Income Tax Appeal v. Vam Resorts & Hotels Pvt. Ltd

AFRRESERVED INCOME TAX APPEAL No. 107 of 2015Commissioner of Income Tax, MeerutVs. Vam Resorts & Hotels Pvt. Ltd. ***** Hon’ble Bharati Sapru,J.Hon’ble Rohit Ranjan Agarwal, J. (By Rohit Ranjan Agarwal,J.) 1.This appeal under Section 260-A of the Income Tax Act,1961 (hereinafter referred to as the Act) has been filed assailingthe judgment and order dated 14.11.2014 passed by the IncomeTax Appellate Tribunal, Delhi Bench “H”, New Delhi. This appealwas admitted on 16.2.2017 on the following questions of law: (1)Whether the ITAT passed a perverse order in setting aside theorder U/s 263 on grounds that A.O. had already conducted inquiry onissues on which order U/s 263 was passed when no such embargohas been put in the language of the Section, the intention of thelegislature was never such so as to render the revenue remedilessagainst erroneous orders of the A.O. nor make the revenue suffer acontinuous wrong. (2)Whether the ITAT erred in law in interpreting the provisions ofSection 263 which says “Commissioner may call for and examine therecords of the proceedings if he considers any order passed therein,by the A.O. is erroneous in so far as prejudicial to the interest ofrevenue” hence the view of the ITAT in the present case that A.O. hadalready conducted inquiry is unsustainable. (3)Whether the ITAT erred in law in curbing the power of the CITgranted by the legislature to examine and correct the orders of theA.O. especially when this is the only remedy available with thedepartment to correct the wrong of the A.O. (4) Whether the ITAT erred in law in deleting the order U/s 263 onthe issue of development expenses when it was clear that only a smallportion of such development expenses was actually related to landdevelopment receipts. (5)Whether the ITAT erred in law in deleting the order U/s 263 onthe issue of agricultural income when it was clear that assessee hadonly purchased a land on which crops were shown and sale proceedsof such crops does not constitute agriculture income. (6)Whether the ITAT erred in law in allowing the appeal of theassessee ignoring the fact that there was a difference between theGross Receipts as per 26AS and Gross Receipts declared by theassessee when the assessee did not furnish any reconciliationstatement to explain the difference. 2.The case relates to the assessment year 2008-09. Theassessee which is a Company, filed return of income on 27.9.2008declaring income at Rs.14,71,900/-. The said return wasprocessed under Section 143(1) of the Act. The case of theCompany was selected for scrutiny and notices under Section143(2) and 142(1) were issued. The assessee produced thebooks of account and replied the various queries raised by theAssessing Officer. As the assessee had shown developmentexpenses of Rs.7,16,62,142/- in the profit and loss account, theA.O. found Rs.1,20,000/- as excessive and disallowed the same,and added to the income of the assessee. The Order underSection 143(3) of the Act was passed by the assessing officer on18.11.2010. 3.The assessee challenged the assessment order passedunder Section143(3) of the Act by filing Appeal No.192/10–11before the CIT(A) under Section 250 of the Act. On 5.6.2013, theCIT(A) allowed the appeal of the assessee on the ground thataddition made by A.O. was without any basis, as the word“appear” to be excessive was stated in the order of the A.O. andsuch addition made in a cavalier and casual manner cannot besustained. 4.During the pendency of the appeal the Commissioner of Income Tax, Meerut exercising power under Section 263 of theAct, issued notice to the assessee. The notice was replied by theassessee, and on 25.3.2013 Commissioner of Income Taxdirected the A.O. to look into applicability of Section 40-A(3) andSection 40(a)(ia) of the Act. 3.The assessee challenged the assessment order passedunder Section143(3) of the Act by filing Appeal No.192/10–11before the CIT(A) under Section 250 of the Act. On 5.6.2013, theCIT(A) allowed the appeal of the assessee on the ground thataddition made by A.O. was without any basis, as the word“appear” to be excessive was stated in the order of the A.O. andsuch addition made in a cavalier and casual manner cannot besustained. 