Mr.

Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January,

2021
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH : D : NEW DELHI
BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER
AND
MS SUCHITRA KAMBLE, JUDICIAL MEMBER
ITA No.3285/Del/2015
Assessment Year: 2005-06

Mr. Abhisar Sharma, Vs DCIT,

B-602, Plot No.F-2, Circle-64(1),
The Crescent, B-Block, Room No.314,
Sector-50, Pratyakshkar Bhawan,
Noida. Civic Centre,
New Delhi.
PAN: AIGPS3840N

(Appellant) (Respondent)
Assessee by : Shri Gautam Jain, Advocate &
Shri Lalit Mohan, CA
Revenue by : Shri J.K. Mishra, CIT-DR.
Date of Hearing : 12.01.2021
Date of Pronouncement : 27.01.2021

ORDER
PER R.K. PANDA, AM:

This appeal filed by the assessee is directed against the order dated 30th March, 2015 passed u/s
263 of the IT Act by the PCIT-22, Delhi, relating to assessment year 2005-06.

2. Facts of the case, in brief, are that the assessee is an individual and filed his return of income on
22nd July, 2005 declaring income of Rs.9,00,355/-. The assessee in the return of income had
declared income from salary at Rs.9,81,964/-

and loss from house property at Rs.81,609/-. The return was processed u/s 143(1) of the Act on 4th
July, 2006 at the same income. Subsequently, the case of the assessee was reopened by issue of
notice u/s 148 of the Act dated 27th March, 2012 after obtaining prior approval of the Addl. CIT,
Range-7, New Delhi, vide his letter No.526 dated 27th March, 2012. The AO completed the
assessment u/s 147/143(3) on 28th March, 2013, determining the income of the assessee at
Rs.11,03,270/- as against the returned income of Rs.9,00,355/- wherein he made the following
additions:-

a) Addition made u/s 17(2) of the Act Rs.1,12,756

b) Income from other sources Rs.4,554/-

c) Unaccounted expenditure of ticket of daughter Rs.4,000/-

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

d) Disallowance of loss from house property Rs.81,609/-

Total Rs.2,02,919/-

3. Subsequently, on 24.07.2013 the CIT-16, Delhi, called for a report from the AO regarding errors
in assessment of the assessee and his wife Smt. Shumana Sen.

An order u/s 127 of the Act was passed by the ld.CIT-16 on 27.08.2013 transferring the jurisdiction
over the assessee's case from DCIT/ACIT, Circle 47(4), Delhi to DCIT/ACIT, Circle 40(1), Delhi. The
DCIT, Circle 40(1) sent a report on 10th February, 2014 which was forwarded by the Addl.CIT,
Range-64 to the CIT on 11th February, 2014, giving his comments as called for by the CIT.

Subsequently, a report by the Addl. CIT, Range-40, Delhi, dated 31.03.2014 was forwarded to the
CIT, wherein he stated that no proper enquiry was conducted by the AO in the case of the assessee
for A.Y. 2005-06 and the AO has not considered the application of provisions u/s 68 or 69C of the
IT Act for making assessment of undisclosed income arising out of unexplained expenditure due to
foreign visits.

The DCIT, Circle 40(1), in his report also stated that no proper enquiry has been made by the AO on
account of the foreign visits.

4. On the basis of the facts arising from the record and the report of the Addl.CIT and the DCIT, the
ld. CIT issued a show cause notice u/s 263 of the Act on 21.08.2014 for the A.Y. 2005-06 on
following issues:-

"(7) After considering all these facts, a show cause notice u/s 263 of I.T[ Act 196 on
21/8/2014 for Asstt. Year 2005-06 on following issues:-

'Pursuant to completion of assessment for A.Y. 2005-06 on 28.03.2013, it was

reported to this office that there has been serious errors in framing the assessment
and those errors have caused substantial and serious prejudice to the interest of
revenue. In view of the specific issues of law and facts involved and a factual report
received from the Assessing Officer through the Range in- charge and on the same
being received the records of the assessment from the Assessing Officer were also
called for and has been examined.

The concerned A.O. (DC1T Circle-40(1), New Delhi and Addl. C1T, Range- 40, report
as submitted to undersigned, have raised following issues in the matter of assessment
completed by the assessment order dated 28.03.2013 passed u/s 147/143(3) in your
case for A.Y. 2005-06 which requires consideration in terms of extant provisions of
law:

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

1) "That the A.O. was not provided any evidence either by you or the witnesses
examined by you claim about receipt of perquisites from your employer/s being
taxable u/s 17(b)/form 121BA and Rule regarding your foreign trip to Europe with
your wife and other members of family at the tost of your despite not getting any
evidence u/s 17(2) as such, the A.O. has made addition as "undisclosed perquisites
provided by M/s NDTV Ltd. to be taxed u/s 17(2), and there is no evidence available
either from M/s NDTV Ltd. or from you to substantiate that the "un-explained
perquisite" as held by the Assessing Officer to be taxed as such because there is no
provision in the I.T. Act, 1961 for taxing "unexplained perquisite" and the
unaccounted expenditure that was incurred by you on the trip abroad of you and your
family was to be dealt with only u/s 69C of the Income Tax Act, 1961 which was not
done by the AO and that the addition on account of "unexplained perquisite" cannot
be sustained in appellate proceedings before the Appellate Authorities, the
Assessment Order as passed by Assessing is erroneous and because of such errors has
caused serious prejudice to the interest of revenue.

2.) That there were contradiction between the stand taken by M/s NDTV Ltd. about nature that
company on your foreign trips with family, your own stand about the same where expenditure
incurred by you was the cost to the company and the stand taken by your i abroad with your other
family members, was personal trip and in view of the contradictions in the stand of you and your
witnesses, your stand should not have been accepted by the Assessing Officer without weighing the
relative merit of version of the each of the witnesses examined in the case.

3.) "That the complainant in your case was neither examined by the Assessing Officer nor was
allowed to cross-examine the witnesses examined by you in support of your stand/claims and
against the stand of the complainant as per facts on record and being in violation of directions under
section 144A of the IT Act, 1961 given by the Addl. CIT to the concerned AO during course of such
assessment proceedings and therefore in terms of CBDT instructions a applicable, the assessment
framed in your case is erroneous and because of such error, has caused serious prejudice to the
interest of revenue.

4.) That, "statutory directions" u/s 144 A of I.T. Act, 1961 issued by the Additional CIT, Range-40
was not fully carried out, the Assessment Order as passed by Assessing Officer is erroneous and
because of such errors has caused serious prejudice to the interest of revenue."

In view of the above errors reported by the Assessing Officer and also the Addl. CIT, the
undersigned has examined the relevant assessment records for A.Y. 2005-06 in your case to find out
if the assessment order dated 28.03.2013 as passed for A. Y. 2005-06 is erroneous and prejudicial to
the interest of revenue and whether undersigned is required to assumed jurisdiction u/s 263 of the
IT. Act, 1961 qua the assessment order dated 28.03.2013 for the A.Y. 2005-06 and do the needful.

On examining the assessment records for A.Y.- 2005-06 in your case, the following facts are
revealed-

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

1. That the AO was not provided with any evidence either by you to support your claim about receipt
of perquisites from your employer/s being taxable u/s 17(b)/Form 12BA and Rule 26A/Form- 16
with respect to your foreign trip to Europe with your wife and other members of family at the cost of
your employer and despite not getting any evidence u/s 17(2) as-such, the A.O. has proceeded to
mdke addition as "undisclosed perquisites" provided by M/s NDTV Ltd. to be taxed u/s 17(2), in
spite >f the fact that there is no evidence available either from M/s NDTV Ltd. or from you to
substantiate the "un-disc there is no provision under the I.T. Act, 1961 for taxing
unexplained/undisclosed perquisite and therefore, this unaccounted expenditure that was incurred
by you on the trip abroad of you and your family as concluded by the AO was to be dealt with only
u/s 69C of the Income Tax Act, 1961, which was not do of this error on the part of Assessing Officer,
the tax required to be collected from expenditure or unexplained money cannot be lawfully collected
as the addition on perquisite" cannot be sustained in appellate proceedings before the Appellate
proceedings before the appellate Authorities.

2. That there were contradiction between the stand taken by M/s NDTV Ltd.. about nature of
expenditure by that company on your foreign trips with family, your own stand about the same
where you only stated that the expenditure incurred by you was the cost to the company and the
stand taken by your, spouse who also travelled abroad with your other family members, that the
same was personal trip and in view of the contradictions in the stand of you and your witnesses,
your stand should not have been accepted by the Assessing Officer without weighing the relative
merit of version of the each of the witnesses examined in the case.

3. The A.O. while passing the assessment order on dated 28.3.13 for AY2005-06 in your case did not
follow the directions by the then Addl. CIT u/s 144A of the IT Act, was neither examined nor was
allowed to cross- examine the witnesses examined by you in support of your claims and against the
stand taken by the complainant though the same was specifically and statutorily directed.

4. That, since "statutory directions" u/s 144 A of I. T. Act, 1961 issued by the Additional CIT were not
fully carried out by Assessing Officer thereby causing errors in the said assessment order and
because of such errors has caused serious prejudice to the interest of the revenue, as it cannot pass
the muster of appeals.

5. That besides the above errors and prejudice to revenue another aspect that has not been
examined by the AO is the ESOPs. It is seen from the NDTV's letter dated 1.7.2006 and 30.6.2005 as
employer of the assessee filed During the course of assessment proceedings that the assessee Shri
Abhisar Shar was granted ESOPs vide AGM held in Sept. 2004 totaling 3,750 shares of NDTV
valued at Rs.7,50,000/- accrued in FY 2004-05 (AY 2005-06) was not assessed to taxs by the AO
while passing the assessment order in his case for AY 2005-06 on 28.3.2013, hence, the said
assessment order Is erroneous and prejudicial to the interest of revenue, since the said ESOP
perquisites has escaped assessment.

6. It is also seen from the records of AY 2005-06 in your case that the above stated issues before the
CIT (Appeals). So considering above, the undersigned is of the opinion that the said assessment
order dated 28.3.2013 in your case is erroneous and prejudicial to the interest of revenue as such

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

since, no proper enquiry has been conducted and no proper law has been invoked in the said
assessment order as the AO failed to conduct proper enquiry and failed to apply proper law leading
to said assessment order being erroneous as well as prejudicial to the interest of revenue, and in
support, the following case laws are quoted for necessary action u/s 263 of the IT Act, 1961 against
the assessment order dated 28.3.13 passed u/s 147/143(3) for AY 2005-06 in your Case:

(1) Rampyari Devi Saraogi vs CIT(SC) 67ITR 84 (2) Malabar Industrial Co. Ltd. vs
CIT(SC) 243 ITR 83 (3) Swarup Vegetable Products industries Ltd. vs CIT (AIL) 187
ITR 412 (4) CIT vs Eastern Medikit Ltd. (Del) 58 DTR 265; 337 ITR 56.

In view of the above facts and circumstances and the law governing the issues involved undersign
considered view that the Assessment Orders dated 28. 03.2013 as passed by the Assessing Officer
for A. your case, erroneous and prejudicial to the interest of revenue and as such assumption of
jurisdiction u/s 263 I.T Act, 1961 by undersigned in case of the said assessment order is required to
protect the interest of revenue.

You are hereby require to show cause as to why the action u/s 263 should not be taken against the
said assessment order dated 28.03.2013 in your case for A.Y. 2005-06."

