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2014 (12) TMI 554 - ITAT DELHI - Income Tax
Head Note / Extract:
Power of the CIT to invoke section 263 - Assessment was done without proper inquiry or not – Order prejudicial to interest of revenue - Held that:- None of the points raised by CIT, while invoking the provision of Section 263, and detailed in the show cause notice, have been enquired into, touched upon, discussed or considered before passing the assessment order – as decided in Malabar Industrial Co. Ltd. Vs. CIT [2000 (2) TMI 10 - SUPREME Court] - The provision cannot be invoked to correct each and every type of mistake or error committed by the AO, it is only when an order is erroneous that the section will be attracted - An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous - since, the assessee has not been able to establish that proper enquiry has been conducted by the AO before finalizing the assessment order, therefore, the CIT, considering this vital aspect while invoking the provisions of Section 263, has concluded to set aside the order of the AO for redoing the same by conducting proper enquiry after giving due opportunity to the assessee - non conducting of proper enquiry renders the order of the assessment erroneous and prejudicial to the interest of the Revenue – thus, the action of CIT is justified and does not call for any interference – the order is upheld – Decided against assessee.