MAHAVEER PRASAD JAIN,JAIPUR vs. PRINCIPAL CIT-2, NEW CENTRAL REVENUE BUILDING

ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by the assessee aggrieved from the order of the Pr. Commissioner of Income Tax, PCIT, Jaipur-2 [ Here in after referred as Ld. PCIT ] for the assessment year 2017-18 dated 29.03.2022 as per provision of section 263 of the Act, which in turn arises from the order passed by the ITO, Ward-7(3), Jaipur passed under Section 143(3) of the Income tax Act, 1961 (in short 'the Act') dated 09.05.2019.

“I, Mahaveer Prasad Jain, the above named assessee-appellant would like to submit that:

1. 1. That the appellant is carrying on business of whole sale & retail trading of Sugar, Edible Oil & etc. in Sambhar Lake, District Jaipur which is rural or sub- urban area and there are very few counsels undertaking Income tax practice and having in depth knowledge of Income Tax laws.

2. That the original assessment for the relevant year was passed by ITO ward 7(3) on 09.05.2019. Subsequently, the revisionary proceedings u/s 263 was initiated by the worthy Pr. CIT-2, Jaipur and thereafter the revisionary order u/s 263 of the Income Tax Act was passed by worthy Pr. CIT (2)-Jaipur setting aside the original assessment order u/s 143(3) on 29.03.2022 which was duly served upon the appellant on 29.03.2022 through e-mail.

3. That the appeal against impugned order was statutorily required to be filed before worthy tribunal by 28.05.2022 and therefore there is delay of 214 days in filing form 36 which the appellant requests your honour to condone and allow admission of the appeal.

4. That the delay in filing Form 36 is solely due to lack of advice from the local counsel (Sambhar Lake), who was not aware that the revisionary order u/s 263 is appealable order before worthy ITAT 5. That the factum of impugned revisionary order was appealable before worthy ITAT came to the knowledge of the appellant only when the notice u/s 142(1) was issued from the NFAC, New-Delhi Dated 16.12.2022 for making fresh assessment for relevant year and thereafter appellant contacted new counsel at Jaipur,who updated the appellant regarding the same.

6. That the delay in filing the form 36 is bona fide & unintentional and backed by reasonable cause. It is therefore, humbly prayed to kindly condone the delay of 214 days in filing Form 36 and allow admission of appeal and oblige.”

2.1 In addition to the petition for condonation of delay is also supported by an affidavit duly swooned and executed wherein it has been contended that; 2.2 Based on the stated facts in the petition and affidavit filed by the assessee it is noted as even confirmed by the registry that this present appeal is delayed by 220 days. As pleaded that the period of delay in filling this appeal is absolutely inadvertent and has occurred due to incorrect advise of the counsel and in support of this the assessee has filed the affidavit also. The counsel who appeared in the assessment proceedings and has not advised to file an appeal against the order of the PCIT passed under section 263 of the Act. There was no malafide of deliberate delay in filling the present appeal and when the assessee came to know about the absolute right of filling an appeal against the order of the PCIT they moved this present appeal with the prayer for condonation of delay. The ld. AR of the assessee further submitted that in the assessment proceeding the other chartered accountant represented the assessee. Whereas the present appeal is filled by another chartered accountant. In support of this contention the assessee filed an affidavit and in the interest of the justice he prayed to condone the delay. The ld. AR of the assessee also submitted that the assessee has not gained anything and there is assessee has merits of his case.

2.3 Per contra the ld. DR appearing on behalf of the revenue strongly objected to the condonation petition on reasons placed before the bench. The assessee is a regular tax payer availing the tax professional services. So, the assessee has no merits on this condonation petition and the appeal should not be entertained as the assessee failed to justify the delay in filling the present appeal.

The affidavit filed by the assessee has no support of any evidence to support the contention so raised.