5. In response to the said show cause notice the assessee filed detailed reply challenging the
initiation of proceedings u/s 263 of the Act. However, the ld.PCIT was not satisfied with the
submissions made by the assessee and held that the various issues raised in the notice at para 11A to
11F were not properly examined and no conclusive findings were arrived at by the AO in the
assessment order for the A.Y. 2005-06. Therefore, amounts taxable have escaped assessment either
in the hands of this assessee or if evidences point out otherwise, in the hands of any other assessee
as the case may be. Therefore, to this extent the order passed by the AO u/s 147/143(3) dated 28th
March, 2013 is erroneous and prejudicial to the interest of the Revenue. He, therefore, set aside the
order passed by the AO u/s 147/143(3) by invoking the revisionary power u/s 263 of the Act and
directed the AO to make the assessment denovo after examining the entirety of the issues
considered in the revision order u/s 263 after giving due opportunity of being heard to the assessee.
The relevant observation of the PCIT from para 11-13 of his order read as under:-

"(11) I have considered the reports of the A.O. and the Addl.

Commissioner, the submissions of the assessee made in response to the notices u/s 263 of the I.T.
Act, 1961, the facts of the case vis-a-vis the statutory provisions u/s 263 of the I.T. Act, the judicial
views taken and rulings given on the relevant issues. On examination of assessment records for
assessment year 2005-06 in the case of said assessee and on perusal of reports of assessing officer &
Additional Commissioner vis-a-vis replies submitted by assessee, the following new facts emerge
which have not been looked into, examined and considered by the A.O. in the order under review
(11)(A) The Assessing Officer made addition on account of "unexplained perquisite" u/s 17(2) of I.T.
Act, 1961 without inquiry since copy of Form 12BA and Form-16 submitted by M/s NDTV Ltd. did
not show any perquisite u/s 17(2) for expenditure incurred in foreign visits of assessee alongwith his
family including spouse, and assessee himself had failed to submit evidence regarding such

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

perquisite from his employer i.e. M/s NDTV Ltd. There is no provision in the IT Act to tax
"unexplained perquisite" under section 17(2) for foreign visit which had not been shown in Form
12BA/Form 16 from employer and assessee could not submit any evidence of receiving any
perquisite u/s 17(2) for foreign visit expense for himself along with his family.

(11) (B) the Assessing Officer while making assessment in Assessment year 2005-06 did not apply
correct provision of I.T. Act and instead of making addition of unexplained expenditure u/s 69C of
the I T Act due to absence of evidence from Employer- M/s NDTV Ltd. as well as from assessee
himself, regarding perquisite u/s 17(2) for foreign visit expense of assessee-employee, A.O. made
wrong application of I.T. Act by making addition as unexplained perquisite u/s 17(2) of I T Act
which is patently wrong application of law.

(11)(C) the Assessing Officer did not conduct any inquiry regarding taxability of receipt arising out of
ESOPs received from employer - M/s NDTV Ltd since it is seen from the NDTV Ltd.'s letter dated
01.07.2006 and 30.06.2005, as employer of the assessee filed during the course of assessement
proceeding in A.Y. 2005-06, the assessee was granted ESOPs vide AGM held in Sept 2004 totalling
3,750 shares of NDTV valued at Rs.7,50,000/- accrued in FY 2004-05 (A.Y. 2005-06).

(11)(D) The A.O., while passing the assessment order dated 28.03.2013 for A.Y. 2005-06 in this case
did not follow the directions by the then Addl. CIT u/s 144A of the IT Act, 1961 and the examination
of the complainant and his cross examination by the assessee in support of his claims and against
the stand taken by the complainant though the same was specifically and statutorily directed.

(11)(E) Since above stated facts are fresh & new arising during assessment proceedings, but A.O. did
not conduct any inquiry to find out veracity of such facts, hence the issues arising out of these facts
are not the subject matter of Appeal filed by Assessee for A.Y. 2005-06.

(11)(F) A.O. failed to conduct proper inquiry and failed to apply proper law leading to said
assessment order being erroneous as well as prejudicial to the interest of revenue, and in support,
the following relevant judicial views exist for supporting necessary action u/s 263 of the IT Act, 1961
against the assessment order dated 28.03.2013 passed u/s 147/143(3) for A.Y 2005-06 in this case:

(1) Rampyari Devi Saraogi vs CIT(SC) 67 ITR 84

(2) Malabar Industrial Co. Ltd. Vs CIT(SC) 243 ITR 83
(3) Swarup Vegetable Products Industrial Ltd. CIT (AIL) 187 ITR 412
(4) CIT vs Eastern Medikit Ltd. (Del) 58 DTR 265; 337 ITR 56.

(12) As against the above noted findings, It is observed from the written submissions made by
assessee that objections on the following points, relevant to the notice u/s 263 and the issues raised
therein have been raised in his written submissions filed before this office (for the sake of brevity the
written submissions of the assessee on these issues are not being repeated, as these have already
been extracted above verbatim, only views taken on these issues of objection are being placed
below:-

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

(12)(A) Validity of notice u/s 263- As against the submissions made by the assessee,
the notice u/s 263 is validly issued based on findings from the assessment order and
the reports of A.O/Addl. CIT extracted above so as to afford the assessee opportunity
of being heard before proceedings u/s 263 are finalized in his case as the order of the
A.O. was found to be erroneous and prejudicial to the interest of revenue. The issues
raised in the notice u/s 263 elaborately indicate adequate errors in the assessment
order causing prejudice to the interest of revenue (12)(B) Jurisdiction of this office-
As against the submissions made by the assessee, flaw in the jurisdiction of this office
over this case as the case of this assessee was originally in the jurisdiction of the
DCIT/ACIT, Circle-47(1), Delhi under the CIT-XVI Delhi. By his order u/s 127 of the
Income Tax Act, 1961 dated 27.08.2013, the CIT-XVI, Delhi transferred the
jurisdiction of the assessee (w.e.f. 28.08.2013) to DCIT/ACIT, Circle-40 (1), Delhi
redesignated as Circle-64(1), Delhi and is part of Range-64, Delhi under the charge of
Principal Commissioner of Income Tax-22, Delhi (old designation Commissioner of
Income Tax-XIV, Delhi). This order u/s 127 was passed with the administrative
approval of Chief Commissioner of Income tax, Delhi-

XIII vide F.No. CCIT-XIII/Centralization/2013-14/640 dated 26.08.2013. A copy of this order has
also been sent to the assessee. Since as per section 127(3) of the IT Act, there is no requirement of
any Opportunity of being heard to be given to the assessee before such transfer, if the transfer is
from any A.O. to any other A.O. whose offices are situated in the same city, locality or place, as was
the case of this assessee, therefore, there is no lacuna in the jurisdiction of this office over the
assessee's case.

(12)(C) Judicial Views - the assessee in his submissions has cited the ruling of Hon'ble Supreme
Court in that the Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC) and has claimed that
the case of the assessee is squarely covered by the ruling without demonstrating such claim. In the
case of Malabar Industrial Co. Ltd. Vs CIT, the Hon'ble Supreme Court held that the Commissioner
has to be satisfied of twin conditions for taking revisionary action u/s 263, namely: (i) That the
order A.O. sought to be revised is erroneous; and (ii) That it is prejudicial to the interests of the
Revenue. The Hon'ble Apex Court in the ruling has opined that an incorrect assumption of fact or an
incorrect application of law, or orders passed without applying the principles of natural justice or
without application of mind, will satisfy the requirement of the order being erroneous. As regards
prejudice to interest of revenue, the Hon'ble Court has ruled that t is of wide import and not
confined to loss of tax. If due to an erroneous order of the ITO, the revenue is losing tax lawfully
payable by a person, it will certainly be prejudicial to the interests of revenue. However, the Apex
Court has clarified that where two views are possible, and the ITO has taken one view which the
Commissioner does not agree to, the order cannot be erroneous and prejudicial to interests of
revenue unless the view taken by the ITO is unsustainable in law. It is therefore difficult to perceive
as to how this ruling of the Hon'ble Apex Court would help the case of the assessee as in the
assessee's case there were no two views possible. Moreover, the order has been passed with incorrect
assumption of facts, incorrect application of law, violating the principles of natural justice and
without application of mind which is unsustainable in law as demonstrated; in the paras above.
Therefore, errors have crept into the order as pointed out in the notice u/s 263 which have caused

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

prejudice to the interests of revenue. It has been observed by the Hon'bie Apex Court in another case
of CIT vs. Shree Manjuathesware Trading Products and Comphor Works, report in (1988) 231 ITR
53, that the revisional power conferred on the Commissioner of Income Tax is of wide amplitude.
The Hon'ble apex Court in the case of Tara Devi Aggarwal vs. CIT (1973) 88 ITR 232 hasf held that
the Commissioner may consider an order of the Assessing Officer to be erroneous not only if there is
some apparent error of reasoning or of law or of fact but also where it is a stereotyped order which
simply accepts what the assessee has stated in his return and fails to make inquiries which are called
for in the circumstances of the case and it is not necessary for the Commissioner to make further
inquiries before cancelling the assessment order of Assessing Officer. The facts of the present case, if
judged on the touchstone of above legal position propounded by the Hon'ble Apex Court, and
section 263 per se unmistakably establish that the order of the A.O. was erroneous and prejudicial to
the interest of Revenue.

(12 )(D) Case for review u/s 263 of A.O's order- As against the submissions made by the assessee
there is a valid case for review u/s 263 of IT Act in view of the erroneous order of the AO which is
prejudicial to the interest of revenue as has been elaborately clarified in the paras above while
pointing out errors in the assessment order and the new facts which remain to be examined by the
AO. Therefore, the assessee's plea that the findings in the show cause notice have already been
examined and are in the ambit of "change of opinion" does not appear to be substantiated.

(12)(E) Issue of ESOP As against the submissions made by the assessee, the Assessing Officer did
not conduct complete inquiry regarding taxability of receipt arising out of ESOPs received from
employer - M/s NDTV Ltd since it is seen from the NDTV Ltd's letter dated 01.07.2006 and
30.06.2005, as employer of the assessee filed during the course of assessment proceedings in A.Y.
2005-06, the assessee was granted ESOPs vide AGM held in Sept. 2004 totalling 3,750 shares of
NDTV valued at Rs.7,50,000/- accrued in FY 2004- 05 (A.Y. 2005-06). As has been admitted by the
assessee in his submission, the relevant material regarding the ESOP was on record, which has
clearly been over looked by the A.O. as to whether they were taxable in the hands of the assessee in
this year, thus constituting a new fact of matter which has not been examined by the AO which in
itself is adequate enough to justify revision u/s 263.

(12)(F) Issue regarding inspection of records:- As regards inspection of records, it is not the case of
the assessee that any issue, from any part of the records, which is being used against his for review,
has not been forwarded to him along with the show cause u/s 263. Neither is it the case of the
assessee that the present order u/s 263 is based upon any issue, in any part of the records which are
not confronted to the assessee in the notice u/s 263, before proceeding u/s 263 are finalized.
Therefore, it is difficult to perceive justification for inspection of records for filing the responses to
the notice u/s 263 itself.

