INCOME TAX ACT 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - Lack of proper inquiry -

CIT, upon examination of assessment record, noticed that the assessee-trust formed for the welfare of Milk Federation Employees had declared surplus during the year under consideration and the same was liable to be taxed. He further noticed that the assessee had also not sought accumulation of income as per the provisions of section 11(2). Accordingly, he held that the assessment order passed by AO was erroneous and prejudicial to the interest of the Revenue and made revision under section 263. Held: The said order passed by CIT was cryptic order without any discussion. It was also not shown by the assessee that AO did examine the taxability or otherwise of the surplus in its income and expenditure account. Since AO had not examined the issue at all in the assessment. order, the impugned assessment order would be rendered erroneous and prejudicial to the interest of revenue as per the decision in the case of Malabar Industrial Company [(2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC)].

Followed:Malabar Industrial Co. [(2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC)].

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2013-14

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