COMMISS"IONER OF INCOME TAX. MUMBAIversusAMITABH BACHCHAN

                             [2016) 3 S.C.R. 516



A            COMMISS"IONER OF INCOME TAX. MUMBAI
                                       v.
                          AMITABH BACHCHAN
                       (Civil Appeal No. 5009 of2016)
B                               MAYll,2016
          [RANJAN GOGOi AND PRAFULLA C. PANT, JJ.]
           Income Tax Act, 1961 - s. 263 - Revision C!f" order prejudicial
    to Revenue - Suo motu revisional powers of Commissioner of Income
    Tax uls. 263 - Exercise of - Held: For exeri.:ise a/jurisdiction u/s.
c   263, order passed by the Authority should be erroneous and
    prejudicial to the interest of the Revenue - Thereafter, the said power
    is available su~ject to observance of the principles of natural justice
    - Power of revision u/s. 263 is not co11tinge11t 011 the gh>ing of a
    notice to show cause - Requirement u/s.263 is an opportunity of
D   hearing to the assessee and failure of the same renders the revisional
    order legally ji-agile - Full opportunity to controvert the same and
    to explain the circumstances surrounding such facts, must be
    afforded to assessee by C.I. T. prior to the finalization of the decision
    - On facts, C.I. Ton scrutinizing the record, noted that the assessee
    did not produce the books of account and other relevant documents
E
    despite various opportunities - Authorized representative of the
    assessee appeared during the revisional proceeding and had full
    opportunity to contest - It was revealed that the original assessment
    order on several heads was erroneous and had the potential of
    causing loss of revenue to the State - Requirement of giving
F   reasonable opportunity of being heard was not breached - Order
    of the tribunal as regards the revisional order going beyond the
    show cause notice, cannot be accepted - Orders passed by the High
    Court not tenable - As regards the claim of additional expenses of
    30% of the gross professional receipts by assessee in its re-revised
    return, and the same was withdrmi'/1, making a claim which would
G   prima facie disclose that the expenses in re~pect of which deduction
    has been claimed, were incurred and thereafter abandoning!
    withdrawing the same gives rise to the 11ecessity of further enquiry
    in the interest of the Revenue - Notice issued could not have been
    simply dropped 011 the ground that the claim has been withdrawn -
H    Thus, C.I. T. was justified in coming to his conclusions - Instant
                                    516
 COMMISSIONER OF INCOME TAX, MUMBAI v. AMITABH                              517
                   BACHCHAN

case is a fit case for exercise of the suo motu revisional powers of A
the C. I. T. uls. 263 - Suo motu revisional order of C.I. T. is restored
and those of the tribunal and the High Court is set aside.               ·
       Disposing of the appeals, the Court
       HELD: 1.1 The basic pre-condition for exercise of
jurisdiction under Section 263 of the Income Tax Act is a                   B
satisfaction that an order passed by the Authority under the Act
is erroneous and prejudicial to the interest of the Revenue. Both
are twin conditions thathave to be conjointly present. Once such
satisfaction is reached, jurisdiction to exercise the power woµld
be available subject to observance of the principles of natural
                                                                             c
justice which is implicit in the requirement cast by the Section to
give the assessee an opportunity of being heard. The power of
revision under Section 263 is not contingent on the giving of a
notice to show cause to the assessee. Rather, what is required
under the said provision is an opportunity of hearing to the
assessee. The two requirements are different; the first would                D
comprehend a prior notice detailing the specific grounds on which
revision of the assessment order is tentatively being proposed.
Such a notice is not required. What is contemplated by Section
263, is an opportunity of hearing to be afforded to the assessee.
Failure to give such an opportunity would render the revisional
                                                                             E
order legally fragile not on the ground of lack of jurisdiction but
on the ground of violation of principles of natural justice. [Para
10] [524-D-G)
        1.2 It may be that in a given case/cases it is so done a notice
proposing the revisional exercise is given to the assessee
indicating therein broadly or even specifically the grounds on               F
which the exercise is felt necessary. But there is nothing in Section
263 to raise the said notice to the status of a mandatory show
cause notice affecting the initiation of the exercise in the absence
thereof or to require the C.I.T. to confine himself to the terms of
the notice and foreclosing consideration of any other issue or               G
question of fact. This is not the purport of Section 263. While the
 C.I.T. is free to exercise his jurisdiction on consideration of all
 relevant facts, a full opportunity to controvert the same and to
explain the circumstances surrounding such facts, must be
afforded to.him by the C.I. T. prior to the finalization of the decision.
 (Para 111 [526-D-E)                                         ·               H
518            SUPREME COURT REPORTS                      [2016] 3 S.C.R.


