CIT vs. J. L. Morrison (India) Ltd (Calcutta High Court)
June, 23rd 2014
S. 263: The CIT can revise an assessment only if he can show unmistakably that the order of the AO is unsustainable. Fact that the AO has passed a non-speaking order does not mean that he has not applied his mind
The High Court had to consider the extent of jurisdiction of the CIT to revise an assessment u/s 263 of the Act. HELD by the High Court:
(i) If the AO has taken a possible view, it cannot be said that the view taken by him is erroneous nor the order of the AO in that case can be set aside in revision. It has to be shown unmistakably that the order of the AO is unsustainable. Anything short of that would not clothe the CIT with jurisdiction to exercise power u/s 263 of the Act.
(ii) Whether the assessment order was passed without application of mind is basically a question of fact. The records of the assessment including the order sheets go to show that appropriate enquiry was made and the assessee was heard from time to time. In deciding the question Court has to bear in mind the presumption in law laid down in Section 114 Clause – e of the Evidence Act “that judicial and official acts have been regularly performed;” Therefore, the Court has to start with the presumption that the assessment order was regularly passed. There is evidence to show that the AO had required the assessee to answer 17 questions and to file documents in regard thereto. It is difficult to proceed on the basis that the 17 questions raised by him did not require application of mind. When the AO was satisfied that the return, filed by the assessee, was in accordance with law, he was under no obligation to justify as to why he was satisfied. On the top of that the AO did not adversely affect any right of the assessee nor was any civil right of the assessee prejudiced. He was as such under no obligation in law to give reasons. If the AO cannot be shown to have violated any form prescribed for writing an assessment order, it would not be correct to hold that he acted illegally or without applying his mind.