarding and lodging for most of the trip was provided by my wife's Aunt, who is a resident of U. K. The trip was for a duration of 7 to 10 days

U.K. and Republic of Ireland. An expenditure of approximately Rs. 90,000/- was incurred in this trip, which was undertaken by myself and my family, consisting of my wife and my daughter, who was at that time 2 years and 8 months old. The source of my expenditure was my salary consisting of foreign travel allowance of foreign travel allowance of Rs. 1,32,996/- per annum and my savings. 1 had a balance of approx. Rs. 1,65,271 - in my account at that time. Boarding and lodging in U.K. was at my wife's Aunt place and in Ireland the boarding and lodging was through a package tour, made by travel agent The trip was for 7 to 10 days.

0.9. Ms Shuman Sen your wife has claimed in her writ Para3.43. page 17 and 18, a copy of affidavit submitted in Hon'ble Delhi High Court that her trip to Europe arose because of a yearly vacation abroad with family being part of salary package of Sh. Abhisar Sharma declared to be her spouse and an employee to M/s NDTV Ltd. in this context what do you want to say?

Ans. 9. It has been correctly stated by my wife that foreign travel allowance was part of my salary package. The same is evident from the submissions made by me in my reply above in Q No. 8 "

Copy of bank statement of Abhisar Sharma with Standard Bank also examined to verify the withdrawals for foreign trip.”

brought to the notice of the Assessing Officer that the allegation

pertaining to her misdemeanor regarding NDTV Ltd allegations have

been examined in detail by the Vigilance Directorate of Income Tax

Department and the file has been closed. To confirm the facts

mentioned by the assessee, the Assessing Officer called for

information u/s 133(6) of the Act from the DIT [Vigilance]-II, New

Delhi, who, vide letter No. 07116 dated 30.03.2013 informed as

under:

“In this regard I am directed to submit that the compliant concerning NDTV Ltd made by Sh. S.K. Srivastava against Ads Shumana Sen was registered as FCR-A/sd/NZ/56/13 and same has been dosed by DGIT(Vig.) on 15/02/2013 in absence of any Vigilance angle and in view of Hon'ble Delhi High Court's order/directions.”

a) Details of foreign travel incurred by Abhisar Sharma and his family from FY.2003-04 to FY.2008-09, alongwith relevant pages of bank statement showing sources and expenditure incurred for foreign trips. b) Information u/s 133(6) received from NDTV Ltd. by ACIT 47(1), New Delhi. c) Salary and reimbursement statement of Abhisar Sharma. d) Copy of passport of Abhisar Sharma. e) Copy of passport of Ms. Shumana Sen f) Copy of statements of Abhisar Sharma recorded u/s 131 of IT Act, 1961 by ACIT Circle 47( 1), New Delhi on 4/03/2013. g). Copy of statement of M/s Shumana Sen recorded u/s 131 of IT Act, 1961, by ACIT Circle 47( 1), New Delhi on 11/03/2013.”

case of Shri Abhisar Sharma for Assessment Year 2005-06 was also

called for and was duly received.

as under:

“The proceeding paras outline the complete details of investigations conducted in this case. Briefly stated the same are as under:

.Information u/s 133(6) of IT Act, 1961 was obtained from a) M/s NDTV L.td. regarding employment contracts of Abhisar Sharma for AY. 2005-06 to AY.2008-09.

.Information u/s 133(6) of If Act, 1961 was obtained from b) DIT(Vigilance)-II, New Delhi regarding outcome vigilance proceedings in case of the assessee visa vis NDTV Ltd.

. Information u/s 133(6) of IT Act, 1961 from ACIT c) Circle 47(1), New Delhi regarding investigations conducted in case of Abhisar Sharma and assessment order passed for AY.2005-06 by him.

Statements recorded u/s 131 of IT Act,1961 of Sh. S.K. d) Srivastava, Sh. Abhisar Sharma and the assessee.

