CHAITALEE SACHIN DEOKAR,MUMBAI vs. COMMISSIONER OF INCOME TAX,-IT -2, MUMBAI

Thereafter, proceedings u/s 263 of the Act were initiated and after providing opportunity of hearing to the assessee order u/s 263 was passed. Aggrieved by the order u/s 263 of the Act, the assessee has preferred the appeal on the grounds mentioned herein above. (a) On the facts and in the circumstances of the case, the Commissioner of Income-tax, hereinafter referred to as the "CIT", has erred in invoking the provisions of section 263 of the Income tax Act, 1961 in the case of the appellant and in directing the assessing officer to make a fresh assessment in the case of the appellant. (b) On the facts and in the circumstances of the case, the CIT has failed to appreciate the fact that the initiation of reassessment in the case of the appellant was itself not justified and correspondingly no addition could have been made in the case of the appellant while completing the reassessment which was not a valid reassessment. (c) The CIT has failed to appreciate that the onus u/s. 69 or section 69B or section 69C is squarely on the department and further that this onus could not have been discharged by the assessing officer in absence of material available with the assessing officer. (d) Without prejudice to the above, the CIT has erred in not appreciating the fact that the assessing officer had made the required inquiries during the assessment and on the basis of such inquiries, no addition was called for in the case of the appellant. The CIT has erred in substituting his judgment over that of the assessing officer. (e) The appellant respectfully submits that the assessment order in her case is neither erroneous nor prejudicial to the interest of revenue and accordingly the provisions of section 263 of the Act cannot be invoked in her case. In view of this, the appellant prays that the order dated 27th March, 2024 passed u/s. 263 of the Act shall please be quashed and the assessment order dated 29-09- 2021 passed u/s. 143(3) r.w.s. 147 of the Act shall please be restored.

All the ground of appeal raised by the assessee are inter related and inter connected and relates to challenging the invocations of provisions of Sec. 263 of the Act. Therefore, we have decided to deal with all the grounds through the present consolidated order.

We have heard counsels of both the parties and we have also perused the material placed on record, judgments cited by both the parties, orders passed by the revenue authorities. From the records, we noticed that the assessee had purchased a residential flat from M/s. Shanti Enterprises at A-1203, Sky Oasis, Ulwe, Navi Mumbai on 14.11.2012 for a total consideration of Rs. 35,00,000/- of which the value determined by the stamp duty authorities was 21,78,000/-. However, as per information a search and survey action was taken out in the case of M/s. Bhagawati Developers and on the basis of examination of seized material, it was noticed that the assessee paid total consideration of Rs. 60,81,875/- for purchase of above mentioned flat, therefore it was taken that 'on money' to the extent of Rs. 25,81,875/- was paid by the assessee as per the information, but no other documentary evidence or incriminating documents were forwarded. On the basis of said information reassessment proceedings were initiated, wherein the assessee has strongly denied having paid any ‘on money' or cash payment for the purchase of the residential flat. Ultimately after seeking enquiries the returned income of the assessee was accepted. Thereafter, proceedings u/s 263 of the Act were initiated by Ld. CIT(IT) by referring to office note attached to the order of the AO, wherein it has been mentioned as under: "As per the information received in this case, the assessee jointly with her husband Shri. Sachin Shivajirao Deokar, purchased a residential flat from M/s. Shanti Enterprises at A- 1203, Sky Oasis, Ulwe, Navi Mumbai, on 14.12.2012 for total consideration of Rs.35,00,000/-. It is noticed that as per the Index II the market value determined by Stamp duty authorities is Rs.21,78,000/- in respect of said flat. As per the information Search and Survey action was carried out in the case of M/s. Bhagawati Developers and on the basis of examination of seized material in this case, it was noticed that the above assessee paid total consideration of Rs.60,81,875/- for purchase of above mentioned flat. The agreement value was Rs.35,00,000/- and on-money to the extent of Rs.25,81,875/- was paid by the assessee as per the information. However, no other documentary evidence or incrementing documents have been forwarded in this case. During the course of reassessment proceedings, the assessee strongly denied having paid any on-money or cash payment for the purchase of said flat. The assessee has stated that the above flat was purchased from M/s. Shanti Enterprises during FY 2012-