(12)(G) Issue regarding transfer of case to another charge:- As regards assessee's request to transfer
his case to any other officer, it is observed that the transfer of jurisdiction has taken place after due
consideration and with the administrative approval of Chief Commissioner of Income-tax,
Delhi-XIII vide F.No. CCIT-XIII/Centralization/2013-14/640 dated.26.08.2013. A copy of this
order has also been sent to the assessee. There are no valid grounds for any further transfer

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

presently. Since as per section 127(3) of the I.T. Act, there is no requirement of any opportunity to
be given to the assessee before such transfer, if the transfer is from any A.O. to any other A.O.,
whose offices are situated in the same city, locality or place, as was the case of this assessee,
therefore, there is no lacuna in the jurisdiction of this office over the assessee's case.

(13) To sum up, It is therefore observed that, during the assessments proceedings, the issues in
question under] this order u/s 263 as per the findings given in paras-ll (A) to 11(F) above, were not
properly examined and no conclusive findings were arrived at by the Assessing Officer in his
assessment orders for A.Y. 2005-06. Therefore amounts taxable have escaped assessment either in
the hands of this assessee or if evidences point out otherwise, in the hands of any other assessees as
the case may be. To this extent it is held that order u/s 147/143(3) dated 211/03/2013 in this case is
erroneous and also prejudicial to the interest of the revenue. Thus the impugned assessment order is
erroneous in so far as it is prejudicial to the interest of revenue and is liable to be set-aside.
Accordingly, in the exercise of revisionary power u/s 263 of the Income Tax the assessment of A.Y.
2005-06 completed u/s 147/143(3) on 28/03/2013 is is hereby cancelled and restored to the
Assessing Officer to make assessment de-novo after examining the entirety of the issues considered
in this revision order u/s 263 in assessee's case after affording reasonable opportunity of being
heard to the assessee. The A.O. is directed to make all necessary inquiries with the concerned
agencies to ensure that all the issues which are subject matter of this revision order u/s 263 as per
the findings given in paras-ll(A) to 11(F) above, are properly examined vis-a-vis the evidences
collected and required to be collected, the claims made by the assessee regarding such evidences and
the position of law, so as to ensure that the errors pointed out in this order and the prejudices
caused to revenue as fper this order are eliminated and the amounts involved in these issues are
taxed in the hands of the assessee or in any other hands as per law."

6. Aggrieved with such order of the PCIT, the assessee is in appeal before the Tribunal by raising the
following grounds:-

"(1) That the order passed under section 263 of the Act by the Principal CIT-22, New
Delhi is arbitrate, biased and bad in law and in facts and circumstances of the case.

(2) That learned Principal C1T has grossly erred in assuming jurisdiction under
section 263 of the Act which is illegal and had in law.

(3) That learned Principal CIT has grossly erred in holding that the order passed by
the Assessing Officer was erroneous and also prejudicial to the interest of revenue on
the issues directed to be re-examined under section 263 of the Act despite the
Assessing officer having taken a possible view.

(4) that learned Principal CIT has grossly erred in assumption of jurisdiction under
section 263 which is bad in law without prejudice to which assumption of jurisdiction
under section 263 could not have been made also due to the doctrine of merger as the
issues covered in assessment under section 147/148 of the Act are the subject matter
of appellate proceedings before the CIT (Appeals).

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

(5) That the learned Principal CIT has grossly erred in holding, that proper enquiry
had not been conducted by the Assessing Officer while passing the assessment order
under section 147/148/143(3) whereas the Assessing Officer had conducted enquiries
before finalizing the assessment.

(6) That the Learned Principal CIT has grossly erred in holding that the order of the
Assessing Officer was erroneous which is against the settled law as the Assessing
Officer had taken a possible view on the issue of alleged unexplained expenditure on
foreign trips.

(7) That the learned Principal CIT has grossly erred in holding that the Assessing
Officer had passed an order which is erroneous as well prejudicial to the interest of
revenue on the issue of grant of ESOPS.

(8) That without prejudice to the fact that the assumption of jurisdiction by the
Learned Principal CIT is bad in law the issues which have been directed to be
examined by the learned Principal CIT are fully explainable on merit.

(9) That the appellant craves leave to add, alter or delete the above
grounds of appeal at the time of hearing."

7. The ld. Counsel for the assessee strongly challenged the initiation of proceedings
u/s 263 by the ld.CIT. He submitted that on the tax evasion petition of Shri S.K.
Srivastava, CIT, OSD, action u/s 147 was initiated against the assessee and his spouse
for F.Y.s 2004-05 to 2007-08 relevant to A.Y. 2005-06 to 2008-09 and the status of
the aforesaid action is as under:-

8. Referring to the decision of the Tribunal in the case of the wife of the assessee, vide
ITA No.3281 to 3284/Del/2015, order dated 11.10.2019, copy of which is placed in
the paper book, page 364 to 435, he submitted that the coordinate Bench of the
Tribunal has set aside the combined order dated 30th March, 2015 for all the
assessment years. The ld. Counsel for the assessee submitted that the issue of
unexplained perquisites is no longer res integra in view of the decision dated
11.10.2019 of the Delhi Bench of the Tribunal in the case of the spouse of the assessee
in ITA No.3281 to 3284/Del/2015. He submitted that in the case of the assessee's
spouse also, the case was reopened u/s 147/143(3) on the basis of the complaint of
Shri S.K. Srivastava, CIT-OSD and further against the order u/s 147/143(3) of the Act

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

action was taken u/s 263 by the PCIT which was set aside by the Tribunal. He
submitted that when the appeal of the assessee was pending before the CIT(A) , the
ld. PCIT could not have invoked the jurisdiction u/s 263 of the IT Act. He submitted
that the addition of Rs.1,12,756/- made by the AO u/s 17(2) of the Act was the subject
matter of appeal before the CIT(A).

Relying on various decisions, he submitted that as per Explanation 1(c) to section 263(1) of the Act
wherein order referred to in the sub-section and passed by the AO had been the subject matter of
any appeal filed on or before or after the first day of June, 1988, the powers of the PCIT or CIT
under this sub-section was explained and shall be deemed always to have extended to such matters
as had not been considered and decided in such appeal. In other words, when the appeal is pending
before the CIT(A), the exercise of jurisdiction u/s 263 of the Act is barred.

The ld. Counsel in his another plank of argument submitted that a perusal of the assessment order
dated 28th March, 2013 passed u/s 147/143(3) would show that there was no foreign visits of the
assessee along with his family including spouse in the F.Y. 2004-05 relevant to A.Y. 2005-06.
Therefore, there is no question of any unexplained expenditure on foreign trips as alleged by the
PCIT in the order passed u/s 263 of the IT Act. Referring to page 9 of the assessment order, he
submitted that the AO, after examining the copy of passport of the assessee and his family members
and other details furnished before him had given a categorical finding that the assessee has not
travelled to UK/Europe during the relevant year but has traveled to Pakistan and USA on official
work. He submitted that there was no foreign visit of the assessee along with his family including the
spouse in the F.Y. 2004-05 which is already established from the order of the assessment in case of
spouse of the assessee which has attained finality after the order of the Tribunal, therefore, the
assumption of jurisdiction u/s 263 by the CIT is not justified. The ld. Counsel further submitted that
the employer of the assessee has also confirmed that the tickets were physically handed over in the
F.Y. 2005-06 relevant to A.Y. 2006-07. Further, 1000 USD were also given to the assessee during
the F.Y. 2005-06 relevant to A.Y. 2006-07 only and the expenses for two tickets were booked by
NDTV in F.Y 2004-05 relevant to A.Y. 2005-06 to expenses of 1000 USD was booked in next
assessment year i.e., A.Ys 2006-07.

However, admittedly, the AO has made the addition for both i.e., two tickets and 1000 USD in the
assessment year 2005-06 only. The ld. Counsel referring to various pages of the paper book
submitted that the AO has made proper enquiry from the assessee and every parties like spouse of
the assessee, employer of the assessee and even from the complainant also. The ld. Counsel filed the
following chart stating the enquiries conducted by the AO:-

9. So far as ESOPs is concerned, the ld. Counsel submitted that the finding of the
PCIT on the above issue is not in accordance with the law and is, therefore, misplaced
and not tenable. He submitted that during the year under consideration i.e., A.Y.
2005-06, there was no provision in the Act to treat the ESOPs as perquisites in the
hands of the assessee. He submitted that the amendment in section 17(2)(vi) of the
Act was w.e.f. 01.04.2010. He submitted that prior to such amendment ESOPs were
treated as capital receipts in the hands of recipient and were taxable only after the

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

sale of the shares. Therefore, the observation of the PCIT that the AO did not conduct
any enquiry regarding tax on receipt arising out of ESOPs received from employer is
not in accordance with law. So far as the allegation that the AO did not follow the
direction in examination of the complaint and his cross-examination by the assessee
in support of his claims and against the stand taken by the complainant through the
same, he submitted that these allegations are contrary and are in excess of scope in
view of order of the Hon'ble High Court dated 1st March, 2013 in the case of S.K.
Srivastava vs. Shumana Sen and Anr. In Cont. App. (C) 1/2013 and CM No.854/2013
(Stay). He submitted that the said order enclosed with CBDT letter dated 6th March,
2013 bearing letter No. HRD/AD/882/2/2012-13/3878 forwarded to the AO vide
letter dated 15th March, 2013 from office of the CIT, Delhi-16, New Delhi. He drew
the attention of the Bench to the page 32 of the order dated 28.03.2013 passed u/s
147/143(3). He submitted that the Delhi bench of the Tribunal in the case of spouse
of the assessee has also passed certain comments and directed the CBDT to initiate a
discrete enquiry in this case to find out as to how and under what circumstances on
the basis of false, frivolous and baseless allegations that too with mala fide intentions
proceedings u/s 263 of the Act have been initiated apparently to victimize the
appellant and to proceed against guilty officials under Rules and to further frame the
guidelines to deal with such abuse of powers by sr. officers so that such incident
should not reappear. Without prejudice to the above, the ld. Counsel submitted that
the AO has duly examined the witness parties including the spouse of the assessee
and employer of appellant and, therefore, the Principal CIT could not have invoked
the jurisdiction u/s 263 of the Act.

10. The ld. Counsel for the assessee, relying on various decisions submitted that in
order to assume jurisdiction u/s 263 of the Act, the twin conditions are satisfied that
the order passed by the AO is erroneous and prejudicial to the interests of the
Revenue must be fulfilled. He submitted that in the instant case, the PCIT ignored or
rather failed to appreciate that once the AO on examination of facts on record and
after making all possible enquiries had made additions then such order of assessment
cannot be alleged to be erroneous and prejudicial to the interest of the Revenue. The
allegation that the AO did not apply correct provisions of Income-

tax Act, in any case satisfy the condition that order of assessment is prejudicial to the interests of the
Revenue. He submitted that in case the order of the AO is erroneous, but is not prejudicial to the
interest of the Revenue, the CIT is not competent to exercise jurisdiction u/s 263 of the Act.
Therefore, the order passed u/s 263 is invalid and illegal and should be set aside.

