This appeal is filed by the assessee against the order dt. 28th Aug., 2012 of the CIT, Bikaner. The Registry has pointed out that the appeal is belated by 6 days, The assessee furnished an application dt; 19th Nov., 2012 for condonation of delay stating therein as under:
"The appellant petitioner, most respectfully submits that his appeal against the order under s. 263 dt. 28th Aug., 2012 passed by the CIT, Bikaner, for the asst. yr. 2009-10, may very kindly be admitted which is being filed late effectively by 6 days probably, as against the 60 days time-limit prescribed which expired on 13th Nov., 2012, as the probable date of service of the order under appeal is 14th Sept., 2012, which is yet to be verified from the record of CIT(A). The appellant was prevented by reasonable and sufficient cause in not filing the same in the prescribed time because of the under-mentioned reason.
The local counsel Shri T.C. Tayal, advocate, had forgotten the exact date as service and remained under a mistaken belief bona fidely of the service date as was 24th Nov., 2012, in instead of 14th Sept., 2012. His affidavit is also enclosed for the purpose in support of the above fact.
Kindly condone the delay in the fact situation and please entertain the appeal, for its admission, registration and hearing.
This petition, therefore, is being filed with a humble request to condone the delay and oblige."
2. In support of the above application the assessee has also furnished an affidavit dt. 17th Nov., 2012.
3. During the course of hearing, the learned counsel for the assessee reiterated the contents of the above application and prayed to condone the delay. In his rival submissions the learned Departmental Representative opposed the application moved by the assess\.e for condonation of delay.
4. After considering the submissions of both the parties and in view of the fact that the appeal is belated by few days only, therefore, the delay is condoned and the appeal is admitted.
5. The only effective ground raised in this appeal reads as under:
"1. That in the facts and circumstances of the case, the learned CIT, Bikaner erred in law and in facts in invoking s. 263 of the IT Act, 1961 and thereby erred in setting aside the assessment to be made de novo by ITO acquiring jurisdiction under s. 263, when the impugned assessment made under s. 143(3) was neither erroneous nor prejudicial to the interest of Revenue, in any manner."
6. The facts related to this case, in brief, are that the assessee filed return of income declaring total income of Rs. 120 and agricultural income of Rs. 2,75,000 on 17th Aug., 2010. The case was selected for scrutiny on the ground that the amount exceeding Rs. 10 lakhs was deposited in the assessee's bank account. The assessment was completed under s. 143(3) of the IT Act, 1961 (hereinafter referred to as the "Act") on 16th Sept., 2011 at the income declared by the assessee in the return of income. Thereafter, the learned CIT exercised hi,S powers under s. 263 of the Act and initiated proceedings on the following ground :
"The AO has completed the assessment in routine manner without making proper enquiry and investigation regarding the deposit of Rs. 15,92,500 made by the assessee in the bank account and failed to examine the source of deposit properly."
7. The submissions of the assessee before the CIT were as under :
"In the above matter it is requested that the assessee Shri Bikar Singh deposited cash ofRs. 15,59,000 to bank account on 8th April, 2008.
That above Smt. Pritam Kaur got this money from FDR made on 7th Sept., 2007. She withdrawn this money Rs. 15,59,000 (with interest) and wanted to purchase agriculture land. But on that day land could not be purchased, so she gave th,is money to her son-in-law Shri Bikar Singh slo Shri Jangirsingh to deposit the money in his own (Bikar Singh's) account so that he can make transactions of land purchasing.
That Smt. Pritam Kaur was residing at Chack 40f, The Sri Karanpur with her husband and doing agriculture. They had 20 Bighas .of agricultural land at chack 40F. 10 Bighas was in the name of Pritam Kaur and 10 Bighas were in the name of her daughter Smt. Gurdeep Kaur. Gurdeep Kaur is only daughter of Smt. Pritam Kaur. Smt. Pritam Kaur has no other child. On 6th May, 2001 husband of Pritam Kaur expired and after that she became alone and her daughter Gurdeep Kaur brought her with her to the Chack II-H (copy of certificate from Sarpanch enclosed).
Here Smt. Pritam Kaur was doing agriculture with the help of her son-inlaw and his family. She was earning about 2 to 2.5 lac rupees per year from agricultural land after all agricultural expenses. On 7th Sept., 2007 Smt. Pritam Kaur and Smt. Gurdeep Kaur sold their land for Rs. 6,00,000 (six lakhs) (three lakhs each). Smt. Gurdeep Kaur given this money Rs. 3,00,000 to her mother. Copy of sale deed of 20 Bighas enclosed herewith.
Smt. Pritam Kaur made FDR of Rs. 15,00,000 (fifteen lakhs) on 7th Sept., 2007 (copy of account is enclosed) with the total amount of land sold and Rs. 9,00,000 from her savings from agricultural income.
That family of Bikar Singh and Pritam Kaur are only agriculturists.
That assessee Bikar Singh and his family have 180 Bighas agricultural land at Chock 1O-11H, The Sri Karanpur."
7.1 The learned CIT, after considering the submissions of the assessee, observed that the reply filed was general in nature and not found to be satisfactory in as much as the genuineness and creditworthiness of the impugned depositor has not been proved. The learned crr pointed out that the AO during the assessment proceedings had neither examined the cash creditor nor obtained any confirmation from the person who gave Rs. 15,59,000 to the assessee and only providing copies of bank accounts was not enough to prove the genuineness of the transaction and creditworthiness of the assessee. He, therefore, considered the order passed by the AO as erroneous in as much as prejudicial to the interest of the Revenue and the same was set aside. The learned CIT directed the AO to make fresh enquiry after giving reasonable opportunity of being heard to the assessee.
