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2023 (10) TMI 30 - AT - Income TaxRevision u/s 263 - whether or not the AO had caused necessary enquiries in respect of the expenditure claimed by the appellant trust? - HELD THAT:- It is an admitted position that during the course of survey proceedings, the appellant could not produce the vouchers in support of the expenditure claimed by the appellant trust. This fact is also made clear by the submissions of the appellant trust that the vouchers in respect of the expenditure incurred by the assessee trust were in the different school premises. Now, the appellant trust worked out the surplus income after disallowing the expenditure, which is not supported by the vouchers, but there is no material on record to indicate that the income offered by the assessee trust represents the entire expenditure not supported by the vouchers. AO had recorded a finding that the disclosure of expenditure was verified on random basis goes to demonstrate that the AO had not verified in full the entire expenditure claimed by the assessee trust. The fact that the vouchers were not found in the premises of the appellant trust at the time of survey proceedings, should have triggered the AO to enquire and verify the evidence of the expenditure incurred on those items such as “Bonus, Perks and Allowances, Office Expenses, Tours and Travelling Expenses, Building Repairs Expenses etc”, which the AO had failed to do so. Therefore, this fact clearly demonstrates that the AO had failed to conduct necessary enquiries in respect of the above items of expenditure and, therefore, the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. The facts of the case are hit by Explanation 2 inserted to section 263 of the Act. Therefore, we do not find any reasons to interfere with the order passed by the ld. PCIT. The ld. PCIT was justified in the facts of the present case in exercising the power of revision vested with him u/s 263 of the Act. Accordingly, the grounds of appeal raised by the assessee trust stand dismissed.
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