Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (2) TMI 988 - AT - Income TaxRevision u/s 263 - AO simply accepted the income returned at ₹ 3,73,08,493/- as assessed income without any adjustment whatsoever by a brief and a non-descript order - HELD THAT:- Having regard to the sweeping conduct of the AO in finalizing the assessment without making requisite enquiry on the abnormal character of outstanding expenses having direct bearing on the assessed income, there appears to be an apparent plausibility in the action of the Pr.CIT by resorting to powers under s.263 of the Act which are of wide amplitude. As narrated, the circumstances clearly existed which demanded enquiry which was not done by the AO while discharging its statutory function. Thus, armed with fairly extensive powers, the Pr.CIT, in our view, has taken action compatible with circumstances. While holding so, we alive to the plea on behalf of the assessee that reasonable details were placed with regard to the pending expenses. We are not impressed by such line of argument when tested on the touchstone of Section 263 of the Act. The record clearly speaks of indifferent conduct by the AO accepting the book results. Therefore, the cause of action did exist for invocation of Section 263 of the Act. Hence, the Pr.CIT was fully justified in invoking its power under s.263 of the Act to set aside the assessment framed without any application of mind on the crucial aspect which is self-revealing in the context of the case. In order to invoke Section 263 of the Act, the competent authority is required to find that order sought to be revised is erroneous and caused prejudice to the Revenue. A lack of inquiry on a pertinent point which demonstrates possible revenue leakage of staggering amount would definitely tantamount to the order being both erroneous as well as prejudicial to the interest of the Revenue. Consequent upon the action of Pr.CIT, the assessment order is merely cancelled and set aside to the file of the AO for making relevant inquiries as specified for which objective material is available at the threshold. The assessee has not estopped in any manner from dealing with the inquiry as specified to the AO and to rebut the perception on error in the original order. The assessee is not prevented from supporting its case in any manner before the AO in the proceedings pursuant to Section 263 of the Act. We thus do not see any justifiable reason to interfere with the revisional action of the Pr.CIT. - Decided against assessee.
|