ANINDITA STEELS LTD.,JHARKHAND vs. PR.CIT-2, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B BENCH, KOLKATA (Before Sri J. Sudhakar Reddy, Hon’ble Accountant Member & Sri Aby T. Varkey, Hon’ble Judicial Member) ITA No. 2225/Kol/2019 Assessment Year: 2009-10 Anindita Steels Ltd………………………………………..............................................……………….…......Appellant 603, Panchawati Tower Harmu Road Ranchi Jharkand - 834012 [PAN : AAECA 1498 H] Vs. Pr. Commissioner of Income Tax -(2), Kolkata...............................................………....…....Respondent Appearances by: Shri Manish Tiwari, A/R, appeared on behalf of the assessee. Shri Imokaba Jamir, CIT D/R, appearing on behalf of the Revenue. Date of concluding the hearing : August 25th, 2020 Date of pronouncing the order : September 16th, 2020 ORDER Per J. Sudhakar Reddy, AM :- This appeal filed by the assessee is directed against the order of the Learned Pr. Commissioner of Income Tax, Central, Kolkata- 2, Kolkata, (hereinafter the “ld. Pr. CIT”), passed u/s. 263 of the Income Tax Act, 1961 (the ‘Act’), dt. 19/03/2019, for the Assessment Year 2009-10. 2. At the outset we find that there is a delay of 126 (One Twenty Six) days in filing of this appeal by the assessee. After perusing the petition for condonation, we are convinced that the assessee was prevented by sufficient cause from filing the appeal in time. Hence the delay is condoned and the appeal is admitted. 3. The ld. Counsel for the assessee submitted that the order passed u/s 263 of the Act, is bad in law for the following reasons:- a) The assessment was reopened after verifying unsecured loans of Rs. 1.74 Crores, received by the assessee from various companies and the Assessing Officer after examining this issue had accepted the unsecured loans as genuine in the reassessment proceedings. The ld. Pr. CIT, cannot for the very same reason revise the assessment order passed by the Assessing Officer. He drew the attention of the Bench to the copy of the reasons recorded for reopening of the assessment as well as the showcause notice issued by the ld. Pr. CIT, prior to passing of his order

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u/s 263 of the Act to demonstrate that both actions were for the very u/s 263 of the Act to demonstrate that both actions were for the very u/s 263 of the Act to demonstrate that both actions were for the very same reasons. same reasons.

b) That the Assessing Officer while completing the assessment u/s That the Assessing Officer while completing the assessment u/s That the Assessing Officer while completing the assessment u/s 143(3)/147 of the Act on 20/05/2016 had conducted enquiries, obtained 143(3)/147 of the Act on 20/05/2016 had conducted enquiries, obtained 143(3)/147 of the Act on 20/05/2016 had conducted enquiries, obtained information from third parties and on being satisfied with the identity information from third parties and on being satisfied with the identity information from third parties and on being satisfied with the identity and creditworthiness of and creditworthiness of the sundry creditors and that the genuineness of at the genuineness of the transactions had not made any addition. That adequate enquiries the transactions had not made any addition. That adequate enquiries the transactions had not made any addition. That adequate enquiries were made and it is not a case of lack of enquiry or lack of application of were made and it is not a case of lack of enquiry or lack of application of were made and it is not a case of lack of enquiry or lack of application of mind and that revision cannot be made on the ground of inadequate mind and that revision cannot be made on the ground of inadequate mind and that revision cannot be made on the ground of inadequate enquiry. c) The ld. Pr. CIT The ld. Pr. CIT did not conduct any enquiry or verification by himself for did not conduct any enquiry or verification by himself for coming to a conclusion that the order requires revision. Such lack of coming to a conclusion that the order requires revision. Such lack of coming to a conclusion that the order requires revision. Such lack of enquiry and non application of mind by the ld. Pr. CIT makes the order enquiry and non application of mind by the ld. Pr. CIT makes the order enquiry and non application of mind by the ld. Pr. CIT makes the order bad in law. d) That the assessee is entitled to question t That the assessee is entitled to question the legality and validity of the ity and validity of the reassessment order passed u/s 143(3)/147 of the Act on 20/05/2016, reassessment order passed u/s 143(3)/147 of the Act on 20/05/2016, reassessment order passed u/s 143(3)/147 of the Act on 20/05/2016, while challenging the order passed u/s 263 of the Act while challenging the order passed u/s 263 of the Act while challenging the order passed u/s 263 of the Act, revising the reassessment order reassessment order, as it would be a jurisdictional issue which goes to the as it would be a jurisdictional issue which goes to the root of the matter. atter. e) The Assessing Officer in the reassessment order dt. 20/05/2016 has not The Assessing Officer in the reassessment order dt. 20/05/2016 has not The Assessing Officer in the reassessment order dt. 20/05/2016 has not made any addition based on the order relatable to the reasons on which made any addition based on the order relatable to the reasons on which made any addition based on the order relatable to the reasons on which the revision was made and the returned income was accepted. Thus, such the revision was made and the returned income was accepted. Thus, such the revision was made and the returned income was accepted. Thus, such reassessment order is bad in law and reassessment order is bad in law and consequently the revision of such consequently the revision of such reassessment order is bad in law. reassessment order is bad in law. f) The Assessing Officer in page 1 of the assessment order states that the The Assessing Officer in page 1 of the assessment order states that the The Assessing Officer in page 1 of the assessment order states that the notice u/s 148 of the Act was issued on 24/02/2016 (para 4). At para 5, notice u/s 148 of the Act was issued on 24/02/2016 (para 4). At para 5, notice u/s 148 of the Act was issued on 24/02/2016 (para 4). At para 5, page 1 of his order, he further states that page 1 of his order, he further states that statutory notice u/s 143(2) of statutory notice u/s 143(2) of the Act was issued on 24/02/2016. This proves that notice u/s 143(2) of the Act was issued on 24/02/2016. This proves that notice u/s 143(2) of the Act was issued on 24/02/2016. This proves that notice u/s 143(2) of the Act was issued prior to the assessee filing a return in response to a the Act was issued prior to the assessee filing a return in response to a the Act was issued prior to the assessee filing a return in response to a notice issued u/s 148 of the Act and that this makes the notice u/s 143(2) notice issued u/s 148 of the Act and that this makes the notice u/s 143(2) notice issued u/s 148 of the Act and that this makes the notice u/s 143(2)

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of the Act, bad in law. Thus, the assessment order is bad in law the Act, bad in law. Thus, the assessment order is bad in law the Act, bad in law. Thus, the assessment order is bad in law as no notice u/s 143(2) was issued to the assessee after filing of the return of notice u/s 143(2) was issued to the assessee after filing of the return of notice u/s 143(2) was issued to the assessee after filing of the return of income in response to a notice issued u/s 148 of the Act and the framing income in response to a notice issued u/s 148 of the Act and the framing income in response to a notice issued u/s 148 of the Act and the framing of assessment u/s 143(3) of the Act. Thu of assessment u/s 143(3) of the Act. Thus, the revisionary order passed revisionary order passed u/s 263 of the Act, consequently bad in law. u/s 263 of the Act, consequently bad in law. 4. The ld. CIT D/R, on the other hand, submitted that the ld. Pr. CIT had given a The ld. CIT D/R, on the other hand, submitted that the ld. Pr. CIT had given a The ld. CIT D/R, on the other hand, submitted that the ld. Pr. CIT had given a finding that the assessee had shown unsecured loan of Rs.1.74 Crores and the Assessing finding that the assessee had shown unsecured loan of Rs.1.74 Crores and the Assessing finding that the assessee had shown unsecured loan of Rs.1.74 Crores and the Assessing Officer has not looked into the adverse evidences while completing the reassessment. s not looked into the adverse evidences while completing the reassessment. s not looked into the adverse evidences while completing the reassessment. He submitted that the Assessing Officer has not examined the antecedents of the He submitted that the Assessing Officer has not examined the antecedents of the He submitted that the Assessing Officer has not examined the antecedents of the company and the creditworthiness while accepting the loans. He company and the creditworthiness while accepting the loans. He relied on the order of relied on the order of the ld. Pr. CIT and submitted that as the Assessing Officer has completed the and submitted that as the Assessing Officer has completed the and submitted that as the Assessing Officer has completed the assessment without due enquiry and verification without due enquiry and verification and hence, the order passed was erroneous and , the order passed was erroneous and prejudicial to the interest of the revenue. On a query from the Bench prejudicial to the interest of the revenue. On a query from the Bench, on the reply of the on the reply of the Department to the legal arguments raised by the assessee’s counsel on the validity of nt to the legal arguments raised by the assessee’s counsel on the validity of nt to the legal arguments raised by the assessee’s counsel on the validity of the reassessment order, the ld. CIT D/R submitted that he is relying on the order of the the reassessment order, the ld. CIT D/R submitted that he is relying on the order of the the reassessment order, the ld. CIT D/R submitted that he is relying on the order of the ld. Pr. CIT. 5. We have heard rival contentions. On careful consideration of the facts an We have heard rival contentions. On careful consideration of the facts an We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities circumstances of the case, perusal of the papers on record, orders of the authorities circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows: below as well as case law cited, we hold as follows:- 6. The reasons for reopening of assessment as recorded by the Assessing Officer The reasons for reopening of assessment as recorded by the Assessing Officer The reasons for reopening of assessment as recorded by the Assessing Officer are as follows:- “The assessee had filed the return for the AY 2009 had filed the return for the AY 2009-10, but was not scrutinized under 10, but was not scrutinized under section 143(3) or 153A. As per the communication received from OFFICE OF THE DEPUTY DIRECTOR OF As per the communication received from OFFICE OF THE DEPUTY DIRECTOR OF As per the communication received from OFFICE OF THE DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION), UNIT INCOME TAX (INVESTIGATION), UNIT-2(4), KOLKATA, 4TH FLOOR, ROOM NO 4/7A, FLOOR, ROOM NO 4/7A, AAYAKAR BHAWAN ANNEXE, ANNEXE, -13, CHOWRINGHEE, KOLKATA-69, VIDE LETTER No. 69, VIDE LETTER No. DDIT/U-2(4)/Rungta/2015 2(4)/Rungta/2015-16/2331 Dated 14.01.2016 A search and seizure operation under section 132 of the Income Tax Act 1961 was A search and seizure operation under section 132 of the Income Tax Act 1961 was A search and seizure operation under section 132 of the Income Tax Act 1961 was conducted on Rungta group of companies on 25/08/2015. During the cours conducted on Rungta group of companies on 25/08/2015. During the cours conducted on Rungta group of companies on 25/08/2015. During the course of post search investigation, a report in the form of STR received from DDIT (Inv), Unit search investigation, a report in the form of STR received from DDIT (Inv), Unit search investigation, a report in the form of STR received from DDIT (Inv), Unit-1, Ranchi. The STR was in the name of RECENT SUPPLIERS PVT. LTD. and related with Ranchi. The STR was in the name of RECENT SUPPLIERS PVT. LTD. and related with Ranchi. The STR was in the name of RECENT SUPPLIERS PVT. LTD. and related with Rungta Group of Companies by way of financial transaction. Rungta Group of Companies by way of financial transaction. In this case one entry operator SHRI RAJENDRA BUBNA was identified and statement y operator SHRI RAJENDRA BUBNA was identified and statement y operator SHRI RAJENDRA BUBNA was identified and statement under oath was recorded. In his statement (copy enclosed in folder), he stated that he under oath was recorded. In his statement (copy enclosed in folder), he stated that he under oath was recorded. In his statement (copy enclosed in folder), he stated that he had provided unsecured loan through his web of had provided unsecured loan through his web of Jamakharchi/paper companies to Jamakharchi/paper companies to