A     1.3 In the instant case, the tribunal did not record any finding
      that in course of the suo motu revisional proceedings, hearing of
      which was spread over many days and attended to by the
      authorized representative of the assessee, opportunity of hearing
      was· not afforded to the assessee and that the assessee was denied
      an opportunity to contest the facts on the basis of which the C.I.T.
B
      had come to his conclusions as recorded in the order. Despite
      the absence of any such finding in the order of the tribunal, before
      holding the same to be legally unsustainable the court will have
      to be satisfied that in the course of the revisional proceeding the
      assessee, actually and really, did not have the opportunity to
c     contest the facts on the basis of which the C.I.T. had concluded
      that the order of the Assessing Officer is erroneous and
      prejudicial to the interests of the Revenue. [Para 13] (527-E-G]

             1.4 The C.I.T. in the course of the revisional proceedings
      had scrutinized the record of the proceedings before the
D     Assessing Officer and noted the various dates on which
      opportunities to produce the books of account and other relevant
      documents were afforded to the assessee which requirement was
      not complied with by the assessee. In these circumstances, the
      revisional authority took the view that the Assessing Officer, after
      being compelled to adjourn the matter from time to time, had to
E
      hurriedly complete the assessment proceedings to avoid the same
      from becoming time barred. In the course of the revisional
      exercise relevant facts, documents, and books of account which
      were overlooked in the assessment proceedings were considered.
      On such re-scrutiny it was revealed that the original assessment
F     order on several heads was erroneous and had the potential of
      causing loss of revenue to the State. It is on the said basis that
      the necessary satisfaction that the assessment order was
      erroneous and prejudicial to the interests of the revenue was
      recorded by the C.I.T. At each stage of the revisional proceeding
      the authorized representative of the assessee had appeared and
G
      had full opportunity to contest the basis on which the revisional
      authority was proceeding/had proceeded in the matter. If the
      revisional authority had come to its conclusions in the matter on
      the basis of the record of the assessment proceedings which was
      open for scrutiny by .the assessee and available to his authorized
H
 COMMISSIONER OF INCOME TAX, MUMBAI v. AMITABH                               519
                   BACH CHAN

representative at all times it is difficult to see as to how the             A
requirement of giving of a reasonable opportunity of being heard as
contemplated by s. 263 had been breached in the instant case. The
order of the tribunal insofar as the first issue i.e. the revisional order
going beyond the show cause notice is concerned, therefore, cannot
be accepted. The High Court having failed to fully deal with the matter
                                                                              B
in its cryptic order, the said orders are not tenable and are liable to
be interfered with. [Para 14] [528-B-F]
       1.5 The assessee in the re-revised return had made a claim of
additional expenses of30% of the gross professional receipts (Rs.3.17
crores) and the same was withdrawn. The C.I.T. took the view that
notwithstanding the withdrawal of the claim by the assessee, in view
                                                                              c
of the earlier stand taken that the said expenses were incurred for
security purposes of the assessee, the Assessing Officer ought to
have proceeded with the matter as the assessee was following the
cash system of accounting and the filing of the re-revised return,
prima facie, indicated that the additional expenses claimed had been          D
incurred. The assessee submitted that notice u/s. 69-C was issued by
the Assessing Officer and thereafter on withdrawal of the claim by
the assessee the Assessing Officer thought that the matter ought
not to be investigated any further. This, according to the counsel for
the assessee, is a possible view and when two views are possible on
an issue, exercise of revisional power under Section 263 would not be         E
justified.[Paras 17, 18, 19, 20] [529-D-E; 530-A, C-D; 531-A-B
       1. 7 So long as the view taken by the Assessing Officer is a
possible view the same ought not to be interfered with by the
Commissioner under Section 263 of the Act merely on the ground
that there is another possible view of the matter. Permitting exercise        F
ofrevisional power in a situation where two views are possible would
really amount to conferring some kind of an appellate power in the
revisional authority. This is a course of action that must be desisted
from. However, the above is not the situation in the instant case.
Making a claim which would prima facie disclose that the expenses
                                                                              G
in respect of which deduction has been claimed has been incurred
and thereafter abandoning/withdrawing the same gives rise to the
necessity of further enquiry in the interest of the Revenue. The
notice issued under Section 69-C of the Act could not have been
simply dropped on the ground that the claim has been withdrawn.
Therefore, the C.I. T. was perfectly justified in coming to his
520            SUPREME COURT REPORTS                         [2016] 3 S.C.R.


