MUMBAI DISTRICT CENTRAL CO OP BANK LTD,MUMBAI vs. CIT 1(1), MUMBAI

आदेश / O R D E R Per Joginder Singh (Judicial Member)

The assessee is aggrieved by the impugned order dated 25.03.2015, of the learned CIT-1, Mumbai, invoking revisional jurisdictional u/s 263 of the Income Tax Act, 1961 (hereinafter the Act) setting aside assessment order framed u/s 143(3) of the Act holding the assessment orders are erroneous and prejudicial to the interest of the Revenue and directing the Assessing Officer to reframe the assessment taking into account the observations made in the impugned order.

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which reliance was placed upon the decision in CIT vs Sunbeam Auto Ltd., (2011} 332 ITR 167, CIT v/s Vikas Polymers, 341 ITR 537 (Del.), CIT v/s Anil Kumar Sharma, 335 ITR 83 (Del.) and various other decisions mentioned in the written submissions. It was submitted that a well reasoned assessment order u/s 143(3) of the Act was passed by the Assessing Officer considering the details filed by the assessee, thus, the assessment order is neither erroneous nor prejudicial to the interest of the Revenue. It was pleaded that the Ld. Commissioner did not apply his mind and our attention was invited to show cause notice issued to the assessee. The Ld. counsel contended that the necessary details were filed before the Ld. Assessing Officer by inviting our attention to various pages of the paper book and the reply submitted before the Assessing Officer. Our attention was further invited to the show cause notice and reply to the show cause notice. Reliance was placed upon the decision in the case of Gitanjali Exports Corp. Ltd. (ITA no.7662/Mum./2013) order dated 31.03.2016. On the

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other hand the the Ld. CIT-DR, Shri B. Srinivas, strongly defended the revisional order by contending that the assessment order is erroneous as well as prejudicial to the interest of Revenue and the Ld. Assessing Officer is silent on various issues raised in the revisional order. It was strongly contended that no details, as has been observed by the Ld. Commissioner of Income Tax, were filed by the assessee before the Assessing Officer. Reliance was placed upon the decision from Hon'ble jurisdictional Hihg Court in CIT vs Bllarpur Industries Ltd. (2017) 85 taxman.com 10(Bom.). The crux of the argument is that the assessment was framed in a slip shot manner, without examining the necessary details and ignored the factual matrix. Thus, the assessment order is erroneous as well as prejudicial to the interest of Revenue.

2.1. We have considered the rival submissions and perused the material available on record. Before adverting further, it is our bounded duty to examine the

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assessment order which was treated as erroneous as well as prejudicial to the interests of Revenue. It is noted that vide assessment order dated 05.11.2012, the assessee declared nil income on 28.09.2010, which was processed u/s 143(1) of the Act. Thereafter, notice u/s 143(2) and 142(1) of the Act along with questionnaire were served upon the assessee. The assessee attended the proceedings and the assessment was completed u/s 143(3) of the Act. The Assessing Officer did not examine the factual matrix in a required manner as has been mentioned by the ld. CIT. Before the Assessing Officer the assessee claimed amount of valuation loss of Rs. 4.02 crore represents actual depreciation on valuation of securities held under the category “available for sale” and the loss on account of depreciation in the valuation was not debited to the Profit & Loss A/c but was debited to investment fluctuation fund in the Balance Sheet under the head “Reserves Funds and Other Reserves”. The Assessing Officer without examining the facts in detail merely granted deduction to the assessee without

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looking into whether the value of securities has actually been reduced in accordance with the prescribed norms resulting into loss claimed by the assessee. It is noted that the Assessing Officer did not apply his mind to the requirement of banking institution and merely framed the assessment on the basis of the claim of the assessee. As observed by the ld. CIT there is nothing on record to suggest that the Assessing Officer ever analysed as to why the assessee was investing into verities of assets including Govt. Bonds which have so long income yield in comparison to other income activities of the assessee. The ld. Counsel for the assessee invited our attention to Page-3 (bold portion) in the impugned order. It is noted that even the proceedings u/s 263, the assessee was asked to give the break-up and the basis of arriving at the loss. However, the assessee merely contended that these are not readily available and substantial time will be required to prepare the details. One fact is oozing out that if these details would have been available before the assessee

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these could have been filed before the Assessing Officer. It clearly indicates that these details were not filed during the assessment proceedings, therefore, there was no question of examining the same by the Assessing Officer. The totality of facts clearly indicates that the factual matrix was not examined by the Assessing Officer in a required manner.

2.2. Now, we shall analyse certain case laws. Hon'ble Delhi High Court in the case of CIT vs Vikas Polymers (supra), relied upon by the ld. counsel for the assessee, order dated 16/08/2010 for ready reference and analysis:-

“It is prerequisite that the Commissioner must give reasons to justify the exercise of suo motu revisional powers by him to reopen a concluded assessment. A bare reiteration by him that 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. The exercise of the power being quasi judicial in nature, the reasons must 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 called for, and must irresistibly lead to the conclusion that the order of the 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 elaborate judgment giving detailed reasons in respect of each any every disallowance, deduction, etc., it is incumbent upon the Commissioner not to exercise his suo motu revisional powers unless supported by adequate reasons for doing so. The provisions of section 263 of the Act, when read as a composite whole, make it incumbent

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upon the Commissioner before exercising revisional powers to : (i) call for and examine the record, and (ii) give the assessee an opportunity of being heard and thereafter to make or cause to be made such enquiry as he deems necessary. It is only on fulfilment of these twin conditions that the Commissioner may pass an order exercising his power of revision. If a query is raised during the course of scrutiny by the 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 would not by itself lead to the conclusion that the order of the Assessing Officer called for interference and revision. Held, that the Commissioner had mentioned that the Income- tax Officer had not examined the cash credits of the partners or deposits of chit fund. Assuming this to be so, this might make the order erroneous, but how it was prejudicial to the interests of the Revenue had not been stated by the Commissioner as he did not deal with the explanation given by the assessee in the course of the section 263 proceedings. The Commissioner observed in his order that the assessee had not filed certain documents on the record at the time of assessment. Assuming this was so it did not justify the conclusion arrived at by the Commissioner that the Assessing Officer had shirked his responsibility of examining and investigation the case. More so, in view of the fact that the assessee explained that the capital investment made by the partners, which had been called into question by the Commissioner, and this was duly reflected in the respective assessments of the partners who were Income- tax assessees and the unsecured loan taken from the chit fund was duly reflected in the assessment order of the chit fund which was also an assessee. The order of revision was not valid.