The bench noted that there is no dispute about the number of days delay by both the parties that this appeal is filed by the assessee after a delay of almost 220 days. To support the reason for the delay the ld. AR of the assessee submitted that they have reasonable reasons for not filing an appeal in time and the assessee live in remote area where the professional tax practioner may not have much knowledge and based on the advice so received there has been a delay and the assessee should not be deprived from the justice on mere technicalities.

3.1 There is also no dispute that under section 253(5) of the Act, the Tribunal may admit an appeal filed beyond the period of limitation where it is satisfied that there was sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. Section 253(5) deals the power of the tribunal and the same is reiterated here in below:

Section 253 (5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period.

3.2 Thus, based on that provision tribunal may admit an appeal filed beyond the period of limitation where it is satisfied that there exists a sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. The explanation of the assessee therefore, becomes relevant to determine whether the same reflects sufficient and reasonable case on its part in not presenting the present appeal within the prescribed time. In the present case, the assessee filed an affidavit stating that due to lack of advice from the local counsel(Sambhar Lake) who was not aware of the legal position that the revisionary order u/s. 263 is appealable order before worthy ITAT.

ITAT came to the knowledge of the assessee only when the notice u/s. 142(1) was issued from the NFAC for making the fresh assessment for relevant year and the assessee contacted new counsel at Jaipur who update the assessee about the right of appeal against the impugned order. As advised by the said counsel the present appeal lies against the order passed u/s. 263 of the Act for which the ld. AR prayed for condonation.

3.4 It has been held by the Hon'ble Bombay High Court in case of Vijay Vishin Meghani vs. DCIT wherein it has referred to the decision in case of Concord of India Insurance Co. Ltd. Vs. Smt.

Nirmala Devi & Ors. AIR 1979 SC 1666 wherein the Hon'ble Supreme Court has held that a legal advice tendered by a professional and the litigant acting upon it one way or the other could be a sufficient cause to seek condonation of delay and coupled with the other circumstances and factors for applying liberal principles and then said delay can be condoned. Eventually, an overall view in the larger interest of justice has to be taken.

None should be deprived of an adjudication on merits unless the Court of law or the Tribunal/Appellate finds that the litigant has deliberately and intentionally delayed filing of the appeal, that he is Hon'ble High Court thereby condoned the delay of 2984 days in filing the appeals holding that the explanation placed on affidavit was not contested nor we find that from such explanation, can we arrive at the conclusion the assessee was at fault, he intentionally and deliberately delayed the matter and has no bona fide or reasonable explanation for the delay in filing the proceedings and the position is quite otherwise.

3.5 Moreover, in case of Collector, Land Acquisition vs MST Katiji, the Hon'ble Supreme Court has held that the expression 'Sufficient Cause' employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner to sub-serves the ends of justice that being the life-purpose of the existence of the institution of Courts. It was further held by the Hon'ble Supreme Court that such liberal approach is adopted on one of the principles that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. Another principle laid down by the Hon'ble Supreme Court is that when substantial the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. It was also held by the Hon'ble Supreme Court that there is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of male fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. In the instant case, applying the same principles, we find that the assessee has all along acted diligently in safeguarding his legal rights and availing the remedies available to him and has acted based on the advice and assistance sought from his legal Counsels. He was initially advised not to file appeal by the earlier counsel, however, due to subsequent advice of another counsel the assessee was advice to file the present appeal, we find that there is no culpable negligence or malafide on the part of the assessee in delayed filing of the present appeal and he does not stand to benefit by resorting to such delay. Similar view is taken by the apex court in the case of Improvement Trust, Ludhiana in civil appeal no. 2395 of 2008, wherein the court ruled that in the legal arena, an attempt should always be made to allow the matter to be contested on merits held that it is the duty of the court to see to it that justice should be done between the parties.