11. The ld. Counsel submitted that admittedly, undisputedly and undeniably it is not a case of lack of
enquiry or lack of investigation. A perusal of the show cause notice itself would show that it has not
been stated in any manner how the AO has failed to apply his mind particularly when it has not been
denied or disputed that all information including bank statement of the assessee, passport of the
assessee and his family, information from employer have been furnished/collected in the course of
assessment proceedings. Referring to the assessment order dated 28th March, 2013 passed u/s

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

147/143(3), he submitted that the order is neither erroneous nor prejudicial to the interest of the
Revenue since it is not based on either incorrect information of law or fact or non-application of
mind. There is nothing to show that the income assessed is not in accordance with the law. He
submitted that the assessee during the course of assessment proceedings had given detailed
explanation and the AO, on the basis of enquiries conducted by him and after examination of the
reply given by the assessee had passed the order and, therefore, the said order cannot be held to be
erroneous and, therefore, the provisions of section 263 cannot be applied. The ld. Counsel also
relied on the following decisions:-

i) CIT vs. Vikas Polymers, 341 ITR 537 (Del);

ii) CIT vs. Sunbeam Auto Ltd., 332 ITR 167 (Del);

iii) CIT vs. DLF Ltd., 350 ITR 555 (Del);

iv) CIT vs. Max India Ltd., 295 ITR 282;

v) ITO vs. DG Housing Projects Ltd., 343 ITR 329 (Del);

vi) Director of Income-tax vs. Jyoti Foundation, 357 ITR 388 (Del);

vii) PCIT vs. Vinita Chaurasia, 394 ITR 758 (Del);

viii) Delhi Airport Metro Express (P) Ltd., 398 ITR 8 (Del)

ix) Shri Abhimanyu Gupta vs. PCIT, ITA No. 771/CHD/2017;

x) Narayan Tatu Rane vs. ITO 70 taxmann.com 227 (Mumbai Trib.);

xi) Jeewanlal Ltd. vs. Addl. ICT, 108 ITR 407 (Cal);

xii) B&A Plantation & Industries Ltd. vs. CIT, 290 ITR 395 (Gau);

xiii) CIT vs. Sunbeam Auto Ltd., 332 ITR 167 (Del);

xiv) CIT vs. Wear Exports Ltd., 341 ITR 166 (Del);

xv) CIT vs. Vikas Polymers, 341 ITR 537 (Del);

xvi) M/s Klaxon Trading (P) Ltd. vs. PCIT, ITA No.7265/Del/2017.

12. The ld. Counsel submitted that even otherwise in a case where two views are possible and the AO
has taken a view with which the PCIT does not agree the said order cannot be treated as erroneous
order prejudicial to the interest of the Revenue. For the above proposition, he relied on the decision
of the Delhi High Court in the case of CIT vs. DLF Ltd. reported in 350 ITR 555. He also relied on
the decision of the Hon'ble Supreme Court in the case of CIT vs. Max India Ltd., 295 ITR 282 AND
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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

Malabar Industrial Co. Ltd. vs. CIT, 243 ITR 83 (SC); Director of Income-tax vs. Jyoti Foundation,
357 ITr 388 (Del) and various other decisions of the coordinate Benches of the Tribunal

13. The ld. Counsel for the assessee submitted that for holding that the reassessment order passed
by the AO is not only prejudicial to the interest of the revenue but is also erroneous then PCIT has to
proceed by some immediate enquiry. However, in the instant case PCIT has not conducted any
enquiry and, therefore, the exercise of jurisdiction u/s 263 of the Act by the PCIT is liable to be set
aside. For the above proposition, he relied on the decision of the Hon'ble Delhi High Court in the
case of PCIT vs. Vinita Chaurasia, 394 ITR 758 (Del) and the decision in the case Delhi Airport
Metro Express (P) Ltd., 398 ITR 8 (Del).

Relying on various decisions, the ld. Counsel for assessee submitted that section 263 does not
permit revision of order on the basis of suspicion, conjectures and surmises. For the above
proposition, he relied on the order of the Hon'ble Supreme Court in the case of Sirpur Paper Mills
Ltd. vs. CWT, 77 ITR 6 and Jeewanlal Ltd vs. Addl. CIT, 108 ITR 407 (Cal). Relying on various other
decisions, the ld. Counsel submitted that section 263 of the Act cannot be invoked to make deeper
enquiry. The ld. Counsel also relied on various other decisions placed in the synopsis and submitted
that proceedings u/s 263 cannot be initiated for inadequate enquiry, but, only for lack of enquiry
which is distinct from inadequate enquiry. He accordingly submitted that the order passed by the
CIT u/s 263 setting aside the assessment order passed u/s 147/143(3) is liable to be set aside and the
grounds raised by the assessee be allowed.

14. The ld. DR, on the other hand, strongly relied on the order of the PCIT. He submitted that the ld.
PCIT, after giving valid reasons has set aside the order passed by the AO u/s 147/143(3) since the
order passed by the AO was both erroneous as well as prejudicial to the interests of the Revenue.
The ld. CIT has given detailed finding as to how the order passed by the AO is erroneous and
prejudicial to the interest of the Revenue. Therefore, the order passed by the PCIT should be upheld
and the grounds raised by the assessee should be dismissed.

15. We have considered the rival arguments made by both the sides, perused the orders of the AO
and the PCIT and the paper book filed on behalf of the assessee.

We have also considered the various decisions cited before us. We find, in the instant case, the
assessee had filed the return of income on 22.07.2005 declaring an income of Rs.9,00,355/-
wherein income from salary at Rs.9,81,964/- and loss from house property at Rs.81,609/- was
declared. This return was processed u/s 143(1) of the Act on 4th July, 2006. This case was reopened
by issue of notice u/s 148 on 27th March, 2012 and an order u/s 147/143(3) of the Act determining
the total income of the assessee at Rs.11,03,270/- was passed on 28th March, 2013 wherein various
additions were made to the tune of Rs.2,02,219/-. We find, the ld.

PCIT invoked the provisions of section 263 of the IT Act by holding the impugned order dated 30th
March, 2015 as erroneous and prejudicial to the interests of the Revenue on the ground that:

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

a) The AO made addition on account of unexplained perquisite u/s 17(2) of the IT

Act, 1961 without any enquiry since copy of Form 12BA and Form-16 submitted by
M/s NDTV Ltd. did not show any perquisite u/s 17(2) for the expenditure incurred
for foreign visits of the assessee along with his family including spouse and the
assessee himself;

b) The AO did not conduct any inquiry regarding taxability of receipt arising out of
ESOPs received from employer;

c) The AO did not follow the directions by the then Addl. CIT u/s 144A of the Act; and

d) The facts are fresh and new arisen during the assessment proceedings, but, the AO
did not conduct any enquiry to find out the veracity of such facts.

16. We find, identical issue had come up before the Tribunal in the case of spouse of the assessee,
namely, Mrs. Shumana Sen wherein the coordinate Bench of the Tribunal, vide ITA
No.3281-3284/Del/2015 (pages 364 to 435 of the paper book II) had decided identical issue. In that
case also, the case was reopened u/s 147/143(3) of the Act on the basis of a complaint of Shri S.K.
Srivastava, CIT(OSD) and further against the order passed u/s 147/143(3) of the Act action was
taken by the PCIT u/s 263 of the Act. The Tribunal set aside the order of the PCIT by observing as
under:-

"10. The basis for the entire assessment proceedings and assumption of jurisdiction
by the PCIT are based upon the complaints made by Shri S.K. Srivastava. It would
not be out of place to refer to the directions of the Hon'ble High Court of Delhi on
01.03.2013 in an Interim Order in Appeal [C] No. 1 of 2013 wherein the Hon'ble High
Court has observed with regard to Shri S.K. Srivastava as under:

"No communication addressed by the petitioners qua any issue should be given any
cognizance or taken into consideration and further the petitioner should not be
entrusted any work in the department as it may affect the public at large..........."

.............................................................................................
...............................................................................................

15. We have given thoughtful consideration to the orders of the authorities below. A perusal of the
aforementioned findings of the PCIT show that the entire quarrel is in respect of travel of the
assessee alongwith her spouse abroad and the expenditure incurred by the spouse of the assessee.
The PCIT is of the firm belief that the Assessing Officer failed to conduct proper enquiry and failed
to apply proper law leading to the said assessment order being erroneous as well as prejudicial to
the interest of the revenue.

16. Let us now see what happened during the course of assessment proceedings. Pursuant to the Tax
Evasion Petition, the case of the assessee was reopened u/s 148 of the Act for Assessment Years

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

2005-06 to 2008-09.The reasons recorded for initiating the reassessment proceedings for all the
four Assessment Years read as under:

"2 "This office received a copy of DO. letter from Sh. S. L Srivastava, CIT(OSD). Delhi
addressed to CIT. Delhi- XIV' New Delhi disclosing details of concealment of income
and resultant evasion of fax of huge amount during the period 2003-2004 onwards
and upto F. Y. 2007-2008 by Mrs. Sumana Sen. IRS currently working in the rank of
JC/T in the department. It also contains details of expenditure incurred on foreign
travels by Mrs. Sumana Sen along with her aunty stated to be in excess of Rs. 3
crores. Reliance was also placed on the copy of an affidavit sworn by Mrs. Shumana
Sen and filed before Hon'ble Delhi High Court in Writ Petition (C) no. 1373 of 2011
wherein she admitted to have traveled abroad with her family several times during
that period.

The said affidavit was enclosed alongwith the D.O. letter of Sh. S. K. Srivastava.

The said TEP alleged that the assessee received gratification by way of expenditure
incurred on her foreign travels alongwith her family by Ms. NDTV Ltd. during the
period under consideration in lieu of favors granted by her to .YTs. NDTV Ltd. as it's
assessing officer being AC IT. Circle-13(1), New Delhi. As per the TEP the estimated
value of such gratification and corresponding expenditure involve in the region of
about Rs. 3-5 crores.

The Add/ CIT. Range-40. New Delhi vide his letter dated 02 12 2011 forwarded to
TEP and letter of CIT, Delhi-XlV. New Delhi in the case of Mrs. Sumana Sen an
existing assessee in this charge to take necessary action as per applicable law.

The complainant being an IRS officer of 1087 batch and holding the rank of
Commissioner of Income Tax subsequently also provided a copy of the letter dated
17/10/2011 written by Mrs. Sumana Sen to the Chairperson, Complaint Committee
on Sexual Harassment, New Delhi wherein also Mrs. Sumana Sen has admitted that
she had travelled abroad several times at the time of her husband's employment with
M/s NDTV Ltd. before, during and after her stint in Circle-13(1). New Delhi.

Pursuant to the receipt of the copy of the TEP the matter was independently
examined in exercise of independent quasijudicial discretion by the undersigned. It
was found that the Returns of Income of Mrs. Sumana Sen an existing assessee in
this office for the relevant period i.e. A.Y. 2004-2005, 2005- 2006, 2006-200 7, 200
7-2008 & 2008- 2009 relevant for F. Y. 2003- 2004, 2004- 2005, 2005-2006,
2006-2007 Si 2007-2008 does not disclose in any manner whatsoever the details
and other particulars of her foreign travelling and the expenditure incurred on that
including the source thereof, the quantum thereof the status of that amount of money
a tut taxability of the same, in view of the fact that the particulars pertaining to the
expenditure incurred on foreign travels has been admitted before Hon'ble Delhi High

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

Court and also before the departmental authorities, prima-facie, a case of non-
disclosure of information about expenditure incurred by the assessee in the returns of
income stands made out which primafacie appears to have escaped the incidence of
tax because of nondisclosure and non- inclusion in the taxable income of the
assessee.

