INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Validity - Assessment under section 153C - Assessee furnished all details before AO

Assessment(s) in case of these assessees were framed : under section 153C read with section 143(3) in the case of assessee and under section 153A read with section 143(3) in case of one Ashoke. The fact of the entire cost of construction of residential house being met by A was duly submitted by assessee before AO. Since assessment was getting time barred AO could not find sufficient time to verify the same and accordingly accepted the plea of the assessee by completing the assessments. Later, these assessments were subject-matter of revision under section 263 by Pr. CIT on the ground of non-enquiry by AO. Held: PCIT proceeded on incorrect application of law while invoking his revisionary jurisdiction under section 263. Assessee had duly furnished all these details before AO during the course of assessment proceedings in response to the queries raised by AO. Hence, it can be safely concluded that AO had, indeed, made necessary verification on the same and was convinced with the reply given by the assessee's. Hence, no error could be attributed in the order passed by AO. It also cannot be said that AO had not made any enquiry on this issue. The law is very well settled that the Principal Commissioner could invoke jurisdiction under section 263 only when there is lack of enquiry by AO. PCIT had merely directed AO to examine the issue flagged by him in the order without pointing out where the order of AO was erroneous.

Followed:CIT v. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del-HC) : 2011 TaxPub(DT) 88 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14 to 2014-15

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