4.During the pendency of the appeal the Commissioner of Income Tax, Meerut exercising power under Section 263 of theAct, issued notice to the assessee. The notice was replied by theassessee, and on 25.3.2013 Commissioner of Income Taxdirected the A.O. to look into applicability of Section 40-A(3) andSection 40(a)(ia) of the Act. 5.After the remand A.O. again issued notice under Section142(3)/263 of the Act to the assessee. It appears that theassessee did not appear before the assessing authority and theassessing officer passed assessment order on 7.3.2014 underSection 263/143(3) of the Act on total income ofRs.17,47,323,650/-. 6.While the remand proceedings were pending before theassessing authority the assessee approached the Income TaxAppellate Tribunal, (Delhi Bench “H”), New Delhi (hereinaftercalled as “ITAT”) challenging the order under Section 263 of theAct passed by the Commissioner of Income Tax, Meerut. The ITATallowed the appeal of the assessee setting aside the order passedby the CIT, Meerut under Section 263 of the Act. 7.Sri Subham Agarwal defending the order passed by theCommissioner of Income Tax, Meerut under Section 263 of the Actsubmitted that the assessing officer has disallowed the expensesof Rs.1,20,000/- only, without any inquiry and has accepted therestb of the amount as land development expenses in the profitand loss account, as such, the CIT had rightly remanded thematter to the assessing authority exercising revisional power asthe order of A.O. was erroneous and pre-judicial to the interest ofrevenue. He further submitted that after the remand order, A.O. again has passed assessment order on 7.3.2014 and now theaddition of Rs.7,16,62,142/- on account of land developmentexpenses had been made as the assessee did not avail theopportunity despite repeated reminders and failed to produce thebooks of account and comply the order of the assessing authority.He contended that Tribunal has passed the order impugned afterassessment order has been passed by the assessing authorityafter remand, and Tribunal should not have set aside the same,but should have relegated the matter to assessing authoritydirecting the assessee to appear before the same and producebooks of account to verify the queries so raised. 8.Per contra, counsel for the assessee submitted that theassessment order dated 18.11.2010 was passed after noticeunder Sections 143(2) and 142(1) of the Act was issued toassessee raising various queries and the assessee had appearedbefore the Assessing Officer number of times and furnished booksof account and replied. Further, the CIT in its show cause noticedated 6.2.2013 has accepted the fact that on examination ofrecord, assessment order was passed after inquiry whichaccording to him was not proper. Thus, proceedings under Section263 of the Act cannot be invoked by the CIT when there is nomaterial to hold that order was erroneous and pre-judicial to theinterest of revenue and it would not be invoked to correct eachand every type of mistake and error committed by A.O. He furtherrelied upon paragraph nos.7 and 9 of judgment of the Apex Courtin the case of Malabar Industrial Co. Ltd. vs. Commissioner ofIncome Tax, 243 ITR 83 (SC), which are extracted hereunder: “7. There can be no doubt that the provision cannot be invoked 5 “7. There can be no doubt that the provision cannot be invoked 5 to correct each and every type of mistake or error committed bythe Assessing Officer; it is only when an order is erroneous thatthe section will be attracted. An incorrect assumption of factsor an incorrect application of law will satisfy therequirement of the order being erroneous. In the samecategory fall orders passed without applying the principles ofnatural justice or without application of mind. 9. The phrase 'prejudicial to the interests of the revenue' has tobe read in conjunction with an erroneous order passed by theAssessing Officer. Every loss of revenue as a consequenceof an order of Assessing Officer cannot be treated asprejudicial to the interests of the revenue, for example,when an ITO adopted one of the courses permissible in lawand it has resulted in loss of revenue; or where two viewsare possible and the ITO has taken one view with which theCommissioner does not agree, it cannot be treated as anerroneous order prejudicial to the interests of the revenueunless the view taken by the ITO is unsustainable in law.” 9.The second limb of argument of counsel for the assessee isthat appeal before the CIT(A) was pending, as such, the CIT hasno jurisdiction to revise the order, in view of Clause (c) ofExplanation-1 to Section 263 of the Act, which provides that whenappeal is pending before the Commissioner, the exercise ofjurisdiction under Section 263 of the Act is barred. He relied uponthe judgment in the case of Smt. Renuka Philip vs. ITO(2018)409 ITR 567 (Mad), the relevant paragraphs of which areextracted hereunder: “21. With regard to the merits of the case, the learned counselfor the assessee referred to a decision of the Division Benchof this Court in Dr.P.K.Vasanthi Rangarajan v. CIT [2012] 23taxmann.com 299/209 Taxman 628 (Mad.), wherein, theHon'ble Division Bench held that there is no inhibition in theassessee claiming the benefit of investment made in four flatsthereby gaining the benefit under Section 54F of the Act. TheCourt took note of the decision in TCA No. 656 of 2005 dated04.01.2012. However, we are not examining the merits of thematter at this juncture since, we are only called upon toanswer the Substantial Question of Law with regard to the assumption of jurisdiction of the Commissioner under Section263 of the Act. The power under Section 263 of the Act is notexercisable under certain circumstances. In this regard, werefer to Section 263(1) explanation 1(c), which reads asfollows: “Revision of orders prejudicial to revenue 263(1)... (a) to (b) (c)Where any order referred to in this sub-section andpassed by the Assessing Officer had been the subjectmatter of any appeal [filed on or before or after the 1stday of June, 1988], the powers of the Commissionerunder this Sub-section shall extend and shall be deemedalways to have extended to such matters as had notbeen considered and decided in such appeal.” 22. The above explanation makes it clear that when theappeal is pending before the Commissioner, the exercise ofjurisdiction under Section 263 of the Act is barred. TheCommissioner in the order dated 14.03.2012 states that theappeal pertains to the claim made by the assessee underSection 54 of the Act and it has got nothing to do with theorder passed by the Assessing Officer under Section 54F ofthe Act. The said finding rendered by the Commissioner iswholly unsustainable, since the assessee went on appealagainst the re-assessment order dated 31.12.2009 statingthat his claim for deduction under Section 54 of the Actshould be accepted.” 10.It has also been contended that remand by the CIT as far asthe non-deduction of TDS is concerned, was wrong, as paymentwas made by the Company, i.e., ERA Land-mark Ltd., and as perSection 194(c) of the Act the TDS was deducted. 10.It has also been contended that remand by the CIT as far asthe non-deduction of TDS is concerned, was wrong, as paymentwas made by the Company, i.e., ERA Land-mark Ltd., and as perSection 194(c) of the Act the TDS was deducted. 11.It was further submitted that all the documents in evidenceas proofs and the queries so raised by the assessing officer wassubmitted and replied by the assessee and the CIT wronglyinvoked the jurisdiction under Section 263. Reliance has beenplaced upon the decision of this Court in the case of CIT vs. Krishna Capbox Ltd, (2015) 372 ITR 310, relevant paragraphs ofwhich are extracted hereunder: 9. The Tribunal further considered the question whetherdiscussion of queries and reply received from assessee, inassessment order, is necessary or not. Relying on twojudgments of Delhi High Court in CIT Vs. Vikash Polymers[2012] 341 ITR 537/ [2010] 194 Taxman 57 and CIT v.Vodafone Essar South Ltd. [2012] 28 taxmann.com 273/[2013] 212 Taxman 184 (Delhi), it held that once inquiry wasmade, a mere non discussion or non- mention thereof inassessment order cannot lead to assumption that AssessingOfficer did not apply his mind or that he has not made inquiry onthe subject and this would not justify interference byCommissioner by issuing notice under Section 263 of the Act. 10. In Vikash Polymers (supra) relevant part of theobservations in this regard read as under (page 548 of 341 ITR): "This is for the reason that if a query was raised during thecourse of scrutiny by the Assessing Officer, which wasanswered to the satisfaction of the Assessing Officer, butneither the query nor the answer was reflected in theassessment order, that would not, by itself, lead to theconclusion that the order of the Assessing Officer called forinterference and revision." 