Bank statements of Abhisar Sharma with Standard e) Chartered Bank and that of the assessee with Syndicate Bank were examined vis a vis these foreign trips. Bank statement with ICICI Bank (joint account of assessee with her husband) were examined. Apart from it information u/s 133(6) was called from f) ACIT(Finance) O/o CCIT-I, New Delhi, ACIT(Personnel) O/o CCIT-I, New Delhi and M/s British Airways and same was obtained.

Copies of passports of the assessee and Abhisar Sharma were g) examined for verification of these foreign Travels by undersigned and ACIT Circle 47(1), New Delhi

“As a result of above mentioned investigations conducted the following facts emerge:-

a) . Sh. Abhisar Sharma was given two economy tickets and US $ 1000 towards travel allowance for AY.2005-06 by M/s NDTV Ltd. was for Europe trip. However foreign trip was undertaken in AY.2005-06 by assessee and her family.

b) . This foreign trip was undertaken in April 2005 relevant to AY2006-07. Sources of the same was stated to be salary

savings of Abhisar Sharma and two tickets alongwith us $ 1000 provided by M/s NDTV Ltd. Boarding and lodging was provided by assessee's aunt in UK. The duration of stay was 7-10days.

c) In AY.2006-07 another trip was undertaken to Australia for 7- lO days. Source was stated to be foreign Travel allowance of Rs. 1,32,996/- of Sh. Abhisar Sharma. Cheqes for this purpose have been issued from bank a/c of Sh. Abhisar Sharma with Standard Chartered Bank for purchase of tickets, visa fees, boarding/lodging etc. This trip was undertaken by the assessee, her husband i.e. Sh. Abhisar Sharma and their daughter whose age was lyear 1 Omonths at that point of time.

d) . In August 2006 relevant to AY. 2007-08 a foreign travel was undertaken to U.K and Republic of Ireland for 7 to lOdays by assessee, her husband and her daughter. Source was foreign travel allowance and savings of Sh. Abhisar Sharma and Boarding & lodging in U.K. was assessee's aunt. Boarding to lodging in Ireland was through package arranged by a travel agent.

e) There was no foreign trip conducted in F.Y. relating to A Y.2008-09 by the assessee and her family.

g) These facts of foreign travel has been conformed from passports of assessee and her husband. Foreign travel

allowance of Sh. Abhisar Sharma has been confirmed from employment contract of Sh. Abhisar Sharma with NDTV Ltd. Withdrawal's in this regard appears in Sh. Abhisar Shrama's bank Account h) M/s NDTV Ltd. has confirmed that foreign travel allowance has been provided to Abhisar Sharma as part of travel allowance. i) Sh. Abhisar Sharma and assessee has conformed under Oath in their statements recorded u/s 131 of Id Act. 1961 that the sources of these foreign travels was foreign travel allowance provided by M/s NDTV Ltd. and his personal savings and the assessee and her daughter had accompanied him as family members. There are supporting withdrawals in the bank account of Abhisar Sharma regarding their foreign travels. j). A complaint to this effects was being processed by Vigilance Directorate of Income Tax Department against the assessee which has been closed as per details outlined in proceeding. paragraphs. The facts of the complaint were same and related foreign travels of the assessee w.r.t. M/s NDTV 1 td. k). The Assessing officer of Sh. Abhisar Sharma has made an addition for undisclosed perquisites in hands of Abhisar Sharma in AY. 2005-06 in regard to the two economy tickets and US $ 1000 received by him from M/s NDTV Ltd.

1) Thus, the reasons outlined in reopening of assessment do not stand proved in view of the employment contract provided by M/s NDTV Ltd. and other investigations conducted as elaborated above m). The statements recorded of Sh Abhisar Sharma u/s 131 of IT Act,1961 is separately being forwarded to ACIT Circle 47(1), New Delhi for information and action, as deemed fit. Sh. Abhisar Sharma in his statement and submissions before ACIT Circle 47(1), New Delhi has confirmed this fact that foreign travels were undertaken through his sources and savings and his wife and daughter accompanied him as family members. Reference is drawn to this letter dated 13/02/2013 and his statement recorded on 04/03/2013.