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M/S ANINDITA STEELS LIMITED [fo M/S ANINDITA STEELS LIMITED [formerly known as ANINDITA TRADES & rmerly known as ANINDITA TRADES & INVESTMENT LTD] to the tune of Rs.1.74 CRORES DURING THE FINANCIAL YEAR INVESTMENT LTD] to the tune of Rs.1.74 CRORES DURING THE FINANCIAL YEAR INVESTMENT LTD] to the tune of Rs.1.74 CRORES DURING THE FINANCIAL YEAR 2008-09 CORRESPONDING ASSESSMENT YEAR 2009 09 CORRESPONDING ASSESSMENT YEAR 2009-10. Also the statement of Sri Samir Kumar Chatterjee, Director of Recent Suppliers Also the statement of Sri Samir Kumar Chatterjee, Director of Recent Suppliers Also the statement of Sri Samir Kumar Chatterjee, Director of Recent Suppliers Pvt. Ltd. was recorded (copy enclosed in the folder) (copy enclosed in the folder) In the light of above facts, I have reasons to believe that the income of Rs.1.74 crore In the light of above facts, I have reasons to believe that the income of Rs.1.74 crore In the light of above facts, I have reasons to believe that the income of Rs.1.74 crore chargeable to tax has escaped assessment for assessment year 2009 chargeable to tax has escaped assessment for assessment year 2009- -10 within the meaning of section 147 of the Income Tax Act, 1961.” meaning of section 147 of the Income Tax Act, 1961.”

6.1. Thereafter, the Assessing Officer called for information Thereafter, the Assessing Officer called for information and after obtaining the after obtaining the required documents accepted the loans received by the assessee company as genuine. required documents accepted the loans received by the assessee company as genuine. required documents accepted the loans received by the assessee company as genuine. The assessee filed a copy of the order sheet entry at page 73 & The assessee filed a copy of the order sheet entry at page 73 & 74 of the paper book. A 74 of the paper book. A perusal of the same demonstrates that the Assessing Officer has called for third party perusal of the same demonstrates that the Assessing Officer has called for third party perusal of the same demonstrates that the Assessing Officer has called for third party information and had received the same and had received the same and also had taken replies and submissions from and also had taken replies and submissions from the assessee. After this exercise, the Assessing Officer After this exercise, the Assessing Officer has accepted the loans taken by the has accepted the loans taken by the assessee from different creditors as genuine and has not made any addition assessee from different creditors as genuine and has not made any addition assessee from different creditors as genuine and has not made any addition in the order passed u/s 143(3) r.w.s. 147 of the Act on 20/05/2016 passed u/s 143(3) r.w.s. 147 of the Act on 20/05/2016. 6.1.1. The ld. Pr. CIT proposed to revise this reassessment order The ld. Pr. CIT proposed to revise this reassessment order dt. 20/05/2 dt. 20/05/2016 by giving a showcause notice dt. 08/03/2019. Para 3 & 4 of th giving a showcause notice dt. 08/03/2019. Para 3 & 4 of this notice reads as follows: notice reads as follows:- “3. It has been observed from the assessment records for the relevant It has been observed from the assessment records for the relevant It has been observed from the assessment records for the relevant assessment year that your concern had received unsecured loans to the tune of assessment year that your concern had received unsecured loans to the tune of assessment year that your concern had received unsecured loans to the tune of Rs.1.74 Cr. From various companies. rom various companies. 4. At the time of re At the time of re-assessment proceedings, the A.O. failed to examine the assessment proceedings, the A.O. failed to examine the nature of business activities of your concern with the companies from who nature of business activities of your concern with the companies from who nature of business activities of your concern with the companies from who unsecured loans were taken. Since no enquiry was conducted into the veracity unsecured loans were taken. Since no enquiry was conducted into the veracity unsecured loans were taken. Since no enquiry was conducted into the veracity of such loans and creditworthiness of the lenders, the order of the AO appears ch loans and creditworthiness of the lenders, the order of the AO appears ch loans and creditworthiness of the lenders, the order of the AO appears to be erroneous in so far as it is prejudicial to the interest of the revenue.” to be erroneous in so far as it is prejudicial to the interest of the revenue.” to be erroneous in so far as it is prejudicial to the interest of the revenue.” 7. From the above it is clear that reasons recorded for reopening of the assessment From the above it is clear that reasons recorded for reopening of the assessment From the above it is clear that reasons recorded for reopening of the assessment and the reason for initiating proceedings u/s 263 of the Act, are the same and based on the initiating proceedings u/s 263 of the Act, are the same and based on the initiating proceedings u/s 263 of the Act, are the same and based on the same material. The allegation in this showcause notice issued u/s 263 of the Act, is that the The allegation in this showcause notice issued u/s 263 of the Act, is that the The allegation in this showcause notice issued u/s 263 of the Act, is that the Assessing Officer has failed to examine and that no enquiry was conducted into the Assessing Officer has failed to examine and that no enquiry was conducted into the Assessing Officer has failed to examine and that no enquiry was conducted into the veracity of the loans by the Assessing Officer, is factually incorrect. ity of the loans by the Assessing Officer, is factually incorrect. It is well settled that It is well settled that inadequate enquiry cannot be a ground for exercising of revisionary powers u/s 263 of the inadequate enquiry cannot be a ground for exercising of revisionary powers u/s 263 of the inadequate enquiry cannot be a ground for exercising of revisionary powers u/s 263 of the

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Act. It is for the Assessing Officer to determine the extent of enquiry and the Assessing Officer to determine the extent of enquiry and the Assessing Officer to determine the extent of enquiry and investigation to be done on a particular issue. From the papers on record it is clear that the Assessing Officer done on a particular issue. From the papers on record it is clear that the Assessing Officer done on a particular issue. From the papers on record it is clear that the Assessing Officer had conducted enquiries both with the assessee as well as with the third parties and on had conducted enquiries both with the assessee as well as with the third parties and on had conducted enquiries both with the assessee as well as with the third parties and on receipt of all the information, copies of which are pl receipt of all the information, copies of which are placed from pages 43 to 72 of the paper aced from pages 43 to 72 of the paper book, has accepted these loans as genuine. The ld. Pr. CIT cannot substitute his has accepted these loans as genuine. The ld. Pr. CIT cannot substitute his has accepted these loans as genuine. The ld. Pr. CIT cannot substitute his opinion for that of the Assessing Officer. It is also seen that the ld. Pr. CIT has not conducted any that of the Assessing Officer. It is also seen that the ld. Pr. CIT has not conducted any that of the Assessing Officer. It is also seen that the ld. Pr. CIT has not conducted any verification or prima facie investi investigation on his own to come to a conclusion that the order gation on his own to come to a conclusion that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue. passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue. passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue. He also failed to notice that enquiries were in fact made by the Assessing Officer. He also failed to notice that enquiries were in fact made by the Assessing Officer. He also failed to notice that enquiries were in fact made by the Assessing Officer. The law on this issue The law on this issue is clear. The Hon’ble Andhra Pradesh High Court in the case of The Hon’ble Andhra Pradesh High Court in the case of Spectra Shares and Scrips Pvt. Ltd. V CIT (AP) 354 ITR 35 Spectra Shares and Scrips Pvt. Ltd. V CIT (AP) 354 ITR 35 had considered a number of had considered a number of judgments on this issue of exercise of jurisdiction u/s 263 of the Act by the Principal judgments on this issue of exercise of jurisdiction u/s 263 of the Act by the Principal judgments on this issue of exercise of jurisdiction u/s 263 of the Act by the Principal Commissioner of Income Tax and culled the principles laid down in the judgments as Commissioner of Income Tax and culled the principles laid down in the judgments as Commissioner of Income Tax and culled the principles laid down in the judgments as below :