11. Further, the relevant observation made in Vodafone EssarSouth Ltd. (supra) in this regard reads as under (page 531 of 1ITR-OL): "The lack of any discussion on this cannot lead to theassumption that the Assessing Officer did not apply hismind." 12. Learned counsel for the Department could not place anyother authority before this Court wherein any otherwise view hasbeen taken. On the contrary, learned counsel for assessee hasplaced before us a decision of Bombay High Court in IncomeTax Appeal No.296 of 2013 (CIT v. Fine Jewellery (India) Ltd.)[2015] 372 ITR 303/230 Taxman 641/55 taxmann.xom 514(Bom.) decided on February 3, 2015, wherein also BombayHigh Court, following its earlier decision in Idea Cellular Ltd.Vs. Dy. CIT [2008] 301 ITR 407 (Bom.) has taken a similar viewand said as under (page 307 of 372 ITR): "…...if a query is raised during assessment proceedingsand responded to by the assessee, the mere fact that it isnot dealt with in the Assessment Order would not lead to a conclusion that no mind had been applied to it." 12.Similarly in the case of CIT vs. Mahendra Kumar Bansal,2008(297)ITR 99 (Alld), this Court held that merely because theincome tax officer had not written lengthy order, it would notestablish that the assessment order passed under Section 143(3)/148 of the Act is erroneous and pre-judicial to the interest of therevenue. Relevant paragraph of which is extracted hereunder:- “In the case of Goyal Private Family Specific Trust [1988]171 ITR 698, this court has held that the order of the Income-tax Officer may be brief and cryptic, but that by itself is notsufficient reason to brand the assessment order as erroneousand prejudicial to the interests of the Revenue and it was forthe Commissioner to point out as to what error was committedby the Income-tax Officer in having reached to its conclusionand in the absence of which proceedings under Section 263 ofthe Act is not warranted. “In the case of Goyal Private Family Specific Trust [1988]171 ITR 698, this court has held that the order of the Income-tax Officer may be brief and cryptic, but that by itself is notsufficient reason to brand the assessment order as erroneousand prejudicial to the interests of the Revenue and it was forthe Commissioner to point out as to what error was committedby the Income-tax Officer in having reached to its conclusionand in the absence of which proceedings under Section 263 ofthe Act is not warranted. In the case of Belal Nisa [1988] 171 ITR 643 the Patna HighCourt has held that where the Income-tax Officer had notcarried out the necessary enquiry enjoined by section 143(1) ofthe Act the Commissioner is within his power in taking action interms of Section 263(1) of the Act. Similar view has been takenin by the Patna High Court in the case of Smt. KaushalyaDevi [1988] 171 ITR 686. The principle laid down by the Patna High Court in theaforesaid two cases are not applicable to the facts of thepresent case in view of the provisions of Section 143(1) of theAct and as the Central Board of Direct Taxes had alreadyissued the circular referred to above that action under Section263 of the Act is not warranted and this circular appears tohave not been brought to the notice of the Patna High Courtwhich is binding upon the departmental authorities. As held by this Court in the case of Goyal Private FamilySpecific Trust [1988] 171 ITR 698, we are of the consideredopinion that merely because the Income- tax Officer had notwritten lengthy order it would not establish that the assessmentorder passed under Section 143(3)/148 of the Act is erroneousand prejudicial to the interests of the Revenue without bringingon record specific instances, which in the present case, theCommissioner of Income Tax has failed to do.” 13.Lastly, the counsel for the assessee submitted that theargument of counsel for the Department relying upon freshassessment order made by the assessing officer under Section263/143(3) of the Act dated 7.3.2004 for the purpose of Section263 of the Act is not sustainable, as according to him definition ofexpression “record” as per Clause (b) of Explanation to Section263 of the Act includes all the records relating to Section 263proceedings available at the time of examination by the CIT only,and not in subsequent order or fresh order passed thereafterunder Section 263/143(3) of the Act, which could justify theproceedings under Section 263 carried out by the CIT. 14.We heard Sri Shubham Agarwal, learned counsel for theDepartment, Sri Suyash Agarwal, learned counsel for therespondent-assessee and have perused the record. 