2018 (9) TMI 1541 - ITAT DELHI - Income Tax

Head Note / Extract:
Revision u/s 263 - assessment involved in this matter is under section 153A - Held that:- Section 263 of the Act confers power on the Principal Commissioner of Income Tax to examine an assessment order so as to ascertain whether it is erroneous insofar as prejudicial to the interests of the Revenue, but it shall not be construed to have conferred jurisdiction upon him to substitute his opinion for the opinion of the Assessing Officer when the AO, being satisfied with the record, passes the assessment order and more particularly in the circumstances when it cannot be stated that there is either lack of enquiry or inadequate enquiry. It is pertinent to note that as is held by the Hon’ble Apex Court in CIT vs. Max India Ltd. [2007 (11) TMI 12 - SUPREME COURT OF INDIA] where two views are possible and one of the possible views have been taken by the Ld. Assessing Officer while passing the assessment order, then the provisions of Section 263 of the Act cannot be invoked. In this case, the peculiarity is that the sales are accepted creating a situation where, if we accept the view taken by the CIT(A), it would show the gross profit of the assessee at 93.73% for the AY 2008-09 which in itself is quite an improbable on its face. So by estimating the gross profit of the assessee at 9% after disallowing the bogus purchasers the Ld. Assessing Officer had taken a pragmatic view which renders the issue not amenable to the Ld. CIT(A) to the jurisdiction u/s 263 of the Act. We are of the considered opinion that the exercise of jurisdiction under section 263 of the Act by the Ld. Principal Commissioner of Income Tax is not warranted, that such an order cannot be sustained and is liable to be quashed. - Decided in favour of assessee.