3.6 In light of above discussions and in the entirety of facts and circumstances of the case, we are of the considered view that the assessee in his averments has made out a clear case that there was sufficient cause which being beyond his control, prevented him from filing the present appeal in time before the Tribunal. The assessee has sought advice from his Counsels and was not guilty of negligence on his part and it cannot be said that the delay was due to the negligence and inaction on the part of the assessee, which could have been avoided by the assessee if he had exercised due care and attention. We find that there is no culpable negligence or malafide on the part of the assessee in delayed filing of the present appeal and he does not stand to benefit by resorting to such delay. Therefore, in the factual matrix of the present case, we find that there exists sufficient and reasonable cause for condoning the delay of 220 days in filing the present appeal and as held by the Hon'ble Supreme Court, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. Therefore, in exercise of powers under section 253(5) of the Act, we hereby condone the delay of 220 days in filing the present appeal as we are satisfied that there was sufficient cause for not presenting the appeal within the prescribed time and the appeal is hereby admitted for adjudication on merits.

“1. That the ld. Pr. CIT has erred in law as well as in facts of the case in exercising revisionary jurisdiction u/s 263 of the IT Act by making observation which are contrary to assessment records 467945/-

2. That ld. Pr. CIT has erred in law as well as in facts of case is not appreciating that alleged order u/s 143(3) dated 09.05.2019 was passed by AO after due verification of books of Accounts & information supplied by appellant during course of assessment proceedings.”

5. The fact as culled out from the records is that the assessee is carrying on business of whole sale & retail of of cotton seed, cotton seed cake, edible oil tin sugar bag and wheat bag and other food products in Sambhar Lake area, District Jaipur which is rural or sub-urban area. The assessee has filed its e- return u/s 139(1) of the Income-tax Act 1961 on 28.10.2017 declaring total income of Rs 4,89,340/- On selection of the case for scrutiny through Manual, notice u/s 143(2) of the income-tax Act, 1961 was issued on-line on 29.09.2018 on ITBA Portal which was served upon the assessee letter was issued on 18/11/2018 fixing the case for submit/produce the document online mode on or before 03.12.2018. Due to change of incumbent notices u/s 142(1) were issued time to time and in compliance of these notices, assessee submitted reply through electronically "E Proceeding" on ITBA Portal. Subsequently on 30.04.2019 notice u/s. 142(1) was issued for provide/furnish books of accounts i.e cash book, bank book, bills/vouchers, ledger and details/supporting document of expenses debited in profit and loss account. On 02.05.2019 the AR of the assessee attended and furnished books of accounts i.e. cash book, bank book, bills/vouchers, ledger and supporting document of expenses.

Based on the examination the documents and details the assessment was completed by making a disallowance of Rs. 43,814/- by the assessee officer.

Based on these propositions the ld. PCIT hold a view that the order passed by the assessing officer is erroneous in so far as it is prejudicial to the interest of the revenue and thereby issued a show cause notice dated 08.03.2022. The assessee filed its reply dated 23.03.2022. The ld. PCIT after considering the reply passed the the order u/s. 263 of the Act and the relevant observation of the ld. PCIT is reiterated here in below:

“9. From the above facts and circumstances of the case and having regard to the material available on record, the Assessing Officer failed to consider/apply his mind to the information available on record with regard to the cash deposited in the bank in old SBN of Rs. 16,80,000. This is turn has resulted in passing of an erroneous order by the Assessing Officer in the case due to non-application of mind to relevant material, reflecting non appreciation of facts and an incorrect application of mind to law which is prejudiced to the interest of the revenue.

10. Accordingly, by virtue of powers conferred on the undersigned under the provisions of section 263 of the Income Tax Act 1961, I hold

that the order under Section 143(3) of the IT Act dated 09.05.2019 for AY 2017-18 passed by the Assessing Officer is erroneous in so far as it prejudicial to the interest of revenue as the said order has been passed by the Assessing Officer in a routine and perfunctory manner without considering/applying his mind to the information available on record. The order of the Assessing Officer is therefore liable to revision under the clause (a) & (b) of Explanation (2) to section 263 of the Income Tax Act. Hence, the assessment order is set aside as discussed above.”

