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2022 (3) TMI 1343 - AT - Income TaxRevision u/s 263 by CIT - Bogus purchases - HELD THAT:- When the assessment order which was subject matter of section 263 of the Act was passed after discreet enquiry and applying its mind the same cannot be revised under section 263 of the Act. Since order passed by the Ld. PCIT does not fulfill the condition laid down under section 263 of the Act the same is not sustainable in the eyes of law, so far as issue as to the bogus sub-contract expenses claimed by the assessee are concerned. We are unable to agree with this reasoning given by the Ld. PCIT as well as by Ld. D.R. for the Revenue because power to reopen the assessment under section 147 of the Act is vested with the AO and not with the Ld. PCIT. For that matters limitation cannot be stretched beyond two years as laid down under section 263(2) of the Act. So assuming jurisdiction qua income from arbitration award under section 263 of the Act is hopelessly time barred and as such the impugned order in this regard is not sustainable. We are of the considered view that the said order was passed on the basis of settled principle of law but we are to decide this issue on the basis of particular facts of this case. In the instant case, we are of the considered view that when after due enquiry, the AO has taken plausible view on the issue in question by calling necessary information from the assessee, such assessment order cannot be held to be prejudicial to the interest of the revenue. So we are of the considered view that very initiation of proceedings by invoking the provisions contained under section 263 of the Act by the Ld. PCIT lacks jurisdictional error and as such not sustainable in the eyes of law. We are of the considered view that very initiation of the proceedings under section 263 of the Act are not sustainable in the eyes of law for lack of jurisdiction as required under section 263(2) to Explanation 1 of the Act, hence ordered to be quashed. Since the assessee has got the relief on legal issue, we find no need to go into the merits of this case. Resultantly, appeal filed by the assessee is allowed.
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