A     conclusions insofar as the issue No.(iii) is concerned and in passing
      the impugned order on that basis. The tribunal as well as the High
      Court, therefore, ought not to have interfered with the said
      conclusion. In the light thereof the instant case is a fit case for
      exercise of the sno mo tu revisional powers of the C.I. T. under Section
      263 of the Act. The order of the C.I.T., therefore, is restored and
B     those of the tribunal and the High Court are set aside. [Paras 21, 22]
      [531-C-H; 532-A]
            2. In Civil Appeal No.5010 of 2016, as by the order passed
      in the Civil Appeal No.5009 of 2016, the suo motu revisional
      order passed by the C.I.T. is restored, the order passed by the
c     tribunal and the order passed by the High Court is set aside.
      However, the re-assessment order had not been tested on merits
      the assessee would be free to do so. [Para 24] [532-E]
            Gita Devi Aggarwal v: Co111111issioner of Inco111e Tax,
            West Bengal and others (1970) 76 ITR 496; The C.I.T..
D           West Bengal, II, Calcutta v. Mis. Electro House (1971)
            82 ITR 824; Malabar 111dustrial Co. Ltd. v. CIT (2000)
            243 ITR 83 (SC); Co111111issioner of 111co111e-tax 1( Max
            India Ltd. (2007) 295 ITR 282 (SC) - referred to.
                             Case Law Reference
E            (1970) 76 ITR 496                 referred to        Para 10
             (1971) 82 ITR 824                 referred to        Para 10
             (2000) 243 ITR 83 (SC)            referred to        Para 21
             (2007) 295 ITR 282 (SC)           referred to        Para 21
            CIVJL APPELLATE JURISDICTION : Civil Appeal No. 5009
 F    of2016.
           From the Judgment and Order dated 07.08.2008 in lTA No 293
      of2008 passed by the High Court of Judicature at Bombay
                                    WITH
           C.A. No. 50 l 0/16.
G
            Ranjit Kumar, SG, Sanjai Kumar Pathak, Zoheb Hussain, B.V.
      Balaram Das, Mrs. Anil Katiyar, Advs. for the Appellant.
             Shyam Divan, Sr. Adv., Ms. Anuradha Dutt, Tushar Jarwal, Rahul
      Sateeja, Ms. B. Vijayalakshmi Menon, Uday Banerjee, Advs. for the
H     Respondents.
 COMMISSIONER OF INCOME TAX, MUMBAI v. AMITABH                                  521
                   BACH CHAN

      The Judgment of the Court was delivered by                                A
      RANJAN GOGOi, J.
      SLP(C) NO. 11621OF2009
       1. Leave granted.
       2. The appellant - Revenue seeks to challenge the order of the            B
High Court dated 7th August, 2008 dismissing the appeal filed by it under
Section 260A of the Income Tax Act, 1961 (hereinafter referred to as
"'the Act") and affirming the order of the Income Tax Appellate Tribunal,
Mumbai Bench ("Tribunal" for short) dated 28th August, 2007 whereby
the order dated 20th March, 2006 passed by the Commissioner oflncome             c
Tax-1, Mumbai ("C.l.T." for short) under Section 263 of the Act was
reversed. The assessment year in question is 2001-2002 and the
assessment order is dated 30th March, 2004.
       3. After the assessment as above was finalized, a show cause
notice dated 7th November, 2005 under Section 263 of the Act was                 D
issued by the learned C.l.T. detailing as many as eleven (I I) issues/
grounds on which the assessment order was proposed to be revised
under Section 263 of the Act. The respondent - assessee filed his reply
to the said show cause notice on consideration of which by order dated
20th March, 2006 the learned C.l.T. set aside the order of assessment
dated 30th March, 2004 and directed a fresh assessment to be made.               E
Aggrieved, the respondent - assessee challenged the said order before
the learned Tribunal which was allowed by the order dated 28th August,
2007.
       4. Aggrieved by the order dated 28th August. 2007 of the learned
Tribunal, the Revenue filed an appeal under Section 260A of the Act              F
before the High Court of Bombay. The aforesaid appeal i.e. ITA No.293
of2008 was summarily dismissed by the High Court by the impugned
order dated 7th August, 2008 holding that as the C.l.T. had gone beyond
the scope of the show cause notice dated 7th November, 2005 and had
dealt with the issues not covered/mentioned in the said notice the revisional
                                                                                 G
order dated 20th March, 2006 was in violation of the principles of natural
justice. So far as the question as to whether the Assessing Officer had
made sufficient enquiries about the assessee's claim of expenses made
in the re-revised return of income is concerned, which question was
fonnulated as question No.2 for the High Comi's consideration, the High
Court took the view that the said question raised pure questions of fact         H
522              SUPREME COURT REPORTS                           [2016) 3 S.C.R.