“24. In Malabar Industrial Co.Ltd. ( 2 Supra), Malabar Industrial Co.Ltd. ( 2 Supra), the Supreme Court held that a the Supreme Court held that a bare reading of Sec.263 makes it clear that the prerequisite for the exercise of bare reading of Sec.263 makes it clear that the prerequisite for the exercise of bare reading of Sec.263 makes it clear that the prerequisite for the exercise of jurisdiction by the Commissioner suomotu under it, is the order of the Income Tax jurisdiction by the Commissioner suomotu under it, is the order of the Income Tax jurisdiction by the Commissioner suomotu under it, is the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the inte Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The rests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Commissioner has to be satisfied of twin conditions, namely, (i) the order of 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 Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to 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 interests of the Revenue. If one of them is absent – if the order of the Income Tax rder of the Income Tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but it is prejudicial to the Revenue but it is prejudicial to the Revenue – recourse cannot be had to Sec.263 (1) of the recourse cannot be had to Sec.263 (1) of the Act. It also held at pg Act. It also held at pg-88 as follows: "The phrase "prejudicial "The phrase "prejudicial to the interests of the Revenue" has to be read in to the interests of the Revenue" has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of conjunction with an erroneous order passed by the Assessing Officer. Every loss of conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as revenue as a consequence of an order of the Assessing Officer cannot be treated as revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Rev prejudicial to the interests of the Revenue. For example, when an Income enue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of Officer adopted one of the courses permissible in law and it has resulted in loss of Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue: or where two views are possible and the Income Revenue: or where two views are possible and the Income-tax Officer has taken tax Officer has taken one view with which the Commissioner does not agree, it one view with which the Commissioner does not agree, it cannot be treated as an cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken erroneous order prejudicial to the interests of the Revenue, unless the view taken erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income-tax Officer is unsustainable in law. It has been held by this Court tax Officer is unsustainable in law. It has been held by this Court tax Officer is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in h that where a sum not earned by a person is assessed as income in his hands on his is hands on his so offering, the order passed by the Assessing Officer accepting the same as such so offering, the order passed by the Assessing Officer accepting the same as such so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the Revenue. will be erroneous and prejudicial to the interests of the Revenue. will be erroneous and prejudicial to the interests of the Revenue. RampyarideviSaraogi v. CIT (1968) 67 ITR 84 (SC) and in Smt. Tara Devi RampyarideviSaraogi v. CIT (1968) 67 ITR 84 (SC) and in Smt. Tara Devi RampyarideviSaraogi v. CIT (1968) 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal V. CIT (197 Aggarwal V. CIT (1973) 88 ITR 323 (SC)". 25. In Max India Ltd. Max India Ltd. (3 Supra), reiterated the view in Malabar Industrial Malabar Industrial Co.Ltd. (2 Supra) and observed that every loss of Revenue as a consequence of an (2 Supra) and observed that every loss of Revenue as a consequence of an (2 Supra) and observed that every loss of Revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest order of the Assessing Officer cannot be treated as prejudicial to the interest order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when an Income Tax Officer adopted one of the courses the Revenue. For example, when an Income Tax Officer adopted one of the courses the Revenue. For example, when an Income Tax Officer adopted one of the courses

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permissible in law and it has resulted in loss of revenue; or where two views are permissible in law and it has resulted in loss of revenue; or where two views are permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one view with which the possible and the Income Tax Officer has taken one view with which the possible and the Income Tax Officer has taken one view with which the Commissioner does n Commissioner does not agree, it cannot be treated as an erroneous order ot agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income prejudicial to the interests of the Revenue, unless the view taken by the Income prejudicial to the interests of the Revenue, unless the view taken by the Income Tax Officer is unsustainable in law. On the facts of that case, Sec.80HHC(3) as it Tax Officer is unsustainable in law. On the facts of that case, Sec.80HHC(3) as it Tax Officer is unsustainable in law. On the facts of that case, Sec.80HHC(3) as it then stood was interpreted by the Asses then stood was interpreted by the Assessing Officer but the Revenue contended sing Officer but the Revenue contended that in view of the 2005 Amendment which is clarificatory and retrospective in that in view of the 2005 Amendment which is clarificatory and retrospective in that in view of the 2005 Amendment which is clarificatory and retrospective in nature, the view of the Assessing Officer was unsustainable in law and the nature, the view of the Assessing Officer was unsustainable in law and the nature, the view of the Assessing Officer was unsustainable in law and the Commissioner was correct in invoking Sec.263. But the Supreme C Commissioner was correct in invoking Sec.263. But the Supreme C Commissioner was correct in invoking Sec.263. But the Supreme Court rejected the said contention and held that when the Commissioner passed his order the said contention and held that when the Commissioner passed his order the said contention and held that when the Commissioner passed his order disagreeing with the view of the Assessing Officer, there were two views on the disagreeing with the view of the Assessing Officer, there were two views on the disagreeing with the view of the Assessing Officer, there were two views on the word "profits" in that section; that the said section was amended eleven times; word "profits" in that section; that the said section was amended eleven times; word "profits" in that section; that the said section was amended eleven times; that different views existed on the day when the Commissioner passed his order; erent views existed on the day when the Commissioner passed his order; erent views existed on the day when the Commissioner passed his order; that the mechanics of the section had become so complicated over the years that that the mechanics of the section had become so complicated over the years that that the mechanics of the section had become so complicated over the years that two views were inherently possible; and therefore, the subsequent amendment in two views were inherently possible; and therefore, the subsequent amendment in two views were inherently possible; and therefore, the subsequent amendment in 2005 even though retrospec 2005 even though retrospective will not attract the provision of Sec.263. tive will not attract the provision of Sec.263. 26. In Vikas Polymers Vikas Polymers (4 Supra), the Delhi High Court held that the power of (4 Supra), the Delhi High Court held that the power of suomotu revision exercisable by the Commissioner under the provisions of Sec.263 suomotu revision exercisable by the Commissioner under the provisions of Sec.263 suomotu revision exercisable by the Commissioner under the provisions of Sec.263 is supervisory in nature; that an "erroneous judgm is supervisory in nature; that an "erroneous judgment" means one which is not in ent" means one which is not in accordance with law; that if an Income Tax Officer acting in accordance with law accordance with law; that if an Income Tax Officer acting in accordance with law accordance with law; that if an Income Tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as "erroneous" by the makes a certain assessment, the same cannot be branded as "erroneous" by the makes a certain assessment, the same cannot be branded as "erroneous" by the Commissioner simply because, according to him, the order should hav Commissioner simply because, according to him, the order should hav Commissioner simply because, according to him, the order should have been written differently or more elaborately; that the section does not visualize the written differently or more elaborately; that the section does not visualize the written differently or more elaborately; that the section does not visualize the substitution of the judgment of the Commissioner for that of the Income Tax substitution of the judgment of the Commissioner for that of the Income Tax substitution of the judgment of the Commissioner for that of the Income Tax Officer, who passed the order unless the decision is not in accordance with the Officer, who passed the order unless the decision is not in accordance with the Officer, who passed the order unless the decision is not in accordance with the law; that to invoke suomotu revisional powers to reopen a concluded assessment invoke suomotu revisional powers to reopen a concluded assessment invoke suomotu revisional powers to reopen a concluded assessment under Sec.263, the Commissioner must give reasons; that a bare reiteration by under Sec.263, the Commissioner must give reasons; that a bare reiteration by under Sec.263, the Commissioner must give reasons; that a bare reiteration by him that the order of the Income Tax Officer is erroneous in so far as it is him that the order of the Income Tax Officer is erroneous in so far as it is him that the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the interests of th prejudicial to the interests of the Revenue, will not suffice; that the reasons must e Revenue, will not suffice; that the reasons must be such as to show that the enhancement or modification of the assessment or be such as to show that the enhancement or modification of the assessment or be such as to show that the enhancement or modification of the assessment or cancellation of the assessment or directions issued for a fresh assessment were cancellation of the assessment or directions issued for a fresh assessment were cancellation of the assessment or directions issued for a fresh assessment were called for, and must irresistibly lead to the co called for, and must irresistibly lead to the conclusion that the order of the nclusion that the order of the Income Tax Officer was not only erroneous but was prejudicial to the interests of Income Tax Officer was not only erroneous but was prejudicial to the interests of Income Tax Officer was not only erroneous but was prejudicial to the interests of the Revenue. Thus, while the Income Tax Officer is not called upon to write an the Revenue. Thus, while the Income Tax Officer is not called upon to write an the Revenue. Thus, while the Income Tax Officer is not called upon to write an elaborate judgment giving detailed reasons in respect of each an elaborate judgment giving detailed reasons in respect of each an elaborate judgment giving detailed reasons in respect of each and every disallowance, deduction, etc., it is incumbent upon the Commissioner not to disallowance, deduction, etc., it is incumbent upon the Commissioner not to disallowance, deduction, etc., it is incumbent upon the Commissioner not to exercise his suomotu revisional powers unless supported by adequate reasons for exercise his suomotu revisional powers unless supported by adequate reasons for exercise his suomotu revisional powers unless supported by adequate reasons for doing so; that if a query is raised during the course of the scrutiny by the doing so; that if a query is raised during the course of the scrutiny by the doing so; that if a query is raised during the course of the scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, er, which was answered to the satisfaction of the Assessing Officer, er, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer were reflected in the assessment order, this but neither the query nor the answer were reflected in the assessment order, this 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 Assessing Officer would not by itself lead to the conclusion that the order of the Assessing Officer would not by itself lead to the conclusion that the order of the Assessing Officer called for interferenc called for interference and revision. 27. In Sunbeam Auto Ltd. Sunbeam Auto Ltd.( 5 Supra), the Delhi High Court held that the Assessing ( 5 Supra), the Delhi High Court held that the Assessing Officer in the assessment order is not required to give a detailed reason in respect Officer in the assessment order is not required to give a detailed reason in respect Officer in the assessment order is not required to give a detailed reason in respect of each and every item of deduction, etc.; that whether there was applicat of each and every item of deduction, etc.; that whether there was applicat of each and every item of deduction, etc.; that whether there was application of mind before allowing the expenditure in question has to be seen; that if there was mind before allowing the expenditure in question has to be seen; that if there was mind before allowing the expenditure in question has to be seen; that if there was an inquiry, even inadequate that would not by itself give occasion to the an inquiry, even inadequate that would not by itself give occasion to the an inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under Sec.263 merely because he has a different Commissioner to pass orders under Sec.263 merely because he has a different Commissioner to pass orders under Sec.263 merely because he has a different opinion in the matter; that it is only in cases of lack of inquiry that such a course atter; that it is only in cases of lack of inquiry that such a course atter; that it is only in cases of lack of inquiry that such a course of action would be open; that an assessment order made by the Income Tax of action would be open; that an assessment order made by the Income Tax of action would be open; that an assessment order made by the Income Tax Officer cannot be branded as erroneous by the Commissioner simply because, Officer cannot be branded as erroneous by the Commissioner simply because, Officer cannot be branded as erroneous by the Commissioner simply because,