While coming to a particular conclusion, the Hon'ble Court considered the following decisions:-

i. CIT v. Gabriel India Ltd. [1993] 203 ITR 108 (Bom) (paras 10, 11, 13) ii. CIT v. Kashi Nath and Co. [1988] 170 ITR 28 (All) (para 16) iii. CIT v. Minalben S. Parikh (Smt.) [1995] 215 ITR 81 (Guj) (para 11)

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iv. CIT v. Narayana Pai (T.) [1975] 98 ITR 422 (Karn) (para 11) v. CIT v. R. K. Metal Works [1978] 112 ITR 445 (P&H) (para 17) vi. CIT v. Sunder Lal (Late) [1974] 96 ITR 310 (All) (para 16) vii. Dawjee Dadabhoy & Co. v. Jain (S. P.) [1957] 31 ITR 872 (Cal) (paras 11, 12) viii. J. P. Srivastava and Sons (Kanpur) Ltd. v. CIT [1978] 111 ITR 326 (All) (para 16) ix. Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC) (paras 9, 11) x. Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 (SC) (para 13)

2.3. We are also expected to analyze the latest decision dated 31/07/2017 (relied upon by Ld. CIT-DR) in the case of CIT vs Ballarpur Industries Ltd.(2017) 85 taxmann.com 10 (Bom.). The relevant portion of the order is reproduced hereunder:-

―The above issue which comes for consideration is, did the Assessing Officer consider and examine the claim of the respondent before allowing a claim for deduction under section 80HHC. The respondent- assessee seeks to draw inference from the statement of case that there was an inquiry made before allowing the claim of deduction under section 80HHC. This inference is not justified. Mere using the word 'allowed' does not mean examination and enquiry before allowing deduction under section 80HHC. The words 'due verification' would include within its ambit not only inadequate inquiry/verification but also

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no enquiry/verification. However, in case the respondent-assessee was of the view that the claim has been examined by the Assessing Officer before allowing it, then respondent-assessee ought to have the statement of case modified/amended so as to bring the aforesaid facts on record. This not being done and now to draw far fetched inference cannot be accepted. It is now settled that non-enquiry before allowing the claim would make the order of the Assessing Officer amenable to jurisdiction under section 263. The non-enquiry by the Assessing Officer gives jurisdiction under section 263. Merely because the issue was debatable, it did not absolve the Assessing Officer from examining the issue and taking a view on the claim after examination. Similarly because the two views are possible and or that there are contrary view of higher forums, does not permit non-examination of the claim and taking one of the possible view by giving reasons. In this case no examination of the claim under section 80HHC was done by the Assessing Officer, therefore, the exercise of jurisdiction by the Commissioner under section 263 was valid. [Para 13] Mere taking of a view by the Assessing Officer without having subjected the claim to examination would not make it a view of the Assessing Officer. A view has necessarily to be preceded by examination of the claim and opting to choose one of the possible results. In the absence of view being taken, merely because the issue itself was debatable, would not absolve the Assessing Officer of applying his mind to the claim made by the assessee and allowing the claim only on satisfaction after verification/enquiry on his part. A view in the absence of examination is no view but only a chance result. [Para 14] Therefore, the Assessing Officer cannot abdicate his responsibility of examining the claim for deduction before allowing it. Absence of examination of the claim made by the assessee while passing an assessment order and allowing the claim made, would render the order of the Assessing Officer erroneous and coupled with the fact that in this case it is admitting prejudicial to the interest of the revenue, exercise of the revisional jurisdiction under section 263 by the Commissioner proper and valid. [Para 16]‖

While coming to the aforesaid conclusion, the Hon'ble jurisdictional High Court considered following cases.

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a. Asstt. CIT v. Mysore Exports Ltd. [1995] 55 ITD 263 (Bang.) (para 2), b. CIT v. Gabrial India Ltd. [1993] 203 ITR 108/71 Taxman 585 (Bom.) (para 2), c. CIT v. Yawar Rashid [1996] 218 ITR 699 (MP) (para 2), d. CIT v. Ballarpur Industries Ltd. [IT Reference No. 39 of 1998, dated 10-7-2017] (para 8), e. CIT v. Calcutta Agency Ltd. [1951] 19 ITR 191 (SC) (para 8), f. Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83/109 Taxman 66 (SC) (para 10), g. CIT v. Max. India Ltd. [2007] 295 ITR 282/[2008] 166 Taxman 188 (SC) (para 12) and h. CIT v. Gogineni Tobacco Ltd. [1999] 238 ITR 970 (AP) i. Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83/109 Taxman 66 (SC) (para 13) followed. j. CIT v. Max India Ltd. [2007] 295 ITR 282/[2008] 166 Taxman 188 (SC) (para 14) k. CIT v. Gogineni Tobacco Ltd. [1999] 238 ITR 970 (AP) (para 14).

2.4. We have also perused and considered the various decisions such as from Hon'ble Apex Court in the case of CIT vs Amitabh Bachchan (2016) 69 taxmann.com 170 (SC), M/s Larso & Toubro Ltd. vs State of Jharkhand & Ors. (Civil Appeal No.5390 of 2007), Jai Steel India Ltd. vs ACIT (2013) 259 CTR (Raj.)

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281, Rajmandir Estates vs Pr. CIT 77 taxmann.com 285 (SC) and Arvee International vs Addl. CIT (ITA No.3543/Mum/2003).