Similarly the assessee reiterated the same before ACIT, Circle 47(1), New Delhi in his statement recorded on 11/03/2013.

o). There was no foreign trip undertaken for AY 2005-06 and AY.2008- 09.

p). No evidence could be gathered in these investigations that the assessee had incurred unaccounted expenditure for these foreign travels.

q). The genuineness of the expenditure shown for these foreign travels can only be ascertained by the Assessing officer of Sh. Abhisar Sharma because Sh. Abhisar Sharma has owned up the entire expenditure incurred on these foreign travels. The statements recorded of Sh. Abhisar Sharma on this issue shall be forwarded to AC1T Circle 47(1), New Delhi for information and action, as deemed fit.

r). Hence, It is concluded that the assessee accompanied her husband during these foreign trips and sources such foreign trips was out of foreign travel allowance provided to her husband and his savings. No adverse inference in hands of the assessee is drawn.

Assessed In view of the above Returned Income at Rs. 1,8Tv85/- is accepted issue necessary forms.”

by Shri S.K. Srivastava. We have been told that Shri S.K. Srivastava

has been removed from services by the Government of India under

Fundamental Rule 56(j) of Central Civil Services (Pension) Rules, 1972.

position of law that powers u/s 263 of the Act can be exercised by the

Commissioner on satisfaction of twin conditions, i.e., the assessment

order should be erroneous and prejudicial to the interest of the

Revenue. By 'erroneous' it 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. Our view is fortified by the decision of

Hon'ble High Court of Bombay in the case of CIT vs. Nirav Modi, [2016]

71 taxmann.com 272 (Bombay). This view is further supported by the

decision of the Hon'ble Gujarat High Court in the case of Shri Prakash

Bhagchand Khatri in Tax Appeal No. 177 with Tax Appeal No.178 of 2016, wherein the Hon'ble Gujarat High Court was seized with the following substantial question of law:-

"Whether the Tribunal is right in law and on facts in upholding the order passed by the CIT under section 263 of the Act on merits and still storing the issue of allowability of deduction under section 54 of the Act to the file of Assessing Officer even though the working of allowability of deduction under section 54F is available in the order under section 263 which is not disputed by the assessee before ITAT."

"6. It can thus be seen that though final order of assessment was silent on this aspect, the Assessing Officer had carried out inquiries about the nature of sale of land and about the validity of the assessee's claim of deduction under section 54F of the Act. Learned counsel for the Revenue however submitted that these inquiries were confined to the claim of deduction under section 54F of the Act in the context of fulfilling conditions contained therein and may possibly have no relevance to the question whether the sale of land gave rise to a long term capital gain. Looking to the tenor of queries by the Assessing Office and details . A.Y. 2009-10

supplied by the assessee, we are unable to accept such a condition. In that view of the matter, the observation of the Tribunal that the Assessing Officer having made inquiries and when two views are possible, revisional powers could not be exercised, called for no interference. Since with respect to computation and assertions of other aspects of deduction under section 54Fofthe Act, the Tribunal has remanded the proceedings, nothing stated in this order would affect either side in considerations of such claim.

"A bare reading of section 263 of the Income-tax Act, 1961, makes it clear that the prerequisite for the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Income- tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent--if the order of the Income-tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue-- recourse cannot be had to section 263(1) of the Act. 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 ".

1116/DEL/2014 vide order dated 17.12.2018 has held as under:

“62. We find the Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar reported in 335 ITR 83 has held that where it was discernible from record that the A.O has applied his mind to the issue in question, the ld. CIT cannot invoke section 263 of the Act merely because he has different opinion. Relevant observation of the High Court reads as under:

