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2016 (12) TMI 1646 - ITAT CHANDIGARHRevision u/s 263 - Held that:- CIT must initially indicate the mistake in the assessment order on merits by making proper enquiry at his end before cancelling assessment under section 263. This judgment makes it palpable that the very fact that the ITO “had not made sufficient enquiries before granting registration to the firm” was considered as sufficient enough to clothe the CIT with the power to revise the assessment order and it was not considered necessary in such circumstances: “for the CIT to have himself made enquiries before cancelling the assessment.” Similar view has been taken by the Hon’ble Supreme Court in the case of Rampyari Devi Saraogi vs. CIT (1967 (5) TMI 10 - SUPREME Court) holding that an assessment made by the AO “in undue haste without making any enquiry” would render an assessment order erroneous and prejudicial to the interests of the revenue. Similar view has been reiterated by the Hon’ble Apex Court in Smt. Tara Devi Aggarwal vs. CIT (1972 (11) TMI 2 - SUPREME Court). We have held in earlier parts of this order that the assessment order under consideration was passed in undue haste, thereby making it rightly eligible for revision by the CIT u/s 263 of the Act. In view of the foregoing discussion, we are satisfied that the ld. CIT was right in setting aside the assessment order and directing the AO to make a fresh assessment. The impugned order is, therefore, countenanced. Genuineness of agricultural income. - A.Y. 2011-12 - Agricultural produce was not proved; transportation of the same to UAA was also not proved; bills issued by UAA were not genuine; cash received from UAA shown at ₹ 1.00 crore did not appear in their books of account; the expenses claimed were not backed by any vouchers/bills; and all the expenses were claimed to have been incurred on one single day and that too in cash. We fail to comprehend as to how the assessment order accepting the genuineness of carrying out the agricultural operations and earning a huge income in such circumstances can be considered as an order made after proper inquiry as has been canvassed by the assessee. It is a case of a patent non-application of mind by the AO to the facts, which were loudly calling for in-depth investigation. CIT was fully justified in setting aside the assessment order and directing the AO to frame a fresh assessment. AR for this year has also assailed the impugned order by adopting the arguments on the legal propositions made in the case of Virbhadra Singh (HUF), namely, inadequate inquiry by the AO cannot empower the CIT to revise order; debatable issue; and the CIT should have himself shown infirmity in the assessment order rather than sending the matter back to the AO. We have elaborately dealt with such issues in our order of Virbhadra Singh (HUF), which mutatis mutandis apply to the assessee also.
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