”The Appellant is an individual and exclusively engaged in retail & wholesale trading of cotton seeds , Sugar , Edible Oil & etc. under the trade name of M/s Mohan Lal Mahaveer Prasad . The business place of the assessee is situated at Teli Darwaja , Sambhar Lake , District Jaipur . The peculiar line of business involves frequent cash deposits into bank account as a regular phenomenon due to cash sales & cash realization from debtors (farmers & small retailers) and the appellant’s business is not exception to same . During the course of demonetization period , the appellant deposited cash to the tune of Rs. 51,60,000/- into Bank account comprising of Specified Bank Notes (SBN) &Non Specifed Bank Notes (Non-SBN ) to the tune of Rs. 16,80,000/- & 34,80,000/- respectively . Subsequently the return was filed u/s 139(1) vide e-filed acknowledgment No. 263605631281017 dated 28.10.2017 . Thereafter , the statutory notices u/s 143(2) & questionaries u/s 142(1) were issued , which were duly responded and source of cash deposit , which formed the sole reason for triggering 143(2)/143(3) proceedings , was explained in detail along with corroborative evidences. Even the Books of Accounts were called for & thoroughly examined by the AO , for verifying the contention claimed in the letter and thereafter satisfying about the claim & contention of the appellant , the detailed & judicious assessment order was passed on 09.05.2019 .

Subsequently , The ld PCIT-II , Jaipur by making finding that the ld AO failed to make any verification relating to source of cash deposit made during demonetization period & also holding non application of mind to the issue, assumed reversionary jurisdiction u/s 263 of the Act and thereafter passed the order setting aside the original assessment u/s 143(3) dated 29.03.2022 by holding the original order to be erroneous & pre judicial to the interest of the revenue , Aggrieved by the same, appellant is in appeal before your honour . With this background , the grounds of appeal

& brief submission covering both the grounds (as both are interconnected) of the appellant is encapsulated as under:- GOA 1 :- That the ld Pr. CIT has erred in law as well in facts of the case in exercising revisionary jurisdiction u/s 263 of the IT Act by making observation which are contrary to assessment records. GOA 2:- That the ld Pr. CIT has erred in law as well in facts of the case in not appreciating that alleged order u/s 143(3) was passed by the AO after due verification of the books of accounts & information supplied by the appellant during course of assessment proceedings. Contention of the PCIT The ld PCIT assumed the revisionary jurisdiction u/s 263 by making following finding , reproduced (in verbatim from impugned order) as below :-

1. It is seen that the A.O. while framing the assessment have not verified the cash deposited by the assessee of Rs. 16,80,000 which were old SBNs. ( Para 1 Pg 4 of Impugned order)

2. Further no queries to the cash deposited in SBNs have been raised by the A.O. or any reply has been filed by the assessee. However, as the A.O. failed to make any enquiries on the cash deposited in the bank, the assessment order passed on 09.05.2019 is erroneous within the purview of Explanation-2 of section 263(1) of the I.T.Act. Thus, it is evident that the AO has not applied his mind to the issue in any manner ( Para 1 Pg 4 of Impugned order).

3. However , as the AO failed to make any enquiries on the cash deposited in the bank , the assessment order passed on 09.05.2019 is erroneous with in the purview of explanation 2 of section 263(1) of the IT Act,1961.(Para1 pg 4 of impugned order )

4. From the above facts and circumstances of the case and having regard to the material available on record, the Assessing Officer failed to consider/apply his mind to the information available on record with regard to the cash deposited in the bank in old SBN of Rs 16,80,000. ( Point 9 Pg 4 of Impugned order) Submission

