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2022 (7) TMI 36 - AT - Income TaxRevision u/s 263 by CIT - Deduction u/s 36(1)(viia) - assessee’s claim u/s. 36(1)(viia) is not correct or in excess as per CIT - HELD THAT:- CIT has merely chosen to ignore the assessee’s clear and pointed reply in the matter. It would be a different matter, we may clarify, where the assessee had not satisfactorily replied or suitably addressed the concerns of the competent authority. Also, this, we are conscious, may not be feasible in all cases, and there may be circumstances, as where verification of facts and figures is required, in which case the ld. Pr. CIT would be justified in, stating the reason/s, directing the assessing authority suitably. How could in the instant case, then, the assessee’s claim, which, qua this limb (of the deduction), works to Rs. 156.88 lacs (i.e., Rs. 175.73 lacs – Rs. 18.85 lacs), be said to be in excess? It is only, where so, even if prima facie, that the revisionary authority can be regarded as within his province to say that the AO had not examined the same, remitting it back for necessary verification. Even here, there is scope for the assessee to explain his claim on the basis of admitted facts and law, as it may well be that the revisionary authority has misconstrued or not assumed the facts correctly. In other words, there must be scope for enquiry and verification, for which the revision is being proposed to be made by the revisionary authority. Without this basic condition being met, serving as a primary check, the exercise may degenerate into a probing exercise, which could then extend to every aspect of an assessee’s return. It is to be borne in mind that it is the non-application of mind, that the absence or lack of inquiry exhibits, which renders an order erroneous and, thus, liable for revision (Malabar Indl. Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] - The words “which should have been made” in Explanation 2 to sec. 263, in our view, and at the cost of repetition, provide the necessary perspective and framework, suggestive of there being circumstance/s warranting enquiry by the AO, which he has failed to. No such circumstance is available on record or otherwise brought to our notice in the instant case, thus failing the exercise of power of revision u/s. 263. Assessee appeal allowed.
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