It is claimed that the market value of the flat in question is Rs. 21,78,000/-and the payment of Rs. 35,00,000/- itself from their side is on much higher side. Thus it is contended that despite having such a low Market value, why would she dare to pay such an exorbitant price of Rs.60,81,875/- to purchase a flat. It is further stated that based on certain documents in a third party office, no addition can be made in her case. Accordingly, she has strongly and categorically denied having made any on-money payment. During the assessment proceedings, the copy of purchase deed, Index-II, relevant bank statements etc. were duly examined. The Purchase Deed /index, Allotment from developer etc, was found in order. Further it was noticed that there was no abnormal withdrawal from the Bank Accounts during the period. Therefore, the contention of the assessee was found to be in order. This no adverse inference could be drawn in this case. Accordingly, the returned income the assessee was accepted. However, the CIT(IT) was of the view that 6. a. During the proceedings the AO did not revert back to the Central Circle to gather the specifics of the evidence that formed the basis of the information received from the Central Circle. This in spite of the fact that the specific search action in which the said evidence was found is duly mentioned in the letter dated 19.02.2020. As no material was gathered or any inquiry conducted to ascertain the relevant inevitable also failed to confront the assessee with the b. No inquiry was made by the AO with the assessing officer of the recipient Builder as to the treatment of the 'on money' in the return filed by the builder. This was a relevant fact that was not examined by the AO. C. AO in the office note has relied upon mere denial by the assessee in accepting the claim that no cash payment was made. The AO reached the conclusion in favour of the assessee's view on the irrelevant consideration of their not being any commensurate cash withdrawals in the bank accounts of the assessee. I hold that no man of ordinary prudence, leave alone an officer of the Revenue in a quasi judicial role like the AO, could have reached such a conclusion that for taxing unexplained investment there is an onus on the Revenue to seek out cash withdrawals from bank accounts which are duly disclosed to the department. e. In effect on account of the above the AO revered the burden of proof in the assessment proceedings and used it to wrongly reach a conclusion without conducting any inquiries in the matter.

Whereas, the fact remains that during the year under consideration the assessee had purchased the residential flat from M/s. Shanti Enterprises for a total sale consideration of Rs. 35,00,000/-, the value adopted by the stamp duty authorities was of Rs. 21,78,000/-, which shows that the consideration paid by the assessee for the purchase of flat in question was higher than the stamp duty value. The return of the income for the year under consideration was initially processed u/s 143(1) of the Act, however, later on the case was taken up for reassessment and during the course of reassessment it was categorically denied by the assessee regarding making payment of any cash amount and after considering the documents placed on record, the AO computed the assessment u/s 143(3) r.w.s 147 of the Act on 29.09.2021, after being convinced that assessee has not made any cash payment or payment of on money for the purchase of flat. Therefore, the assessment was completed without any additions.

The notice for initiating proceedings u/s 263 of the Act was issued by Ld. CIT(IT) on the basis of office note and the said office note is the only basis to take a view that the order of AO is erroneous and prejudicial to the interest of the revenue. However, from the records, we noticed that the said office note has recorded a finding wherein it has been specifically mentioned that as per “the information search and survey action was carried out in the case of M/s. Bhagawati Developers and on the basis of examination of seized material, in this case it was noticed that the above assessee paid total consideration of Rs. 60,81,875/- for the purchase of the flat, the agreement value was of Rs. 35,00,00/- and on money to the extent of Rs. 25,81,875/- was paid by the assessee as per the information. However, no other documentary evidence or incriminating documents have been forwarded in this case”.

From the entire facts as discussed by us, it shows that apart from the said office note, that no other documentary evidence or incriminating documents have been forwarded in this case by the Investigating Wing to the AO. Therefore, the AO carried out the reassessment proceedings and completed the assessment without making any addition, more particularly when there was no material before the revenue authorities to make any additions. The facts again remains the same that assessee had purchased the flat in question from M/s Shanti Enterprises that has no connection in any manner whatsoever with Bhagawati Developers and the entire action of reassessment was initiated on the basis of information emerging from the Investigation Wing about search and survey action on the said Bhagawati Developers. Whereas, as per record no transactions of the assessee has ever taken place with Bhagawati Developers and as per assessee he even do not know this party i.e. Bhagawati Developers and in this regard assessee has also relied upon decision in the following cases: Pr. CIT Vs. Shodiman Investments P Ltd, [2020] 422 ITR 337 (Bom) IT: Where Assessing Officer had issued a reassessment notice on basis of intimation from DDIT (Inv.) about a particular entity entering into suspicious transactions, this was clearly in breach of settled position in law that re-opening notice has to be issued by Assessing Officer on his own satisfaction and not on borrowed satisfaction Section 147 of the Income-tax Act, 1961 Income-escaping assessment Non-disclosure of primary facts (Information)

