|The Tax Publishers2021 TaxPub(DT) 0103 (Asr-Trib)
INCOME TAX ACT, 1961
Where AO during course of assessment proceedings failed to carry out adequate enquiry about the alleged transactions in the name of assessee; the CIT rightly invoked the provisions of section 263 holding the assessment order as erroneous and prejudicial to the interest of Revenue.
Revision under section 263 - Erroneous and prejudicial order - AO failed to carry out adequate enquiry about alleged transactions in the name of assessee -
Assessee was an individual working as a partner in a firm and was deriving income from salary, working partner's remuneration and interest on capital from partnership firm. It filed his return of income, which was processed under section 143(1) and selected for scrutiny under CASS. Thereafter, AO framed assessment under section 143(3) and assessed the total income of the assessee at returned income, thereby creating an additional demand of Rs. NIL. Subsequently, CIT invoking powers under section 263 quashed the order passed by the AO under section 143(3) holding the same as erroneous and prejudicial to the interest of Revenue. Held: CIT found that the Office Note appended to the assessment order was factually incorrect. Further, he also found that the amount of Rs. 29,69,855 stated to be belonged to the HUF was deposited not in the account of the HUF but into the account of the individual. Further, Revenue failed to substantiate that the said issue was examined by AO and there was any conclusive findings by the AO as per law. It is expected from the AO that he has assessed the taxable income as per law as the AO is investigating officer thereafter he is an adjudicating officer. Since the AO failed to carry out adequate enquiry about the alleged transactions in the name of the assessee; the CIT rightly invoked the provisions of section 263 to reopen the completed assessment.
FAVOUR : Against the assessee
A.Y. : 2011-12
IN THE ITAT, AMRITSAR BENCH
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