Case Law Details
Eveready Industries India Ltd. Vs PCIT (ITAT Kolkata)
Conclusion: While passing the assessment order AO had followed the permissible view in law which could not be said to be ‘unsustainable in law’. Therefore, the jurisdictional facts for usurping the jurisdiction u/s 263, being absent, the action of CIT to exercise revisional jurisdiction was without jurisdiction and all subsequent actions were ‘null’ in the eyes of law.
Held: In the instant case, it was found that in the show-cause notice SCN, CIT set out seven specific reasons for which he had considered AO’s order to be erroneous in so far as prejudicial to the interests of the Revenue. In response, assessee had submitted before CIT detailed explanations supported by tangible documentary evidence to prove that the SCN had proceeded on assumption of some incorrect facts and wrong interpretation of applicable legal provisions. Assessee also explained with cogent material that before completion of assessment, AO had indeed made enquiries with reference to specific issues raised in the SCN and the order u/s 143(3) was passed only after considering the outcome of the enquiry. On receipt of the objections from the assessee, CIT ought to have examined the assessment records and conducted his own enquiry and thereafter should have recorded his own finding proving that the explanations furnished by assessee suffered from any factual or legal infirmity and because of which he found that the view adopted by AO was unsustainable in law making his order as erroneous within the meaning of Section 263. Thus, once the CIT initiated the proceedings u/s 263 for specific reasons and these reasons were met by the assessee, then it was incumbent upon the ld. CIT to himself independently deal with the objections and record his own satisfaction to prove that the AO’s order is in fact erroneous and prejudicial to the interests of the Revenue for the reasons out in the SCN. CIT in such a situation could not merely set aside the assessment order directing AO to pass the order of assessment afresh, effectively giving the AO a second innings without establishing that the initial order was erroneous as well as prejudicial to the interests of the Revenue. It was also noticed that the assessment order was not the result of non-enquiry or non-application of mind or assumption of wrong facts.While passing the assessment order AO had followed the permissible view in law which could not be said to be ‘unsustainable in law’. Therefore, the jurisdictional facts for usurping the jurisdiction u/s 263 of the Act, being absent, the action CIT was without jurisdiction and all subsequent actions were ‘null’ in the eyes of law.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal preferred by the assessee is against the revision order of the Ld. Pr. CIT-4, Kolkata dated 26.02.2019 for AY 2014-15.
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