In the case of Narayan Tatu Vs. ITO, 70 taxmann.com 227 (Bom), the Coordinate Bench of ITAT, Mumbai Bench has categorically held and operative portion of the said order is mentioned below Both the appeals filed by the assessee are directed against the common order dated 29-03-2016 passed by Ld Pr. CIT-27, Mumbai u/s 263 of the Act and they relate to the assessment years 2007-08 and 2008-09. The assessee is challenging the validity of the revision orders passed by Ld CIT. 2.The facts relating to the issue are stated in brief. The assessee originally filed returns of income for both the years under consideration_u/s_139(1) of the Act. Subsequently information was received from Bangalore office of Income tax that they had carried out search and seizure operations in the case of M/s R.N.S Infrastructure Ltd on 16.02.2012 and during the course of the search, certain documents indicating payments made to persons holding public office were seized. One of the said documents contained certain payment details under the heading "Rane CM". Based on this information, the assessing officer reopened the assessment of both the years under consideration by issuing notices u/s 148 of the Act. The AO completed the assessments_u/s_143(3) r.w.s. 147 of the Act, accepting the explanations of the assessee that the said incriminating document do not relate to him. Thus the assessing officer completed the assessment without making any addition, i.e., accepting the income returned by the assessee. 3.On examination of the assessment records, the Ld Pr. CIT took the view that the assessing officer did not examine and verify the issues by correlating the evidences found during the course of search conducted in the hands of R.N.S. Infrastructure.

The assessee contended before the Ld Pr. CIT that the assessing officer has reopened the assessment of both the years for the specific purpose of assessing the income, if any, noticed in the incriminating documents. The assessee had objected to the reopening, but the AD has overruled the same by giving detailed reasoning. The assessing officer issued notice u/s 142(1) of the Act calling for various details. The assessee replied to all the queries raised by the assessing officer by giving a detailed reply, wherein the assessee had denied the entire transactions noted down in the incriminating documents. It was further submitted that the assessing officer was satisfied with the explanations and replies given by the assessee and accordingly he did not make any addition. The assessee further contended that the assessing officer has applied his mind on the incriminating documents, correctly appreciated the facts and has come to reasoned conclusion that no addition is required to be made to the income of the assessee. It was also submitted that the revision proceedings have been initiated for examining the very same issue on which the assessments were reopened.