2.5. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, before adverting further, we shall examine the provision of section 263 of the Act which is reproduced for ready reference and analysis:-

“263. (1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. 46[Explanation 1.]—For the removal of doubts, it is hereby declared that, for the purposes of this sub- section,—

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(a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include— (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income- tax Officer on the basis of the directions issued by the Joint Commissioner undersection 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General or Principal Commissioner or Commissioner authorised by the Board in this behalf under section 120; (b) "record" shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Principal Commissioner or Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Principal Commissioner or Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. 47[Explanation 2.—For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner,— (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or

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(d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.] (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation.—In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded.‖

2.6. If the aforesaid section is analyzed, it speaks about the powers of the Ld. Pr. Commissioner or the Commissioner to consider whether the assessment order is erroneous in so far as prejudicial to the interest of Revenue and after giving opportunity of being heard and he make such enquiry as he deems necessary and pass such order thereon as the circumstances of the case so justify including, enhance and modifying the

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assessment or canceling the assessment and directing a fresh assessment. It has been further explained with the insertion of Explanation-2 inserted by the Finance Act, 2015 w.e.f. 01/06/2015. Undisputedly, the Ld. Commissioner served upon the assessee a show cause notice asking the assessee as to why the revisional jurisdiction may not be invoked. It is also noted that it is not the case that the Ld. Commissioner caused any prejudice to the assessee rather directed the Ld. Assessing Officer to frame the assessment afresh that too after providing due opportunity of being heard. Therefore, from so far as invocation of revisional jurisdiction u/s 263 is concerned, we find no infirmity in such invocation.

2.7. Now, we shall deal with the cases cited from both sides along with the ratio laid down therein and also some other cases which are available with us, so that we can reach to a justifiable conclusion. The Hon'ble Calcutta High Court in Rajmandir Estate Pvt.

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Ltd. vs Pr. CIT (2016) 70 taxman.com 124 (Calc.) order dated 13/05/2016 and the ratio laid down therein supports the case of the Revenue. It is noteworthy that while coming to a particular conclusion, Hon'ble Calcutta High Court considered following judicial pronouncements:-

i. CIT v. Calcutta Discount Co. Ltd. [1973] 91 ITR 8 (SC) (para 3), ii. Sumati Dayal v. CIT [1995] 214 ITR 801/80 Taxman 89 (SC) (para 4), iii. CIT v. Nova Promoters & Finlease (P.) Ltd. [2012] 342 ITR 169/206 Taxman 207/18 taxmann.com 217 (Delhi) (para 4), iv. CIT v. Durga Prasad More [19711] 82 ITR 540 (SC) (para 6), v. CIT v. Precision Finance (P.) Ltd. [1994] 208 ITR 465/[1995] 82 Taxman 31 (Cal.) (para 6), vi. ITO v. DG Housing Projects Ltd. [2012] 343 ITR 329/212 Taxman 132 (Mag.)/[2012] 20 taxmann.com 587 (Delhi) (para 7), vii. DIT v. Jyoti Foundation [2013] 35 ITR 388/219 Taxman 105/38 taxmann.com 180 (Delhi) (para 7), viii. CIT v. Steller Investment Ltd. [1991] 192 ITR 287/59 Taxman 568 (Delhi) (para 8), ix. CIT v. Sophia Finance Ltd. [1994] 205 ITR 98/70 Taxman 69 (Delhi) (FB) (para 8),

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x. CIT v. Divine Leasing & Finance Ltd. [2008] 299 ITR 268/[2007] 158 Taxman 440 (Delhi)(para 8), xi. Lotus Capital Financial Services Ltd. v. ITO [IT Appeal No. 479 (Kol.) of 2011] (para 8), xii. CIT v. Lotus Capital Financial Services (P.) Ltd. [ITAT No. 125 of 2012] (para 8), xiii. CIT v. Dataware (P.) Ltd. [ITAT No. 263 of 2011] (para 8), xiv. CIT v. Roseberry Mercantile (P.) Ltd. [G.A. No. 3296 of 2010, dated 10-1-2011] (para 8), xv. CIT v. Sanchati Projects (P.) Ltd. [ITAT No. 140 of 2011] (para 8), xvi. CIT v. Samir Bio-Tech. (P.) Ltd. [2010] 325 ITR 294 (Delhi) (para 8), xvii. CIT v. Kamdhenu Steel & Alloys Ltd. [2014] 361 ITR 220/[2012] 206 Taxman 254/19 taxmann.com 26 (Delhi) (para 8), xviii. CIT v. Dwarkadhish Capital (P.) Ltd. [2011] 330 ITR 298/[2010] 194 Taxman 43 (Delhi) (paras 9, 10), xix. CIT v. Kinetic Capital Finance Ltd. [2013] 354 ITR 296/[2011] 202 Taxman 548/14 taxmann.com 150 (Delhi) (paras 9, 10), xx. Zafa Ahmad & Co. v. CIT [2013] 214 Taxman 440/30 taxmann.com 267 (All.) (paras 9, 10), xxi. Anil Rice Mills v. CIT [2006] 282 ITR 236/[2005] 149 Taxman 313 (All.) (paras 9, 10), xxii. CIT v. Five Vision Promoters (P.) Ltd. [2016] 380 ITR 289/236 Taxman 502/65 taxmann.com 71 (Delhi) (para 11),

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xxiii. CIT v. Gabriel India Ltd. [1993] 203 ITR 108/71 Taxman 585 (Bom.) (para 12), xxiv. Hari Iron Trading Co. v. CIT [2003] 263 ITR 437/131 Taxman 535 (Punj. & Har.) (para 12), xxv. CIT v. Leisure Wear Exports (P.) Ltd. [2012] 341 ITR 166/[2011] 202 Taxman 130/11 taxmann.com 54 (Delhi) (para 13), xxvi. Omar Salay Mohamed Sait v. CIT [1959] 37 ITR 151 (SC) (para 14), xxvii. Lalchand Bhagat Ambica Ram v. CIT [1959] 37 ITR 288 (SC) (para 14), xxviii. Reliance Jute & Industries Ltd. v. CIT [1979] 120 ITR 921/2 Taxman 417 (SC) (para 15), xxix. Karimtharuvi Tea Estate Ltd. v. State of Kerala [1966] 60 ITR 262 (SC) (para 15), xxx. CIT v. Sunbeam Auto Ltd. [2011] 332 ITR 167/[2010] 189 Taxman 436 (Delhi) (para 16), xxxi. Grindlays Bank Ltd. v. ITO [1978] 115 ITR 799 (Cal.) (para 17), xxxii. Vijay Mallya v. Asstt. CIT [2003] 131 Taxman 477 (Cal.) (para 17), xxxiii. CIT v. J.L. Morrison (India) Ltd. [2014] 366 ITR 593/225 Taxman 17 (Mag.)/46 taxmann.com 215 (Cal.) (para 17), xxxiv. Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83/109 Taxman 66 (SC) (para 18), xxxv. CIT v. Max India Ltd. [2007] 295 ITR 282/166 Taxman 188 (SC) (para 18), xxxvi. CIT v. Maithan International [2015] 375 ITR 123/231 Taxman 381/56 taxmann.com 283 (Cal.) (para 20),