8. Being aggrieved, the assessee is in appeal. The learned counsel for the assessee submitted that the AO made the detailed enquiries relating to the cash deposits of Rs. 15,92,500 and the case was selected for scrutiny on the said basis only. Thereafter, the AO on being satisfied, framed the assessment under s. 143(3) of the Act and had taken a possible view. It was contended that the AO had passed the assessment order after considering all the relevant material on record and after making proper enquiry by considering the bank statement of the assessee where the amount in question was deposited. Therefore, the assessment order passed by the AO was not erroneous and prejudicial to the interest of Revenue. The reliance was placed on the following case laws:
(i) Order of Tribunal. Jodhpur Bench in the case of Sunil Bhandari vs. Asstt. CIT in ITA No. 122/Jd/2011 [reported at (2013) 154 TTJ (Jd) 751 (2013) 87 DTR (Jd)(Trib) 169];
(ii) Ram Dayal Kalla vs. ITO (2004) 90 TTJ (Jd) 450;
(Hi) Metallizing Equipment vs. Jt. CIT (2005) 96 TTJ (Jd) 827;
(iv) Hycron India vs. Asstt. CIT (2004) 82 TTJ (Jd) 450;
(v) CIT vs. Max India Ltd. (2007) 213 CTR (SC) 266 : (2007) 295 ITR 282 (SC).
9. In his rival submissions the learned Departmental Representative supported the order of learned CIT.
10. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case it is noticed that the case of the assessee was selected for scrutiny only on the basis that there was cash deposit exceeding Rs. 10 lakhs in his bank account. In the present case, it is an admitted fact that the learned CIT exercised his revisionary powers under s. 263 of the Act. The said powers may be summarised as under:
"(i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interests of the Revenue. Both the conditions must be fulfilled.
(ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it is only when an order is erroneous, that the section will be attracted.
(iii) An incorrect assumption of facts or an incorrect application of law will suffice for the requirement or order being erroneovs.
(iv) If the order is passed without application of mind, such order will fall under the category of erroneous order.
(v) Every loss of revenue cannot be treated as prejudicial to the interest of the Revenue and if the AO has adopted one of the courses permissible under law 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, unless the view taken by the AO is unsustainable under the law.
(vi) If while making the assessment, the AO examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income, the CIT, while exercising his power under s. 263, is not permitted to substitute his estimate of income in place of the income estimated by the AO.
(vii) The AO exercises quasi-judicial power vested in him and if he exercises such power in accordance with law and arrives at a conclusion, such conclusion cannot be termed to be erroneous simply because the CIT does not feel satisfied with the conclusion.
(viii) The CIT, before exercising his jurisdiction under s. 263, must have material on record to arrive at a satisfaction.
(ix) If the AO has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation by a letter in writing and the AO allowed the claim 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 does not make an elaborate discussion in that regard."
10.1 In the present case the AO during the course of original assessment proceedings made the enquiries relating to cash deposit and even the case was selected for scrutiny on the basis of deposits in the bank account. The assessee furnished the bank statement and source of agricultural income from 184 Bighas agricultural land. The AO examined those documents and on being satisfied, framed the assessment under s. 143(3) of the Act vide order dt. 16th Sept., 2011. Therefore, a possible view was taken by the AO. So it cannot be said that the AO had not examined the issue on the basis of which the learned CIT has held that the assessment order dt. 16th Sept., 2011 passed by the AO was erroneous or prejudicial to the interest of the Revenue. In the present case, it is noticed from the copy of the order sheet of the AO during the assessment proceedings (placed at page No. 14 of the assessee's compilation) that on 7th Sept., 2011 the assessee furnished copy of bank account, evidence for land holding, agricultural income and interest income. Thereafter, on 12th Sept., 2011, the AO asked the assessee to explain the source of deposit amounting to Rs. 15,59,000 on 8th April, 2008 in SBBJ savings account. The AO again noted in the order sheet entry dt. 15th Sept., 2011 that the assessee tiled UIC source of ocposn in the bank account. He again asked the assessee to furnish the copy of bank account No. 85940 for further verification and ultimately the AO noted in the order sheet entry dt. 16th Sept., 2011 that the assessee produced the information and the case was discussed with him. From the abovesaid order sheet entries, copy of which is placed at page Nos. 14 and 15 of the assessee' compilation, it is clear that the AO made the proper enquiry relating to the deposit of Rs. 15,59,000 and only after being satisfied, the assessment was framed under s. 143(3) of the Act.
10.2 On a similar issue, the Hon'ble Supreme Court in the case of CIT vs. Max India Ltd. (supra) has held as under:
'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."
II. In the present case also, the AO had made necessary enquiry about the bank transactions and after being satisfied from the assessee's explanation that such transactions were genuine, he passed the order under s. 143(3) of the Act. Therefore, a mere disagreement or dissatisfaction of the learned CIT over the manner of assessment cannot be a basis for revision of the order under s. 263 of the Act. In that view of the matter, we set aside the impugned order passed by the learned CIT and the assessment order framed by the AO under s. 143(3) of the Act vide order dt. 16th Sept., 2011 is restored.
12. In the result, the appeal of the assessee is allowed.