Francis Klein & Co. Ltd. v. CIT

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The Tax Publishers2016 TaxPub(DT) 4434 (Kol-Trib) Francis Klein And Co. Ltd. v. CIT INCOME TAX ACT, 1961 --Revision under section 263--Erroneous and prejudicial orderLack of enquiry----Where AO did not make proper scrutiny in relation to various critical matters, CIT was justified in holding the assessment order as erroneous and prejudicial to the interest of revenue.--CIT passed an order under section 263 holding the assessment order as erroneous and prejudicial to the interest of revenue on the ground that proper verification was not made by AO in respect of assessee's claim of TDS, income from investments in group companies, commission paid to directors and manager, etc. *Held:* AO is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. As the case was of insufficient enquiry by AO, CIT was justified in invoking jurisdiction under section 263. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2016 TaxPub(DT) 4434 (Kol-Trib)

Francis Klein And Co. Ltd. v. CIT

INCOME TAX ACT, 1961

--Revision under section 263--Erroneous and prejudicial orderLack of enquiry----Where AO did not make proper scrutiny in relation to various critical matters, CIT was justified in holding the assessment order as erroneous and prejudicial to the interest of revenue.--CIT passed an order under section 263 holding the assessment order as erroneous and prejudicial to the interest of revenue on the ground that proper verification was not made by AO in respect of assessee's claim of TDS, income from investments in group companies, commission paid to directors and manager, etc. Held: AO is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. As the case was of insufficient enquiry by AO, CIT was justified in invoking jurisdiction under section 263.