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2017 (12) TMI 1858 - AT - Income TaxRevision u/s 263 - difference between lack of enquiries and inadequate enquiries - HELD THAT:- Deeming fiction has been created in section 263 of the Act by the amendment made by Finance Act, 2015 w.e.f. 01.06.15 wherein it has been mentioned that where the Commissioner is of the opinion that the AO had passed the order without making enquiries or verifications which should have been made or a relief has been allowed without enquiring into the claim or that the same is not in accordance with any order or direction or instruction issued by CBDT, that shall be deemed to be erroneous in so far as its prejudicial to the interest of Revenue. The said deeming provisions, in our view, are not applicable for the assessment year under consideration. We find that the Hon’ble Supreme court and various other High Courts including our Jurisdictional High Court have been almost unanimous in holding that before enhancing or annulling or modifying or cancelling the assessment while exercising his powers under section 263 of the Act, the Commissioner must record a finding of fact or of law that the order of the AO is erroneous and is also prejudicial to the interest of Revenue as discussed above. In the case in hand, this prerequisite condition has not been satisfied as the Commissioner after calling for the explanation from the assessee has failed to make necessary exercise in examining or cause to examine the explanation/details submitted by the assessee for the justification of its claim and even without any further enquiry, directed the AO to make additions of the entire deposits into the income of the assessee. Hence, in the light of the various case laws as analyzed above, the order of the Commissioner exercising jurisdiction u/s 263 of the Act cannot be held to be sustainable in law. Appeal of the assessee is hereby allowed.
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