2023 (3) TMI 472 - AT - Income Tax

Revision u/s 263 - assessment order had been framed u/s 143(3) r.w.s. 147 - cash deposits has remained unverified /unexplained - refund of advance of property u/s 69A of the act, which was also settled under VSVS scheme - HELD THAT:- PCIT ought to have rebutted the documentary evidences filed by the assessee and the view of the AO in accepting the source of cash deposits as explained by way of pointing out deficiencies and directing specific enquiries in respect of source of particular amount of cash deposit or the source of cash deposit remained unverified or unexplained. Meaning thereby, the PCIT’s general and vague observation that the source of cash deposit remained unverified or unexplained and same need verification at assessment stage without appreciating the facts on record and holding the order passed by the AO to be erroneous and prejudicial to the interest of Revenue is against the intention of the legislation and bad in law. It is pertinent to mention that by way of the impugned order passed u/s 263, it can be said the PCIT-1 has attempted to made a case for reexamination of facts and evidences already examined by the AO while passing the order u/s 143/147 of the act. Such an action of PCIT is not justified in law and on the facts of the case.

We have to understand that lack of enquiry/no enquiry is different from inadequate enquiry and it is only in case of no enquiry by the AO, Pr. CIT/C1T can exercise jurisdiction u/s 263 of the Act and not in case where the AO has made enquiries as seems appropriate in the facts and circumstances of the case. In the instance case inquiry on relevant issue has been made by AO, hence no action invited u/s 263.

We hold that the impugned order passed by the PCIT is perverse to facts on record in holding assessment order erroneous and prejudice to the interest of revenue on account of lack of enquiry. Accordingly, the order passed by the PCIT -1, Jalandhar u/s 263 is cancelled being bad in law. Appeal of the assessee is allowed.