A      and, therefore, ought not to be examined under Section 260A of the Act.
       The appeal of the Revenue was consequently dismissed. Aggrieved,
       this appeal has been filed upon grant of leave under Article 136 of the
       Constitution oflndia.
             5. We have heard Shri Ranjit Kumar, learned Solicitor General
B      appearing for the appellant Revenue and Shri Shyarn Divan, learned
       Senior Counsel appearing for the respondent - assessee.
                6. The assessment in question was set aside by the learned C.l.T.
        by the order dated 20th March, 2006 on the principal ground that requisite
        and due enquiries were not made by the Assessing Officer prior to
c       finalization of the assessment by order dated 30th March, 2004. In this
        connection, the learned C.l.T. on consideration of the facts of the case
        and the record of the proceedings came to the conclusion that in the
        course of the assessment proceedings despite several opportunities the
        assessee did not submit the requisite books of account and documents
        and deliberately dragged the matter leading to one adjournment after the
D     · other. Eventually, the Assessing Officer, to avoid the bar of I imitation,
        had no option but to "hurriedly" finalize the assessment proceedings
        which on due and proper scrutiny disclosed that the necessary enquiries
        were not made. On the said basis the learned C.l.T. came to the
        conclusion that the assessment order in question was erroneous and
E       prejudicial to the interests of the Revenue warranting exercise of power
        under Section 263 of the Act. Consequently, the assessment for the
        year 2001-2002 was set aside and a fresh assessment was ordered. At
        this stage, it must be noticed that in the order dated 20th March, 2006
        the learned C.l.T. arrived at findings and conclusions in respect of issues
        which were not specifically mentioned in the show cause notice dated
F       7th November, 2005. In fact, on as many as seven/eight (07/08) issues
        mentioned in the said show cause notice the learned C.l.T. did not record
        any finding whereas conclusions adverse to the assessee were recorded
        on issues not specifically mentioned in the said notice before proceeding
        to hold that the assessment needs to be set aside. However, three (03)
G       of the issues, details of which are noticed herein below, are common to
        the show cause notice as well as the revisional order of the learned
        C.I.T.
              7. On appeal, the learned Tribunal took the view that the learned
       C.I.T. exercising powers under Section 263 of the Act could not have
H      gone beyond the issues mentioned in the show cause notice dated 7th
  COMMISSIONER OF INCOME TAX, MUMBAI v. AMITABH                                 523
           BACHCHAN [RANJAN GOGOI, J.]

November, 2005. The learned Tribunal, therefore, thought it proper to           A
take the view that in respect of the issues not mentioned in the show
cause notice the findings as recorded in the revisional order dated 20th
March, 2006 h~ve to be understood to be in breach of the principles of
natural justice. The learned Tribunal also specifically considered thethree
(03) common issues mentioned above and on such consideration arrived
                                                                                B
at the conclusion that the reasons disclosed by the learned C.l.T. in the
order dated 20th March, 2006 for holding the assessment to be liable for
cancellation on that basis are not tenable. Accordingly, the learned Tribunal
allowed the appeal of the assessee and reversed the order of the suo
motu revision dated 20th March, 2006.
       8. At this stage, it may be appropriate to reproduce hereunder
                                                                                 c
the provisions of Section 263 of the Act to appreciate the arguments
ac!vanced and to understand the contours of the suo motu revisional
power vested in the learned C.I.T. by the aforesaid provision of the Act.
       "263 - Revision of orders prejudicial to revenue.-(1)
       The Principal Commissioner or Commissioner may                            D
       call for and examine the record of any proceeding
       under this Act, and if he considers that any order
       passed therein by the Assessing Officer is erroneous
       in so far as it is prejudicial to the interests of the
       revenue, he may, after giving the assessee an                             E
       opportunity of being heard and after making or causing
       to be made such inquiry as he deems necessary, pass
       such order. thereon as the circumstances of the case
       justify, including an order enhancing or modifying the
       assessment, or cancelling the assessment and
       directing a fresh assessment.                                             F

       Explanation.••.··· .......................................... "
       9. Under the Act different shades of power have been conferred
on different authorities to deal with orders of assessment passed by the
primary authority. While Section 147 confers power on the Assessing
                                                                                 G
Authority itself to proceed against income escaping assessment, Section
154 of the Act empowers such authority to correct a mistake apparent
on the face of the record. The power of appeal and revision is contained
in Chapter XX of the Act which includes Section 263 that confer suo
motu power of revision in the learned C.l.T. The different shades of
power conferred on different authorities under the Act has to be exercised       H
524              SUPREME COURT REPORTS                         [2016] 3 S.C.R.


