Income Tax Appellate Tribunal - Kolkata
Sinhotia Metals & Minerals Private ... vs Pcit, Durgapur, Durgapur on 16 January, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL "C", BENCH KOLKATA BEFORE SHRI A.T.VARKEY, JM &DR. A.L.SAINI, AM आयकरअपीलसं./ITA No.889/Kol/2017 ( नधा रणवष / Assessment Year: 2012-13 ) Sinhotia Metals & Minerals Pvt. Vs. PCIT, Durgapur Ltd.
Aayakar Bhawan Annexe, City Centre, C/o, CA Amit Kumar, 4/18 Suhatta, Durgapur-713216 City Centre, Durgapur-713216.
थायीले खासं . /जीआइआरसं . /PAN/GIR No.: AAICS 1443 C (Assessee) .. (Revenue) Assessee by :Shri S.M. Surana, Advocate Respondent by : Shri P.K. Srihari, CIT DR सन ु वाईक तार ख/ Date of Hearing : 19/12/2018 घोषणाक तार ख/Date of Pronouncement : 16 /01/2019 आदे श / O R D E R Per Dr. A. L. Saini:
1. The captioned appeal filed by the Assessee pertaining to assessment year 2012-
13, is directed against an order passed by the learned Principal Commissioner of Income Tax -Durgapur (in short the ld. PCIT], passed u/s 263 of the Act dated 20.02.2017.
2. At the outset itself, the ld. Counsel for the assessee drew our attention to the letter dated 18.08.2016, which is reproduced as under:
Sinhotia Metals & Minerals Pvt. Ltd.ITA No.889/Kol/2017
Assessment Year:2012-13 No. JT.CIT/R-2/Dgp./Revision/ 2016-17/571 Dated 18.08.2016 To
1. The ACIT, Circle-2, Durgapur
2. The ITO, Ward-2(1), Durgapur
3. The ITO, Ward-2(2), Durgapur Aayakar Bhawan, City Centre, Durgapur-713216 Sub: Revisionary action u/s 263 of the I.T. Act, 1961- matter regarding The Hon'ble PCIT, Durgapur has directed the undersigned to resubmit the proposal ensuring the conditions laid down in explanation 2 of provision of section 263 of the Income Tax Act, 1961.
Accordingly, you are directed to resubmit proposal in the case(s) of your jurisdiction in light of explanation 2 of section 263 within 5 days.
Enclo: As stated above. Ajay Kr. Keshari
JCIT/R-2, Durgapur
A bare perusal of the above said letter, indicates the PCIT, Durgapur, had directed JCIT to resubmit the proposal ensuring the conditions laid down in explanation 2 of provision of section 263 of the Act. The Explanation 2 of section 263 of the Act is given below for ready reference.
"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,--
Pa g e | 2 Sinhotia Metals & Minerals Pvt. Ltd.ITA No.889/Kol/2017
Assessment Year:2012-13
(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
(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.".
The ld. Counsel assailing the decision of ld. PCIT contended that the revisional jurisdiction can be exercised only when the ld. PCIT himself considers after calling and examining the assessment records himself and considers that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue and that power vested to him cannot be delegated to JCIT/A.O. In order to buttress this contention the ld. Counsel referred the decision of this Co-ordinate Bench in the case of M/s Rupayan Udyog in I.T.A. No. 1073/Kol/2012, for assessment year 2005-06 order dated 28.10.2018 wherein it was held as follows :
"A perusal of sec. 263 of the Act reads as under:
"Revision of orders prejudicial to revenue. 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......."
So from a bare reading of sec. 263 of the Act reveals that the Commissioner may call for and examine the record of any proceeding under the Act and if he considers that any order passed therein by the AO is erroneous in so far as prejudicial to the interest of the revenue, he may after giving opportunity of being heard to the assessee pass orders as prescribed under the Act. So, the power vested in the CIT is that of revisional jurisdiction to interfere with the order of AO, if it is erroneous in so far as prejudicial to the revenue and, therefore, the power to exercise the revisional jurisdiction is vested only with the Pr. Commissioner/Commissioner if he considers the order of the AO to be erroneous in so far as prejudicial to the interest of the revenue. Therefore, this power is vested with the Pr. CIT/CIT to exercise revisional jurisdiction is only when he considers that the order passed by the AO is erroneous in so far as prejudicial to the interest of the revenue and that power cannot be usurped by the AO to trigger the revisional jurisdiction vested with the CIT as per the scheme of the Act which gives various power to various authorities to exercise and they have to exercise powers in their respective given sphere which is clearly ear-marked and spelled Pa g e | 3 Sinhotia Metals & Minerals Pvt. Ltd.
ITA No.889/Kol/2017Assessment Year:2012-13 out by the statute. Here, we note that the AO who is empowered by the Act to assess a subject within a prescribed time period has first assessed the assessee and later after passage of time has taken up a proposal with the CIT to exercise his revisional jurisdiction cannot be countenanced for the simple reason that when in the first place the AO noticing that he failed to properly enquire before assessing the assessee within the time limit prescribed by the statute cannot be allowed to get fresh innings to reassess because it was his duty to enquire properly within the time limit prescribed by the statute. Therefore, the very invocation of revisional jurisdiction on the proposal of the AO itself is bad in law and for coming to such a decision we rely on the decision of the Tribunal in the case of Shantai Exim Ltd. Vs. CIT (2017) 88 taxmann.com 361 (Ahd. Trib.) and the decision of ITAT, Mumbai Bench in the case of Ashok Kumar Shivpuri Vs. CIT for AY 2008-09 dated 07.11.2014. Therefore, we find merit in the contention of the Ld. AR and we quash the very usurpation of jurisdiction u/s. 263 of the Act by the CIT. Therefore, the appeal filed by the assessee is allowed."
Since the department could not controvert the contents of the letter of the JCIT(supra) dated 18.08.2016 which clearly brings out that ld. PCIT has called for proposal from JCIT/Assessing Officer to exercise the jurisdiction u/s 263. It means the ld. PCIT has not exercised the jurisdiction u/s 263 himself but he exercised the jurisdiction at the instance of the A.O. / JCIT which is against the provision of law. The power of revisional jurisdiction is vested only with the ld. PCIT. Therefore we note that the exercise of the jurisdiction u/s 263 of the Act itself is not in accordance with law hence we cancel the order passed by ld. PCIT u/s 263 of the Act.
3. In the result, the appeal of the assessee is allowed.
Order is pronounced in the open court on 16.01.2019.
Sd/- Sd/-
(A.T.VARKEY) (A.L.SAINI)
या यकसद य / JUDICIAL MEMBER लेखासद य / ACCOUNTANT MEMBER
कोलकाता /Kolkata;
दनांक/ Date: 16/01/2019
(SB, Sr.PS)
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Sinhotia Metals & Minerals Pvt. Ltd.
ITA No.889/Kol/2017
Assessment Year:2012-13
आदे शक त ल पअ े षत/Copy of the Order forwarded to :
1. अपीलाथ /The Appellant - Sinhotia Metals & Minerals Pvt. Ltd.
2. !यथ / The Respondent - PCIT, Durgapur
3. आयकरआय"
ु त(अपील) / The CIT(A),
4. आयकरआय"
ु त/ CIT
5. #वभागीय &त&न'ध, आयकरअपील यअ'धकरण, कोलकाता/ DR, ITAT, Kolkata
6. गाड*फाईल / Guard file.
स!या#पत &त True Copy By Order Assistant Registrar, I.T.A.T, Kolkata Benches, Kolkata.
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