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xxxvii. CIT v. Navodaya Castles (P.) Ltd. [2014] 367 ITR 306/226 Taxman 190/50 taxmann.com 110 (Delhi) (para 20), xxxviii. CIT v. N.R. Portfolio (P.) Ltd. [2013] 214 Taxman 408/29 taxmann.com 291 (Delhi) (para 20), xxxix. CIT v. Active Traders (P.) Ltd. [1995] 214 ITR 583/[1993] 69 Taxman 281 (Cal.) (para 20), xl. CIT v. Jawahar Bhattacharjee [2012] 341 ITR 434/209 Taxman 174/24 taxmann.com 215 (Gau.) (FB) (para 20) and xli. Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC) (para 27).

2.8. So far as, the cases relied upon by the assessee are concerned, we find that these cases may not help the assessee as these cases are based upon the facts of each case where the assessment order was neither erroneous nor prejudicial to the interest of Revenue and a speaking well reasoned assessment order was framed by the Assessing Officer. In the case of Development credit Bank Ltd, the assessment order was passed after considered necessary details called for and the same were furnished by the assessee. In that situation, the Hon'ble High Court held that the revisional jurisdiction was not justified. In the case of

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Vikas Polymers (supra), the Hon'ble High Court held that the Commissioner must give the reasons and the assessee must be given opportunity of being heard. No material was found to show that the assessment order was erroneous and prejudicial to the interest of Revenue, even the explanation of the assessee was not considered by the Ld. Commissioner, therefore, the revisional order was held to be not valid. In a later decision by Hon'ble jurisdictional High Court in the case of Ballarpur Industries Ltd. (supra), relied upon by Ld. CIT-DR, wherein, the assessee company claimed deduction u/s 80HHC in respect of export of goods and merchandize. It was noted that the Assessing Officer allowed the claim of deduction without examining it with reference to unabsorbed depreciation and investment allowance as referred to section 32 and 32A of the Act. The question before the Hon'ble Court was since, the claim of deduction was allowed without due verification whether the exercise of revisional jurisdiction was justified. After considering various

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decisions, the Hon'ble High Court held in favour of the Revenue.

2.9. We have also perused the assessment order, which is a subject matter of revisional jurisdiction u/s 263 and the impugned order passed by the ld. Commissioner. Admittedly, an incorrect assumption of fact or an incorrect application of law would satisfy the requirement of order being erroneous u/s. 263 of the Act. The phrase “prejudicial to the interest of the Revenue” u/s. 263, has to be read in conjunction with the expression “erroneous” order by the Assessing Officer. Every loss of Revenue as a consequence of assessment order cannot be termed as prejudicial to the interest of Revenue, meaning thereby, “prejudice” must be prejudice to the Revenue administration. At the same time, if another view is possible, revision is not permissible. Our view is fortified by the decision from Himachal Pradesh Financial Corp. (186 Taxmann 105)(HP), Bismillah Trading Co. (248 ITR 292)(Ker.) and

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CIT vs. Green World Corpn. (314 ITR 81)(SC). For invoking revisional jurisdiction u/s. 263 of the Act, the assessment order must contain grievous error which is subversive of the administration of Revenue. Further, exact error must be disclosed by the Commissioner as was held in CIT vs. G.K. Kabra (211 ITR 336)(AP). Section 263 of the Act enables the Commissioner to have a re-look at the orders or proceedings of the lower authority to effect correction, if so needed, particularly, if the order is erroneous and prejudicial to the interest of the Revenue. The object of the provision is to raise revenue for the state and section 263 is enabling provision conferring jurisdiction upon the Commissioner to revise the order. The provision is intended to plug the leakage of the revenue by the erroneous and prejudicial order. Our view find support from the ratio laid down in following decisions:-

i. CIT vs Infosys Technologies ltd. (2012) 341 ITR 293 (Karn.), ii. CIT vs Jawahar Bhattacharyaji (2012) 341 ITR 434 (Guwahati) (FB),

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iii. CIT vs Leisure wear Exports Ltd. (2012) 341 ITR 166 (Del.), iv. CIT vs Triveni Engineering Works Ltd. (2011) 336 ITR 366 (Del.), v. R.A. Himmatsinghka & Company vs CIT (2012) 340 ITR 253 (Pat.) vi. CIT vs Rajeev Agnihotri (2011) 332 ITR 608 (P & H), vii. CIT vs DLF Ltd. (2013) 350 ITR 555 (Del.), viii. CIT vs Gabreal India Ltd. (1993) 203 ITR 108, 114 (Bom.), ix. Malabar Industrial Company Ltd. vs CIT (2000) 243 ITR 83 (SC), x. Nabha Investments Pvt. ltd. vs UOI (2000) 246 ITR 41 (Del.), xi. Bismillah Trading Company Ltd. vs IO (2001) 248 ITR 292, 308 (Kerala), xii. Paul Mathews & Sons vs CIT (2003) 263 ITR 101, 113 (Kerala), xiii. CIT vs Seshasayee Paper & Boards Ltd. (2000) 242 ITR 490, 500 (Mad.), xiv. Rayon Silk Mills vs CIT 221 ITR 155 (Guj.)

2.10. If the aforesaid judicial pronouncements are kept in juxtaposition with the facts of the present appeal and analyzed, the ld. Assessing Officer while framing the assessment made no discussion/enquiry, during assessment proceedings, with respect to observations made by the ld. CIT in the revisional order.