A     within the areas specifically delineated by the Act and the exercise of
      power under one provision cannot trench upon the powers available
      under another provision of the Act. In this regard, it must be specifically
      noticed that against an order of assessment, so far as the Revenue is
      concerned, the power conferred under the Act is to reopen the concluded
      assessment under Section 14 7 and/or to revise the assessment order
B
      under Section 263 of the Act. The scope of the power/jurisdiction under
      the different provisions of the Act would naturally be different. The
      power apd jurisdiction of the Revenue to deal. with a concluded
      assessment;therefore, must be understood in the context of the provisions
      of the relevant Sections noticed above. While doing so it must also be
c     borne in mind that the legislature had not vested in the Revenue any
      specific power to question an order of assessment by means of an appeal.
             I 0. Reverting to the specific provisions of Section 263 of the Act
      what has to be seen is that a satisfaction that an order passed by the
      Authority under the Act is erroneous and prejudicial to the interest of the
D     Revenue is the basic pre-condition for exercise of jurisdiction under
      Section 263 of the Act. Both are twin conditions that have to be conjointly
      present. Once such satisfaction is reached, jurisdiction to exercise the
      power woi1ld be available subject to observance of the principles of
      natural justice which is implicit in the requirement cast by the Section to
      give the assessee an opportunity of being heard. It is in the context of
E     the above position that this Court has repeatedly held that unlike the
      power of reop~ning an assessment under Section 14 7 of the Act, the
      power of revision under Section 263 is not contingent on the giving of a
      notice to show cause. In fact, Section 263 has been understood not to
      require any specific show cause notice to be served on the assessee.
 F    Rather, what is required under the said provision is an opportunity of
      hearing to the assessee. The two requirements are different; the first
      would comprehend.a prior notice detailing the specific grounds on which
      revision of the assessment order is tentatively being proposed. Such a
      notice is not required. What is contemplated by Section 263, is an
      opportunity of hearing to be afforded to the assessee. Failure to give
 G    such an opportunity would render the revisional order legally fragile not
      on the ground· of lack of jurisdiction but on the ground of violation of
      principles ofnaturaljustice. Reference in this regard may be illustratively
      made to the decisions of this Coutt in Gita Devi Aggarwal vs.
      Commissioner of Income Tax, West Bengal mu/ otlters and in Tlte
                                                                   1




H     I   (1970) 76 ITR496
 COMMISSIONER OF INCOME TAX, MUMBAI v. AMITABH                          525
          BACHCHAN [RANJAN GOGOi, J.]

C.l.T., West Bengal, II, Calcutta vs. Mis Electro House~. Paragraph      A
4 of the decision in The C.I.T., West Bengal, II, Calcutta vs. Mis
Electro House (supra) being illumination of the issue indicated above
may be usefully reproduced hereunder:
      "This section unlike Section 34 does not prescribe any notice
      to be given. It only requires the Commissioner to give an          B
      opportunity to the assessee of being heard. The section does
      not speak of any notice. It is unfortunate that the High Court
      failed to notice the difference in language between Sections
      33-B and 34. For the assumption of jurisdiction to proceed
      under Section 34, the notice as prescribed in that section is
      a condition precedent. But no such notice is contemplated
                                                                         c
      by Section 33-B. The jurisdiction of the Commissioner to
      proceed under Section 33-B is not dependent on the
      fulfilment ofany condition precedent. All that he is required
      to do before reaching his decision and not before
      commencing the enquiry, he must give the assessee an               D
      opportunity of being heard and make or cause to make such
      enquiry as he deems necessaiy. Those requirements have
      nothing to do with the jurisdiction of the Commissioner. They
       pertain to the region of natural justice. Breach of the
       principles of natural justice may affect the legality of the
      order made but that does not affect the jurisdiction of the        E
      Commissioner. At present we are not called upon to consider
       whether the order made by the Commissioner is vitiated
       because of the contravention of any of the principles of
       natural justice. The scope of these appeals is very narrow.
       All that we have to see is whether before assuming                F
       jurisdiction the Commissioner was required to issue a notice
       and if he was so required what that notice should have
       contained? Our answer to that question has already been
       made clear. In our judgment no notice was required to be
       issued by the Commissioner before assumingjurisdiction to
       proceed under Section 33-B. Therefore the question what           G
       that notice should contain does not arise for consideration.
       It is not necessary nor proper for us in this case to consider
       as to the nature of the enquiry to be held under Section 33-
       B. Therefore, we refrain from spelling out what principles
-----
' (1971) 82 ITR 824                                                      H
526             SUPREME COURT REPORTS                             [2016] 3 S.C.R.



A           of natural justice should be observed in an enquiry under
            Section 33-B. This Court in Gita Devi Aggarwal v. CIT,
            West Bengal ruled that Section 33-B does not in express
            terms require a notice to be served on the assessee as in
            the case of Section 34. Section 33-B merely requires that
            an opportunity of being heard should be given to the assessee
B
            and the stringent requirement of service of notice under
            Section 34 cannot, therefore, be applied to a proceeding
            under Section 33-B." (Page 827-828).
      [Note: Section 33-B and Section 34 of the Income Tax Act, 1922
      corresponds to Section 263 and Section 14 7 of the Income Tax Act,
c     1961]
               11. It may be that in a given case and in most cases it is so done
      a notice proposing the revisional exercise is given to the assessee indicating
      therein broadly or even specifically the grounds on which the exercise is
      felt necessary. But there is nothing in the section (Section 263) to raise
D     the said notice to the status of a mandatory show cause notice affecting
      the initiation of the exercise in the absence thereof or to require the
      C.I.T. to confine himself to the terms of the notice and foreclosing
      consideration of any other issue or question of fact. This is not the purport
      of Section 263. Of course, there can be no dispute that while the C.l.T.
E     is free to exercise his jurisdiction on consideration of al I relevant facts, a
      full opportunity to controvert the same and to explain the circumstances
      surrounding such facts, as may be considered relevant by the assessee,
      must be afforded to him by the C.l.T. prior to the finalization of the
      decision.