I have considered the facts of the case, the assessment records, show cause notice issued ande appellant's submission and the case laws relied upon by the assessee. In CIT Vs. Gabriel India Ltd 203 ITR 108, 114-115, 117 (Born), the assessee had claimed a deduction of Rs.99,326 under the head plant 're- lay-out expenses' which was allowed by the Assessing Officer while the CIT was of the view that it was a capital expenditure. Hon'ble Bombay High Court held that the Commissioner could not be vested with the power to re-examine the accounts and determine the income himself at a higher figure. The claim was allowed by the Assessing Officer on being satisfied with the explanation of the assessee and such decision cannot be held to be 'erroneous' simply because in his order he did not make an elaborate discussion in that regard. The decision is distinguishable on facts as in the instant case the issue is not the nature of expenditure being capital or revenue but failure to conduct inquiries and examine the evidence found in the course of the search in which transactions relating to the assessee were mentioned. Hon'ble Delhi High Court in the case of CIT vs. 537, 548, Hon'ble Delhi High Court held that the order of the Assessing Officer might be erroneous but how it was prejudicial to the interest of 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 proceedings under section 263. This decision also being distinguishable, is not applicable to the facts of the case of the assessee. Thus, all the decisions relied upon by the Ld A.R being distinguishable on facts are not applicable to the facts of the case of the assessee. 8.The objection of the assessee that the order is no erroneous for the purpose of section 263 of the Act is also not borne out from the facts of the case. The relevant facts of these cases relied upon are not similar to the facts of the case of the assessee as the Assessing Officer has not examined and verified the information with reference to the assessee. Secondly, the assessee has maintained silence on the issue in para no.3(2) of the show cause notice wherein it was mentioned that the payments were made to "Rane CM" who is the same person as Shri Narayan T Rane, the Ex-Chief Minister of Maharashtra. Kudal is the assembly constituency of Shri Narayan Rane which is also mentioned in the first two entries. The last entry indicates that the amount was paid to Shri Narayan Rane for the election expenses. Further, it is also observed that no notices u/s 133(6) were issued to M/s R.N.S Infrastructure Pvt Ltd and neither was any opportunity given to the assessee to cross examine the said person Shri Sunil Sahasrabudhe (VP - Finance) on the basis of whose statement the case was reopened. Merely on the basis of the assessee's submissions and arguments, the proceedings u/s 148 were completed. It is, therefore, evident that the information was not verified properly. Thus it is held that the requisite inquiry and verification was not carried out before passing the orders u/s 143(3) r.w.s. 147 of the Act as the Assessing Officer did not make necessary enquiry on this issue and accordingly, in view of clause (a) of Explanation 2 below sub section (1) of section 263 of the Income tax Act, 1961, the order passed by the Assessing Officer is deemed to be erroneous and prejudicial to the interests of revenue. 6.Aggrieved by the соmmоn order passed by Ld CIT, the assessee has filed these appeals before us. 7.The Ld A.R submitted that the assessing officer had reopened the assessment of both the years under consideration on the basis of the incriminating documents found during the course of search conducted in the hands of M/s R.N.S infrastructure in order to assess the income escaped in the hands of the assessee. He submitted that the objection raised by the assessee for reopening of the assessment was overruled by the AO. Thereafter the assessee has cooperated fully with the assessing officer by furnishing necessary details and has strongly denied the transactions noted down in the document. The Ld A.R submitted that the assessing officer was satisfied with the explanations given by the assessee and hence did not make any addition. He submitted that the assessing officer has taken a possible view after due application of mind and hence the Ld Pr. CIT was not justified in holding that the assessment orders were erroneous, since the assessing officer did not make enquiries in the way the Ld CIT thought that it should have been done. He submitted that the Ld CIT has initiated the revision proceedings in respect of the very same issue, since he was of the view that the assessing officer should have conducted the enquiries in a particular manner and the enquiries made by the AO were not sufficient. Thus, the Ld CIT has initiated revision proceedings in order to carry out fishing and roving enquiries in the matters which have already been concluded, which is not permissible u/s 263 of placed reliance on the decision rendered by the Hon'ble juri ictional Bombay High Court in the case of CIT Vs. Development Credit Bank Ltd (2010)(323 ITR 206)(Bom). Не further submitted that the provisions of sec. 263 do not visualise a case of substitution of the judgement of the Commissioner for that of the Income tax Officer who passed the order unless the decision is held to be erroneous, as held by Hob'le Delhi High even the official of M/s R.N.S. Infrastructure also did not implicate the assessee, when specific questions were put to him about the impugned incrimating document. Accordingly he submitted that the assessment order cannot be considered to be prejudicial to the interest of the revenue. He further submitted that the Ld Pr. CIT has also not shown as to how the assessment order is erroneous one. He further submitted that the Ld CIT can initiate revision proceedings only if both the conditions specified in sec. 263 of the Act is satisfied, viz., the assessment order was erroneous and it was prejudicial to the interest of the revenue. For this proposition he placed strong reliance on the decisions rendered by Hon'ble Supreme Court in the case of Malabar placed reliance on the decision rendered by Hon'ble Supreme particularly to the following observations made by Hon'ble Apex Court:- "

