Case Law Details
In the case of Former Chief Minister of Maharashtra Narayan Rane ITAT Mumbbai held that before holding an order to be erroneous, Ld Pr. CIT should have conducted necessary enquiries or verification in order to show that the finding given by the assessing officer is erroneous, the Ld Pr. CIT should have shown that the view taken by the AO is unsustainable in law.
It further held that there is doubt whether Explanation 2(a) to sec. 263, inserted by Finance Act 2015 w.e.f. 01.04.2015 has retrospective effect.
In the instant case, the assessing officer has reopened the assessment only to assess the income, if any, that has escaped the assessment for the years under consideration. The assessments have been reopened only on the basis of the impugned incriminating document found at the premises of M/s RNS infrastructure. We also notice that the search team has recorded a statement from VP – Finance of M/s RNS Infrastructure Ltd u/s 132(4) of the Act on 12.2012 and he was confronted with the impugned incriminating document. In the reply given by the VP – Finance, he has stated that the entries were made by him on the basis of information given to him over phone from its Kudal Maharashtra branch. With regard to the entry made as “Rane-CM” also, he simply stated that the information was received from the branch. Thus, we notice that in none of the answers given, the VP- finance has implicated the assessee. In spite of these facts, the investigation wing has passed on these documents and information to the assessing officer and accordingly he has also reopened the assessments of the two years under consideration.
The assessing officer has also furnished to the assessee the reasons for reopening of the assessments and the assessee has also objected to the The assessing officer has specifically addressed those objections and has also rejected the same. In the notice issued u/s 142(1) of the Act, the assessing officer has asked the assessee to clarify about the impugned incriminating document and also to give explanations as to why the amounts mentioned therein should not be added back to the total income of the assessee. In response thereto, the assessee has filed a reply, wherein he has denied any connection with the incriminating document. The assessing officer was satisfied with the said explanations and accordingly did not make any addition to the total income in both the years.
However, the Ld Pr. CIT has taken the view that the assessing officer has 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.
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