The Tax PublishersITA No. 244/Jp/2020
2020 TaxPub(DT) 5083 (Jp-Trib)

INCOME TAX ACT, 1961

Section 263

Where AO had not conducted the due enquiry in respect of the total deposit made by the assessee in the bank account and consequently determined total turnover of the assessee without considering the deposits made in the bank account and order passed by AO based on incorrect and incomplete facts due to lack of inquiry renders it as erroneous so far as prejudicial to the interest of the revenue, therefore, there was no merit in challenging the notice issued under section 263.

Revision under section 263 - Validity - AO having not conducted due enquiry in respect of total deposit made by assessee in bank account -

On the basis of AIR information received by AO regarding deposit in Savings Bank Account, AO issued notice under section 148. Assessment was completed under section 143(3) read with section 147. Subsequently, Pr. CIT on verification of the assessment record noted that the order passed by AO under section 143(3) read with section 147 is erroneous so far as it was prejudicial to the interest of the revenue as AO had not conducted any enquiry about the total deposits made by the assessee in the bank account and consequently the turnover of the assessee remained understated. Held: AO had not conducted the due enquiry in respect of the total deposit made by the assessee in the bank account and consequently determined total turnover of the assessee without considering the deposits made in the bank account. Therefore, the order passed by AO based on incorrect and incomplete facts due to lack of inquiry renders it as erroneous so far as prejudicial to the interest of the revenue. Thus, the assessment order was suffering from error which was factual in nature and not in respect of any view taken by AO. There is no quarrel on the point that if AO had taken one of the possible views, then CIT was not permitted to invoke the provisions of section 263 merely because he does not agree with the view taken by AO. Therefore, there was no merit in challenging the notice issued under section 263.

Relied:Torrent Pharmaceuticals Ltd. v. Dy. CIT (2018) 173 ITD 130 (Ahd-Trib.) : 2018 TaxPub(DT) 5254 (Ahd-Trib) and Amira Pure Foods (P) Ltd. v. Pr. CIT (2017) 63 ITR (Del-Trib.) 355 : 2017 TaxPub(DT) 5413 (Del-Trib).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2010-11



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