15.The revenue in this appeal has tried to establish that ITATwas not correct in setting aside the order passed by theCommissioner under Section 263 of the Act, on the ground, thatassessee had not furnished entire details regarding the contracts,which was cancelled and also the A.O. not looking into theprovisions of Section 40(a)(i-a) of the Act whereby such expenseson which the T.D.S. was liable to be deducted, but was notactually deducted were required to be disallowed and added backunder the said provisions of the Act. 16.On the other hand, the contention of assessee that the A.O.after considering the entire books of account and the replyfurnished by the assessee passed the assessment order underSection 143(3) of the Act. Further, from perusal of the assessment order dated 18.11.2010, it is clear that the A.O. had considered allthe books of account and further on 13.5.2010 it had required theassessee, the entire information for the relevant assessmentyears along with copy of bank statement, narration of debit andcredit entries, and other details. 16.On the other hand, the contention of assessee that the A.O.after considering the entire books of account and the replyfurnished by the assessee passed the assessment order underSection 143(3) of the Act. Further, from perusal of the assessment order dated 18.11.2010, it is clear that the A.O. had considered allthe books of account and further on 13.5.2010 it had required theassessee, the entire information for the relevant assessmentyears along with copy of bank statement, narration of debit andcredit entries, and other details. 17.On 7.7.2010, the assessee had replied the said notice andmade available all the documents as required by the A.O. TheTribunal being the last fact finding Court, in paragraph 7 of itsjudgment, had noted that details of the documents producedbefore the A.O. included computation of income along with returnand details of TDS, copy of balance sheet, trading and profit andloss account, details of sundry debtors as well as copies of theorders issued by the debtors to the assessee. 18.Thus, the case in hand is not a case where the CIT foundthat the assessment order was erroneous and it is prejudicial tothe interest of the revenue, as the A.O. after the case of theassessee was selected in scrutiny had required the assessee tofurnish all the documents and only after the production of the saiddocuments and his satisfaction the assessment order was passedunder Section 143(3) of the Act. The Apex Court in the case ofMalabar Industrial Co. Ltd. (supra) while considering the pre-requisite for exercising power by the Commissioner under Section263 of the Act, held as under: “A bare reading of Section 263 of the Income Tax Act, 1961 makes itclear that the prerequisite for the exercise of jurisdiction by theCommissioner suo moto under it, is that the order of the Income-taxOfficer is erroneous insofar as it is prejudicial to the interests of therevenue. The Commissioner has to be satisfied of twin conditions,namely, (i). the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the revenue. Ifone of them is absent - if the order of the Income-tax Officer iserroneous but is not prejudicial to the revenue or if it is not erroneousbut is prejudicial to the Revenue - recourse cannot be had to Section263(1) of the Act. The provision cannot be invoked to correct eachand every type of mistake or error committed by the Assessing Officer;it is only when an order is erroneous that the section will be attracted.” 19.Similar view has been taken by the Bombay High Court inthe case of Commissioner of Income Tax vs. DevelopmentCredit Bank Ltd., 323 ITR 83(SC), relevant paragraph of thesame is extracted below: “Held, dismissing the appeal, that there was no basis or justificationfor the Commissioner to invoke the provisions of Section 263. TheAssessing Officer after making an enquiry and eliciting a responsefrom the assessee came to the conclusion that the assessee wasentitled to depreciation on the value of securities held on the tradingaccount. The Commissioner could not have treated this findings to beerroneous or to be prejudicial to the interests of the Revenue. Theobservation of the Commissioner that the Assessing Officer hadarrived at a finding without conducting an enquiry was erroneous,since an enquiry was specifically held