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2.11. This observation made by the Ld. Commissioner of the impugned order with respect to observation made in the impugned order were not contradicted with the help of any positive material. The totality of facts clearly indicates that the assessment was framed without application of mind and further without making due enquiry/verification of material facts, thus, the revisional jurisdiction was rightly invoked. It is also noted that if the assessee is so clean in its claim then no prejudice is caused to the assessee as the Ld. Commissioner merely directed the Assessing Officer to frame the assessment order afresh. Our view is fortified by the decision in Indian Textile vs CIT (157 ITR 112) (Mad.), Gee Vee Enterprises vs Addl. CIT (99 ITR 375)(Del.), Thalibai F Jain vs ITO 101 ITR 1 (Karn.) and CIT vs HPFC 186 Taxman 105 (HP), CIT vs Pushpa Devi 164 ITR 639 (Patna). We are aware that before the Ld. Commissioner invokes the revisional jurisdiction u/s 263 of the Act, he should get satisfied that the order passed by the Assessing Officer is

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erroneous and prejudicial to the interest of the Revenue. Hon’ble Gujarat High Court in CIT vs M. M.Khambatbala 198 ITR 144 (Guj.) even went to the extent that revisional powers can be exercised even if the issue is debatable. The Hon’ble jurisdictional High Court in CIT vs Gabriel India Ltd. (1993) 203 ITR 108 (Bom.) concluded that powers u/s 263 cannot be exercised for starting fishing and roving enquiries. For making a valid order u/s 263(1), it is essential that the Commissioner has to record an express finding that prejudice has been caused to the interest of the Revenue. Our view find support from the ratio laid down in Bhargwa Engineering Corporation vs CIT (1996) 134 taxation 493, 494 (All.), CIT vs Digvijay Traders (1997) 137 CTR (MP) 224, CIT vs Regional Agro Industrial Development Cooperative Society Ltd. (1998) 143 taxation 293 (Kerala), CIT vs Agarwal Enterprises (1998) 100 taxman 360 (All.) and CIT vs Kailash Apartment Pvt. Ltd. (200) 243 ITR 795 (Del.). Totality of facts, clearly indicates that the assessment order has

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been framed without full enquiries, therefore, the ld. Commissioner justifiably invoked revisional jurisdiction.

2.12. The Hon'ble Apex Court in Rajmandir Estates Pvt. Ltd. (2017) 77 taxman.com 285 (SC), wherein, there was lack of requisite enquiry into increase of share capital and non-application of mind, the Commissioner was held to be justified in invoking the revisional jurisdiction, which is reproduced hereunder:-

“Section 68, read with section 263 of the Income-tax Act, 1961 - Cash credit (Share application money) - Assessment year 2009-10 - During relevant year, assessee-company had increased its share capital by issuing 7.93 lakhs shares of Rs.10 each at a premium of Rs.390 - Assessing Officer completed assessment without holding requisite investigation except for calling for records - Commissioner passed order under section 263 and opined that this could be a case of money laundering which went undetected due to lack of requisite enquiry into increase of share capital including premium received by assessee and non- application of mind - High Court by impugned order held that since assessee with an authorised share capital of Rs.1.36 crores raised nearly a sum of Rs.32 crores on account of premium and chose not to go in for increase of authorised share capital merely to avoid payment of statutory fees was an important pointer necessitating investigation and thus, Commissioner was justified in treating assessment order erroneous and prejudicial to interest of revenue - Whether special leave petition filed against impugned order was to be dismissed - Held, yes [Para 2] [In favour of revenue]”

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2.13. The Hon'ble Apex Court in CIT vs Amitabh Bacchan (2016) 69 taxman.com 170 (SC) (order dated 11/05/2016) is held as under:-

“2. The appellant - Revenue seeks to challenge the order of the High Court dated 7th August, 2008 dismissing the appeal filed by it under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as '"the Act") and affirming the order of the Income Tax Appellate Tribunal, Mumbai Bench ("Tribunal" for short) dated 28th August, 2007 whereby the order dated 20th March, 2006 passed by the Commissioner of Income Tax-1, Mumbai ("C.I.T." for short) under Section 263 of the Act was reversed. The assessment year in question is 2001-2002 and the assessment order is dated 30th March, 2004. 3. After the assessment as above was finalized, a show cause notice dated 7th November, 2005 under Section 263 of the Act was issued by the learned C.I.T. detailing as many as eleven (11) issues/grounds on which the assessment order was proposed to be revised under Section 263 of the Act. The respondent - assessee filed his reply to the said show cause notice on consideration of which by order dated 20th March, 2006 the learned C.I.T. set aside the order of assessment dated 30th March, 2004 and directed a fresh assessment to be made. Aggrieved, the respondent – assessee challenged the said order before the learned Tribunal which was allowed by the order dated 28th August, 2007. 4. Aggrieved by the order dated 28th August, 2007 of the learned Tribunal, the Revenue filed an appeal under Section 260A of the Act before the High Court of Bombay. The aforesaid appeal i.e. ITA No. 293 of 2008 was summarily dismissed by the High Court by the impugned order dated 7th August, 2008 holding that as the C.I.T. had gone beyond the scope of the show cause notice dated 7th November, 2005 and had dealt with the issues not covered/mentioned in the said notice the revisional order dated 20th March, 2006 was in violation of the principles of natural justice. So far as the question as to whether the Assessing Officer had made sufficient enquiries about the assessee's claim of expenses made in the re-revised return of income is concerned, which question was formulated as question No. 2 for the High

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Court's consideration, the High Court took the view that the said question raised pure questions of fact and, therefore, ought not to be examined under Section 260A of the Act. The appeal of the Revenue was consequently dismissed. Aggrieved, this appeal has been filed upon grant of leave under Article 136 of the Constitution of India. 5. We have heard Shri Ranjit Kumar, learned Solicitor General appearing for the appellant Revenue and Shri Shyam Divan, learned Senior Counsel appearing for the respondent – assessee. 6. The assessment in question was set aside by the learned C.I.T. by the order dated 20th March, 2006 on the principal ground that requisite and due enquiries were not made by the Assessing Officer prior to finalization of the assessment by order dated 30th March, 2004. In this connection, the learned C.I.T. on consideration of the facts of the case and the record of the proceedings came to the conclusion that in the course of the assessment proceedings despite several opportunities the assessee did not submit the requisite books of account and documents and deliberately dragged the matter leading to one adjournment after the other. Eventually, the Assessing Officer, to avoid the bar of limitation, had no option but to "hurriedly" finalize the assessment proceedings which on due and proper scrutiny disclosed that the necessary enquiries were not made. On the said basis the learned C.I.T. came to the conclusion that the assessment order in question was erroneous and prejudicial to the interests of the Revenue warranting exercise of power under Section 263 of the Act. Consequently, the assessment for the year 2001-2002 was set aside and a fresh assessment was ordered. At this stage, it must be noticed that in the order dated 20th March, 2006 the learned C.I.T. arrived at findings and conclusions in respect of issues which were not specifically mentioned in the show cause notice dated 7th November, 2005. In fact, on as many as seven/eight (07/08) issues mentioned in the said show cause notice the learned C.I.T. did not record any finding whereas conclusions adverse to the assessee were recorded on issues not specifically mentioned in the said notice before proceeding to hold that the assessment needs to be set aside. However, three (03) of the issues, details of which are noticed herein below, are common to the show cause notice as well as the revisional order of the learned C.I.T. 7. On appeal, the learned Tribunal took the view that the learned C.I.T. exercising powers under Section 263 of the Act could not

