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2017 (2) TMI 1522 - Income Tax
Revision u/s 263 - Distinction between “lack of enquiry and inadequate enquiry” - Unexplained deposits in the bank accounts - HELD THAT:- We find that assessee had submitted copy of bank accounts and had also requested Assessing Officer to verify from the banks statements that the money deposited in banks were paid to agents and if the work was not done, the same was returned.
In view of the above facts and circumstance, we find that AO during assessment proceedings had duly verified the entries in the banks statement and therefore had arrived at the conclusion that the deposits represented business transactions and had taken a plausible view and therefore the provisions of section 263 were not applicable.
Provisions of section 263 cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer. It is only when an order is erroneous that the section will be attracted. Before invoking provisions of section 263 of the Act one has to keep in mind the distinction between “lack of enquiry and inadequate enquiry”. If there was any enquiry, even thought inadequate it would not in itself empower CIT to invoke provisions of section 263 of the Act merely because he had different opinion in the matter. It is only in cases of lack of enquiry that such a course of action would be available to CIT.
Cross objections filed by revenue u/s 253(4) - We find that the AO or assessee on receipt of notice that an appeal against the order of Deputy Commissioner (Appeal) or Commissioner (Appeal) has been preferred by either party and then the other party can file the cross objections. In the present case, the order passed by the CIT u/s 263 has not been passed by Deputy Commissioner (Appeal) or the Commissioner (Appeal) and rather it has been passed by Principal Commissioner and therefore the provisions relating to cross objections as contained in section 253(4) are not applicable and hence, the cross objections filed by revenue are not maintainable.