INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - Assessment order passed after detailed scrutiny of documents/evidences filed by assessee -

Assessee's case was selected for limited scrutiny with the reasons large interest expenses relatable to exempt investments under section 14A, large deduction under section 57 and mismatch in turnover reported in Audit Report and ITR. The issues were examined and keeping in view the past history, disallowance of interest was made by AO while passing assessment order under section 143(3). CIT was of the view that there were some deficiencies and irregularities crept in the assessment order passed by the AO and accordingly, he issued notice under section 263 alleging that the order passed by the AO was erroneous and prejudicial to the interest of Revenue. Held: AO initiated a limited scrutiny and asked the assessee to file specific details and documents. In response, the assessee filed the specific details and required documents and after doing detailed scrutiny of such documents/evidences, the AO framed the assessment order. As the AO examined and enquired about assessee's accounts and details filed by the assessee and applied his mind to the facts of the case and after being satisfied with all the details and documents, the AO, therefore, framed the assessment, thus, merely for reason that CIT was not satisfied with manner of verification and investigation carried out by the AO, the assessment order could not be held to be erroneous and prejudicial to the interest of Revenue. Hence, the revisional order passed under section 263 was quashed.

REFERRED : CIT v. Goyal Private Family Specific Trust (1988) 67 CTR (All) 206 : (1988) 171 ITR 698 (All) : 1988 TaxPub(DT) 0738 (All-HC) CIT v. Sunbeam Auto Ltd. (2009) 227 CTR (Del) 133 : (2009) 31 DTR (Del) 1 : (2011) 332 ITR 167 (Del) : 2011 TaxPub(DT) 0088 (Del-HC)

FAVOUR : In assessee's favour

A.Y. : 2014-15

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