“We are thus of the opinion that the provisions of s. 263 of the Act, when read as a composite whole make it incumbent upon the CIT before exercising revisional powers to : (i) call for and examine the record, and (ii) give the assessee an opportunity of being heard and thereafter to make or cause to be made such enquiry as he deems necessary. It is only on fulfilment of these twin conditions that the CIT may pass an order exercising his power of revision. Minutely examined, the provisions of the section envisage that the CIT may call for the

records and if he prima facie considers that any order passed therein by the AO is erroneous insofar 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 enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. The twin requirements of the section are manifestly for a purpose. Merely because the CIT considers on examination of the record that the order has been erroneously passed so as to prejudice the interest of the Revenue will not suffice. The assessee must be called, his explanation sought for and examined by the CIT and thereafter if the CIT still feels that the order is erroneous and prejudicial to the interest of the Revenue, the CIT may pass revisional orders. If, on the other hand, the CIT is satisfied, after hearing the assessee, that the orders are not erroneous and prejudicial to the interest of the Revenue, he may choose not to exercise his power of revision. This is for the reason that if a query is raised during the course of scrutiny by the AO, which was answered to the satisfaction of the AO, but neither the query nor the answer were reflected in the assessment order, this would not by itself lead to the conclusion that the order of the AO called for interference and revision. In the instant case, for example, the CIT has observed in the order passed by him that the assessee has not filed certain documents on the record at the time of assessment. Assuming it to be so, in our opinion, this does not justify the conclusion arrived at by the CIT that the AO had shirked his responsibility of examining and investigating the case. More so, in view of the fact that the assessee explained that the capital investment made by the partners, which had been called into question by the CIT was duly reflected in the

respective assessments of the partners who were I.T. assessees and the unsecured loan taken from M/s Stutee Chit & Finance (P) Ltd. was duly reflected in the assessment order of the said chit fund which was also an assessee.”

3927/DEL/2016 order dated 04.07.2018, the co-ordinate bench under

similar facts and circumstances, has held as under:

“19. The Hon'ble Bombay High Court in the case of Gabriel India Ltd 203 ITR 108 has held as under:

“The power of suo motu revision under subsection (1) is in the nature of supervisory jurisdiction and the same can be

exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue of the order being erroneous prejudice has been caused to the interests of the Revenue. It has, therefore, to be considered firstly as to when an order can be said to be erroneous. We find that the expressions "erroneous", "erroneous assessment" and "erroneous judgment" have been defined in Black's Law Dictionary. According to the definition, "erroneous" means "involving error; deviating from the law". "Erroneous assessment" refers to an assessment that deviates from the law and is, therefore, invalid, and is a defect that is jurisdictional in its nature, and does not refer to the judgment of the Assessing Officer in fixing the amount of valuation of the property. Similarly, "erroneous judgment" means "one rendered according to course and practice of court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal principles".

This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. It may be said in such a case that in the opinion of the Commissioner the order in question is prejudicial to the interests of the Revenue. But that by itself will not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, viz., that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the

interests of the Revenue, then also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also must be fulfilled. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act there must be material before the Commissioner to consider that the order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We have already held what is erroneous. It must be an order which is not in accordance with the law or which has been passed by the Income-tax Officer without making any enquiry in undue haste. We have also held as to what is prejudicial to the interests of the Revenue. An order can be said to be prejudicial to the interests of the Revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised. There must be material available on the record called for by the Commissioner to satisfy him prima facie that the aforesaid two requisites are present. If not, he has no authority to initiate proceedings for revision. Exercise of

power of suo motu revision under such circumstances will amount to arbitrary exercise of power.

It is well-settled that when exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on record to satisfy it in that regard. If the action of the authority is challenged before the court it would be open to the courts to examine whether the relevant objective factors were available from the records called for and examined by such authority.

The Income-tax Officer in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the Income- tax Officer on being satisfied with the explanation of the assessee. Such decision of the Income-tax Officer cannot be held to be "erroneous" simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an expenditure of capital nature. He simply

asked the Income-tax Officer to re-examine the matter. That, in our opinion, is not permissible. Hence the provisions of section 263 of the Act were not applicable to the instant case and, therefore, the commissioner was not justified in setting aside the assessment order.”

judgment dated 20.07.2018 of the Hon'ble High Court of Delhi in the

case of Braham Dev Gupta 907 of 2017. We find that the facts of the

case in hand are not even remotely related to the facts of this case.