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have gone beyond the issues mentioned in the show cause notice dated 7th November, 2005. The learned Tribunal, therefore, thought it proper to take the view that in respect of the issues not mentioned in the show cause notice the findings as recorded in the revisional order dated 20th March, 2006 have to be understood to be in breach of the principles of natural justice. The learned Tribunal also specifically considered the three (03) common issues mentioned above and on such consideration arrived at the conclusion that the reasons disclosed by the learned C.I.T. in the order dated 20th March, 2006 for holding the assessment to be liable for cancellation on that basis are not tenable. Accordingly, the learned Tribunal allowed the appeal of the assessee and reversed the order of the suo motu revision dated 20th March, 2006. 8. At this stage, it may be appropriate to reproduce hereunder the provisions of Section 263 of the Act to appreciate the arguments advanced and to understand the contours of the suo motu revisional power vested in the learned C.I.T. by the aforesaid provision of the Act. "263 - Revision of orders prejudicial to revenue.—(1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation………………………………………..." 9. Under the Act different shades of power have been conferred on different authorities to deal with orders of assessment passed by the primary authority. While Section 147 confers power on the Assessing Authority itself to proceed against income escaping assessment, Section 154 of the Act empowers such authority to correct a mistake apparent on the face of the record. The power of appeal and revision is contained in Chapter XX of the Act which includes Section 263 that confer suo motu power of revision in the learned C.I.T. The different shades of power conferred on different authorities under the Act has to be exercised within the

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areas specifically delineated by the Act and the exercise of power under one provision cannot trench upon the powers available under another provision of the Act. In this regard, it must be specifically noticed that against an order of assessment, so far as the Revenue is concerned, the power conferred under the Act is to reopen the concluded assessment under Section 147 and/or to revise the assessment order under Section 263 of the Act. The scope of the power/jurisdiction under the different provisions of the Act would naturally be different. The power and jurisdiction of the Revenue to deal with a concluded assessment, therefore, must be understood in the context of the provisions of the relevant Sections noticed above. While doing so it must also be borne in mind that the legislature had not vested in the Revenue any specific power to question an order of assessment by means of an appeal. 10. Reverting to the specific provisions of Section 263 of the Act what has to be seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudicial to the interest of the Revenue is the basic pre-condition for exercise of jurisdiction under Section 263 of the Act. Both are twin conditions that have to be conjointly present. Once such satisfaction is reached, jurisdiction to exercise the power would be available subject to observance of the principles of natural justice which is implicit in the requirement cast by the Section to give the assessee an opportunity of being heard. It is in the context of the above position that this Court has repeatedly held that unlike the power of reopening an assessment under Section 147 of the Act, the power of revision under Section 263 is not contingent on the giving of a notice to show cause. In fact, Section 263 has been understood not to require any specific show cause notice to be served on the assessee. Rather, what is required under the said provision is an opportunity of hearing to the assessee. The two requirements are different; the first would comprehend a prior notice detailing the specific grounds on which revision of the assessment order is tentatively being proposed. Such a notice is not required. What is contemplated by Section 263, is an opportunity of hearing to be afforded to the assessee. Failure to give such an opportunity would render the revisional order legally fragile not on the ground of lack of jurisdiction but on the ground of violation of principles of natural justice. Reference in this regard may be illustratively made to the decisions of this Court in Gita Devi Aggarwal v. CIT [1970] 76 ITR 496 and in CIT v.

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Electro House [1971] 82 ITR 824 (SC). Paragraph 4 of the decision in Electro House (supra) being illumination of the issue indicated above may be usefully reproduced hereunder: "This section unlike Section 34 does not prescribe any notice to be given. It only requires the Commissioner to give an opportunity to the assessee of being heard. The section does not speak of any notice. It is unfortunate that the High Court failed to notice the difference in language between Sections 33-B and 34. For the assumption of jurisdiction to proceed under Section 34, the notice as prescribed in that section is a condition precedent. But no such notice is contemplated by Section 33-B. The jurisdiction of the Commissioner to proceed under Section 33-B is not dependent on the fulfilment of any condition precedent. All that he is required to do before reaching his decision and not before commencing the enquiry, he must give the assessee an opportunity of being heard and make or cause to make such enquiry as he deems necessary. Those requirements have nothing to do with the jurisdiction of the Commissioner. They pertain to the region of natural justice. Breach of the principles of natural justice may affect the legality of the order made but that does not affect the jurisdiction of the Commissioner. At present we are not called upon to consider whether the order made by the Commissioner is vitiated because of the contravention of any of the principles of natural justice. The scope of these appeals is very narrow. All that we have to see is whether before assuming jurisdiction the Commissioner was required to issue a notice and if he was so required what that notice should have contained? Our answer to that question has already been made clear. In our judgment no notice was required to be issued by the Commissioner before assuming jurisdiction to proceed under Section 33-B. Therefore the question what that notice should contain does not arise for consideration. It is not necessary nor proper for us in this case to consider as to the nature of the enquiry to be held under Section 33-B. Therefore, we refrain from spelling out what principles of natural justice should be observed in an enquiry under Section 33-B. This Court in Gita Devi Aggarwal v. CIT, West Bengal ruled that Section 33-B does not in express terms require a notice to be served on the assessee as in the case of Section 34. Section 33-B merely requires that an opportunity of being heard should be given to the assessee and the stringent requirement of service of notice under Section 34 cannot, therefore, be applied to a proceeding under Section 33-B." (Page 827-828).

