| The Tax Publishers2021 TaxPub(DT) 0699 (Mum-Trib) INCOME TAX ACT, 1961
Section 263
Tribunal found that the details of long-term borrowings and other current liabilities were admittedly filed before the AO during the course of assessment proceedings and the AO on examination of the same, had arrived at the right conclusion that those liabilities were indeed genuine and had accordingly resorted not to make any addition thereon hence, it could be safely concluded that the Pr. CIT had invoked revisionary jurisdiction in the instant case by incorrect assumption of fact, which was not permissible in law.
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Revision under section 263 - Assumption of jurisdiction by Pr. CIT - Non-verification of long-term borrowings and other current liabilities, self explained by assessee -
The Tribunal found that assessee had filed three undated replies before the AO, wherein in one of the replies, assessee had specifically furnished the entire details of long-term borrowings along with confirmation of accounts, ITR acknowledgement and balance sheet of loan creditors and in yet another reply it had also furnished the details of other current liabilities together with confirmation from parties, ITR acknowledgements and balance sheet of the creditors. Assessee had furnished yet another reply before the AO, wherein it specifically had furnished the details of other current liabilities, details of long-term borrowings, details of non-current investments, details of loans and advances and details of other current assets. AO enquired about all those details and found in order. The two undated letters were on records before Pr.CIT. Pr. CIT, however, on the ground of non-vertifcation of long-term borrowings and other current liabilities invoked section 263. Held: The Tribunal was unable to accept to the finding recorded by the Pr. CIT that no enquiries per se were carried out by the AO with regard to long term borrowings and other current liabilities in the scrutiny assessment proceedings. Tribunal found that the aforesaid details of long-term borrowings and other current liabilities were admittedly filed before the AO during the course of assessment proceedings and the AO on examination of the same, had arrived at the right conclusion that those liabilities were indeed genuine and had accordingly resorted not to make any addition thereon. Merely because there was no discussion in the assessment order regarding a particular item enquired by the AO, it does not make the order of the AO erroneous. AO was satisfied with details furnished by assessee with evidence then AO could take the same to the logical conclusion by not making any addition thereon in the assessment, these tantamount to due application of mind on the part of the AO and proper enquiries being carried out by him in the scrutiny assessment proceedings. The law is very well-settled that the revisionary jurisdiction under section 263 could be initiated by the Pr. CIT only for lack of enquiry on the part of the AO, and not for inadequate enquiry. It was not the case of the Pr. CIT that the AO had indeed made enquiries but he had not made requisite entries thereon. Hence, it could be safely concluded that Pr. CIT had invoked revisionary jurisdiction in the instant case by incorrect assumption of fact, which was not permissible in law. Any order passed under section 263 on incorrect assumption of fact requires to be dismissed in limine.
REFERRED : CIT v. Nirav Modi (2016) 71 Taxmann.com 272 (Bom) : 2016 TaxPub(DT) 3506 (Bom-HC) and (2017) 77 Taxmann.com 15 (SC) : 2017 TaxPub(DT) 0060 (SC).
FAVOUR : In assessee's favour.
A.Y. : 2015-16
IN THE ITAT, MUMBAI BENCH
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