At the very outset , It is submitted that the condition precedent for exercise of jurisdiction u/s 263 by the PCIT is that the order of the AO is established to be erroneous in so far as it is prejudicial to the interest of the revenue. Thus, for exercising the jurisdiction both the twin conditions are mandatorily required to be satisfied . This provision cannot be invoked to correct each and every type of mistake or error committed by the AO; it is only when an order is erroneous as also prejudicial to Revenue’s interest, that the provision will be attracted. Adverting to the facts of the case , It is submitted that assumption of jurisdiction u/s 263 of the Income tax by the PCIT was uncalled for & unwarranted, in as much , the original assessment order dated 09.05.2019 was passed after judicious & meticulous appreciation & verification of the information and examination of books of accounts and therefore even if same could be hold to be prejudicial to Interest of revenue but in any stretch of imagination cannot come under the ambit of erroneous order .The assumption of Jurisdiction is erroneous & unwarranted , for want of the following submitted point wise as under :- 1. That there was no occasion for the ld PCIT to assume revisionary jurisdiction by holding order to be erroneous by making finding as to absence of inquiry & no application of mind what so ever , in as much , the assessment order was passed after due verification & examination of cash deposit made during course of demonetization period. 1.1 That from the bare perusal of the order of PCIT , it is evident that it is not the the case of the PCIT that the AO has not made enquiries or verification which should have been made in respect of verification of cash deposit during demonetization but it is the case where in PCIT made specific finding that there is no verification at all of the issue involved by the AO & hence non application of mind by the AO in any manner what so ever . Thus , the assumption of the jurisdiction by the PCIT is built upon finding that there is “complete absence of enquiry ” by the AO . In this regard , It is submitted that whole edifice over which foundation of the case is being built “complete absence of enquiry by the AO ” is altogether absent & contrary to information & document on assessment record , the finding is controverted point wise as under:-

1.1.1 The AO has made proper enquiries & verification and only thereafter accepted the documents filed during the course of assessment and passed the order after due application of mind.

1.1.2 The sequence of events which took place before passing of assessment order is narrated as under , for fortifying the contention that there was enquiry and that too proper & adequate :-

The Notice u/s 143(2) was issued on 29.09.2018 . The AO on receipt of detailed reply of the assessee on 10.10.2018 to notice u/s 143(2) in connection with source of cash deposit during demonetization , did not accepted the issue of cash deposit summarily but shown appetite for further inquiry & verification , which is palpable from notice dated 18.11.2018 where in he seek copy of bank statements so as to verify the trend of cash deposit through out the year vis-à-vis demonetization period & subsequently through notice dated 10.04.2019 , further seek copy of sales & purchase ledger along with confirmation from parties from whom purchases exceeding Rs. 5 lakhs were made so as to verify that there was no backdating of sales (cash sales )not backed by purchases & ultimately called for production of books of accounts viz. cash book , bank book , stock register , sales & purchase bill through notice dated 30.04.2019 . Therefore , the observation of the PCIT that there was no enquiry & complete absence of application of mind is contrary to information on assessment records.

1.1.3 The ld AO , even in in body of order duly incorporated & discussed the submission of the appellant and also observed that “AR of the assessee also furnished details/supporting documents of cash deposit made by him during the year under consideration (what to say of demonetization period) .Even the factum of calling & verification of books of accounts is contained in assessment order therefore in any stretch of imagination , the finding of PCIT that there was complete absence of any enquiry has no legs to stand .

1.1.4 The thorough & meticulous verification of submission & examination of books of accounts including but not limited to cash book , bank book , sales book , purchase book , sales & purchase bills , stock register was undertaken by the AO before arriving at the satisfaction that cash deposit was explained ,which echoes that there was due application of mind by the AO & thus foundation for exercise of jurisdiction u/s 263 by the PCIT is apparently missing .

