INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - Lack of enquiry on AO's part -

Pr. CIT has invoked jurisdiction under section 263 as AO had not enquired into the fault pointed out by him in his show cause notice, i.e., AO having allowed deduction claimed for maintenance/compensation amounting to Rs. 4,07,404 related to rental income when only standard deduction of 30% was allowable which amounted to double deduction. Assessee contended that assessee having filed the computation of income pursuant to notice under section 142(1) wherein income from house property was evident and claim of standard deduction was also visible, it could be assumed that AO had enquired into the issue of allowability of (Maintenance Compensation) along with standard deduction of 30% under section 24. Held:. It could not be assumed that merely assessee having filed of computation of income, claim of standard deduction in respect of house property was enquired into by AO because there was no query in this respect or even in respect of house property was sought by AO in the notice under section 142(1) and moreover, AO had asked assessee to file only copy of computation of income which assessee did and from filing of the same it could not be said that AO had enquired into the claim of deduction. Since AO had not made any enquiry into the faults pointed out by Pr. CIT, the order passed by AO was rightly treated as erroneous as well as prejudicial to the interests of the revenue.

Relied:Malabar Industries Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2015-16

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