 F           12. In the present case, there is no dispute that in the order dated
      20th March, 2006 passed by the learned C.J.T. under Section 263 of the
      Act findings have been recorded on issues that are not specifically
      mentioned in the show cause notice dated 7th November, 2005 though
      there are three (03) issues mentioned in the show cause notice dated 7th
      November, 2005 which had specifically been dealt with in the order
G     dated 20th March, 2006. The learned Tribunal in its order dated 28th
      August, 2007 put the aforesaid two features of the case into two different
      compartments. Insofar as the first question i.e. findings contained in the
      order of the learned C.l.T. dated 20th March, 2006 beyond the issues
      mentioned in the show cause notice is concerned the learned Tribunal
H     taking note of the aforesaid admitted position held as follows:
 COMMISSIONER OF INCOME TAX, MUMBAI v. AMITABH                                  527
          BACHCHAN [RANJAN GOGOi, J.]

      "In the case on hand, the CIT has assumed jurisdiction by                 A
      issuing show cause notice u/s 263 but while passing the
      final order he relied on various other grounds for coming to
      the final conclusion. This itself makes the revision order
      bad in law and also violative of principles of natural justice
      and thus not.maintainable. If, during the course ofrevision
                                                                                 B
      proceedings the CIT was of the opinion that the order of
      the AO was erroneous on some other grounds also or on
      any additional grounds not mentioned in the show cause
      notice, he ought to have given another show cause notice
      to the assessee on those grounds and given him a reasonable
      opportunity of hearing before coming to the conclusion and                 c
      passing the final revision order. In the case on hand, the
      CIT has not done so. Thus, the order u/s 263 is violative of
       principles of natural justice as far as the reasons, which
       formed the basis for the revision but were not part of the
       show cause notice issued u/s 263 are concerned. The order
                                                                                 D
       of the CIT passed u/s 263 is therefore liable to be quashed
       in so far as those grounds are concerned."
        13. The above ground which had led the learned Tribunal to
interfere with the order of the learned C.1.T. seems to be contrary to the
settled position in law, as indicated above and the two decisions of this
Court in Gita Devi Aggarwal (supra) and Mis Electro House (supra).               E
The learned Tribunal in its order dated 28th August, 2007 had not recorded
any finding that in course of the suo motu revisional proceedings, hearing
of which was spread over many days and attended to by the authorized
representative of the assessee, opportunity of hearing was not afforded
to the assessee and that the assessee was denied an opportunity to contest       F
the facts on the basis of which the learned C.l.T. had come to his
conclusions as recorded in the order dated 20th March, 2006. Despite
the absence of any such finding in the order of the learned Tribunal,
before holding the same to be legally unsustainable the Court will have
to be satisfied that in the course of the revisional proceeding the assessee,
actually and really, did not have the. opportunity to contest the facts on       G
the basis of which the learned C.1.T. had concluded that the order ofthe
Assessing Officer is erroneous and prejudicial to the interests of the
Revenue. The above is the question to which the Court, therefore, will
have to turn to.
       14. To determine the above question we have read and considered           H
528             SUPREME COURT REPORTS                            [2016] 3 S.C.R.


