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2022 (10) TMI 1203 - AT - Income TaxRevision u/s 263 - Order erroneous and prejudicial or not? - as per CIT AO made no enquiry with regard to interest income received during the year and treatment same as income from other sources - HELD THAT:- The scheme of the IT Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to erroneous order of the assessing officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interest of the revenue. As held in the case of Malabar Industries Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT], the Commissioner can exercise revision jurisdictional u/s 263 if he is satisfied that the order of the assessing officer sought to be revised is (i)erroneous; and also (ii) prejudicial to the interests of the revenue. AO is not expected to put blinkers on his eyes and mechanically accept what the assessee claims before him. It is his duty to ascertain the truth of the facts stated and the genuineness of the claims made in the return when the circumstances of the case are such as to provoke inquiry. Arbitrariness in either accepting or rejecting the claim has no place. The order passed by the AO becomes erroneous because an enquiry has not been made or genuineness of the claim has not been examined where the inquiries ought to have been made and the genuineness of the claim ought to have been examined and not because there is anything wrong with his order if all the facts stated or claim made therein are assumed to be correct. In the present case, the AO must have made an enquiry with regard to interest income received during the year and treatment same as income from other sources as no business activity has been carried on by the assessee in this assessment year under consideration. Being so, we do not find any infirmity in the order of the Ld. PCIT in invoking the jurisdiction u/s 263 of the Act and in vacating the assessment order passed by the AO for denovo consideration. Decided against assessee.
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