In Beni Vs. Bisan Dayal (AIR 1925 Nag 445: 89 IC 371), it was observed that entries in books of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate and in absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another..... 10.On the contrary, the Ld D.R submitted the assessing officer has simply extracted the explanations furnished by the assessee in the assessment order and he did not give his conclusion on the submissions made by the assessee. Accordingly he contended that the assessing officer has not taken any view at all and hence there is no justification in contending that the assessing officer has taken a possible view. He submitted that the incriminating document contained sufficient entries to indicate that the payment was made to the assessee only. He submitted that a part of sum was given to the assessee on his birth day and further, a reference is there as "Rane C M", which is nothing but "Rane Chief Minister". He submitted that the assessee has not rebutted this inference before the assessing officer. further submitted that there is a reference to a place called "Kudal" and the said place happened to be the assembly constituency from where the assessee had won elections. He submitted that the assessing officer did not make enquires about these facts, which create link between the assessee and the incriminating document. He submitted that all these factual aspects clearly point out that the entries made in the impugned incriminating document are factually correct. Further he did not make any enquiries with M/s R.N.S Infrastructure, from whom the document was seized. He further submitted that the assessing officer should have made necessary enquires and should have provided opportunity to the assessee to cross examine them. Accordingly he submitted that the assessing officer has completed the assessment upon incorrect presumption of facts and without making proper enquiries and without taking a view. The Ld D.R placed reliance on the decision rendered by Hon'ble Madras High Court in the case of CIT Vs. Amalgamations Ltd (238 ITR 963) to contend that the incorrect assumption of facts renders the assessment order as erroneous. He further relied upon the decision rendered by Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd (supra) to contend that non-application of mind on the part of the AO on the facts assessee at all in the statement taken from him u/s 132(4) of the Act. He submitted that the assessing officer has accepted the explanations of the assessee by considering all these factual details and hence he did not make any addition. He further submitted that the assessment orders of the two years under consideration have been passed by two different assessing officers and both have taken the view that no addition was called for on the basis of the impugned incriminating document. The Ld A.R further submitted that the assessing officer has carried out necessary enquiries with regard to the impugned incriminating documents and was satisfied with the explanations given by the assessee. He submitted that, even though the Ld Pr. CIT was not satisfied with the scope of enquiry conducted by the AO, yet the Ld CIT himself has not conducted any enquiry to prove that the entries made in the document could be linked to the assessee, particularly in view of the fact that the official of M/s RNS infrastructure did not implicate the assessee in the statement taken with regard to the impugned document. He further submitted that the Ld CIT did not show as to how the entries made in the document could be considered as income in the hands of the assessee, even if it is taken for a moment that the entries made in the document did relate to the assessee.

However, the Ld Pr. CIT has taken the view that the assessing officer as completed the assessments without making proper enquiries with regard to the incriminating documents. According to Ld Pr. CIT, the AO should have made further enquiries in this matter. Accordingly he has passed the impugned revision order.

We have noticed earlier that the Ld Pr. CIT can revised the order only if it is shown that the assessment order is erroneous in so far as prejudicial to the interests of the revenue. The question as to when an order can be termed as "erroneous" was explained by Hon'ble Bombay High Court in the case of Gabriel India Ltd (supra) as under:- "From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an income tax officer acting in accordance with the law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order, unless the decision is held to be erroneous. Cases may be visualised where the Income tax officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income tax officer. That would not vest the Commissioner with power to examine the accounts and determine the income himself at a higher figure. It is because the Income tax officer has exercised the quasi judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion.... There 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 statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed" The Hon'ble High Court has considered the definitions given to the words "erroneous", "erroneous assessment" and "erroneous judgment" in Black's Law Dictionary and and accordingly held that an order cannot be termed as erroneous unless it is not in accordance with law. An order can be termed as "erroneous" only if it is not in accordance with the law. 17.The Hon'ble Delhi High Court has also followed the above said 167). The Hon'ble Delhi High Court has also extracted following observations made by the Tribunal:- "

