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2023 (6) TMI 1023 - AT - Income TaxRevision u/s 263 - Accepting the claim of assessee without enquiry - CIT justification in invoking jurisdiction u/s 263 in respect of the issues other than the commission expenses - HELD THAT:- As per the documents placed before us by assessee, it is clear and evident that it was a case of complete scrutiny and not limited scrutiny as canvassed by assessee before us. Therefore, argument of assessee that the ld.Pr.CIT’s order on issues other than those mentioned for scrutiny selection was beyond the scope of revisionary power, does not survive. Even otherwise, the finding of the error by the PCIT of non-examination of disproportionately large claim of expenses by the assessee in the impugned year, as compared to the preceding year is in relation to and has direct bearing on the aspect of low net profit earned by the assessee which was one of the reasons for scrutiny selection. Therefore, for this reason also the contention of the assessee that other than the issue of commission no other issues could have been dealt by the ld.Pr.CIT, we find, has no merit, and is therefore rejected. Assesses case was selected for scrutiny on account of large commission expenses, the facts before us reveal that the AO merely accepted whatever reply was filed by the assessee, which as noted above by us did not even justify the increase in commission expenses but contrarily revealed infirmities which should have prompted further inquiry by the AO. The finding of the ld.Pr.CIT, we hold, are correct that the assessment order was erroneous on account of no inquiry at all having been conducted on the issue of large commission expenses claimed. Issue of commission expenses and the issue of low net profit, we find that there was no inquiry conducted by the AO at all, and therefore, the ld.Pr.CIT was right in holding that the assessment order was erroneous causing prejudice to the Revenue. The assessee’s arguments therefore that the issues were examined during the assessment proceedings is dismissed. Also since we have found the AO to have not conducted any inquiry on the issues for which complete scrutiny was directed in the present case, there cannot be any question of any view formed by the AO on the issues and hence the argument advanced on behalf of the assessee that where two views were possible, revisionary proceedings are unjustified, needs to be rejected. In the present case, the show cause notice issued by CIT pointed out the reasons found by the ld.Pr.CIT for finding the assessment order passed in the present case to be erroneous. Due reply was filed by the assessee, and finding no satisfactory reply given by the assessee, the ld.Pr.CIT went on to hold that the assessment order as erroneous. Therefore, CIT had examined the order passed by the AO on merits, giving assessee due opportunity during the revisionary proceedings to establish its case on merits, but clearly, the assessee failed to do so. Therefore, his order restoring the case to the file of the AO for denovo assessment is in accordance with law, and we do not find any infirmity in the same. Decided against assessee.
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