2.2.1 This aspect is directly covered by recent decision of Hon’ble Supreme Court in the case of Principal Commissioner of Income-tax, Surat- 2 Vs. Shreeji Prints (P.) Ltd. [2021] 130 taxmann.com 294 (DPB 43-48) wherein vide the Hon’ble Supreme Court held as under”-

“Section 69, read with section 263, of the Income-tax Act, 1961 Unexplained investments (Unsecured loans)- Assessment year 2013-14 Assessee-company had. received unsecured loans from two different companies Commissioner noting that said loans were shown as investment in assessee’s name in balance sheet of respective companies exercised his revisionary powers and passed an order without giving an opportunity to assessee of being heard, invoking Explanation 2 to section 263 High court by impugned order held that since Assessing Officer has made inquiries in details and accepted genuineness of loans received by assessee, such view of Assessing Officer was a plausible view and same cannot to be considered erroneous or prejudicial to interest of revenue Whether SLP against said impugned order was to be dismissed-Held, yes (Para 21 [in favour of assessee)” Since the facts are admitted and undisputed hence the impugned order deserved to be quashed in toto.

2.2.2 It is well settled that the amendment (Expl. 2(a) &(b) ) does not confer blind & unbridled powers to the PCIT , despite there being an amendment, enlarging the scope of the revisionary power of the ld. PCIT u/s 263 to some extent, it cannot justify the invoking of the Expl. 2(a) in the facts of the present case. The power of PCIT subsequent to amendment was dealt with & lucid finding was made in following judgements :-

In Narayan Tatu Rane Vs. ITO, (2013) 7 NYPTTJ 1493 (Mum) , it was held that newly inserted Explanation 2(a) to S. 263 does not authorize or give unfettered powers to Commissioner to revise each and every order, if in his (subjective) opinion, same has been passed without making enquiries or verification which should have been made. As submitted above here also the AO having already applied its mind (directly or indirectly), the assessment order was not erroneous.

3. That the alleged finding of the PCIT that “ Further no queries to the cash deposited in SBNs have been raised by the A.O. or any reply has been filed by the assessee ” does not hold water & is non existent , in as much , same is contrary to the document & information on assessment record . The appellant was well aware of the issue that triggered the proceedings by issue of notice u/s 143(2) and therefore immediately on receipt of notice filed detailed & elaborated reply covering each & every aspect of source of cash deposit vide letter e- filed dated 09.10.2018 . (Kindly refer Pg No. 11-13 of PB) . The bare perusal of the submission dated , will convey to your honour that the appellant left no stone unturned in explaining the source of cash deposit

to have been emanated out of trading operations of the business and therefore the alleged observation is bereft of any merit & contrary to assessment records .It is mysterious how PCIT reached to the conclusion that there was no reply of the assessee on issue of cash deposit .

4. The factual matrix of the case manifest that revisionary proceeding has been initiated based upon proposal made by the AO thereby making proceedings to be null & void . The contention of the appellant is fortified from the fact that notice u/s 133(6) was issued & served upon the appellant by the AO (ITO ward 7(1) dated 23.02.2022 for re-verification of cash deposit during demonetization .(Kindly refer Pg 27) , In this reliance is placed upon recent judgment in PCIT vs Reeta Lakhmani [2022] 145 taxmann.com 590 (Calcutta), where in on exercise of jurisdiction by PCIT at instance of AO was hold to be against law by observing as under (refer Pg 60-2 of PB) :- 9. In more or less identical circumstances in the case of Pr. CIT v. Sinforte (P.) Ltd. [ITAT No. 104 of 2019, dated 7-1-2022] the court had dismissed the appeal filed by the revenue on the ground that the PCIT in order to exercise jurisdiction under section 263 of the Act exercised jurisdiction at the instance of the assessing officer which is against the provisions of the law. This decision supports the case of the respondent assessee. Hence, for the above reasons, we are of the view that the order passed by the learned tribunal on the first ground, namely with regard to the correctness of the exercise of power under section 263 of the Act has to be affirmed and, accordingly, the appeal filed by the revenue is dismissed and the substantial questions of law suggested by the revenue are not required to be decided in the instant case.

