2015 (3) TMI 17 - HC - Income Tax

Revision u/s 263 - Assessing Officer had not made inquiry on certain aspects - Held that - Relying on two judgments of Delhi High Court in CIT Vs. Vikash Polymers 2010 (8) TMI 745 - Delhi High Court and CIT Vs. Vodafone Essar South Ltd. 2012 (12) TMI 70 - DELHI HIGH COURT it held that once inquiry was made a mere non discussion or non mention thereof in assessment order cannot lead to assumption that Assessing Officer did not apply his mind or that he has not made inquiry on the subject and this would not justify interference by Commissioner by issuing notice under Section 263 of the Act. Tribunal fairly concluded that the Assessing Officer had investigated all the points and reply relating to all the query were given. - Decided in favour of assessee.

Summary

Issues:
Substantial question of law regarding the necessity of mentioning inquiry details in the assessment order to exclude application of Section 263 of the Income Tax Act, 1961.

Analysis:
The case involved a substantial question of law related to the necessity for the Assessing Authority to specify inquiry details in the assessment order to exclude the application of Section 263 of the Income Tax Act, 1961. The appellant had filed a return for the assessment year 2008-09, which was processed under Section 143(1) of the Act. The case was selected for scrutiny, and the Assessing Authority issued a notice under Section 143(2) of the Act. After making inquiries and receiving replies from the assessee, the Assessing Officer accepted the declared income and passed the assessment order. However, the Commissioner of Income Tax issued a notice under Section 263, stating that the Assessing Officer had not properly investigated certain aspects, such as additions in fixed assets, unconfirmed sundry creditors, unverified unsecured loans, lack of verification of bank statements, non-deduction of TDS on freight, and discrepancies in creditors' confirmation.

The Commissioner set aside the assessment order, directing the Assessing Authority to pass a fresh order after considering all evidence. The appellant challenged this decision in an appeal, where the Department argued that no inquiry was conducted by the Assessing Officer on the mentioned aspects. However, the Tribunal found this defense to be incorrect and contrary to the record. The Tribunal noted that the Assessing Officer had indeed made inquiries and investigations as evidenced by the documents submitted in response to the queries raised.

Furthermore, the Tribunal deliberated on whether the discussion of queries and replies in the assessment order was necessary. Citing judgments from the Delhi High Court, the Tribunal held that the absence of such discussion does not imply that the Assessing Officer did not apply his mind. The Tribunal referenced the judgments in CIT Vs. Vikash Polymers and CIT Vs. Vodafone Essar South Ltd., emphasizing that the mere lack of discussion in the assessment order does not warrant interference by the Commissioner under Section 263.

The Tribunal also considered a decision of the Bombay High Court, supporting the notion that the absence of a specific discussion in the assessment order does not indicate a lack of consideration by the Assessing Officer. The Department failed to provide any substantial argument or authority to counter the findings of the Tribunal. Consequently, the Tribunal ruled against the Department, upholding the decision in favor of the Assessee.

In conclusion, the Court found no merit in the appeal and dismissed it, affirming the validity of the order in question.