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according to him, the order should hav according to him, the order should have been written more elaborately; there e been written more elaborately; there must be some prima facie material on record to show that the tax which was must be some prima facie material on record to show that the tax which was must be some prima facie material on record to show that the tax which was lawfully exigible has not been imposed or that by the application of the relevant lawfully exigible has not been imposed or that by the application of the relevant lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation, a less statute on an incorrect or incomplete interpretation, a lesser tax than what was er tax than what was just, has been imposed. In that case, the Delhi High Court held that the just, has been imposed. In that case, the Delhi High Court held that the just, has been imposed. In that case, the Delhi High Court held that the Commissioner in the exercise of revisional power could not have objected to the Commissioner in the exercise of revisional power could not have objected to the Commissioner in the exercise of revisional power could not have objected to the finding of the Assessing Officer that expenditure on tools and dies by the assesse finding of the Assessing Officer that expenditure on tools and dies by the assesse finding of the Assessing Officer that expenditure on tools and dies by the assessee, a manufacturer of Car parts, is revenue expenditure where the said claim was a manufacturer of Car parts, is revenue expenditure where the said claim was a manufacturer of Car parts, is revenue expenditure where the said claim was allowed by the latter on being satisfied with the explanation of the assessee and allowed by the latter on being satisfied with the explanation of the assessee and allowed by the latter on being satisfied with the explanation of the assessee and where the same accounting practice followed by the assessee for number of years where the same accounting practice followed by the assessee for number of years where the same accounting practice followed by the assessee for number of years with the approval of the Income Tax Authorities. It held that the Assessing Officer val of the Income Tax Authorities. It held that the Assessing Officer val of the Income Tax Authorities. It held that the Assessing Officer had called for explanation on the very item from the assessee and the assessee had called for explanation on the very item from the assessee and the assessee had called for explanation on the very item from the assessee and the assessee had furnished its explanation. Merely because the Assessing Officer in his order had furnished its explanation. Merely because the Assessing Officer in his order had furnished its explanation. Merely because the Assessing Officer in his order did not make an elaborate did not make an elaborate discussion in that regard, his order cannot be termed discussion in that regard, his order cannot be termed as erroneous. The opinion of the Assessing Officer is one of the possible views and as erroneous. The opinion of the Assessing Officer is one of the possible views and as erroneous. The opinion of the Assessing Officer is one of the possible views and there was no material before the Commissioner to vary that opinion and ask for there was no material before the Commissioner to vary that opinion and ask for there was no material before the Commissioner to vary that opinion and ask for fresh inquiry. 28. In Gabriel India Ltd Gabriel India Ltd. (6 Supra), the Bombay High Court held that a (6 Supra), the Bombay High Court held that a consideration of the Commissioner as to whether an order is erroneous in so far consideration of the Commissioner as to whether an order is erroneous in so far consideration of the Commissioner as to whether an order is erroneous in so far as it is prejudicial to the interests of the Revenue, must be based on materials on as it is prejudicial to the interests of the Revenue, must be based on materials on as it is prejudicial to the interests of the Revenue, must be based on materials on the record of the proceedings called for by h the record of the proceedings called for by him. If there are no materials on im. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a record on the basis of which it can be said that the Commissioner acting in a record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of reasonable manner could have come to such a conclusion, the very initiation of reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. It he proceedings by him will be illegal and without jurisdiction. It he proceedings by him will be illegal and without jurisdiction. It held that the Commissioner cannot initiate proceedings with a view to start fishing and roving Commissioner cannot initiate proceedings with a view to start fishing and roving Commissioner cannot initiate proceedings with a view to start fishing and roving inquiries in matters or orders which are already concluded; that the department inquiries in matters or orders which are already concluded; that the department inquiries in matters or orders which are already concluded; that the department cannot be permitted to begin fresh litigation because of new views they entertain cannot be permitted to begin fresh litigation because of new views they entertain cannot be permitted to begin fresh litigation because of new views they entertain on facts or new versions which they present as to what should be the inference or n facts or new versions which they present as to what should be the inference or n facts or new versions which they present as to what should be the inference or proper inference either of the facts disclosed or the weight of the circumstance; proper inference either of the facts disclosed or the weight of the circumstance; proper inference either of the facts disclosed or the weight of the circumstance; that if this is permitted, litigation would have no end except when legal ingenuity that if this is permitted, litigation would have no end except when legal ingenuity that if this is permitted, litigation would have no end except when legal ingenuity is exhausted; that to do so is to divide one argument into two and multiply the ted; that to do so is to divide one argument into two and multiply the ted; that to do so is to divide one argument into two and multiply the litigation. It held that cases may be visualized where the Income Tax Officer while litigation. It held that cases may be visualized where the Income Tax Officer while litigation. It held that cases may be visualized where the Income Tax Officer while making an assessment examines the accounts, makes inquiries, applies his mind making an assessment examines the accounts, makes inquiries, applies his mind making an assessment examines the accounts, makes inquiries, applies his mind to the facts and circum to the facts and circumstances of the case and determines the income either by stances of the case and determines the income either by accepting the account or by making some estimate himself; that the accepting the account or by making some estimate himself; that the accepting the account or by making some estimate himself; that the Commissioner, on perusal of the record, may be of the opinion that the estimate Commissioner, on perusal of the record, may be of the opinion that the estimate Commissioner, on perusal of the record, may be of the opinion that the estimate made by the Officer concerned was on the lower side a made by the Officer concerned was on the lower side and left to the Commissioner nd left to the Commissioner he would have estimated the income at a figure higher than the one determined he would have estimated the income at a figure higher than the one determined he would have estimated the income at a figure higher than the one determined by the Income Tax Officer; but that would not vest the Commissioner with power by the Income Tax Officer; but that would not vest the Commissioner with power by the Income Tax Officer; but that would not vest the Commissioner with power to reexamine the accounts and determine the income himself at a higher to reexamine the accounts and determine the income himself at a higher to reexamine the accounts and determine the income himself at a higher figure; there must be material available on the record called for by the Commissioner to there must be material available on the record called for by the Commissioner to there must be material available on the record called for by the Commissioner to satisfy him prima facie that the order is both erroneous and prejudicial to the satisfy him prima facie that the order is both erroneous and prejudicial to the satisfy him prima facie that the order is both erroneous and prejudicial to the interests of the Revenue. Otherwise, it would amount to giving unbridled and interests of the Revenue. Otherwise, it would amount to giving unbridled and interests of the Revenue. Otherwise, it would amount to giving unbridled and arbitrary power to the revising authority to initiate proceedings for revision in power to the revising authority to initiate proceedings for revision in power to the revising authority to initiate proceedings for revision in every case and start re every case and start re-examination and fresh inquiry in matters which have examination and fresh inquiry in matters which have already been concluded under law. already been concluded under law. 29. In M.S. Raju(15 Supra), this Court has held that the power of the (15 Supra), this Court has held that the power of the (15 Supra), this Court has held that the power of the Commissioner under Sec.263 (1) is not limited only to the material which was issioner under Sec.263 (1) is not limited only to the material which was issioner under Sec.263 (1) is not limited only to the material which was available before the Assessing Officer and, in order to protect the interests of the available before the Assessing Officer and, in order to protect the interests of the available before the Assessing Officer and, in order to protect the interests of the Revenue, the Commissioner is entitled to examine any other records which are Revenue, the Commissioner is entitled to examine any other records which are Revenue, the Commissioner is entitled to examine any other records which are

