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2022 (8) TMI 915 - HC - Income TaxRevision u/s 263 - Deduction u/s 36(1)(vii) with respect to write off of interest receivable forgone under the One Time Settlement (‘OTS’) entered into by the assessee with its borrowers and Deduction u/s 36(1)(iii) with respect to Interest expenditure incurred with respect to borrowings made for the slum rehabilitation project at Dindoshi - HELD THAT:- Findings of fact by the Tribunal which is the highest fact finding authority. No material has been brought to our notice controverting the same nor do we find any perversity in the said findings. We observe that the AO had called for particulars of interest. Tribunal clearly records in paragraph 8.2 that this is not a case where the AO has not made inquiry and blindly accept the return filed by the assessee. AO has called for particulars at the time of the scrutiny of assessment proceedings, received the reply and following the principles of natural justice, passed an assessment order expressing his opinion in the matter. Once this is done, then the Commissioner cannot impose/ substitute his opinion on the view taken by the AO to say that the said assessment order is erroneous and prejudicial to the interest of the revenue. Revisional CIT cannot substitute his view upon the view of the Assessing Officer if the Assessing Officer has taken one of the possible/plausible views, unless AO’s view is unsustainable in law. As supported by the view of the in the case of CIT (Central), Ludhiana v/s. Max India Ltd. [2007 (11) TMI 12 - SUPREME COURT] where it has been observed that where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an order erroneous and prejudicial to the interest of the revenue unless the view taken by the AO is unsustainable in law. Once the AO has raised queries which the assessee may not have answered fully then to say that this is a case of no enquiry cannot be permitted. What Section 263 covered prior to insertion of Explanation 2 was a case of no enquiry but not a case of inadequate enquiry. As noted above, with the introduction of Explanation 2 with effect from 1st June, 2015 even cases of inadequate or improper enquiry may be covered albeit not for the assessment year in question. We are concerned with the assessment year 2006-07. Prior to the insertion of Explanation 2, it was the prerogative of the Assessing Officer to determine what enquiry he wants to make while completing the assessment. We have already observed that an enquiry was made by the AO and the assessment order passed. CIT could not invoke jurisdiction u/s 263 as the view taken by the AO was a possible/plausible view. It was only if the AO had not made any enquiry then it could be said that the order passed was erroneous. This is not a case of lack of enquiry though it may be a case of inadequate enquiry. Inadequacy of enquiry as elucidated above does not give jurisdiction to the CIT to invoke provisions of Section 263 prior to the insertion of Explanation 2. In our view, the Explanation 2 does not help the revenue in as much as the same is prospective and applicable with effect from 1st June, 2015. Therefore, the order of the Tribunal cannot be faulted with. There is no error apparent nor any perversity in the findings of the Tribunal. The appeal does not raise any substantial question of law and is dismissed.
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