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2021 (12) TMI 975 - ITAT BANGALORERevision u/s 263 by CIT - AO was erroneous and prejudicial to the interest of the revenue for the reason that the AO failed to obtain any reconciliation of the turnover as per Profit and Loss account with the total invoice value and whether the invoices were raised on cost plus method, which receiving the corresponding amount from the clients - HELD THAT:- The law is well settled that if there is a failure on the part of AO to make an enquiry on the issue which calls for an enquiry, that by itself will render the order of assessment erroneous and prejudicial to the interests of the revenue. It has been so held by the Hon’ble Delhi High Court in the case of Gee Vee Enterprises Vs. DCIT [1974 (10) TMI 29 - DELHI HIGH COURT] We are of the view that the mere fact the Assessee gave a reconciliation of sales as per invoices and as per the profit and loss account and the fact that the very same AO made enquiries in AY 2013-14 and therefore he was well aware of the issue and accepted the reconciliation given by the Assessee cannot be the basis to hold that the AO made necessary enquires. Since there was a failure on the part of AO to make necessary enquiry, we are of the view that the CIT was justified in invoking jurisdiction u/s. 263 of the Act in the facts and circumstances of the present case. We are of the view that we need not examine the arguments of the learned counsel for the Assessee in this regard because Explnation-2 is only a deeming provision and if on facts it is found that the AO did not make any enquiries before concluding the assessment there is no need to take recourse to the deeming provisions. We are of the view that the scope of enquiry in the set aside proceedings will be restricted to the directions as set out above and to this extent the impugned order is modified. With these observations, we partly allow the appeal of the Assessee.
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