The assessee in the affidavit filed before Hon'ble Delhi High Court and in her letter
dated 17/10/2011 before Departmental Authorities has claimed stated that the
expenditure involved on her foreign travels was part of yearly vacation abroad with
family of the salary package of Sh. Abhisar Sharma, her spouse, from the employer of
Sh. Abhisar Sharma i.e. M/s. NDTV Ltd. It was further stated by the assessee that
similar perquisites were given by M/s. NDTV Ltd. from time to time to other
employees of that company as well as pen t of their salary package.

The copy of employment contract of Sh. Abhisar Sharma with M/s. NDTV Ltd. or any
other document is not available on file to corroborate the claim of source of
expenditure on foreign travel. Nor is there any documentary evidence available to
show inclusion of the expenditure involved on her foreign travels in taxable income of
her spouse namely Sh. Abhisar Sharma who is an existing assessee in charge of AC
IT, Circle 48( I), New Delhi.

The expenditure on foreign travel of assessee, if it is a part of salary package of Sh.

Abhisar Sharma received/receivable from M/s, NDTV Ltd. is taxable perquisite U/s
17 of the Income Tax Act, 1961. Upto A. Y. 2007-2008 it was required to be disclosed
in return of income and form no. 16 issued by the employer. These particulars were
also required to be furnished inform no. 12 BA issued by the employer to the
employee. This was to be furnished by the employer with his/her return of income
alongwith form no. 16 and in addition to the form no. 16. The provisions of Rule
26(2)(b) is being relied upon.

The assessee while claiming that the expenditure incurred by her on her foreign
travels alongwith her family was part of the salary package of her Spouse Sh. Abhisar
Sharma has not made any mention of the above refer red to statutory documents
which are mandatorily to be submitted by the concerned assessee nor has included
any of these documents either with the affidavit filed by her before Hon'ble Delhi
High Court nor with official letter dated 17/10 2011.

In view of the above facts there is an admitted position about expenditure incurred
on foreign travels of the assessee and her family during the period F.Y. 2003-2004 to
F. Y. 2007-2003. The sources of expenditure incurred by the assessee on her foreign
travels during the above mentioned period required to be verified to ascertain the
correct and full tax payable by the assessee on her taxable income.

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

In view of the facts and circumstances stated hereinabove and the material available
on the record of this office. I have reasons to believe that income far in excess of the
limit prescribed in law and much more than the limit of Rs. One lakh prescribed in
section 149/1 Kb) of the Income Tax Act. 1961 has escaped assessment diming A. Y.
2005-2006,2006-2007, 2007-2008 & 2008- 2009 and to bring the escaped income
to tax, re-assessment proceedings are required to be initiated for A. Y. 2005-2006,
2006-2007. 2007- 2008 & 2008- 2009 U/s 147 of the Income Tax Act, 1961 and
notice U s 148 is to be issued welt within the limitation period.

It is further highlighted that the complainant in his Tax Evasion Petition has alleged
evasion of tax and concealment of income during the period October. 2003 to
October, 2007 which is material for A. Y. 2004-2005. 2005-2006. 2006-2007,
2007-2008 & 2008-2009. Out of this the A. Y. 2004-2005 is no longer open for
reopening in terms of provision U/s 149 of the Income Tax Act, 1961 but the
remaining four years are capable of being reopened U/s 14n and where notice can he
issued U s 148 of the Income Tax Act. 1961 to bring the income escaped from tax to
tax It is therefore proposed that all these four assessment years may be re-opened
together for proper and effective inquiry in the matter and the statutory approval for
the same is solicited from Add I. C1T, Range-40, New Delhi. In view of the facts and
circumstances stated hereinabove, the necessary approval of Add I CAT, Rcmge-40,
New Delhi is being solicited in terms of statutory requirement of section 147 of the
Income Tax Act, 1961 and other enabling provisions of law to assume jurisdiction U/s
147 and issue notice u/s 148 in terms of requirements of section 149 of Income Tax
Act. 1961 for A Y. 2005-2006 ,2006- 2007, 2007-2008 & 2008-2009 relevant for F.
Y. 2004- AMQPS5036G.

" 2. In the TEP filed by the complainant following main allegations were levied.

1 "In writ petition filed before Hon'ble Delhi High Court the assessee has claimed that
her trip to Europe arose because of yearly vacation abroad with family being part of
salary package of Sh. Abhisar Shanna, her spouse and an employee of NDTV Ltd.

2 The trip of Europe by Ms. Shumana Sen and Shri Abhisar Sharma during F.Y.
2005-06 ( April 12th 2005 to April 20th 2005) by British Airways Flight BA 142 and
BA 143. cost NOT I Ltd about Rs 1.00,00.000 - and by that yardstick, Ms. Shumana
Sen and Shri Abhisar Sharma have evaded the taxable income during the period
2003 to Oct. 2007 in the range of Rs. 3.00.00.000 - to Rs 5,00.00.000/-.

3 Apart from that, claim oj Shumana Sen is incorrect in so much expenditure

incurred on the trip was Bribe paid to Ms Shumana Sen DCIT, Cir. 13(1) and
Assessing Officer of NDTV Ltd. at the material time, the entire amount of
expenditure incurred on yearly vacation abroad by Sh. Abhisar Sharma and Shumana
Sen. paid by employer of Sh. Abhisar Sharma it/ 17 of the I T Act, 1961 being the
income oj the assessee.

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

4 M/s NDTV Ltd. has also not included the expenditure incurred on vacation abroad
of Ms Shumana Sen in the salary of Sh. Abhisar Sharma . and has not deducted any
tax on that nor has included any perquisite in the Form of 16 issued by NDTV Ltd. to
Sh. Abhisar Sharma and thereby it is clear that expenditure incurred on the vacation
abroad of Ms Shumana Sen was not the salary of Sh. Abhisar Sharma but bribe and
illegal gratification received by Ms. Shumana Sen ay DCIT Cir. 13(1), for favouring
M/s NDTV Ltd. illegally."

17. The reopening vis a vis notices u/s 148 of the Act was challenged by the assessee before the
Hon'ble High Court of Delhi by way of writ petition and the said writ petition was disposed of by the
Hon'ble High Court vide order dated 19.10.2012 in WP(C) No. 4022/2012 CM Appeal
8436-8438/2012. The Hon'ble High Court held as under:

"In the circumstances, we are not inclined to accept the submissions of the petitioner.
We accordingly hold that the notice issued on 28 03' 2012 u s 148 of the Act for AY
2005- 06 was within the jurisdiction of the Assessing officer. The AO is directed to
dispose off the objections filed by the petitioner within a reasonable time and at any
rate not later than 30/11/2012, if not disposed off We refrain from expressing any
opinion on the various allegations and counter allegations which were exchanged
between the petitions and respondent No 4 in other proceedings. In coming to our
decision we have kept in view only the material before t)avAO on basis of which he
recorded reasons and issued notice u/s 148"

18. Subsequently, the reassessment proceedings were started. In the questionnaire, the assessee was
required to submit the following information:

"A) AS Per Tax Evasion Petition filed in your case it has been alleged that you have
incurred unaccounted expenditure to the tune oj Rs. 3 crores on such foreign travels.
In this connection you are hereby asked to submit a detailed reply on this allegation
alongwith supporting evidence, if any, for the year under consideration B) Statement
of your taxable Income for the year under consideration.

C) A copy of your Bank Account in which the salary was being credited for the
relevant accounting period and all other bank accounts in your name or in joint name
for the relevant period.

D) A copy of your Passport E) Details in respect of Foreign tours performed by you

individually and collectively with your family during the relevant period, the date of
travel, places travelled, purpose of travel, ticket expenses, boarding & lodging
expenses, sight-seeing expenses, shopping for each such foreign travel alongwith
sources of incurring such expenditure and documentary evidence in support thereof
Plus reply should pertain to foreign travel incurred during 39 the F. Y. 2004-05.

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

F) A copy of form no. 16 along with a copy of the return of Income if already filed by
your goodself for the assessment year 2005- 06, with supporting evidence. G) A
Photocopy of Return of Income of Shri Abhisar Sharma for the Asstt. Year 2005-06,
alongwith copy of Form No. 16 and a copy of his Passport. H) Moveable or
Immovable property sold or purchased, individually or jointly, during the relevant
period i.e F Y2004- 05 alongwith the sale purchase Deed and source of such
expenditure or utilization of sale proceeds received if any Photocopy of immovable
property declared in your office for the relevant period"

18. In her reply, inter alia, the assessee referred to the observations of the Hon'ble High Court of
Delhi which have been mentioned by us elsewhere. During the course of assessment proceedings,
the Assessing Officer called for information u/s 133(6) of the Act from NDTV Ltd in the case of
Abhisar Sharma [spouse of the assessee]. The following information was called for:

"Sh. Abhisar Sharma was employed by M/s NDTV Ltd. during October 2003 to
October 2007, i.e. financial year 2003-04,2004- 05,2005-06,2006-07 and 2007-08.
You are requested to provide the following information u/s 133(6) of the Income-tax
Act, 1961 In the above mentioned financial years for the period October 2003 to Oct,
2007, there are five financial years involved i.e.2003- 04 to 2007-08, you are
therefore required to provide authenticated copies of:

1. The employment contract of Sh. Abhisar Sharma with M/s NDTV Ltd. for this
period i.e. from Oct. 2003 to Oct. 2007.

2. Copy of Form No. 16 issued to Sh. Abhisar Sharma for this period.

3. Copy of Form No. 12BA( Rule ( 26a(2) ) provided to Sh Abhisar Sharma, month
wise break up salary, showing the amount of salary actually paid, tax deducted and
value of perquisites included in total emoluments for each month separately.

4. Amount of expenditure incurred by you on the annual vacation abroad for each
year and amount of TDS thereon.

5. List of employees other than Directors of the Company who were provided the
perquisite of annual vacation abroad for self and family during the period 1-4-2003
to 31.3.2008.

6. Amount of gross emoluments, TDS and the value of perquisites in terms of section
17(2) of the Income-tax Act. during the period 1/472003 to 31/3/2008 in the case of
each employee who was provided with the perquisite of annual vacation abroad for
self and family."

19. Simultaneously, information u/s 133(6) of the Act was called from the following parties :

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

a). From ACIT (Finance) o/o CCIT-I, New Delhi regarding bank a/cs of the assessee.

b) From ACIT Circle 47(1), New Delhi regarding copies of ITR's and FormNo 16 of Sh.
Abhisar Sharma for AY.2005-06 to 2008- 09.

c) From ACIT(HQ)(Personnes) O/o CCIT-1, New Delhi regarding intimations given by the assessee
and permissions accorded for foreign travel. From British Airways regarding journeys conducted
abroad by the assessee from AY.2008-09 to AY.2008-09 vide their carriers."

20. Replies received from the aforesaid parties are summarized by the Assessing Officer as under:

a) ACIT (Finance) informed that salary of the assessee is credited into Syndicate
Bank account No 90672010049291 in CR Building. New Delhi.

w.e.f. March 2009.

b) ACIT Circle 47(1), New Delhi provided Form Nol6 of Sh. Abhisar Sharma for AY. 2005-06,
2007-08 and 2008-09. Copy to Form No 12BA for AY2005- 06 submitted by NDTV Ltd. was also
provided.

c) ACIT(HQ)(Personnel) O/o CCTT-1, New Delhi informed that assessee was permitted to travel
abroad during AY 2005-06.

d) M/s British Airways stated that they don't have record beyond 3years on their system. No
information was provided by them due to this reason."