A     the order of the Assessing Officer dated 30th March, 2004; as well as
      the order of the learned C.I.T. dated 20th March, 2006. From the
      above consideration, it appears that the learned C.I.T. in the course of
      the revisional proceedings had scrutinized the record of the proceedings
      before the Assessing Officer and noted the various dates on which
      opportunities to produce the books of account and other relevant
B
      documents were afforded to the assessee which requirement was not
      complied with by the assessee. In these circumstances, the revisional
      authority took the view that the Assessing Officer, after being compelled
      to adjourn the matter from time to time, had to hurriedly complete the
      assessment proceedings to avoid the same from becoming time barred.
c     In the course of the revisional exercise relevant facts, documents, and
      books of account which were overlooked in the assessment proceedings
      were considered. On such re-scrutiny it was revealed that the original
      assessment order on several heads was erroneous and had the potential
      of causing loss of revenue to the State. It is on the aforesaid basis that
      the necessary satisfaction that the assessment order dated 30th March,
D
      2004 was erroneous and prejudicial to the interests of the revenue was
      recorded by the learned C.I.T. At each stage of the revisional proceeding
      the authorized representative of the assessee had appeared and had full
      opportunity to contest the basis on which the revisional authority was
      proceeding/had proceeded in the matter. If the revisional authority had
E     come to its conclusions in the matter on the basis of the record of the
      assessment proceedings which was open for scrutiny by the assessee
      and available to his authorized representative at all times it is difficult to
      see as to how the requirement of giving of a reasonable opportunity of
      being heard as contemplated by Section 263 of the Act had been breached
      in the present case. The order of the learned· Tribunal insofar as the first
F      issue i.e. the revisional order going beyond the show cause notice is
      concerned, therefore, cannot have our acceptance. The High Court
      having failed to fully deal with the matter in its cryptic order dated 7th
      August, 2008 we are of the view that the said orders are not tenable and
      are liable to be interfered with.
G            15. This will bring us to a consideration of the second limb of the
      case as dealt with by tlie learned Tribunal, namely, that tenability of the
      order of the learned C.l.T. on the three (03) issues mentioned in the
      show cause notice and also dealt with in the revisional order dated 20th
      March, 2006. The aforesaid three (03) issues are:
H            "i) Assessee maintaining 5 bank accounts and AO not
 COMMISSIONER OF INCOME TAX, MUMBAI v. AMITABH                                  529
          BACHCHAN [RANJAN GOGOi, J.]

          examining the 5th bank account, books of account and.                  A
          any other bank account where receipts related to KBC ·
          were banked.
      ii) Regarding claim of deposits ofRs.52.06 lakhs in Special
          BenchA/c No.11155 under the head."Receipts on behalf
          ofMrs. Jaya Bachchan and                         ·                     B
      iii) Regarding the claim of additional expenses in the re-
           revised return."
       16. On the above issues the learnedTribunal had given detailed
reasons for not accepting the grounds cited in the revisional order for
setting aside the assessment under Section 263 of the Act. The reasons           c
cited by the learned Tribunal insofar as the first two issues are concerned
may not justify a serious relook and hence need llot be gone into. The
third question would, however, require some detailed attention. The said
question is with regard to the claim of additional expenses made by the
assessee in its re-revised return which was subsequently withdrawn.              D
        17. The assessee in the re-revised return dated 3 I st March, 2003
had made a claim ofadditional expenses of30% of the gross professional
receipts (Rs.3.17 crores). It appears that the Assessing Officer required
the assessee to file requisite details in this regard. The assessee responded
by letter dated 13th February, 2004 stating as follows:                          E
       "With regard to the 30% estimated expenses claimed, we ·
       have to submit that these are the expenses \Vhich are sperit ·
       for security purposes by employing certain Agencies, guards
       etc. for the personal safety of Shri Bachchan as he has to
       protect himself from various threats to his life received by
                                                                                 F
       him and to avoid extortion of mo11ey from gangsters. The
       names of such Agencies cannot be disclosed/divulged as
       there is a possibility ofleakage of information of Agencies'
       names from the office staff, which. will obviously be
       detrimental to the interests ofShri Bachchan. The payments
       have been made out of cash balances available and lot of                  G
       outstanding expenses are to be paid which could not be
       paid for want of income."
      18. Thereafter by letter dated 13th March, 2004 the assessee
informed the learned C.I.T. that the claim was made ona belief that the
same is allowable but as it will not be feasible for the assessee to             H
530             SUPREME COURT REPORTS                            [2016] 3 S.C.R.



A     substantiate the same, the re-revised return of income may be taken to
      the withdrawn. It appears that thereafter the Assessing Officer issued
      a notice to show cause as to why the provisions of Section 69-C should
      not be invoked and the expenses claimed should not be treated as
      unexplained expenditure. In reply, the assessee by letter dated 24th March,
      2004 submitted that the claim was made as a standard deduction and
B
      that the assessee had been wrongly advised to make the said claim and
      as the same has been withdrawn, Section 69-C will have no application.
      The record of the assessment proceedings disclose that the said stand
      was accepted by the Assessing Officer and the matter was not pursued
      any further.
c             19. The learned C.I.T. took the view that notwithstanding the
      withdrawal of the claim by the assessee, in view of the earlier stand
      taken that the said expenses were incurred for security purposes of the
      assessee, the Assessing Officer ought to have proceeded with the matter
      as the assessee was following the cash system of accounting and the
D     filing of the re-revised return, prima facie, indicated that the additional
      expenses claimed had been incurred. In this regard, the fol lowing findings/
      reasons recorded by the learned C.l.T. in the order dated 20th March,
      2006 would be of particular relevance:
            "Withdrawal of claim by assessee can be for variety of
            reasons and this does not mean that Assessing Officer
E
            should abandon enquiries regarding sources for incurring
            expenses. Assessee follows cash system of accounting
            and the claim regarding additional expenses was made
            through duly verified revised return. The claim was pressed
            during assessment proceedings carried on by A.O. after
F           filing revised return and it was specially stated in letter dated
            13.02.2004 that expenses were for security purposes and
            that payments have been made out of cash balances available
            etc. Under the circumstances, the Assessing Officer was
            expected to examine the matter further to arrive at a definite
            finding whether assessee incurred expenses or not and in
G
            case, actually incurred, then what were sources for incurring
            these expenses. Assessing Officer was satisfied on
            withdrawal of the claim and in my view, his failure to decide
            the matter regarding actual incurring of additional expenses
            and sources thereofresulted into erroneous order which is
H           prejudicial to the interest ofrevenue."
  COMMISSIONER OF INCOME TAX, MUMBAI v. AMITABH                               531
           BACHCHAN [RANJAN GOGOi, J.)