6. That the law is well settled to the effect that mere possibility of gathering more material to prove the claim of the assessee would not make concluded assessment to be erroneous so long the ld AO has acted

judiciously and conducted enquiries in the course of assessment proceedings . (Reliance placed upon Plastic Concern vs ACIT [61 (TTJ) 87(Cal)] 7. That one of the alleged observation of the PCIT in justifying his arbitrary assumption of jurisdiction is the “failure of the AO in calling deposit receipts from the bank including the counterfoils and has not verified the cash deposited in the bank account vis-a-vis cash book “ .Further No cash book has been filed during the assessment proceedings . The alleged observation has no legs to stand and is hereby controverted point wise as under :- 7.1 That with due respect to the contention of the PCIT & as per our understanding of IT law there is no provision in the law which mandates filing of cash book through ITBA portal only , as a condition precedent for explaining the source of cash deposit . (Emphasis Supplied) 7.2 The cash book was produced before AO and same was examined & verified by him,before arriving at satisfaction regarding cash deposits during demonetization .That it is mysterious & not understandable how the bank counterfoils /deposit receipts can decipher about source of cash deposit and more interestingly how can they weight over the cash book , sales voucher & sales book , which were duly verified & examined for reaching to the satisfaction about source of cash deposit .

7.3 That the ld AO vide letter dated 30.04.2019 directed for production of books of accounts on 02.05.2019 (Kindly refer Pg 22 of PB ) and even reference of same is contained in body of order . 7.4 That contention of the appellant that PCIT acted in haste and arbitrary manner & without understanding the geography of the case , also gets cemented from the fact that PCIT failed to appreciate that appellant ’s book of account were maintained manually and were in regional language(hindi) and therefore neither it was possible to upload voluminous cash book on portal nor without linking the same with sales & other ledger would have served any purpose . The ld AO was well acquainted with the fact and therefore specific notice for production of the books of accounts for examination & verification was made and same was thoroughly & vigilantly verified & examined on 02.05.2019 7.5 That the ld PCIT failed to appreciate the assessment records in true spirt gets fortified from the fact that appellant deposited Non SBN currency of Rs. 34,80,000/- during demonetization , which standalone was sufficient evidence by itself , to adduce that there was perennial receipt of cash in the form of cash sales & realization for debtors in the business carried on by the assessee .

8. That there are catena of Judgements of the Higher authority having direct relevance on the case involving almost identical isssues wherein assumption of jurisdiction u/s 263 have been negated & quashed , the gist and eloquent observation in them is elucidated as under :- CIT v Sunbeam Auto Ltd. ( 2010) 332 ITR 167 Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. One has to keep in mind the distinction between lack of inquiry and inadequate inquiry. If there was any inquiry, even inadequate, that would not, by itself, give occasion to the Commissioner to pass orders under section 263 merely because he has different opinion in the matter. It is only in cases of lack of inquiry that such a course of action would be open. [Para 12] CIT v Gabriel India Ltd. [1993] 203 ITR 108 Bom “The AO has made enquiries . The assessee has given a detailed explanation in writing . Evidently, the claim as allowed by the AO on being satisfied with the explanation of the assessee . The decision of the AO cannot be held to be erroneous simply because in his order he did not made an elaborate discussion in this regard .” In concluding part of our submission , It is reiterated that there was no occasion on the part of the PCIT to assume reversionary jurisdiction in light of the factual matrix of the case and looking to the factum of specific reply of the appellant on assessment file , calling & verification of books of accounts , dealing with the aspect of the issue in the body of order.”

