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2023 (4) TMI 279 - AT - Income TaxRevision u/s 263 by CIT - Estimation of income - bogus purchases - HELD THAT:- As per the provisions of section 263(1), Explanation 1(c) of the I.T. Act, inter alia, where any order referred to in section 263(1) of the I.T. Act, and passed by the AO, had been the subject matter of any appeal filed before 1.6.1988, the powers of the PCIT or Commissioner under section 263(1) shall extend to such matters as had not been considered and decided in such appeal. In the case at hand, addition made by the AO by applying the GP rate, had been challenged by the assessee by way of appeal. The purchases qua which such addition had been made were, therefore, subject matter of appeal before the ld. CIT(A) and the ld. CIT(A) had passed his order on 15.4.2021. The show cause notice under section 263 of the I.T. Act had, on the other hand, been issued only on 17.3.2022, i.e., almost a year later. That being so, given the provisions of Explanation 1(c) to section 263(1) of the I.T. Act, the revisional jurisdiction under section 263 of the I.T. Act, by issuance of such show cause notice, could not have been assumed. "CIT vs. Bholenath Poly Feb Pvt. Ltd." [2013 (10) TMI 933 - GUJARAT HIGH COURT] and "PCIT vs. Rishabhdev Technocable Ltd." [2020 (2) TMI 662 - BOMBAY HIGH COURT] are eloquent in this regard. The view taken by the Assessing Officer was a possible view, due to which, invocation of powers under section 263 of the I.T. Act could not have been done. Appeal of the assessee is allowed. 22. We find that the Assessing Officer, therefore, had carried out a thorough enquiry and examination of the purchases in question and it was only after such enquiry and examination that the addition was made by the Assessing Officer, by applying GP rate. Appeal of the assessee is allowed.
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