21. The assessee replied vide letter dated 11.03.2013 in response to the questionnaire, statement of
the complainant, exhibit filed by the complainant of year wise details of alleged unaccounted and
undisclosed income, expenditure and investment submitted by Shri S.K. Srivastava and detailed
point wise reply was filed before the Assessing Officer. Subsequently, on 22.03.2013, in response to
summons u/s 131 of the Act, statement of the assessee was recorded.

The relevant portion reads as under:

"In response to Summon u/s 131 of the l.T. Act, 1961, the asses see eel the ease on
25/3/2013 and statement on Oath was recorded. The relevant portion is as under:-

"08. As per Tax evasion petition. Sh S.K Srivastava alleged that you have incurred
expenditure to the tune of Rs. 3 Crores or more on such foreign travels during the
financial year 2004-05 2005-06 2006-07 and 200^-08, whether you have gone to
foreign trip during the financial year 2004-05. 2005-

06. 2006-07 and 2007-08. What is the source of the expenditure incurred, and how
much expenditure you have actually incurred with documentary evidence?

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

Ans: As per the allegation made by Sh. S.k Srivastava is concerned, the same is
completely false, baseless and malicious. They are also unsubstantiated, without any
evidence or any basis. 1 would like to point out here that Sh. S.K Srivastava has been
in the habit oj making such allegations. Consequently, he had to tender an apology
before the Hon.hie High Court of Delhi for making such unsubstantiated allegations
and had withdrawn the same, with the undertaking that he would desist from
repeating such allegations In fact, he has been sentenced to 15 days of imprisonment
by the Hon.ble High Court of Delhi for contempt of Court which arose out of the fact
that he repeated such allegations.

It is categorically denied that I had incurred an expenditure of Rs. 3 Crores and above
on such trips. In the Assessment Year 2005-06, there was no foreign trip undertaken
by me. I undertook trips to UK and Australia in A. Y 2006-07. the cost incurred on
which was Rs. 80,000/ to I Lakh as far as trip to UK is concerned and the
expenditure incurred was from the salary and savings of my spouse Sh. Abhisar
Sharma. For the trip to Australia, an approximate cost of Rs. 1,25,000/- to
Rs.1,35,000/- was incurred by the entire family. consisting of my spouse, my minor
daughter and myself. As stated above, the source of the same was salary and savings
of my husband. In the A Y 2007- 08, 1 took a trip with my family to Ireland & UK.
The cost incurred therein was approximately Rs 90,000/-. The source was the salary
and savings of my husband "

Q.9 Sh. S.K Srivastava the complainant submitted documentary evidence in support of his statement
exhibit I to exibit 36 and yearwise details of unaccounted and unexplained income, expenditure and
investment submitted, for the A. Y 2005- 06 . Point Ao. l, 2,3 and 4, for the A.Ys 2006-0"- point No I
to 6. 2007-08-point no 1 to 6 and 2008-09- Point no I to 4. What is your reply on these allegations.

Ans It is wrong on your part to say that Sh. Srivastava has submitted documentary evidence. A
perusal of the documents that you are referring to clearly show that these are not in the nature of
any evidence Rather, these are again either repititions of the vulgar and baseless allegations that Sh.
S K Srivastava is in the habit of making or are new allegations leveled by him which are equally
baseless and scurrilous. My averments in reply 8 above are reiterated. In this regard, my detailed
reply in my letter dated 11703/2013, which gives point wise reply to each and every allegations
leveled, along with the facts and the documentary evidence where ever applicable have been
provided. 0.

10 In your reply dated 11/03/2013, in para 1 you have replied that all such allegations made had
been examined by the Vigilance directorate of the department as well as seniors and file had been
closed pursuant to the same. So, have you any documentary evidence for this verification?

Ans: I have no documents in my possession regarding the same However, as had been requested by
my letter dated 11/03/2013. a copy of the report may be sought from the concerned authorities.
Without prejudice to the same, it Is stated that these allegations have been withdrawn by the
complainant as already been stated above by me and therefore have no bearing to the impugned

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

assessment proceedings."

22. Proceeding further, the Assessing Officer issued summons u/s 131 of the Act to Shri Abhisar
Sharma, husband of the assessee whose statement was recorded on oath on 29.03.2013. The
relevant part of the statement reads as under:

"Q No 7 As per Tax Evasion Petition, Sh. S.K Srivastava alleged to Ms Shumana Sen
H o Sh. Abhisar Sharma have incurred expenditure to the tune of Rs. 3 crores or
more on such foreign travels during the financial year 2004- 05, 2005- 06, 2006- 07
and 2007-08 . Whether you have gone to foreign trip during the financial year
2004-05, 2005-06, 2006-07 and 2007-08. Whether these trips are official or
personal?

Ans All allegations made by Sh. S.K. Srivastava are false, baseless and malicious. No
expenditure of Rs. 3 crores or more were incurred on these trips. The detail of the
expenditure actually incurred have been given to my A.O. vide letter dated 24.2.2012.
These trips were personal in nature.

Q.No. 8.As you have told in your Answer of O.No.7 that you have travelled personally,
please give details with expenditure incurred on tickets, fooding & lodging, on local
site seen and other expenses etc.7 Also provide documentary evidence?

Ans.8 The details are as under:-

There was no foreign visit with family for A. Y. 2005-06. I. In April 2005. A.Y.
2006-07 A visit was made to the U.K. for tourism purpose. The expenditure incurred
was approx. Rs. 80,000/- to Rs. I lac. The source of the same was my salary, wherein
two tickets and 1000 doller were provided to me by my ex-employer and also I had
substantial savings at that time.

Boarding and lodging for most of the trip was provided by my wife's Aunt, who is a
resident of U. K. The trip was for a duration of 7 to 10 days

2. Nov. Dec. 2005: A. Y.2006-07 A trip was made to Australia for a period of 7 days to
10 days in was my salary of which foreign travel allowance of Rs 1,32.996 - per
annum was a component I had a balance of.Rs. 1,89,565 - in my account at that time
in Standard Chartered Bank. Cheques were issued from the same for the purpose of
purchasing tickets, visa fees, boarding and lodging and for site seen. An approx.
expenditure of Rs. 1,25,000/- to Rs. 1.35.000 - was incurred for the same. This trip
was undertaken by myself and my family consisting of my wife and my daughter who
was at that time one year and 10 months old.

3. Aug. 2006: A. Y.2007-08:

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

U.K. and Republic of Ireland. An expenditure of approximately Rs. 90,000/- was

incurred in this trip, which was undertaken by myself and my family, consisting of
my wife and my daughter, who was at that time 2 years and 8 months old. The source
of my expenditure was my salary consisting of foreign travel allowance of foreign
travel allowance of Rs. 1,32,996/- per annum and my savings. 1 had a balance of
approx. Rs. 1,65,271 - in my account at that time. Boarding and lodging in U.K. was at
my wife's Aunt place and in Ireland the boarding and lodging was through a package
tour, made by travel agent The trip was for 7 to 10 days.

4. There was no foreign trip with family for the Asstt. Year. 2008-09 0.9. Ms Shuman
Sen your wife has claimed in her writ Para3.43. page 17 and 18, a copy of affidavit
submitted in Hon'ble Delhi High Court that her trip to Europe arose because of a
yearly vacation abroad with family being part of salary package of Sh. Abhisar
Sharma declared to be her spouse and an employee to M/s NDTV Ltd. in this context
what do you want to say?

Ans. 9. It has been correctly stated by my wife that foreign travel allowance was part of my salary
package. The same is evident from the submissions made by me in my reply above in Q No. 8 "

Copy of bank statement of Abhisar Sharma with Standard Bank also examined to
verify the withdrawals for foreign trip."

23. During the course of assessment proceedings, the assessee brought to the notice of the Assessing
Officer that the allegation pertaining to her misdemeanor regarding NDTV Ltd allegations have
been examined in detail by the Vigilance Directorate of Income Tax Department and the file has
been closed. To confirm the facts mentioned by the assessee, the Assessing Officer called for
information u/s 133(6) of the Act from the DIT [Vigilance]-II, New Delhi, who, vide letter No. 07116
dated 30.03.2013 informed as under:

"In this regard I am directed to submit that the compliant concerning NDTV Ltd
made by Sh. S.K. Srivastava against Ads Shumana Sen was registered as
FCR-A/sd/NZ/56/13 and same has been dosed by DGIT(Vig.) on 15/02/2013 in
absence of any Vigilance angle and in view of Hon'ble Delhi High Court's
order/directions."

24. Proceeding further, the Assessing Officer once again called for information u/s 133(6) of the Act
from the ACIT, Circle 47(1), New Delhi who is the Assessing Officer of Shri Abhisar Sharma,
husband of the assessee. Information provided by the concerned Assessing Officer reads as under:

a) Details of foreign travel incurred by Abhisar Sharma and his family from
FY.2003-04 to FY.2008-09, alongwith relevant pages of bank statement showing
sources and expenditure incurred for foreign trips.

b) Information u/s 133(6) received from NDTV Ltd. by ACIT 47(1), New Delhi.

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

c) Salary and reimbursement statement of Abhisar Sharma.

d) Copy of passport of Abhisar Sharma.

e) Copy of passport of Ms. Shumana Sen

f) Copy of statements of Abhisar Sharma recorded u/s 131 of IT Act, 1961 by ACIT
Circle 47( 1), New Delhi on 4/03/2013.

g). Copy of statement of M/s Shumana Sen recorded u/s 131 of IT Act, 1961, by ACIT
Circle 47( 1), New Delhi on 11/03/2013."

25. Assessment order framed u/s 143(3) r.w.s 147 of the Act in the case of Shri Abhisar Sharma for
Assessment Year 2005-06 was also called for and was duly received.

26. The gist of the enquiries conducted by the Assessing Officer read as under:

"The proceeding paras outline the complete details of investigations conducted in this
case. Briefly stated the same are as under:

a) .Information u/s 133(6) of IT Act, 1961 was obtained from M/s NDTV L.td.

regarding employment contracts of Abhisar Sharma for AY. 2005-06 to AY.2008-09.

b) .Information u/s 133(6) of If Act, 1961 was obtained from DIT(Vigilance)- II, New Delhi regarding
outcome vigilance proceedings in case of the assessee visa vis NDTV Ltd.

c) . Information u/s 133(6) of IT Act, 1961 from ACIT Circle 47(1), New Delhi regarding
investigations conducted in case of Abhisar Sharma and assessment order passed for AY.2005-06 by
him.

d) Statements recorded u/s 131 of IT Act,1961 of Sh. S.K. Srivastava, Sh. Abhisar Sharma and the
assessee.

e) Bank statements of Abhisar Sharma with Standard Chartered Bank and that of the assessee with
Syndicate Bank were examined vis a vis these foreign trips. Bank statement with ICICI Bank (joint
account of assessee with her husband) were examined.

f) Apart from it information u/s 133(6) was called from ACIT(Finance) O/o CCIT-I, New Delhi,
ACIT(Personnel) O/o CCIT-I, New Delhi and M/s British Airways and same was obtained.

g) Copies of passports of the assessee and Abhisar Sharma were examined for verification of these
foreign Travels by undersigned and ACIT Circle 47(1), New Delhi

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

27. On the basis of the aforesaid enquiries, the Assessing Officer finally concluded as under;

"As a result of above mentioned investigations conducted the following facts emerge:-

a) . Sh. Abhisar Sharma was given two economy tickets and US $ 1000 towards travel
allowance for AY.2005-06 by M/s NDTV Ltd. was for Europe trip. However foreign
trip was undertaken in AY.2005-06 by assessee and her family.

b) . This foreign trip was undertaken in April 2005 relevant to AY2006-07.