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[Note: Section 33-B and Section 34 of the Income Tax Act, 1922 corresponds to Section 263 and Section 147 of the Income Tax Act, 1961] 11. It may be that in a given case and in most cases it is so done a notice proposing the revisional exercise is given to the assessee indicating therein broadly or even specifically the grounds on which the exercise is felt necessary. But there is nothing in the section (Section 263) to raise the said notice to the status of a mandatory show cause notice affecting the initiation of the exercise in the absence thereof or to require the C.I.T. to confine himself to the terms of the notice and foreclosing consideration of any other issue or question of fact. This is not the purport of Section 263. Of course, there can be no dispute that while the C.I.T. is free to exercise his jurisdiction on consideration of all relevant facts, a full opportunity to controvert the same and to explain the circumstances surrounding such facts, as may be considered relevant by the assessee, must be afforded to him by the C.I.T. prior to the finalization of the decision. 12. In the present case, there is no dispute that in the order dated 20th March, 2006 passed by the learned C.I.T. under Section 263 of the Act findings have been recorded on issues that are not specifically mentioned in the show cause notice dated 7th November, 2005 though there are three (03) issues mentioned in the show cause notice dated 7th November, 2005 which had specifically been dealt with in the order dated 20th March, 2006. The learned Tribunal in its order dated 28th August, 2007 put the aforesaid two features of the case into two different compartments. Insofar as the first question i.e. findings contained in the order of the learned C.I.T. dated 20th March, 2006 beyond the issues mentioned in the show cause notice is concerned the learned Tribunal taking note of the aforesaid admitted position held as follows: "In the case on hand, the CIT has assumed jurisdiction by issuing show cause notice u/s 263 but while passing the final order he relied on various other grounds for coming to the final conclusion. This itself makes the revision order bad in law and also violative of principles of natural justice and thus not maintainable. If, during the course of revision proceedings the CIT was of the opinion that the order of the AO was erroneous on some other grounds also or on any additional grounds not mentioned in the show cause notice, he ought to have given another show cause

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notice to the assessee on those grounds and given him a reasonable opportunity of hearing before coming to the conclusion and passing the final revision order. In the case on hand, the CIT has not done so. Thus, the order u/s 263 is violative of principles of natural justice as far as the reasons, which formed the basis for the revision but were not part of the show cause notice issued u/s 263 are concerned. The order of the CIT passed u/s 263 is therefore liable to be quashed insofar as those grounds are concerned." 13. The above ground which had led the learned Tribunal to interfere with the order of the learned C.I.T. seems to be contrary to the settled position in law, as indicated above and the two decisions of this Court in Gita Devi Aggarwal (supra) and Electro House (supra). The learned Tribunal in its order dated 28th August, 2007 had not recorded any finding that in course of the suo motu revisional proceedings, hearing of which was spread over many days and attended to by the authorized representative of the assessee, opportunity of hearing was not afforded to the assessee and that the assessee was denied an opportunity to contest the facts on the basis of which the learned C.I.T. had come to his conclusions as recorded in the order dated 20th March, 2006. Despite the absence of any such finding in the order of the learned Tribunal, before holding the same to be legally unsustainable the Court will have to be satisfied that in the course of the revisional proceeding the assessee, actually and really, did not have the opportunity to contest the facts on the basis of which the learned C.I.T. had concluded that the order of the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. The above is the question to which the Court, therefore, will have to turn to. 14. To determine the above question we have read and considered the order of the Assessing Officer dated 30th March, 2004; as well as the order of the learned C.I.T. dated 20th March, 2006. From the above consideration, it appears that the learned C.I.T. in the course of the revisional proceedings had scrutinized the record of the proceedings before the Assessing Officer and noted the various dates on which opportunities to produce the books of account and other relevant documents were afforded to the assessee which requirement was not complied with by the assessee. In these circumstances, the revisional authority took the view that the Assessing Officer, after being compelled to adjourn the matter from time to time, had to hurriedly complete the

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assessment proceedings to avoid the same from becoming time barred. In the course of the revisional exercise relevant facts, documents, and books of account which were overlooked in the assessment proceedings were considered. On such re-scrutiny it was revealed that the original assessment order on several heads was erroneous and had the potential of causing loss of revenue to the State. It is on the aforesaid basis that the necessary satisfaction that the assessment order dated 30th March, 2004 was erroneous and prejudicial to the interests of the revenue was recorded by the learned C.I.T. At each stage of the revisional proceeding the authorized representative of the assessee had appeared and had full opportunity to contest the basis on which the revisional authority was proceeding/had proceeded in the matter. If the revisional authority had come to its conclusions in the matter on the basis of the record of the assessment proceedings which was open for scrutiny by the assessee and available to his authorized representative at all times it is difficult to see as to how the requirement of giving of a reasonable opportunity of being heard as contemplated by Section 263 of the Act had been breached in the present case. The order of the learned Tribunal insofar as the first issue i.e. the revisional order going beyond the show cause notice is concerned, therefore, cannot have our acceptance. The High Court having failed to fully deal with the matter in its cryptic order dated 7th August, 2008 we are of the view that the said orders are not tenable and are liable to be interfered with. 15. This will bring us to a consideration of the second limb of the case as dealt with by the learned Tribunal, namely, that tenability of the order of the learned C.I.T. on the three (03) issues mentioned in the show cause notice and also dealt with in the revisional order dated 20th March, 2006. The aforesaid three (03) issues are: "(i) Assessee maintaining 5 bank accounts and AO not examining the 5th bank account, books of account and any other bank account where receipts related to KBC were banked. (ii) Regarding claim of deposits of Rs. 52.06 lakhs in Special Bench A/c No.11155 under the head Receipts on behalf of Mrs. Jaya Bachchan and (iii) Regarding the claim of additional expenses in the re-revised return." 16. On the above issues the learned Tribunal had given detailed reasons for not accepting the grounds cited in the revisional order for setting aside the assessment under Section 263 of the Act. The reasons cited by the

