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2015 (9) TMI 223 - AT - Income TaxValidity Revision u/s 263 by CIT(A) - Held that:- Commissioner exercising the powers u/s 263 cannot shirk the legal mandate of pointing out the error in the assessment order coupled with the requirement to point out that the error is prejudicial to the interests of the Revenue. It is not each and every error which the law permits the Commissioner to revise as is settled by the Apex Court in Malabar Industries [2000 (2) TMI 10 - SUPREME Court] and consistently followed by various Courts. Even otherwise the present case is a case of enquiry and is not a case of no enquiry. It is well settled that the Commissioner u/s 263 cannot revise the order on the reasoning that the enquiry as conducted by the AO be substituted by her method of enquiry without first meeting the twin conditions. The enquiry of the AO cannot be substituted by the Commissioner. The law permits the doing of a thing in a particular manner and the law does not permit a fishing and roving enquiry based on suspicions and surmises. The Commissioner exercising the powers u/s 263 of the Act cannot direct a second investigation without first finding the order erroneous and that too such an extent that it is prejudicial to the interests of the Revenue. Pointing out of an error by the Commissioner is not an empty formality. These twin requirements which the Ld. Commissioner is required, fulfilled cannot be said to be met because the Commissioner is of the view that another view may be possible. The decision of Duggal & Co. [1994 (8) TMI 6 - DELHI High Court] strongly relied upon by the Ld. CIT it is seen is distinguishable on facts and the principle arrived at in those facts cannot be selectively picked and applied to facts which are entirely distinguishable. In the facts of that case the assessee company was found to be paying higher rate of interest to the extent of 9 to 12 % on its borrowing while it charged lesser rate of interest on advances made to a particular firm. It was in these circumstances where diversion of a part of its borrowings for its investments for considerations other than that of business that the action of the Commissioner in invoking the provision of Section 263 was consistently upheld. In the facts of the present case there is no such error and it is only a case of suspicion that if proper enquiry is done a different picture may result. Such suspicious do not justify the invokes of the power u/s 263. Thus we hold the section 263 in the facts of the present case has wrongly been invoked - Decided in favour of assessee.
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