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2019 (3) TMI 1870 - AT - Income TaxRevision u/s 263 - AO, before completing the assessment, failed to make proper and adequate enquiry with regard to the TDS obligation on payments made to Ansys Inc., USA and disallowance u/s. 40(a)(ia) of the Act - HELD THAT:- It is clear from earlier paras the CIT has discussed the nature of payments as being in the nature of royalty, the conclusion of the CIT for invoking jurisdiction u/s. 263 of the Act are justified in the light of failure on the part of AO to make enquiries, which he ought to have made before completing assessment - mere reference of international transaction on purchase of software to the TPO for determination of ALP cannot be the basis to say that the AO made adequate and due enquiries before completing the assessment. The law is well settled that failure on the part of the AO to make proper and adequate enquiries renders his order erroneous and prejudicial to the interests of revenue. See GEE VEE ENTERPRISES VERSUS ADDITIONAL COMMISSIONER OF INCOME-TAX, DELHI I, AND OTHERS [1974 (10) TMI 29 - DELHI HIGH COURT] There was a failure on the part of AO to make any enquiry with regard to payments made to Ansys Inc., USA in the light of provisions of section 40(a)(ia) of the Act. In that view of the matter, we are of the view that the jurisdiction u/s. 263 of the Act was rightly invoked by the CIT. We are also of the view that the CIT has remanded the matter to the AO for fresh consideration and has not concluded on the issue, as was sought to be canvassed by the ld. counsel for the assessee before us. Therefore, the Assessee is at liberty to agitate on the issue on merits without any fetters. - Decided against assessee.
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