Sources of the same was stated to be salary savings of Abhisar Sharma and two tickets alongwith us
$ 1000 provided by M/s NDTV Ltd. Boarding and lodging was provided by assessee's aunt in UK.
The duration of stay was 7- 10days.

c) In AY.2006-07 another trip was undertaken to Australia for 7- lO days. Source was stated to be
foreign Travel allowance of Rs. 1,32,996/- of Sh. Abhisar Sharma. Cheqes for this purpose have been
issued from bank a/c of Sh. Abhisar Sharma with Standard Chartered Bank for purchase of tickets,
visa fees, boarding/lodging etc. This trip was undertaken by the assessee, her husband i.e. Sh.
Abhisar Sharma and their daughter whose age was lyear 1 Omonths at that point of time.

d) . In August 2006 relevant to AY. 2007-08 a foreign travel was undertaken to U.K and Republic of
Ireland for 7 to lOdays by assessee, her husband and her daughter. Source was foreign travel
allowance and savings of Sh. Abhisar Sharma and Boarding & lodging in U.K. was assessee's aunt.
Boarding to lodging in Ireland was through package arranged by a travel agent.

e) There was no foreign trip conducted in F.Y. relating to A Y.2008-09 by the assessee and her
family.

g) These facts of foreign travel has been conformed from passports of assessee and her husband.
Foreign travel 54 allowance of Sh. Abhisar Sharma has been confirmed from employment contract
of Sh. Abhisar Sharma with NDTV Ltd. Withdrawal's in this regard appears in Sh. Abhisar Shrama's
bank Account

h) M/s NDTV Ltd. has confirmed that foreign travel allowance has been provided to Abhisar Sharma
as part of travel allowance.

i) Sh. Abhisar Sharma and assessee has conformed under Oath in their statements recorded u/s 131
of Id Act. 1961 that the sources of these foreign travels was foreign travel allowance provided by M/s
NDTV Ltd. and his personal savings and the assessee and her daughter had accompanied him as
family members. There are supporting withdrawals in the bank account of Abhisar Sharma
regarding their foreign travels.

j). A complaint to this effects was being processed by Vigilance Directorate of Income Tax
Department against the assessee which has been closed as per details outlined in proceeding.

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

paragraphs. The facts of the complaint were same and related foreign travels of the assessee w.r.t.
M/s NDTV 1 td.

k). The Assessing officer of Sh. Abhisar Sharma has made an addition for undisclosed perquisites in
hands of Abhisar Sharma in AY. 2005-06 in regard to the two economy tickets and US $ 1000
received by him from M/s NDTV Ltd. 55

1) Thus, the reasons outlined in reopening of assessment do not stand proved in view of the
employment contract provided by M/s NDTV Ltd. and other investigations conducted as elaborated
above

m). The statements recorded of Sh Abhisar Sharma u/s 131 of IT Act,1961 is separately being
forwarded to ACIT Circle 47(1), New Delhi for information and action, as deemed fit.

Sh. Abhisar Sharma in his statement and submissions before ACIT Circle 47(1), New Delhi has
confirmed this fact that foreign travels were undertaken through his sources and savings and his
wife and daughter accompanied him as family members. Reference is drawn to this letter dated
13/02/2013 and his statement recorded on 04/03/2013.

Similarly the assessee reiterated the same before ACIT, Circle 47(1), New Delhi in his statement
recorded on 11/03/2013.

o). There was no foreign trip undertaken for AY 2005-06 and AY.2008- 09.

p). No evidence could be gathered in these investigations that the assessee had incurred
unaccounted expenditure for these foreign travels.

q). The genuineness of the expenditure shown for these foreign travels can only be ascertained by
the Assessing officer of Sh. Abhisar Sharma because Sh. Abhisar Sharma has owned up the entire
expenditure incurred on these foreign travels. The statements recorded of Sh. Abhisar Sharma on
this issue shall be forwarded to AC1T Circle 47(1), New Delhi for information and action, as deemed
fit.

r). Hence, It is concluded that the assessee accompanied her husband during these foreign trips and
sources such foreign trips was out of foreign travel allowance provided to her husband and his
savings. No adverse inference in hands of the assessee is drawn.

Assessed In view of the above Returned Income at Rs. 1,8Tv85/- is accepted issue necessary forms."

28. A conspectus reading of the assessment order vis a vis the issues raised by the PCIT would show
that the PCIT has assumed jurisdiction on the ground that no proper enquiries were conducted by
the Assessing Officer during the course of assessment proceedings. Whereas, the facts on record and
as discussed hereinabove clearly reveal that thorough and investigative enquiries were conducted by
the Assessing Officer, not only from the assessee, but also from all the concerned persons. As

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

mentioned elsewhere, the entire investigation/ enquiry revolve around the malicious and scurrilous
allegations made 57 by Shri S.K. Srivastava. We have been told that Shri S.K. Srivastava has been
removed from services by the Government of India under Fundamental Rule 56(j) of Central Civil
Services (Pension) Rules, 1972.

29. Adverting to the facts of the case, we find that it is a settled position of law that powers u/s 263
of the Act can be exercised by the Commissioner on satisfaction of twin conditions, i.e., the
assessment order should be erroneous and prejudicial to the interest of the Revenue. By 'erroneous'
it is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to
establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the
Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the
possible views, no action to exercise powers of revision can arise, nor can revisional power be
exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of
revision can be exercised only where no enquiry, as required under the law, is done. It is not open to
enquire in case of inadequate inquiry. Our view is fortified by the decision of Hon'ble High Court of
Bombay in the case of CIT vs. Nirav Modi, [2016] 71 taxmann.com 272 (Bombay). This view is
further supported by the decision of the Hon'ble Gujarat High Court in the case of Shri Prakash 58
Bhagchand Khatri in Tax Appeal No. 177 with Tax Appeal No.178 of 2016, wherein the Hon'ble
Gujarat High Court was seized with the following substantial question of law:-

"Whether the Tribunal is right in law and on facts in upholding the order passed by
the CIT under section 263 of the Act on merits and still storing the issue of
allowability of deduction under section of the Act to the file of Assessing Officer even
though the working of allowability of deduction under section 54F is available in the
order under section 263 which is not disputed by the assessee before ITAT."

30. And the Hon'ble High Court, after considering the facts, held as under:-

"6. It can thus be seen that though final order of assessment was silent on this aspect,
the Assessing Officer had carried out inquiries about the nature of sale of land and
about the validity of the assessee's claim of deduction under section 54F of the Act.
Learned counsel for the Revenue however submitted that these inquiries were
confined to the claim of deduction under section 54F of the Act in the context of
fulfilling conditions contained therein and may possibly have no relevance to the
question whether the sale of land gave rise to a long term capital gain. Looking to the
tenor of queries by the Assessing Office and details . A.Y. 2009-10 59 supplied by the
assessee, we are unable to accept such a condition. In that view of the matter, the
observation of the Tribunal that the Assessing Officer having made inquiries and
when two views are possible, revisional powers could not be exercised, called for no
interference. Since with respect to computation and assertions of other aspects of
deduction under section 54Fofthe Act, the Tribunal has remanded the proceedings,
nothing stated in this order would affect either side in considerations of such claim.

7. No question of law arises. Tax Appeals are dismissed."

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

31. The Hon'ble Supreme Court in Malabar Industrial Co. Ltd., 243 ITR 83, has laid down the
following ratio:

"A bare reading of section 263 of the Income-tax Act, 1961, makes it clear that the
prerequisite for the exercise of jurisdiction by the Commissioner suo motu under it, is
that the order of the Incometax Officer is erroneous in so far as it is prejudicial to the
interests of the Revenue. 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. If one of them is absent--if the
order of the Income-tax Officer is erroneous but is not prejudicial to the Revenue or if
it is not erroneous but is prejudicial to the Revenue-- recourse cannot be had to
section 263(1) of the Act. The provision 60 cannot be invoked to correct each and
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. An incorrect assumption of facts
or an incorrect application of law will satisfy the requirement of the order being
erroneous ".

32. The co-ordinate bench in the case of Technip UK Ltd, ITA No. 1116/DEL/2014 vide order dated
17.12.2018 has held as under:

"62. We find the Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar reported
in 335 ITR 83 has held that where it was discernible from record that the A.O has
applied his mind to the issue in question, the ld. CIT cannot invoke section 263 of the
Act merely because he has different opinion. Relevant observation of the High Court
reads as under:

63. We find the Hon'ble Delhi High Court in the case of Vikas Polymer reported in
341 ITR 537 has held as under:

"We are thus of the opinion that the provisions of s. 263 of the Act, when read as a
composite whole make it incumbent upon the CIT before exercising revisional powers
to : (i) call for and examine the record, and (ii) give the assessee an opportunity of
being heard and thereafter to make or cause to be made such enquiry as he deems
necessary. It is only on fulfilment of these twin conditions that the CIT may pass an
order exercising his power of revision. Minutely examined, the provisions of the
section envisage that the CIT may call for the 61 records and if he prima facie
considers that any order passed therein by the AO is erroneous insofar as it is
prejudicial to the interest of the Revenue, he may after giving the assessee an
opportunity of being heard and after making or causing to be made such enquiry as
he deems necessary, pass such order thereon as the circumstances of the case justify.
The twin requirements of the section are manifestly for a purpose. Merely because
the CIT considers on examination of the record that the order has been erroneously
passed so as to prejudice the interest of the Revenue will not suffice. The assessee
must be called, his explanation sought for and examined by the CIT and thereafter if

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

the CIT still feels that the order is erroneous and prejudicial to the interest of the
Revenue, the CIT may pass revisional orders. If, on the other hand, the CIT is
satisfied, after hearing the assessee, that the orders are not erroneous and prejudicial
to the interest of the Revenue, he may choose not to exercise his power of revision.
This is for the reason that if a query is raised during the course of scrutiny by the AO,
which was answered to the satisfaction of the AO, but neither the query nor the
answer were reflected in the assessment order, this would not by itself lead to the
conclusion that the order of the AO called for interference and revision. In the instant
case, for example, the CIT has observed in the order passed by him that the assessee
has not filed certain documents on the record at the time of assessment. Assuming it
to be so, in our opinion, this does not justify the conclusion arrived at by the CIT that
the AO had shirked his responsibility of examining and investigating the case. More
so, in view of the fact that the assessee explained that the capital investment made by
the partners, which had been called into question by the CIT was duly reflected in the
62 respective assessments of the partners who were I.T. assessees and the unsecured
loan taken from M/s Stutee Chit & Finance (P) Ltd. was duly reflected in the
assessment order of the said chit fund which was also an assessee."

64. Since in the instant case the A.O after considering the various submissions made by the assessee
from time to time and has taken a possible view, therefore, merely because the DIT does not agree
with the opinion of the A.O, he cannot invoke the provisions of section 263 to substitute his own
opinion. It has further been held in several decisions that when the A.O has made enquiry to his
satisfaction and it is not a case of no enquiry and the DIT/CIT wants that the case could have been
investigated/ probed in a particular manner, he cannot assume jurisdiction u/s 263 of the Act. In
view of the above discussion, we hold that the assumption of jurisdiction by the DIT u/s 263 of the
Act is not in accordance with law. We, therefore, quash the same and grounds raised by the assessee
are allowed."