with reference to which adisclosure of details was called for by the Assessing Officer andfurnished by the Assessing Officer and furnished by the assessee.The Tribunal was justified in holding that recourse to the powersunder Section 263 was not warranted in the facts and circumstancesof the case.” 20.In the case of CIT vs. Arvind Jewellers, 259 ITR 502(Gujrat), it was held that once the A.O. after issuing notice hadconsidered all the material on record, there was no basis forinvocation of jurisdiction under Section 263 of the Act. Relevantparagraph of the said judgment is extracted hereunder: 20.In the case of CIT vs. Arvind Jewellers, 259 ITR 502(Gujrat), it was held that once the A.O. after issuing notice hadconsidered all the material on record, there was no basis forinvocation of jurisdiction under Section 263 of the Act. Relevantparagraph of the said judgment is extracted hereunder: ‘Held, that the finding of fact by the Tribunal was that the assesseehad produced relevant material and offered explanation in pursuanceof the notices issued under Section 142(1) as well as section143(2)of the Act and after considering the material and explanations, theIncome-tax Officer had come to a definite conclusion. Since thematerial was there on record and the said material was considered by the Income-tax Officer and a particular view was taken, the mere factthat different view can be taken should not be the basis for an actionunder Section 263. The order of revision was not justified.” 21.The Bombay High Court in the case of CIT vs. Gabriel IndiaLtd., 203 ITR 108 (Bombay), held that the order of the A.O.would not become erroneous simply because he did not makeelaborate discussion. The relevant paragraph of the said judgmentis extracted hereunder: “Held, that the Income-tax Officer in this case had made enquiries inregard to the nature of the expenditure incurred by the assessee. Theassessee had given detailed explanation in that regard by a letter inwriting. All these were part of the record of the case. Evidently, theclaim was allowed by the Income-tax Officer on being satisfied withthe explanation of the assessee. This decision of the Income-taxOfficer could not be held to be "erroneous" simply because in hisorder he did not make an elaborate discussion in that regard.Moreover, in the instant case, the Commissioner himself, even afterinitiating proceedings for revision and hearing the assessee, couldnot say that the allowance of the claim of the assessee waserroneous and that the expenditure was not revenue expenditure butan expenditure of capital nature. He simply asked the Income-taxOfficer to re-examine the matter. That was not permissible. TheTribunal was justified in setting aside the order passed by theCommissioner of Income-tax under Section 263.” 22.The Division Bench of this Court in the case ofJ.P.Srivastava & Sons vs. CIT, 111 ITR 326 (Alld) had taken asimilar view. The relevant paragraph is extracted hereunder: “We are of opinion that the approach of the Commissioner iserroneous. The failure of the Income-tax Officer to deal with theclaim of the assessee in the assessment order may be an error, butan erroneous order by itself is not enough to give jurisdiction to theCommissioner to revise it under Section 33B. It must further beshown that the order was prejudicial to the interests of the revenue.It is not each and every order passed by the Income-tax Officerwhich can be revised under Section 33B. Section 33B contemplates a notice to the assessee. In response tothe notice the assessee may show to the Commissioner that theorder sought to be revised is not prejudicial to the interests of therevenue. In that event, the Commissioner would have no jurisdictionto take any further action. He would be competent to take action onlyif he rejects the plea of the assessee. It thus becomes necessary forthe Commissioner to examine the merits of the objection raised bythe assessee. He cannot delegate that power to the Income-taxOfficer by setting aside the assessment order and directing him tomake a fresh assessment after taking into consideration theobjection of the assessee.” Section 33B contemplates a notice to the assessee. In response tothe notice the assessee may show to the Commissioner that theorder sought to be revised is not prejudicial to the interests of therevenue. In that event, the Commissioner would have no jurisdictionto take any further action. He would be competent to take action onlyif he rejects the plea of the assessee. It thus becomes necessary forthe Commissioner to examine the merits of the objection raised bythe assessee. He cannot delegate that power to the Income-taxOfficer by setting aside the assessment order and directing him tomake a fresh assessment after taking into consideration theobjection of the assessee.” 