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available at the time available at the time of examination by him and to take into consideration even of examination by him and to take into consideration even those events which arose subsequent to the order of assessment. those events which arose subsequent to the order of assessment. 30. In Rampyari Devi Saraogi Rampyari Devi Saraogi(21 Supra), the Commissioner in exercise of (21 Supra), the Commissioner in exercise of revisional powers cancelled assessee’s assessment for the yea revisional powers cancelled assessee’s assessment for the years 1952 rs 1952-1953 to 1960-61 because he found that the income tax officer was not justified in 61 because he found that the income tax officer was not justified in 61 because he found that the income tax officer was not justified in accepting the initial capital, the gift received and sale of jewellery, the income accepting the initial capital, the gift received and sale of jewellery, the income accepting the initial capital, the gift received and sale of jewellery, the income from business etc., without any enquiry or evidence whatsoever . He directed the from business etc., without any enquiry or evidence whatsoever . He directed the from business etc., without any enquiry or evidence whatsoever . He directed the income tax officer to do fresh assessment after making proper enquiry and come tax officer to do fresh assessment after making proper enquiry and come tax officer to do fresh assessment after making proper enquiry and investigation in regard to the jurisdiction. The assessee complained before the investigation in regard to the jurisdiction. The assessee complained before the investigation in regard to the jurisdiction. The assessee complained before the Supreme Court that no fair or reasonable opportunity was given to her. The Supreme Court that no fair or reasonable opportunity was given to her. The Supreme Court that no fair or reasonable opportunity was given to her. The Supreme Court held that there Supreme Court held that there was ample material to show that the income tax was ample material to show that the income tax officer made the assessments in undue hurry; that he had passed a short stereo officer made the assessments in undue hurry; that he had passed a short stereo officer made the assessments in undue hurry; that he had passed a short stereo typed assessment order for each assessment year; that on the face of the record, typed assessment order for each assessment year; that on the face of the record, typed assessment order for each assessment year; that on the face of the record, the orders were pre- -judicial to the interest of the Revenue; and no prejudice was the Revenue; and no prejudice was caused to the assessee on account of failure of the Commissioner to indicate the caused to the assessee on account of failure of the Commissioner to indicate the caused to the assessee on account of failure of the Commissioner to indicate the results of the enquiry made by him, as she would have a full opportunity for results of the enquiry made by him, as she would have a full opportunity for results of the enquiry made by him, as she would have a full opportunity for showing to the income tax officer whether he had jurisdiction or showing to the income tax officer whether he had jurisdiction or not and whether not and whether the income tax assessed in the assessment years which were originally passed the income tax assessed in the assessment years which were originally passed the income tax assessed in the assessment years which were originally passed were correct or not" were correct or not" 31. From the above decisions, the following principles as to exercise of jurisdiction 31. From the above decisions, the following principles as to exercise of jurisdiction 31. From the above decisions, the following principles as to exercise of jurisdiction by the Commissioner u/s.263 of the Act can be culled ou by the Commissioner u/s.263 of the Act can be culled out: a) The Commissioner has to be satisfied of twin conditions, namely, (i) the order a) The Commissioner has to be satisfied of twin conditions, namely, (i) the order a) 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 of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If erroneous but is not prejudicial to the Revenue to the interests of the Revenue. If erroneous but is not prejudicial to the Revenue to the interests of the Revenue. If erroneous but is not prejudicial to the Revenue or if it is not erroneous but it is prejudicial to the Revenue or if it is not erroneous but it is prejudicial to the Revenue – recourse cannot be recourse cannot be had to Sec.263 (1) of the Act. had to Sec.263 (1) of the Act. b) Every loss of revenue as a consequence of an order of the Assessing Officer b) Every loss of revenue as a consequence of an order of the Assessing Officer b) Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Reven cannot be treated as prejudicial to the interests of the Revenue. For example, ue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it tax Officer adopted one of the courses permissible in law and it tax Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue: or where two views are possible and the Income has resulted in loss of Revenue: or where two views are possible and the Income has resulted in loss of Revenue: or where two views are possible and the Income- tax Officer has taken one view with which the Commissioner does not agree, it tax Officer has taken one view with which the Commissioner does not agree, it tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the annot be treated as an erroneous order prejudicial to the interests of the annot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income Revenue, unless the view taken by the Income-tax Officer is unsustainable in law. tax Officer is unsustainable in law. c) To invoke suomotu revisional powers to reopen a concluded assessment under c) To invoke suomotu revisional powers to reopen a concluded assessment under c) To invoke suomotu revisional powers to reopen a concluded assessment under Sec.263, the Commissi Sec.263, the Commissioner must give reasons; that a bare reiteration by him that oner must give reasons; that a bare reiteration by him that the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, will not suffice; that the reasons must be such as to show interests of the Revenue, will not suffice; that the reasons must be such as to show interests of the Revenue, will not suffice; that the reasons must be such as to show that the and must irresi that the and must irresistibly lead to the conclusion that the order of the Income stibly lead to the conclusion that the order of the Income Tax Officer was not only erroneous but was prejudicial to the interests of the Tax Officer was not only erroneous but was prejudicial to the interests of the Tax Officer was not only erroneous but was prejudicial to the interests of the Revenue. Thus, while the Income Tax Officer is not called upon to write an Revenue. Thus, while the Income Tax Officer is not called upon to write an Revenue. Thus, while the Income Tax Officer is not called upon to write an elaborate judgment giving detailed reasons elaborate judgment giving detailed reasons in respect of each and every in respect of each and every disallowance, deduction, etc., it is incumbent upon the Commissioner not to disallowance, deduction, etc., it is incumbent upon the Commissioner not to disallowance, deduction, etc., it is incumbent upon the Commissioner not to exercise his suomotu revisional powers unless supported by adequate reasons for exercise his suomotu revisional powers unless supported by adequate reasons for exercise his suomotu revisional powers unless supported by adequate reasons for doing so; that if a query is raised during the course of the scrutiny b doing so; that if a query is raised during the course of the scrutiny b doing so; that if a query is raised during the course of the scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, Assessing Officer, which was answered to the satisfaction of the Assessing Officer, Assessing Officer, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer were reflected in the assessment order, this but neither the query nor the answer were reflected in the assessment order, this 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 Assessing Officer would not by itself lead to the conclusion that the order of the Assessing Officer would not by itself lead to the conclusion that the order of the Assessing Officer called for interference and revision. alled for interference and revision. e) The Commissioner cannot initiate proceedings with a view to start fishing and e) The Commissioner cannot initiate proceedings with a view to start fishing and e) The Commissioner cannot initiate proceedings with a view to start fishing and roving inquiries in matters or orders which are already concluded; that the roving inquiries in matters or orders which are already concluded; that the roving inquiries in matters or orders which are already concluded; that the department cannot be permitted to begin fresh litigation becau department cannot be permitted to begin fresh litigation because of new views se of new views

