INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - Failure on part of AO to make detailed discussion about enquires made in assessment order -

PCIT directed AO to make assessment afresh on allegation that assessment order in case of assessee was erroneous in as much as it was prejudicial to interest of revenue. Pr.CIT held that AO failed to made independent inquiries with regard to the genuineness of the agricultural income, sundry creditors and mismatching in sales turnover.Held: Perusal of order of PCI revealed that without considering submission of assessee and even without giving any prima facie findings that explanation given by assessee was not correct or that same was not reliable, PCIT, proceeded to hold that order of AO was erroneous and prejudicial to interest of revenue because of the inadequate inquiries. Merely because AO did not discuss about the enquiries made by him in detail in assessment order, it was no ground to hold that order of AO was erroneous and prejudicial to the interest of Revenue. Principal Commissioner in instant case wrongly exercised revision jurisdiction under section 263.

REFERRED : Malabar Industrial Co. Ltd. v. CIT (2000) 109 Taxman 66 (SC) : 2000 TaxPub(DT) 1227 (SC), KA Ramaswamy Chettiar & Anr. v. CIT 1996 TaxPub(DT) 485 (Mad-HC), Gee Vee Enterprises v. Addl. CIT, Delhi I, & Ors. 1975 TaxPub(DT) 267 (Del-HC) and Narayan Tatu Rane v. ITO Ward 27 (1) (1) (2016) 70 Taxman.com 227 (Mum) : 2016 TaxPub(DT) 2516 (Mum-Trib).

FAVOUR : In assessee's favour.

A.Y. :

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