7.1 The ld. AR of the assessee in addition to the written submitted that the ld. PCIT has not appreciated the line of business where in the assessee is engaged. The receipt of the cash is the nature phenomenal in the business of the assessee and the same is verified by the ld. AO. The relevant observation is made at page 3 of the his order. The ld. AR of the assessee filed a letter dated 09.10.2018 where in the details of the money so deposited into the details of the money so for an Amount of Rs. 51.60 out of that Rs. 16.80 was demonetized currency. The reply is considered and thereafter vide notice dated 18.11.2018. Assessee submitted reply on 02.12.2018 in e-proceeding module and related acknowledgement was placed on record at page 18 of the paper book. Considering the nature of business that the assessee carries there is persistent deposit of cash and the same is not disputed even by the PCIT and objected only for an amount of the demonetized currency. The ld. AO vide notice issued on 30.04.2019 (APB-page,22-23) specifically called for the cash book, bank book, sales and purchase and sales bills ledger account bank statement and other related records. The same has been produced and verified is recorded in the part of the assessment order and the same is not disputed. The ld. AO at the four instances verified the issue including source of the money so deposited into the bank account by calling the relevant circumstantial related evidence.

Thus, there is no lack of inquiry or inadequate inquiry by the ld. AO.

Based on these the ld. AR submitted that the PCIT has not find any mistake and thereby intend to review the order of the ld. AO and in law.

The ld. PCIT in his order contended that the ld. AO has not properly addressed the issue while completing the assessment. specific error on the part of the assessee. We have perused the assessment order and the relevant submission on the issue that the assessee has given details in the assessment proceeding at four instance so as to support the fact that inquiry in relation to the generation of the cash by the assessee is verified by the ld. AO. It is also not disputed by the PCIT or ld. Sr. DR for the balance amount deposited in the demonetized period which is that out of 51.60 lacs but disputed only for an amount Rs. 16.80 lac being the demonetized currency. There is no evidence or material that has been observed by the PCIT from the details so placed on record by the assessee in the assessment proceeding to disbelieve the averments about the source of the said demonetized currency.

Merely the PCIT said that in his opinion the ld. AO has not properly addressed the issue. The observation so made is very general and routine without pinpointing any specific defect the action of the PCIT u/s. 263 is nothing but a review of the order of the ld. AO. It has been held in so many cases by the various High Courts and Tribunal that the amendment made in section 263 does not confer blind and uncontrolled power to the PCIT, despite there being an amendment, enlarging the scope of the revisionary power of the ld. PCIT. The newly inserted explanation 2(a) to section 263 does not authorize or give unfettered powers to Commissioner to revise each and every order, if in his opinion same has been passed without making enquiry or verification. Here in this case the ld. AO has made enquiry at four instance and recorded his satisfaction after examined the books of account, bank statement and purchase and sales records of the assessee. Here in this case even there is no specific observation of the PCIT pinpointing any specific defect in the records that has been placed on record instead he has simply stated that AO has not addressed the issue this observation is very much in general and without specifying any faults in the assessment records, details submitted and verified by the ld. AO.

In fact on perusal of the assessment order we have noted the following observation of the ld. AO.

“I have considered the reply of the assessee. Further, the assessee furnished the source of cash deposited during demonetization period”

(2000) 243 ITR 83 (SC). We also draw strength from the decision of the Hon'ble Supreme Court in the case of CIT vs. Max India Ltd. (2007) 213 CTR (SC) 266: (2007) 295 ITR 282 (SC) wherein it was held that:

"The phrase 'prejudicial to the interests of the Revenue' in s. 263 of the IT Act, 1961, has to be read in conjunction with the expression 'erroneous' order passed by the AO. Every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interests of the Revenue. For example, when the AO adopts one of two courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the Revenue, unless the view taken by the AO is unsustainable in law." view that when the ld. PCIT has not disputed the source of other cash deposited from the same set of books of accounts and record maintained by the assessee was not justified in invoking the provision of section 263 to the present matter of the assessee for the balance amount of Rs. 16.80 lac. Being so, we quash the order passed by Ld. PCIT passed u/s 263 for the year under consideration.

In the result, appeal of the assessee is allowed.