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they entertain on facts or new circumstance; that if this is permitted, litigation they entertain on facts or new circumstance; that if this is permitted, litigation they entertain on facts or new circumstance; that if this is permitted, litigation would have no end except when legal ingenuity is exhausted would have no end except when legal ingenuity is exhausted f) Whether there was application of mind before allowing the expenditure in f) Whether there was application of mind before allowing the expenditure in f) Whether there was application of mind before allowing the expenditure in question has to be see question has to be seen; that if there was an inquiry, even inadequate that would n; that if there was an inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under Sec.263 not by itself give occasion to the Commissioner to pass orders under Sec.263 not by itself give occasion to the Commissioner to pass orders under Sec.263 merely because he has a different opinion in the matter; that it is only in cases of merely because he has a different opinion in the matter; that it is only in cases of merely because he has a different opinion in the matter; that it is only in cases of lack of inquiry that such a course lack of inquiry that such a course of action would be open; that an assessment of action would be open; that an assessment order made by the Income Tax Officer cannot be branded as erroneous by the order made by the Income Tax Officer cannot be branded as erroneous by the order made by the Income Tax Officer cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been Commissioner simply because, according to him, the order should have been Commissioner simply because, according to him, the order should have been written more elaborately; there must be some prima facie mater written more elaborately; there must be some prima facie material on record to ial on record to show that the tax which was lawfully exigible has not been imposed or that by the show that the tax which was lawfully exigible has not been imposed or that by the show that the 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 application of the relevant statute on an incorrect or incomplete interpretation, a application of the relevant statute on an incorrect or incomplete interpretation, a lesser tax than what was just, has been imposed. lesser tax than what was just, has been imposed. g) The power of the Comm g) The power of the Commissioner under Sec.263 (1) is not Commissioner is issioner under Sec.263 (1) is not Commissioner is entitled to examine any other records which are available at the time of entitled to examine any other records which are available at the time of entitled to examine any other records which are available at the time of examination by him and to take into consideration even those events which arose examination by him and to take into consideration even those events which arose examination by him and to take into consideration even those events which arose subsequent to the order of assessment. subsequent to the order of assessment. Now we examine the following judgements e the following judgements. :- DIRECTOR OF INCOME TAX vs. JYOTI FOUNDATION 357 ITR 388 (Delhi High Court ) DIRECTOR OF INCOME TAX vs. JYOTI FOUNDATION 357 ITR 388 (Delhi High Court ) DIRECTOR OF INCOME TAX vs. JYOTI FOUNDATION 357 ITR 388 (Delhi High Court ) It was held that revisionary power u/s 263 is conferred on the It was held that revisionary power u/s 263 is conferred on the It was held that revisionary power u/s 263 is conferred on the Commissioner/Director of Income Tax when an order passed by the lower Commissioner/Director of Income Tax when an order passed by the lower Commissioner/Director of Income Tax when an order passed by the lower authority is erroneous and prejudicial to the interest of the Revenue. authority is erroneous and prejudicial to the interest of the Revenue. authority is erroneous and prejudicial to the interest of the Revenue. Orders which are passed without inquiry or investiga are passed without inquiry or investigation are treated as erroneous and tion are treated as erroneous and prejudicial to the interest of the Revenue, but orders which are passed after prejudicial to the interest of the Revenue, but orders which are passed after prejudicial to the interest of the Revenue, but orders which are passed after inquiry/investigation on the question/issue are not per se or normally treated as inquiry/investigation on the question/issue are not per se or normally treated as inquiry/investigation on the question/issue are not per se or normally treated as erroneous and prejudicial to the interest of the Revenue becau erroneous and prejudicial to the interest of the Revenue because the revisionary se the revisionary authority feels and opines that further inquiry/investigation was required or authority feels and opines that further inquiry/investigation was required or authority feels and opines that further inquiry/investigation was required or deeper or further scrutiny should be undertaken. deeper or further scrutiny should be undertaken. INCOME TAX OFFICER vs. DG HOUSING PROJECTS LTD343 ITR 329 (Delhi) INCOME TAX OFFICER vs. DG HOUSING PROJECTS LTD343 ITR 329 (Delhi) Revenue does not have any right to appeal Revenue does not have any right to appeal to the first appellate authority against to the first appellate authority against an order passed by the Assessing Officer. S. 263 has been enacted to empower the an order passed by the Assessing Officer. S. 263 has been enacted to empower the an order passed by the Assessing Officer. S. 263 has been enacted to empower the CIT to exercise power of revision and revise any order passed by the Assessing CIT to exercise power of revision and revise any order passed by the Assessing CIT to exercise power of revision and revise any order passed by the Assessing Officer, if two cumulative conditions are satisfied. Fi Officer, if two cumulative conditions are satisfied. Firstly, the order sought to be rstly, the order sought to be revised should be erroneous and secondly, it should be prejudicial to the interest revised should be erroneous and secondly, it should be prejudicial to the interest revised should be erroneous and secondly, it should be prejudicial to the interest of the Revenue. The expression "prejudicial to the interest of the Revenue" is of of the Revenue. The expression "prejudicial to the interest of the Revenue" is of of the Revenue. The expression "prejudicial to the interest of the Revenue" is of wide import and is not confined to merely loss of tax. The te wide import and is not confined to merely loss of tax. The term "erroneous" means rm "erroneous" means a wrong/incorrect decision deviating from law. This expression postulates an a wrong/incorrect decision deviating from law. This expression postulates an a wrong/incorrect decision deviating from law. This expression postulates an error which makes an order unsustainable in law. error which makes an order unsustainable in law. The Assessing Officer is both an investigator and an adjudicator. If the Assessing The Assessing Officer is both an investigator and an adjudicator. If the Assessing The Assessing Officer is both an investigator and an adjudicator. If the Assessing Officer as an adjudicator Officer as an adjudicator decides a question or aspect and makes a wrong decides a question or aspect and makes a wrong assessment which is unsustainable in law, it can be corrected by the assessment which is unsustainable in law, it can be corrected by the assessment which is unsustainable in law, it can be corrected by the Commissioner in exercise of revisionary power. As an investigator, it is incumbent Commissioner in exercise of revisionary power. As an investigator, it is incumbent Commissioner in exercise of revisionary power. As an investigator, it is incumbent upon the Assessing Officer to investigate the facts requi upon the Assessing Officer to investigate the facts required to be examined and red to be examined and verified to compute the taxable income. If the Assessing Officer fails to conduct verified to compute the taxable income. If the Assessing Officer fails to conduct verified to compute the taxable income. If the Assessing Officer fails to conduct the said investigation, he commits an error and the word "erroneous" includes the said investigation, he commits an error and the word "erroneous" includes the said investigation, he commits an error and the word "erroneous" includes failure to make the enquiry. In such cases, the order becomes erroneous b failure to make the enquiry. In such cases, the order becomes erroneous b failure to make the enquiry. In such cases, the order becomes erroneous because

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enquiry or verification has not been made and not because a wrong order has enquiry or verification has not been made and not because a wrong order has enquiry or verification has not been made and not because a wrong order has been passed on merits been passed on merits. Thus, in cases of wrong opinion or finding on merits, the CIT has to come to the Thus, in cases of wrong opinion or finding on merits, the CIT has to come to the Thus, in cases of wrong opinion or finding on merits, the CIT has to come to the conclusion and himself decide that the order is erroneous, by conduct conclusion and himself decide that the order is erroneous, by conduct conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under s. 263 is necessary enquiry, if required and necessary, before the order under s. 263 is necessary enquiry, if required and necessary, before the order under s. 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because passed. In such cases, the order of the Assessing Officer will be erroneous because passed. In such cases, the order of the Assessing Officer will be erroneous because the order passed is not sustainable in law and the said finding must be recorded. the order passed is not sustainable in law and the said finding must be recorded. the order passed is not sustainable in law and the said finding must be recorded. CIT cannot remand the matter to the Assessing Officer to decide whether the not remand the matter to the Assessing Officer to decide whether the not remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous. findings recorded are erroneous. In cases where there is inadequate enquiry but In cases where there is inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding that the not lack of enquiry, again the CIT must give and record a finding that the not lack of enquiry, again the CIT must give and record a finding that the order/inquiry made is erroneous. order/inquiry made is erroneous. This can happen if an enquiry and verification This can happen if an enquiry and verification is conducted by the CIT and he is able to establish and show the error or mistake is conducted by the CIT and he is able to establish and show the error or mistake is conducted by the CIT and he is able to establish and show the error or mistake made by the Assessing Officer, making the order unsustainable in Law. In some made by the Assessing Officer, making the order unsustainable in Law. In some made by the Assessing Officer, making the order unsustainable in Law. In some cases possibly though rarely, the CIT can also s cases possibly though rarely, the CIT can also show and establish that the facts on how and establish that the facts on record or inferences drawn from facts on record per se record or inferences drawn from facts on record per se justified and mandated justified and mandated further enquiry or investigation but the Assessing Officer had erroneously not further enquiry or investigation but the Assessing Officer had erroneously not further enquiry or investigation but the Assessing Officer had erroneously not undertaken the same. However, the said finding must be clear, u undertaken the same. However, the said finding must be clear, unambiguous and nambiguous and not debatable. The matter cannot be remitted for a fresh decision to the Assessing The matter cannot be remitted for a fresh decision to the Assessing The matter cannot be remitted for a fresh decision to the Assessing Officer to conduct further enquiries without a finding that the order is erroneous. Officer to conduct further enquiries without a finding that the order is erroneous. Officer to conduct further enquiries without a finding that the order is erroneous. Finding that the order is erroneous is a condition or requirement which mu Finding that the order is erroneous is a condition or requirement which mu Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under s. 263 of the Act. In such matters, to satisfied for exercise of jurisdiction under s. 263 of the Act. In such matters, to satisfied for exercise of jurisdiction under s. 263 of the Act. In such matters, to remand the matter/issue to the Assessing Officer would imply and mean the CIT remand the matter/issue to the Assessing Officer would imply and mean the CIT remand the matter/issue to the Assessing Officer would imply and mean the CIT has not examined and decided whether or not the order is erroneous but has has not examined and decided whether or not the order is erroneous but has has not examined and decided whether or not the order is erroneous but has directed the Assessing Officer to decide the aspect/question. Assessing Officer to decide the aspect/question. This distinction must be kept in mind by the CIT while exercising jurisdiction This distinction must be kept in mind by the CIT while exercising jurisdiction This distinction must be kept in mind by the CIT while exercising jurisdiction under s. 263 of the Act and in the absence of the finding that the order is under s. 263 of the Act and in the absence of the finding that the order is under s. 263 of the Act and in the absence of the finding that the order is erroneous and prejudicial to the interest of Revenue erroneous and prejudicial to the interest of Revenue, exercise of jurisdiction under , exercise of jurisdiction under the said section is not sustainable. the said section is not sustainable. In most cases of alleged "inadequate In most cases of alleged "inadequate investigation", it will be difficult to hold that the order of the Assessing Officer, investigation", it will be difficult to hold that the order of the Assessing Officer, investigation", it will be difficult to hold that the order of the Assessing Officer, who had conducted enquiries and had acted as an investigator, i who had conducted enquiries and had acted as an investigator, i who had conducted enquiries and had acted as an investigator, is erroneous, without CIT conducting verification/inquiry. The order of the Assessing Officer without CIT conducting verification/inquiry. The order of the Assessing Officer without CIT conducting verification/inquiry. The order of the Assessing Officer may be or may not be wrong. CIT cannot direct reconsideration on this ground may be or may not be wrong. CIT cannot direct reconsideration on this ground may be or may not be wrong. CIT cannot direct reconsideration on this ground but only when the order is erroneous. but only when the order is erroneous. An order of remit cannot be passed by the An order of remit cannot be passed by the CIT to ask the Assessing Officer to decide whether the order was erroneous. This is ask the Assessing Officer to decide whether the order was erroneous. This is ask the Assessing Officer to decide whether the order was erroneous. This is not permissible. An order is not erroneous, unless the CIT hold and records not permissible. An order is not erroneous, unless the CIT hold and records not permissible. An order is not erroneous, unless the CIT hold and records reasons why it is erroneous. An order will not become erroneous because on reasons why it is erroneous. An order will not become erroneous because on reasons why it is erroneous. An order will not become erroneous because on remit, the Assessing Office remit, the Assessing Officer may decide that the order is erroneous. Therefore CIT r may decide that the order is erroneous. Therefore CIT must after recording reasons hold that the order is erroneous. The jurisdictional must after recording reasons hold that the order is erroneous. The jurisdictional must after recording reasons hold that the order is erroneous. The jurisdictional precondition stipulated is that the CIT must come to the conclusion that the order precondition stipulated is that the CIT must come to the conclusion that the order precondition stipulated is that the CIT must come to the conclusion that the order is erroneous and is unsustainable i is erroneous and is unsustainable in law. It may be noticed that the material n law. It may be noticed that the material which the CIT can rely includes not only the record as it stands at the time when which the CIT can rely includes not only the record as it stands at the time when which the CIT can rely includes not only the record as it stands at the time when the order in question was passed by the Assessing Officer but also the record as it the order in question was passed by the Assessing Officer but also the record as it the order in question was passed by the Assessing Officer but also the record as it stands at the time of examination by the CIT. N stands at the time of examination by the CIT. Nothing bars/prohibits the CIT from othing bars/prohibits the CIT from collecting and relying upon new/additional material/evidence to show and state collecting and relying upon new/additional material/evidence to show and state collecting and relying upon new/additional material/evidence to show and state that the order of the Assessing Officer is erroneous. that the order of the Assessing Officer is erroneous.