Court of Delhi in the case of BSES Rajadhani Power Ltd 399 ITR 228 is

again distinguishable on facts as in that case, the Assessing Officer did

not go into the issue with respect to whole claim of deprecation and

that was considered as an error justifying the assumption of

jurisdiction u/s 263 of the Act. Whereas the facts of the case, as

discussed hereinabove, clearly show that the reasons on which the

PCIT assumed jurisdiction are the very reasons for reopening the

assessment and the Assessing Officer has not only made thorough

enquiry, but has also done detailed investigative work by calling for

information u/s 133(6) of the Act from various parties mentioned

elsewhere.

Estates 386 ITR 162 wherein the Assessing Officer did not make any

enquiry in respect of huge premium collected by the assessee with a

small amount of authorised share capital and, therefore, it was held

that the commissioner was justified in treating the assessment order as

erroneous and prejudicial to the interest of the revenue.

Manjunathesware Packing Products and Camphor Works 231 ITR 53,

would, in fact, do good to the assessee because in that case, the

Hon'ble Supreme Court held that the word “record” used in Sec. 263

(1) of the Act would mean the record as it stands at the time of

examination by the Commissioner, but not as it stands at the time the

order was passed by the Assessing Officer.

by due application of mind, the PCIT would have known the fate of

frivolous complaints made by Shri S.K. Srivastava and his conviction by

the Hon'ble High Court. The other decisions relied upon by the ld.

counsel for the Revenue are also misplaced and need no separate

discussion.

of judicial decisions discussed hereinabove, supported by a vortex of

evidences, examined and analysed by the Assessing Officer during the

course of assessment proceedings, further supported by thorough

investigations/enquiries made by the Assessing Officer during the

assessment proceedings, we are of the considered view that there

remains nothing for the PCIT to assume jurisdiction u/s 263 of the Act

to say that the assessment order is not only erroneous but prejudicial

to the interest of the revenue. We are of the considered view that the

PCIT has wrongly assumed jurisdiction u/s 263 of the Act, hence his

combined order for all the A.Ys deserves to be set aside. We,

accordingly, set aside the order of the PCIT and restore that of the

Assessing Officer. We order accordingly.

bring on record, to be looked into by the Central Board of Direct Taxes

(CBDT) that proceedings u/s 263 of the Act have been initiated in this

case apparently on the basis of false, frivolous and baseless allegations

with malafide intention of the quarter concerned which were also

examined and found not sustainable by the Vigilance Directorate of

Income-tax Department. No doubt, proceedings u/s 263 of the Act

having been initiated and completed on the allegations leveled by a

Senior Officer of the Income-tax Department is an order passed by a

quasi-judicial authority but it sans judicious approach required to be

exercised by the quasi-judicial authority. Quasi-judicial proceedings

initiated apparently on the basis of false, frivolous and baseless

allegations have not only prejudiced appellant rather it has also

wasted the valuable time of the Tribunal. Facts and circumstances of

the case, available on record as discussed in the preceding paras

prove, that the Senior Officer of the Revenue Department had not only

got the proceedings u/s 263 initiated against Appellant on false,

frivolous and baseless allegations rather continued to litigate against

the appellant as well as against the Revenue Department by filing

frivolous applications one after the other before the Hon’ble High

Court of Delhi as well as the Tribunal.

enquiry in this case to find out, as to how and under what

circumstances on the basis of false, frivolous and baseless allegations,

that too with malafide intentions, proceedings u/s 263 of the Act have

been initiated apparently to victimize the appellant, to proceed

against the guilty officials under Rules and to further frame the

guidelines to deal with such abuse of powers by the senior officers, so

that such incident should not reoccur.

3281 to 3284/DEL/2015 are allowed.

The order is pronounced in the open court on 11.10.2019.

Sd/- Sd/-

[KULDIP SINGH] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated: 11th October, 2019

VL/