23.In the present case, the Tribunal rightly arrived at the findingthat all the material in regard to land development expenses wasbefore the Assessing Officer who had required the assessee toproduce all the documents in relation to the same and afterinquiring about the details of contract and the contract executedby assessee, the bill submitted and payment schedule made, theAssessing Officer accepted the books of account and onlydisallowed Rs.1,20,000/- and added to the income of theassessee, which was also set aside by order of the CIT(A) whileexercising the power under Section 263 of the Act CIT did nothave any material for invoking the said provision and it merely didthe same on suspicion and presumption. The Punjab and HaryanaHigh Court in the case of CIT vs. Ram Narain Goel, 224 ITR 180(P & H) held that suspicion however drawn cannot take place onevidence or proof. This case was followed in the case of CIT vs.Faqir Chaman Lal, 262 ITR 295 (P & H). 24.The argument raised by counsel for the revenue that theTribunal should have send back the matter to the assessingauthority to decide afresh is a fallacy, as the CIT itself on 5.6.2013,while deciding the appeal of the assessee under Section 250 ofthe Act set aside the assessment order dated 18.11.2010 to the extent of addition of Rs.1,20,000/- made in the assessmentproceedings. Further, the appeal before the Tribunal emanatedfrom the order of the Commissioner of Income Tax exercisingpower under Section 263 of the Act, as such the Tribunal wascorrect in limiting its scope to decide whether the exercise ofpower made by the Commissioner was in consonance withprovision of Section 263 and relied upon the decision of MalabarIndustrial Co. Ltd. (supra). 25.As, Clause (c) of Explanation 1 to Section 263 of the Actprovides that when an appeal is pending before theCommissioner, the exercise of jurisdiction under Section 263 ofthe Act by CIT is barred. Thus, in the present case, the CITwrongly exercised jurisdiction under Section 263 of the Act byremanding back the matter to assessing authority on 25.3.2013,while the appeal was decided by CIT (A) on 5.6.2013. Thus, theorder passed by the ITAT does not suffer from any irregularity andneeds no interference. 26.As far as the word “record” appearing in Clause (b) ofExplanation-1 to Section 263 is concerned, it means the recordavailable at the time of examination by the Commissioner ofIncome Tax and not any material or record available subsequentto his examination or exercise of power under Section 263. Thus,any order passed by the AO in the assessment proceedings afterthe remand by the CIT cannot be looked upon and the argumentmade by the counsel for the revenue for relying upon the freshassessment order made on 7.3.2004 under Section 263/143(3) ofthe Act cannot be accepted in view of the above provision of law. 27.In the present case, the Tribunal had recorded specificfinding of fact that the assessing authority had examined each andevery aspect of the case on which the remand order hinges, assuch the remand order was not sustainable in the eyes of law. 27.In the present case, the Tribunal had recorded specificfinding of fact that the assessing authority had examined each andevery aspect of the case on which the remand order hinges, assuch the remand order was not sustainable in the eyes of law. 28.Considering the facts and circumstances of the case, we areof the considered opinion, that the revenue has failed to make anycase for interference in the order of the ITAT, as the CIT hadproceeded to remand the matter back to the assessing authoritywhile the appeal of the assessee was pending under Section 250and the power of exercise under Section 263 was barred byClause (c) to Explanation 1 of Section 263 of the Act. Further, theremand order by the CIT was based merely on suspicion andpresumption. 29. The appeal is devoid of merit and is hereby dismissed. Thequestion of law is, therefore, answered against the revenue and infavour of the assessee. Dated:- 20.8.2019AKJ