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learned Tribunal insofar as the first two issues are concerned may not justify a serious relook and hence need not be gone into. The third question would, however, require some detailed attention. The said question is with regard to the claim of additional expenses made by the assessee in its re-revised return which was subsequently withdrawn. 17. The assessee in the re-revised return dated 31st March, 2003 had made a claim of additional expenses of 30% of the gross professional receipts (Rs. 3.17 crores). It appears that the Assessing Officer required the assessee to file requisite details in this regard. The assessee responded by letter dated 13th February, 2004 stating as follows: "With regard to the 30% estimated expenses claimed, we have to submit that these are the expenses which are spent for security purposes by employing certain Agencies, guards etc. for the personal safety of Shri Bachchan as he has to protect himself from various threats to his life received by him and to avoid extortion of money from gangsters. The names of such Agencies cannot be disclosed/divulged as there is a possibility of leakage of information of Agencies' names from the office staff, which will obviously be detrimental to the interests of Shri Bachchan. The payments have been made out of cash balances available and lot of outstanding expenses are to be paid which could not be paid for want of income." 18. Thereafter by letter dated 13th March, 2004 the assessee informed the learned C.I.T. that the claim was made on a belief that the same is allowable but as it will not be feasible for the assessee to substantiate the same, the re-revised return of income may be taken to the withdrawn. It appears that thereafter the Assessing Officer issued a notice to show cause as to why the provisions of Section 69C should not be invoked and the expenses claimed should not be treated as unexplained expenditure. In reply, the assessee by letter dated 24th March, 2004 submitted that the claim was made as a standard deduction and that the assessee had been wrongly advised to make

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the said claim and as the same has been withdrawn, Section 69-C will have no application. The record of the assessment proceedings disclose that the said stand was accepted by the Assessing Officer and the matter was not pursued any further. 19. The learned C.I.T. took the view that notwithstanding the withdrawal of the claim by the assessee, in view of the earlier stand taken that the said expenses were incurred for security purposes of the assessee, the Assessing Officer ought to have proceeded with the matter as the assessee was following the cash system of accounting and the filing of the re-revised return, prima facie, indicated that the additional expenses claimed had been incurred. In this regard, the following findings/reasons recorded by the learned C.I.T. in the order dated 20th March, 2006 would be of particular relevance: "Withdrawal of claim by assessee can be for variety of reasons and this does not mean that Assessing Officer should abandon enquiries regarding sources for incurring expenses. Assessee follows cash system of accounting and the claim regarding additional expenses was made through duly verified revised return. The claim was pressed during assessment proceedings carried on by A.O. after filing revised return and it was specially stated in letter dated 13.02.2004 that expenses were for security purposes and that payments have been made out of cash balances available etc. Under the circumstances, the Assessing Officer was expected to examine the matter further to arrive at a definite finding whether assessee incurred expenses or not and in case, actually incurred, then what were sources for incurring these expenses. Assessing Officer was satisfied on withdrawal of the claim and in my view, his failure to decide the matter regarding actual incurring of additional expenses and sources thereof resulted into erroneous order which is prejudicial to the interest of revenue." 20. An argument has been made on behalf of the assessee that notice under Section 69-C was issued by

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the Assessing Officer and thereafter on withdrawal of the claim by the assessee the Assessing Officer thought that the matter ought not to be investigated any further. This, according to the learned counsel for the assessee, is a possible view and when two views are possible on an issue, exercise of revisional power under Section 263 would not be justified. Reliance in this regard has been placed on a judgment of this Court in Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83/109 Taxman 66 which has been approved in CIT v. Max India Ltd. [2007] 295 ITR 282/[2008] 166 Taxman 188 (SC) 21. There can be no doubt that so long as the view taken by the Assessing Officer is a possible view the same ought not to be interfered with by the Commissioner under Section 263 of the Act merely on the ground that there is another possible view of the matter. Permitting exercise of revisional power in a situation where two views are possible would really amount to conferring some kind of an appellate power in the revisional authority. This is a course of action that must be desisted from. However, the above is not the situation in the present case in view of the reasons stated by the learned C.I.T. on the basis of which the said authority felt that the matter needed further investigation, a view with which we wholly agree. Making a claim which would prima facie disclose that the expenses in respect of which deduction has been claimed has been incurred and thereafter abandoning/withdrawing the same gives rise to the necessity of further enquiry in the interest of the Revenue. The notice issued under Section 69-C of the Act could not have been simply dropped on the ground that the claim has been withdrawn. We, therefore, are of the opinion that the learned C.I.T. was perfectly justified in coming to his conclusions insofar as the issue No. (iii) is concerned and in passing the impugned order on that basis. The learned Tribunal as well as the High Court, therefore, ought not to have interfered with the said conclusion.

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39 The Mumbai District Central Co-op. Bank Ltd. ITA NO. 3198/Mum/2015

not been tested on merits the assessee would be free to do so, if he is so inclined and so advised. 25. The appeals are disposed of in the above terms.”

If the ratio laid down in the aforesaid order is applied to the facts of the present appeal, we find that the Ld. Commissioner issued show cause notice to the assessee and provided due opportunity to the assessee to substantiate its claim and after being satisfied that the order is erroneous as well as prejudicial to the interest of Revenue and after recording the due reasons, directed the Assessing Officer to frame the assessment afresh and that too after providing sufficient opportunity to the assessee, thus, no grievance is caused to the assessee. Even otherwise, the mandate of Article 265 of Constitution of India is to levy and collect due taxes. In view of this factual matrix, we affirm the stand of the ld. Commissioner, resultantly the appeals of the assessee are, therefore, having no merit, consequently, dismissed.

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This Order was pronounced in the open court in the presence of learned representatives from both sides at the conclusion of the hearing on 22nd March, 2018.

Sd/- Sd/- (Joginder Singh) (N.K. Pradhan) ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER भुिंफई Mumbai; ददनािंक Dated : 22/03/2018 Pradeep J. Chowdhury, Sr. PS

आदेश की प्रयिलऱपप अग्रेपषि/Copy of the Order forwarded to :

आदेशान सार/ BY ORDER,

उप/सहायक पुंजीकार (Dy./Asstt. Registrar) आयकर अपीऱीय अधिकरण, भुिंफई / ITAT, Mumbai