2022 (8) TMI 1431 - ITAT AMRITSAR

Revision u/s 263 - bogus purchase was informed from the Sales Tax order - PCIT had issued notice for setting aside the order of assessing authority passed u/s 148 - HELD THAT:- As per the ‘office note’ it is confirmed that the books of accounts and relevant documents are verified by the assessing authority during the assessment proceeding and no such bogus purchase was found in the books of the assessee. Revenue authorities was unable to substantial any nexus with the sellers and assessee. The proper verification was made during assessment proceeding with the proper application of mind.

So, the assessment order cannot be called as erroneous. The assessee had complied the notice U/s 263 - But ld PCIT unable to comply the same in the order u/s 263. Both in reopening u/s 148 & revision U/s 263 the same issue, bogus purchase cannot be enquired multiple time.

As in the case of CIT versus Paramjit Kaur [2007 (8) TMI 323 - PUNJAB AND HARYANA HIGH COURT] held that the existence of material must be real and it must also have nexus with the believe that income, escaped assessment.

It is clear that an order cannot be termed as erroneous unless it is not in accordance with law. This section does not visualize a case of substitution of the judgment of the Commissioner for that of the AO. Therefore, it cannot be held that in the instant case the ld. AO's order was erroneous and prejudicial to the interest of the revenue within the terms of section 263.

Once the impugned issue was considered and examined by the AO Commissioner cannot set aside the order without recording a contrary finding. This will be contrary to Section 263 - Therefore, we are of the considered opinion that the impugned action of the PCIT u/s 263 of the Act was patently illegal and is liable to be quashed.