       20. An argument has been made on behalf of the assessee that            A
notice under Section 69-C was issued by the Assessing Officer and
thereafter on withdrawal of the claim by the assessee the Assessing
Officer thought that the matter ought not to be investigated any further.
This, according to the learned counsel for the assessee, is a possible
view and when two views are possible on an issue, exercise ofrevisional
                                                                               B
power under Section 263 would not be justified. Reliance in this regard
has been placed on a judgment of this Court in Malabar Industrial Co.
Ltd. vs. C/T3 which has been approved in Commissio11er ofb1come-
tax vs. Max India Ltd.~
       2 l. There can be no doubt that so long as the view taken by the
Assessing Officer is a possible view the same ought not to be interfered       c
with by the Commissioner under Section 263 of the Act merely on the
ground that there is another possible view of the matter. Permitting
exercise ofrevisional power in a situation where two views are possible
would really amount to conferring some kind of an appellate power in
the revisional authority. Th is is a course of action that must be desisted    D
from. However, the above is not the situation in the present case in
view of the reasons stated by the learned C.l.T. on the basis of which
the said authority felt that the matter needed further investigation, a
view with which we wholly agree. Making a claim which would prima
facie disclose that the expenses in respect of which deduction has been
claimed has been incurred and thereafter abandoning/withdrawing the            E
same gives rise to the necessity of further enquiry in the interest of the
Revenue. The notice issued under Section 69-C of the Act could not
have been simply dropped on the ground that the claim has been
withdrawn. We, therefore, are of the opinion that the learned C.l.T.
was perfectly justified in coming to his conclusions insofar as the issue      F
No.(iii) is concerned and in passing the impugned order on that basis.
The learned Tribunal as well as the High Court, therefore, ought not to
have interfered with the said conclusion.
       22. In the light of the discussions that have preceded and for the
reasons alluded we are of the opinion that the present is a fit case for       G
exercise of the suo motu revisional powers of the learned C.LT. under
Section 263 of the Act. The order of the learned C.l. T., therefore, is
restored and those of the learned Tribunal dated 28th August, 2007 and
' (2000) 243 !TR 83 (SC)
• (2007) 295 !TR 282 (SC)
                                                                               H
532                SUPREME COURT REPORTS                      [2016] 3 S.C.R.


A     the High Court dated 7th August, 2008 are set aside. The appeal of the
      Revenue is allowed.
             SLPCC)No.861 of2013
             23. Leave granted.

B            24. Pursuant to the revisional order dated 20th March, 2006 under
      Section 263 of the Income Tax Act setting aside the assessment order
      for the assessment year 2001-2002 and directing fresh assessment, a
      fresh assessment had been made by the Assessing Officer by order
      dated 29th December, 2006. Against the said order the respondent
      assessee filed an appeal before the learned Commissioner of Income
c     Tax (Appeals). By order dated 18th October, 2007 the learned
      Commissioner of Income Tax (Appeals) had set aside the assessment
      order dated 29th December, 2006 as in the meantime, by order dated
      28th August, 2007 of the learned Income Tax Appellate Tribunal the
      revisional order dated 20th March, 2006 under Section 263 of the Act
D     was set aside. The Revenue's appeal before the learned Tribunal against
      the order dated 18th October, 2007 was dismissed on 11th January, 2000
      and by the High Court on 29th February, 2012. Against the aforesaid
      order of the High Cou11 this appeal has been filed by the Revenue. As
      by the order passed today in the Civil Appeal arising out of Special Leave
      Petition (Civil) No.11621 of2009 we have restored the suo motu revisional
E     order dated 20th March, 2006 passed by the learned C.l.T., we allow
      this appeal filed by the Revenue and set aside the order dated 1Ith
      January, 2010 passed by the learned Tribunal and the order dated 29th
      February, 2012 passed by the High Court referred to above. However,
      we have to add that as the re-assessment order dated 29th December,
F     2006 had not been tested on merits the assessee would be free to do so,
      ifhe is so inclined and so advised.
              25. The appeals are disposed of in the above terms.


      Nidhi Jain                                             Appeals disposed of.
G