COMMISSIONER OF INCOME TAX vs. J. L. MORRISON (INDIA) LTD. 366 ITR COMMISSIONER OF INCOME TAX vs. J. L. MORRISON (INDIA) LTD. 366 ITR As regard the submi As regard the submission on behalf of the Revenue that power under Section 263 ssion on behalf of the Revenue that power under Section 263 of the Act can be exercised even in a case where the issue is debatable, it was held of the Act can be exercised even in a case where the issue is debatable, it was held of the Act can be exercised even in a case where the issue is debatable, it was held that the case of CIT vs. M. M. Khambhatwala was not applicable. The observation that the case of CIT vs. M. M. Khambhatwala was not applicable. The observation that the case of CIT vs. M. M. Khambhatwala was not applicable. The observation

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that the Commissioner can exerc that the Commissioner can exercise power under Section 263 of the Act even in a ise power under Section 263 of the Act even in a case were the issue is debatable was a mere passing remark which is again case were the issue is debatable was a mere passing remark which is again case were the issue is debatable was a mere passing remark which is again contrary to the view taken by the Apex Court in thecase of Malabar Industrial contrary to the view taken by the Apex Court in thecase of Malabar Industrial contrary to the view taken by the Apex Court in thecase of Malabar Industrial Company Ltd. & Max India Ltd. If the Assessing Officer Company Ltd. & Max India Ltd. If the Assessing Officer has taken a possible view, has taken a possible view, it cannot be said that the view taken by him is erroneous nor the order of the it cannot be said that the view taken by him is erroneous nor the order of the it cannot be said that the view taken by him is erroneous nor the order of the Assessing Officer in that case can be set aside in revision. It has to be shown Assessing Officer in that case can be set aside in revision. It has to be shown Assessing Officer in that case can be set aside in revision. It has to be shown unmistakably that the order of the Assessing Officer is unsustainable. unmistakably that the order of the Assessing Officer is unsustainable. unmistakably that the order of the Assessing Officer is unsustainable. Anything short of that would not clothe the CIT with jurisdiction to exercise power under short of that would not clothe the CIT with jurisdiction to exercise power under short of that would not clothe the CIT with jurisdiction to exercise power under Section 263 of the Act. CIT vs. M. M. Khambhatwala reported in 198 ITR 144; CIT Section 263 of the Act. CIT vs. M. M. Khambhatwala reported in 198 ITR 144; CIT Section 263 of the Act. CIT vs. M. M. Khambhatwala reported in 198 ITR 144; CIT vs. Ralson Industries Ltd. reported in 288 ITR 322 (SC), not applicable; Malabar vs. Ralson Industries Ltd. reported in 288 ITR 322 (SC), not applicable; Malabar vs. Ralson Industries Ltd. reported in 288 ITR 322 (SC), not applicable; Malabar Industrial Co. Ltd. v. CIT reported in 243 ITR 83, relied on. strial Co. Ltd. v. CIT reported in 243 ITR 83, relied on. (Para 72) As regard the third question as to whether the assessment order was passed by As regard the third question as to whether the assessment order was passed by As regard the third question as to whether the assessment order was passed by the Assessing Officer without application of mind, it was held that the Court has the Assessing Officer without application of mind, it was held that the Court has the Assessing Officer without application of mind, it was held that the Court has to start with the presumptio to start with the presumption that the assessment order was regularly passed. n that the assessment order was regularly passed. There is evidence to show that the assessing officer had required the assessee to There is evidence to show that the assessing officer had required the assessee to There is evidence to show that the assessing officer had required the assessee to answer 17 questions and to file documents in regard thereto. It is difficult to answer 17 questions and to file documents in regard thereto. It is difficult to answer 17 questions and to file documents in regard thereto. It is difficult to proceed on the basis that the 17 questions r proceed on the basis that the 17 questions raised by him did not require aised by him did not require application of mind. Without application of mind the questions raised by him in application of mind. Without application of mind the questions raised by him in application of mind. Without application of mind the questions raised by him in the annexure to notice under Section 142 (1) of the Act could not have been the annexure to notice under Section 142 (1) of the Act could not have been the annexure to notice under Section 142 (1) of the Act could not have been formulated. The Assessing Officer was required to examine the return fi formulated. The Assessing Officer was required to examine the return fi formulated. The Assessing Officer was required to examine the return filed by the assessee in order to ascertain his income and to levy appropriate tax on that assessee in order to ascertain his income and to levy appropriate tax on that assessee in order to ascertain his income and to levy appropriate tax on that basis. When the Assessing Officer was satisfied that the return, filed by the basis. When the Assessing Officer was satisfied that the return, filed by the basis. When the Assessing Officer was satisfied that the return, filed by the assessee, was in accordance with law, he was under no obligation to justify as to assessee, was in accordance with law, he was under no obligation to justify as to assessee, was in accordance with law, he was under no obligation to justify as to why was he satisfied. On the top of that the Assessing Officer by his order dated he satisfied. On the top of that the Assessing Officer by his order dated he satisfied. On the top of that the Assessing Officer by his order dated 28th March, 2008 did not adversely affect any right of the assessee nor was any March, 2008 did not adversely affect any right of the assessee nor was any March, 2008 did not adversely affect any right of the assessee nor was any civil right of the assessee prejudiced. He was as such under no obligation in law to civil right of the assessee prejudiced. He was as such under no obligation in law to civil right of the assessee prejudiced. He was as such under no obligation in law to give reasons. The fact, that all requisite papers were summoned and thereafter e fact, that all requisite papers were summoned and thereafter e fact, that all requisite papers were summoned and thereafter the matter was heard from time to time coupled with the fact that the view taken the matter was heard from time to time coupled with the fact that the view taken the matter was heard from time to time coupled with the fact that the view taken by him is not shown by the revenue to be erroneous and was also considered both by him is not shown by the revenue to be erroneous and was also considered both by him is not shown by the revenue to be erroneous and was also considered both by the Tribunal as also by us to by the Tribunal as also by us to be a possible view, strengthens the presumption be a possible view, strengthens the presumption under Clause (e) of Section 114 of the Evidence Act. A prima facie evidence, on the under Clause (e) of Section 114 of the Evidence Act. A prima facie evidence, on the under Clause (e) of Section 114 of the Evidence Act. A prima facie evidence, on the basis of the aforesaid presumption, is thus converted into a conclusive proof of the basis of the aforesaid presumption, is thus converted into a conclusive proof of the basis of the aforesaid presumption, is thus converted into a conclusive proof of the fact that the order was passed by the fact that the order was passed by the assessing officer after due application of assessing officer after due application of mind. Meerut Roller Flour Mills Pvt. Ltd. vs. C.I.T., ITA No. 116 /Coch/ 2012; CIT mind. Meerut Roller Flour Mills Pvt. Ltd. vs. C.I.T., ITA No. 116 /Coch/ 2012; CIT mind. Meerut Roller Flour Mills Pvt. Ltd. vs. C.I.T., ITA No. 116 /Coch/ 2012; CIT vs. Infosys Technologies Ltd., 341 ITR 293 (Karnataka); S.N. Mukherjee vs. Union vs. Infosys Technologies Ltd., 341 ITR 293 (Karnataka); S.N. Mukherjee vs. Union vs. Infosys Technologies Ltd., 341 ITR 293 (Karnataka); S.N. Mukherjee vs. Union of India, AIR 1990 SC 1984; A. A. Doshi vs. JCIT, of India, AIR 1990 SC 1984; A. A. Doshi vs. JCIT, 256 ITR 685; Hindusthan Tin 256 ITR 685; Hindusthan Tin Works Ltd. Vs. CIT, 275 ITR 43 (Del), distinguished. Works Ltd. Vs. CIT, 275 ITR 43 (Del), distinguished. (Paras 90-92, 102) 92, 102) COMMISSIONER OF INCOME TAX vs. SOHANA WOOLLEN MILLS 296 ITR 238 (P&H HC) COMMISSIONER OF INCOME TAX vs. SOHANA WOOLLEN MILLS 296 ITR 238 (P&H HC) COMMISSIONER OF INCOME TAX vs. SOHANA WOOLLEN MILLS 296 ITR 238 (P&H HC) A reference to the provisions of s. 263 shows that jurisdiction thereunder A reference to the provisions of s. 263 shows that jurisdiction thereunder A reference to the provisions of s. 263 shows that jurisdiction thereunder can be exercised if the CIT finds that the order of the AO was erroneous and prejudicial exercised if the CIT finds that the order of the AO was erroneous and prejudicial exercised if the CIT finds that the order of the AO was erroneous and prejudicial to the interest of Revenue. Mere audit objection and merely because a different to the interest of Revenue. Mere audit objection and merely because a different to the interest of Revenue. Mere audit objection and merely because a different view could be taken, were not enough to say that the order of the AO was view could be taken, were not enough to say that the order of the AO was view could be taken, were not enough to say that the order of the AO was erroneous or prejudicial to the interest of the Revenue. The jurisdiction could be prejudicial to the interest of the Revenue. The jurisdiction could be prejudicial to the interest of the Revenue. The jurisdiction could be exercised if the CIT was satisfied that the basis for exercise of jurisdiction existed. exercised if the CIT was satisfied that the basis for exercise of jurisdiction existed. exercised if the CIT was satisfied that the basis for exercise of jurisdiction existed. No rigid rule could be laid down about the situation when the jurisdiction can be No rigid rule could be laid down about the situation when the jurisdiction can be No rigid rule could be laid down about the situation when the jurisdiction can be exercised. Whether satisfaction of the CIT for exercising jurisdiction was called for er satisfaction of the CIT for exercising jurisdiction was called for er satisfaction of the CIT for exercising jurisdiction was called for or not, has to be decided having regard to a given fact situation. In the present or not, has to be decided having regard to a given fact situation. In the present or not, has to be decided having regard to a given fact situation. In the present case, the Tribunal has held that the assessee had disclosed that out of sale case, the Tribunal has held that the assessee had disclosed that out of sale case, the Tribunal has held that the assessee had disclosed that out of sale

