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2022 (9) TMI 925 - Income Tax
Revision u/s 263 by CIT - unexplained cash deposits - when an order can be termed as "erroneous" ? - HELD THAT:- PCIT, before holding an order to be erroneous, should have conducted necessary enquiries or verification in order to show that the finding given by the assessing officer is erroneous, the Ld. PCIT should have shown that the view taken by the AO is unsustainable in law.
In the instant case, PCIT has failed to do so and has simply expressed the view that the assessing officer should have conducted enquiry in a particular manner as desired by him. Such a course of action of the Ld. PCIT is not in accordance with the mandate of the provisions of sec. 263 - CIT has taken support of the newly inserted Explanation 2(a) to sec. 263 of the Act. The said explanationwas inserted by Finance Act 2015 w.e.f. 1.4.2015. If that be the case, then the PCIT can find fault with each and every assessment order, without conducting any enquiry or verification in order to establish that the assessment order is not sustainable in law and order for revision.
Hon'ble Supreme Court has held in the case of Parashuram Pottery Works Co. Ltd. [1976 (11) TMI 1 - SUPREME COURT] that there must be a point of finality in all legal proceedings and the stale issues should not be reactivated beyond a particular stage and the lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity.
what is relevant for clause (a) of Explanation 2 to sec. 263 is whether the AO has passed the order after carrying our enquiries or verification, which a reasonable and prudent officer would have carried out or not. It does not authorise or give unfettered powers to the Ld. PCIT to revise each and every order, if in his opinion, the same has been passed without making enquiries or verification which should have been made. In our view, it is the responsibility of the Ld. PCIT to show that the enquiries or verification conducted by the AO was not in accordance with the enquiries or verification that would have been carried out by a prudent officer.
During the notice u/s 142(1) the assessee submitted the relevant documents before the revenue authorities. On basis of these documents the order was passed by the ld. AO. It cannot be said that the issue was untouched and unverified by the assessing authority. Mere change of opinion an order cannot be called as erroneous. We directed that the order passed by the PCIT is unjust for, and the order is setting aside. Appeal of assessee allowed.