33. In yet another case, Jubilant Energy [P] Ltd ITA No. 3927/DEL/2016 order dated 04.07.2018,
the co-ordinate bench under similar facts and circumstances, has held as under:

"19. The Hon'ble Bombay High Court in the case of Gabriel India Ltd 203 ITR 108
has held as under:

"The power of suo motu revision under subsection (1) is in the nature of supervisory
jurisdiction and the same can be 63 exercised only if the circumstances specified
therein exist. Two circumstances must exist to enable the Commissioner to exercise
power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue
of the order being erroneous prejudice has been caused to the interests of the
Revenue. It has, therefore, to be considered firstly as to when an order can be said to
be erroneous. We find that the expressions "erroneous", "erroneous assessment" and
"erroneous judgment"

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

have been defined in Black's Law Dictionary. According to the definition, "erroneous" means
"involving error; deviating from the law". "Erroneous assessment" refers to an assessment that
deviates from the law and is, therefore, invalid, and is a defect that is jurisdictional in its nature, and
does not refer to the judgment of the Assessing Officer in fixing the amount of valuation of the
property. Similarly, "erroneous judgment" means "one rendered according to course and practice of
court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal
principles".

12. From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is
not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain
assessment, the same cannot be branded as erroneous by the Commissioner simply because,
according to him, the order should have been written more elaborately 64 This section does not
visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax
Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised
where the Income-tax Officer while making an assessment examines the accounts, makes enquiries,
applies his mind to the facts and circumstances of the case and determines the income either by
accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the
records, may be of the opinion that the estimate made by the officer concerned was on the lower side
and left to the Commissioner he would have estimated the income at a figure higher than the one
determined by the Income-tax Officer. That would not vest the Commissioner with power to
re-examine the accounts and determine the income himself at a higher figure. It is because the
Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and
arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the
Commissioner does not feel satisfied with the conclusion. It may be said in such a case that in the
opinion of the Commissioner the order in question is prejudicial to the interests of the Revenue. But
that by itself will not be enough to vest the Commissioner with the power of suo motu revision
because the first requirement, viz., that the order is erroneous, is absent. Similarly, if an order is
erroneous but not prejudicial to the interests of the Revenue, then also the power of suo motu
revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of
revision because the second requirement also must be fulfilled. There must be some prima facie
material on record to show that tax which was lawfully exigible has not been imposed or that by the
application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than
what was just has been imposed.

We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act
there must be material before the Commissioner to consider that the order passed by the
Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We
have already held what is erroneous. It must be an order which is not in accordance with the law or
which has been passed by the Income-tax Officer without making any enquiry in undue haste. We
have also held as to what is prejudicial to the interests of the Revenue. An order can be said to be
prejudicial to the interests of the Revenue if it is not in accordance with the law in consequence
whereof the lawful revenue due to the State has not been realised or cannot be realised. There must
be material available on the record called for by the Commissioner to satisfy him prima facie that
the aforesaid two requisites are present. If not, he has no authority to initiate proceedings for

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

revision. Exercise of 66 power of suo motu revision under such circumstances will amount to
arbitrary exercise of power.

It is well-settled that when exercise of statutory power is dependent upon the existence of certain
objective facts, the authority before exercising such power must have materials on record to satisfy it
in that regard. If the action of the authority is challenged before the court it would be open to the
courts to examine whether the relevant objective factors were available from the records called for
and examined by such authority.

The Income-tax Officer in this case had made enquiries in regard to the nature of the expenditure
incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in
writing. All these are part of the record of the case. Evidently, the claim was allowed by the
Incometax Officer on being satisfied with the explanation of the assessee. Such decision of the
Income-tax Officer cannot be held to be "erroneous" simply because in his order he did not make an
elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even
after initiating proceedings for revision and hearing the assessee, could not say that the allowance of
the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but
an expenditure of capital nature. He simply asked the Income- tax Officer to re-examine the matter.
That, in our opinion, is not permissible. Hence the provisions of section 263 of the Act were not
applicable to the instant case and, therefore, the commissioner was not justified in setting aside the
assessment order."

34. The ld. DR, in his written submissions, has relied upon the judgment dated 20.07.2018 of the
Hon'ble High Court of Delhi in the case of Braham Dev Gupta 907 of 2017. We find that the facts of
the case in hand are not even remotely related to the facts of this case.

35. Reliance was also placed on the decision of the Hon'ble High Court of Delhi in the case of BSES
Rajadhani Power Ltd 399 ITR 228 is again distinguishable on facts as in that case, the Assessing
Officer did not go into the issue with respect to whole claim of deprecation and that was considered
as an error justifying the assumption of jurisdiction u/s 263 of the Act. Whereas the facts of the case,
as discussed hereinabove, clearly show that the reasons on which the PCIT assumed jurisdiction are
the very reasons for reopening the assessment and the Assessing Officer has not only made
thorough enquiry, but has also done detailed investigative work by calling for 68 information u/s
133(6) of the Act from various parties mentioned elsewhere.

36. Similar is the fate of the decision in the case of Rajmandir Estates 386 ITR 162 wherein the
Assessing Officer did not make any enquiry in respect of huge premium collected by the assessee
with a small amount of authorised share capital and, therefore, it was held that the commissioner
was justified in treating the assessment order as erroneous and prejudicial to the interest of the
revenue.

37. Another decision relied upon by the ld. DR which is in the case of Manjunathesware Packing
Products and Camphor Works 231 ITR 53, would, in fact, do good to the assessee because in that
case, the Hon'ble Supreme Court held that the word "record" used in Sec. 263 (1) of the Act would

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

mean the record as it stands at the time of examination by the Commissioner, but not as it stands at
the time the order was passed by the Assessing Officer.

38. Records which were examined by the PCIT, had it been examined by due application of mind,
the PCIT would have known the fate of frivolous complaints made by Shri S.K. Srivastava and his
conviction by the Hon'ble High Court. The other decisions relied upon by the ld. counsel for the
Revenue are also misplaced and need no separate discussion.

39. Considering the facts of the case in hand, in totality, in the light of judicial decisions discussed
hereinabove, supported by a vortex of evidences, examined and analysed by the Assessing Officer
during the course of assessment proceedings, further supported by thorough
investigations/enquiries made by the Assessing Officer during the assessment proceedings, we are
of the considered view that there remains nothing for the PCIT to assume jurisdiction u/s 263 of the
Act to say that the assessment order is not only erroneous but prejudicial to the interest of the
revenue. We are of the considered view that the PCIT has wrongly assumed jurisdiction u/s 263 of
the Act, hence his combined order for all the A.Ys deserves to be set aside. We, accordingly, set aside
the order of the PCIT and restore that of the Assessing Officer. We order accordingly.

40. Before parting with the present order, we are constrained to bring on record, to be looked into
by the Central Board of Direct Taxes (CBDT) that proceedings u/s 263 of the Act have been initiated
in this case apparently on the basis of false, frivolous and baseless allegations with malafide
intention of the quarter concerned which were also examined and found not sustainable by the
Vigilance Directorate of Income-tax Department. No doubt, proceedings u/s 263 of the Act having
been initiated and completed on the allegations leveled by a Senior Officer of the Income-tax
Department is an order passed by a quasi-judicial authority but it sans judicious approach required
to be exercised by the quasi-judicial authority. Quasi-judicial proceedings initiated apparently on
the basis of false, frivolous and baseless allegations have not only prejudiced appellant rather it has
also wasted the valuable time of the Tribunal. Facts and circumstances of the case, available on
record as discussed in the preceding paras prove, that the Senior Officer of the Revenue Department
had not only got the proceedings u/s 263 initiated against Appellant on false, frivolous and baseless
allegations rather continued to litigate against the appellant as well as against the Revenue
Department by filing frivolous applications one after the other before the Hon'ble High Court of
Delhi as well as the Tribunal.

41. In these circumstances, we direct the CBDT to initiate a discreet enquiry in this case to find out,
as to how and under what circumstances on the basis of false, frivolous and baseless allegations, that
too with malafide intentions, proceedings u/s 263 of the Act have been initiated apparently to
victimize the appellant, to proceed against the guilty officials under Rules and to further frame the
guidelines to deal with such abuse of powers by the senior officers, so that such incident should not
reoccur.

42. In the result, all the four appeals of the assessee in ITA Nos. 3281 to 3284/DEL/2015 are
allowed."

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

17. Since the facts of the instant case are identical to the facts of the case already decided by the
Tribunal in the case of the spouse of the assessee, namely, Mrs. Shumana Sen in so far as allegation
no. (a), (c) and (d) of para 15 of this order, therefore, respectfully following the decision of the
Tribunal in the case of the spouse of the assessee Mrs. Shumana Sen (supra), we hold that the PCIT
has wrongly assumed jurisdiction u/s 263 of the Act on these issues.

18. So far as the allegation of not conducting any enquiry regarding ESOP is concerned, we find the
year under consideration is A.Y. 2005-06 and there was no provision in the Act to treat the ESOPs
as perquisites in the hands of the assessee.

The amendment in Section 17(2)(vi) of the Act was w.e.f. 01.04.2010 and prior to such amendment
ESOPs were treated as capital receipts in the hands of the recipient and were taxable only after the
sale of the shares. Therefore, we find merit in the argument of the ld. Counsel for the assessee that
the observation of the PCIT that the AO did not conduct any enquiry regarding tax on receipt arising
out of ESOPs received from employer is not in accordance with law. Therefore, the PCIT, in our
opinion, is not justified in assuming jurisdiction u/s 263 on the issue of non-examination of
taxability of receipts of ESOPs from the employer.

19. It is the settled proposition of law that in order to assume jurisdiction u/s 263 of the Act, the
twin conditions namely, (a) that the order is erroneous and (b) that the order is prejudicial to the
interest of the Revenue must be satisfied. In the instant case, the AO after examining the facts on
record and after conducting all possible enquiries had passed the order by making certain additions.
Therefore, merely because the ld. PCIT does not agree with the order of the AO cannot make the
order erroneous as long as the same was passed after all possible enquiries and due verification of
facts on record. It is not a case of lack of enquiry or lack of investigation so as to invoke the
provisions of section 263 of the IT Act, 1961.

Further, the PCIT himself has not conducted any enquiry so as to give a definite finding that the
order passed by the AO is erroneous. Even otherwise also when two views are possible and the AO
has adopted one possible view, the order of the AO cannot be said to be erroneous so as to assume
the jurisdiction u/s 263 since the twin conditions cannot be fulfilled.

20. In this view of the matter, we hold that the PCIT was not justified in assuming jurisdiction u/s
263 of the IT Act, 1961. We, therefore, set aside the order of the PCIT passed u/s 263 and the
grounds raised by the assessee are allowed.

21. In the result, the appeal filed by the assessee is allowed.

The order was pronounced in the open court on 27th January, 2021.

Sd/- Sd/-

(SUCHITRA KAMBLE) (R.K. PANDA)

JUDICIAL MEMBER ACCOUNTANT MEMBER

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 Mr. Abhisar Sharma, Noida vs Dcit, New Delhi on 27 January, 2021

Dated: 27th January, 2021.

dk

Copy forwarded to

1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asstt. Registrar, ITAT, New Delhi

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