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2023 (10) TMI 1233 - ITAT DELHIRevision u/s 263 - as per CIT re-assessment order accepting the cash advance in a commercial and business transaction is without proper inquiry having regard to the provisions of Section 40A(3) and therefore erroneous in so far as prejudicial to the interest of the Revenue - HELD THAT:- CIT cannot merely set aside the assessment on the basis of a new fact (albeit incorrect) coming on record without exerting himself and provide some basis to dislodge the response of the assessee on such new material. CIT, under the circumstances, is under bounden duty to take into account the perspective of the assessee on such fresh material and is required to pass a speaking order thereon. CIT thus is not expected to sit solely in the capacity of revisionary authority qua the new fact coming to the light post assessment/re-assessment order but is required to assume the task of AO in tandem and discharge quasi judicial functions in a reasonable manner. CIT, in the instant case, has failed to do so. There is not even an iota of any discussion as to how reply of the assessee is without any substance particularly when the assessee has furnished evidences to corroborate his version before theCIT. CIT has abruptly observed that the re-assessment order is erroneous in so far as it is prejudicial to the interest of the Revenue “in view of following observations” but however no observations thereafter has been found to be made. Thus, findings of CIT suffer from apparent error and incompleteness. CIT has summarily set aside the re-assessment order and shifted the responsibility on the AO to examine or verify the facts. The opportunity contemplated under Section 263 is thus rendered illusory and merely an empty formality resulting in miscarriage of justice in contravention of express intendment of provision of Section 263. Directions towards verification of impugned transactions without observance of natural justice and without speaking order on the point based on some degree of inquiry by CIT himself, are unsustainable in law and deserves to be quashed. Decided in favour of assessee.
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