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| The Tax Publishers2019 TaxPub(DT) 5779 (Cal-HC) : (2020) 423 ITR 0180 : (2019) 310 CTR 0599 INCOME TAX ACT, 1961
Section 263
Since Tribunal found that CIT had not even indicated in show cause notice that “adequate enquiries were not carried out and AO had conducted an enquiry regarding the addition of fixed assets, therefore, order passed by AO in such circumstances could neither be held to be erroneous nor prejudicial to the interest of the Revenue and accordingly appeal of Revenue was dismissed.
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Revision under section 263 - Validity - Order under section 143(3) found to be erroneous and prejudicial to the interest of Revenue -
AO passed assessment order under section 143(3) which was found to be erroneous and prejudicial to interest of revenue by CIT. The specific matter pertained to difference in the addition of fixed assets. Notice under section 263 was issued to clarify the difference. Assessee clarified the difference by its written submission and a reconciliation statement was also used. However, CIT, instead of considering the reply, recorded that the issue had not been verified by AO. Tribunal set aside the order of CIT. Held: Tribunal found that CIT had not even indicated in the show cause notice that “adequate enquiries were not carried out.” Tribunal found that AO had conducted an enquiry regarding the addition of fixed assets. Order passed by AO in such circumstances could neither be held to be erroneous nor prejudicial to the interest of the Revenue. CIT could exercise his jurisdiction under section 263 “only in cases where no enquiry is made by AOâ€. Therefore, appeal of Revenue was dismissed.
REFERRED : Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC) CIT v. G.K. Kabra (1995) 211 ITR 336 (AP) : 1995 TaxPub(DT) 0352 (AP-HC) and Vesuvius India Ltd. v. CIT (2012) 54 SOT 172 (Kol) : 2012 TaxPub(DT) 2909 (Kol-Trib)
FAVOUR : In assessee's favour
A.Y. :
INCOME TAX ACT, 1961
Section 263
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