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consideration, a sum of Rs. consideration, a sum of Rs. 1 lakh was to be received for sale of permit. If that is 1 lakh was to be received for sale of permit. If that is so, there was no error in the view taken by the AO and no case was made out for so, there was no error in the view taken by the AO and no case was made out for so, there was no error in the view taken by the AO and no case was made out for invoking jurisdiction under s. 263. invoking jurisdiction under s. 263. 8. Applying the propositions of law to the facts of this case, we hold that the o Applying the propositions of law to the facts of this case, we hold that the o Applying the propositions of law to the facts of this case, we hold that the order passed u/s 263 of the Act, d. 19/03/2019, as bad in law. of the Act, d. 19/03/2019, as bad in law. It is wrong both on facts as well It is wrong both on facts as well as law. Enquiries were made by the Assessing Officer and the Assessing Officer on such as law. Enquiries were made by the Assessing Officer and the Assessing Officer on such as law. Enquiries were made by the Assessing Officer and the Assessing Officer on such enquiries has taken a possible view. The very reason for reopening is the enquiries has taken a possible view. The very reason for reopening is the enquiries has taken a possible view. The very reason for reopening is the ground for proposing the revision. This is not permissible in law. proposing the revision. This is not permissible in law. 9. As regards the arguments of the assessee that the validity of the reassessment As regards the arguments of the assessee that the validity of the reassessment As regards the arguments of the assessee that the validity of the reassessment proceedings can be challenged during the course of challenging the revisionary order proceedings can be challenged during the course of challenging the revisionary order proceedings can be challenged during the course of challenging the revisionary order u/s 263 of the Act, we are of the opinion that law is in the favour of such arguments. e are of the opinion that law is in the favour of such arguments. e are of the opinion that law is in the favour of such arguments. Jurisdictional issue, can be raised even in collateral proceedings. Jurisdictional issue, can be raised even in collateral proceedings. At the same time, we At the same time, we are unable to uphold the contention of the assessee that the reassessment order itself are unable to uphold the contention of the assessee that the reassessment order itself are unable to uphold the contention of the assessee that the reassessment order itself would become bad in law, if the reason recorded for reopening does not for reopening does not ultimately result in an addition being made by the Assessing Officer result in an addition being made by the Assessing Officer. In fact, no addition has been . In fact, no addition has been made in this case. What the Courts of law have said on this issue is that, if an addition is made in this case. What the Courts of law have said on this issue is that, if an addition is made in this case. What the Courts of law have said on this issue is that, if an addition is not made for the reasons which are recorded for reopening of the assessment, de for the reasons which are recorded for reopening of the assessment, de for the reasons which are recorded for reopening of the assessment, no other addition can be made on some other grounds which do not form part of the reasons be made on some other grounds which do not form part of the reasons be made on some other grounds which do not form part of the reasons recorded for reopening. If an Assessing Officer accepts the return of income of the . If an Assessing Officer accepts the return of income of the . If an Assessing Officer accepts the return of income of the assessee on reopening of an assessment, such assessment order does not become an reopening of an assessment, such assessment order does not become an reopening of an assessment, such assessment order does not become an illegal assessment order. The Courts never said that the reassessment order would be . The Courts never said that the reassessment order would be . The Courts never said that the reassessment order would be bad in law. Thus, this argument of the assessee is dismissed bad in law. Thus, this argument of the assessee is dismissed as devoid of merit as devoid of merit. 9.1. Coming to the second argument we find that the notice u/s 148 of the Act has econd argument we find that the notice u/s 148 of the Act has econd argument we find that the notice u/s 148 of the Act has been issued to the assessee on 24/02/2016 as is evident from the copy of the notice been issued to the assessee on 24/02/2016 as is evident from the copy of the notice been issued to the assessee on 24/02/2016 as is evident from the copy of the notice place at page 6 of the paper book. From the order sheet entry it is clear that the place at page 6 of the paper book. From the order sheet entry it is clear that the place at page 6 of the paper book. From the order sheet entry it is clear that the assessee, on 24/03/2016, re on 24/03/2016, requested the Assessing Officer to treat the original return of quested the Assessing Officer to treat the original return of income filed by it for the Assessment Year 2009 for the Assessment Year 2009-10, as that return of income return of income which is filed in response to notice u/s 148 of the Act. From the order sheet entries, it is clear filed in response to notice u/s 148 of the Act. From the order sheet entries, it is clear filed in response to notice u/s 148 of the Act. From the order sheet entries, it is clear that notice u/s 143(2) of the Act was issued on 24/02/2016. This fact is also mentioned 43(2) of the Act was issued on 24/02/2016. This fact is also mentioned 43(2) of the Act was issued on 24/02/2016. This fact is also mentioned by the Assessing Officer at para 5 of his order. This proves that the notice u/s 143(2) of by the Assessing Officer at para 5 of his order. This proves that the notice u/s 143(2) of by the Assessing Officer at para 5 of his order. This proves that the notice u/s 143(2) of the Act, was issued much prior to the assessee filing his return of income. This is not in the Act, was issued much prior to the assessee filing his return of income. This is not in the Act, was issued much prior to the assessee filing his return of income. This is not in accordance with law. Hence the order passed u/s 148 of the Act without issuing valid . Hence the order passed u/s 148 of the Act without issuing valid . Hence the order passed u/s 148 of the Act without issuing valid

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notice u/s 143(2) of the Act, makes the reassessment order dt. 20/05/2016, passed u/s notice u/s 143(2) of the Act, makes the reassessment order dt. 20/05/2016, passed u/s notice u/s 143(2) of the Act, makes the reassessment order dt. 20/05/2016, passed u/s 143(3)/147 of the Act, bad in law. Consequently, the revision of the assessment u/s 263 143(3)/147 of the Act, bad in law. Consequently, the revision of the assessment u/s 263 143(3)/147 of the Act, bad in law. Consequently, the revision of the assessment u/s 263 of the Act dt. 19/03/2019, revising such illegal assessment order revising such illegal assessment order is also also bad in law. Thus, for all these reasons we quash the order passed by the ld. Pr. CIT u/s 263 Thus, for all these reasons we quash the order passed by the ld. Pr. CIT u/s 263 Thus, for all these reasons we quash the order passed by the ld. Pr. CIT u/s 263 of the Act as bad in law and allow the appeal of the assessee. of the Act as bad in law and allow the appeal of the assessee. of the assessee is allowed. 10. In the result, appeal of the assessee is allowed. Kolkata, the Kolkata, the 16th day of September, 2020.

Sd/- Sd/- [Aby T. Varkey] [J. Sudhakar Reddy J. Sudhakar Reddy] Judicial Member Accountant Member countant Member Dated : 16.09.2020 {SC SPS} Copy of the order forwarded to: 1. Anindita Steels Ltd 603, Panchawati Tower Harmu Road Ranchi Jharkand – 834012 Pr. Commissioner of Income Tax -(2), Kolkata 2. Pr. Commissioner of Income Tax 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata. Kolkata.