Still further, the Hon'ble Supreme Court in Malabar Industrial Co. (2000) 243 ITR 83 has held that when two views are possible and the Assessing Officer has taken one of the possible view, then the order cannot be held to be prejudicial to the interest of the Revenue. Since the Commissioner of Income tax could not come to a definite finding that the expenditure in question was a capital expenditure in the proceedings under section 263, in our opinion, the order of the assessing officer could not be held to be erroneous." 18.In the case of Nagesh Knitwears P Ltd (2012)(345 ITR 135), the Hon'ble Delhi High Court has elucidated and explained the scope of the provisions of sec. 263 of the Act and the same has been extracted by the Delhi High court in the case of CIT Vs. Goetze (India) Ltd (361 ITR 505) as under:- "Thus, in cases of wrong opinion or finding on merits, the Commissioner of Income tax has to come to the conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under section 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because the order is not sustainable in law and the said finding must be recorded. The Commissioner of Income tax cannot remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but not lack of enquiry, again the Commissioner of Income tax must give and record a finding that the order/inquiry made is erroneous. This can happen if an enquiry and verification is conducted by the Commissioner of Income tax and he is able to establish and show the error or mistake made by the Assessing officer, making the order unstainable in law. In some cases possibly though rarely, the Commissioner of Income tax can also show and establish that the facts on record or inferences drawn from facts on record per se justified and mandated further enquiry or investigation but the Assessing officer had erroneously not undertaken the same. However, the said finding must be clear, unambiguous and not debatable. 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. Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of juri iction under section 263 of the Act. In such matters, to remand the matter to the Assessing Officer would imply and mean the Commissioner of Income tax has not examined and decided whether or not the order is erroneous but has directed the Assessing Officer to decide the aspect/question...." Similar view has been expressed by Hon'ble Madras High Court ridden the law interpreted by Hon'ble Delhi High Court, referred above. If that be the case, then the Ld Pr. CIT can find fault with each and every assessment order, without conducting any enquiry or verification in order to establish that the assessment order is not sustainable in law and order for revision. Не сап also force the AO to conduct the enquiries in the manner preferred by Ld Pr. CIT, thus prejudicing the independent application of mind of the AO. Definitely, that could not be the intention of the legislature in inserting Explanation 2 to sec. 263 of the Act, since it would lead to unending litigations and there would not be any point of finality in the legal proceedings. The Hon'ble Supreme Court has held in the case of Parashuram quasi-judicial controversies as it must in other spheres of human activity. 20 Further clause (a) of Explanation states that an order shall be deemed to be erroneous, if it has been passed without making enquiries or verification, which should have been made. In our considered view, this provision shall apply, if the order has been passed without making enquiries or verification which a reasonable and prudent officer shall have carried out in such cases, which means that the opinion formed by Ld Pr. CIT cannot be taken as final one, without scrutinizing the nature of enquiry or verification carried out by the AO vis-à-vis its reasonableness in the facts and circumstances of the case. Hence, in our considered view, what is relevant for clause (a) of Explanation 2 to sec. 263 is whether the AO has passed the order after carrying our enquiries or verification, which a reasonable and prudent officer would have carried out or not. It does not authorise or give unfettered powers to the Ld Pr. CIT to revise each and every order, if in his opinion, the same has been passed without making enquiries or verification which should have been made. In our view, it is the responsibility of the Ld Pr. CIT to show that the enquiries or verification conducted by the AO was not in accordance with the enquries or verification that would have been carried out by a prudent officer. Hence, in our view, the question as to whether the amendment brought in by way of Explanation 2(a) shall have retrospective or prospective application shall not be relevant. 21 In the instant case, as noticed earlier, the AO has accepted the explanations of the assessee, since there is no fool proof evidence to link the assessee with the document and M/s RNS Infrastructure Ltd, from whose hands it was seized, also did not implicate the assessee. Thus, the assessee has been expected to prove a negative fact, which is humanely not possible. No other corroborative material was available with the department to show that the explanations given by the assessee were wrong or incorrect. Under these set of facts, the AO appears to have been satisfied with the explanations given by the assessee and did not make any addition. We have noticed that the Hon'ble given u/s 263 of the Act. In the instant case, we are of the view that the Ld Pr. CIT has failed to show that both the conditions exist in the instant case. Accordingly we find merit in the contentions of the assessee that the revision orders passed by Ld Pr. CIT for the years under consideration are beyond the scope of sec. 263 and hence not valid. Accordingly we set aside the revision orders passed by Ld CIT for the two years under consideration.

In the result, both the appeals filed by the assessee are allowed. with no order as to cost.. Order pronounced in the open court on 04.12.2024. (MS. PADMAVATHY S) ACCOUNΤΑΝΤ ΜEMBER Mumbai, Dated 04/12/2024 KRK, PS (SANDEEP GOSAIN) JUDICIAL MEMBER आदेश की प्रतिलिपि अग्रेषित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. संबंधित आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त (अपील) / Concerned CIT 5. विभागीय प्रतिनिधि, आयकर अपीलीय अधिकरण, मुम्बई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशानुसार / BY ORDER, सत्यापित प्रति //// उप/सहायक पंजीकार ( Asst.