TMI Blog2016 (5) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... d his individual satisfaction before taking action against the assessee. Therefore, we do not find any error in the order of the ld.Commissioner. - Decided against assessee - ITA. No. 1249/Ahd/2015 - - - Dated:- 2-5-2016 - Shri Rajpal Yadav, Judicial Member And Shri Manish Borad, Accountant Member For the Petitioner : Shri S.N. Divetia, AR For the Respondent : Shri Jagdish, CIT-DR ORDER Per Rajpal Yadav, Judicial Member The assessee is in appeal before us against the order of ld.Pr.CITIII, Ahmedabad dated 9.3.2015 passed under section 263 of the Income Tax Act, 1961 in the Asstt.Year 2010-2011. 2. Solitary grievance of the assessee is that the ld.Commissioner has erred in taking action under section 263 of the Act, and thereby, set aside the assessment order for framing de novo assessment order. 3. Brief facts of the case are that the assessee has filed its return of income on 2.5.2011 declaring income of ₹ 1,58,010/-. The assessee has revised this return on 29.3.2012 declaring income of ₹ 5,82,800/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) of the Act was issued on 1.8.2012, which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld.Commissioner formed an opinion that the assessment order is an erroneous order, which has caused a prejudice to the interest of the Revenue. Therefore, a show cause notice dated 5.11.2014 was issued to the assessee. Copy of the show cause notice is available page nos.10-14 of the paper book. In response to the show cause, the assessee has filed his reply vide letter dated 10.12.2014. After hearing the assessee, ld.Commissioner has passed impugned order. The ld.Commissioner has basically held that the AO did not inquire any of the issues during the course of assessment proceedings. He has accepted the return as it is, without any deliberation, and therefore, an erroneous order has been passed, which has caused prejudice to the interest of the Revenue. 5. Before us, the ld.counsel for the assessee, while impugning the order of the ld.Commissioner contended that the AO has issued show cause notice under section 142 of the Act. Copy of the notice is available at page no.85 of the paper book no.2. He took us through this show cause notice. On the strength of this show cause notice, he contended that AO has applied his mind before scrutinizing the return of the assessee. He furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asi-judicial power vested in his and if he exercises such power in accordance with law and arrive at a conclusion, such conclusion cannot be termed to be erroneous simply because the CIT does not fee stratified with the conclusion. (viii) The CIT, before exercising his jurisdiction under s. 263 must have material on record to arrive at a satisfaction. (ix) If the AO has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation by a letter in writing and the AO allows the claim on being satisfied with the explanation of the assessee, the decision of the AO cannot be held to be erroneous simply because in his order he does not make an elaborate discussion in that regard. 8. Apart from the above principles, we deem it appropriate to make reference to the decision of the Hon'ble Delhi High Court in the case of CIT vs. Sun Beam Auto reported in 227 CTR 113, and Gee Vee Enterprises Ltd vs. Addl. Commissioner of Income Tax (99 ITR 375). In the case of Sun Beam Auto, the Hon'ble High Court has pointed out a distinction between lack of inquiry and inadequate inquiry. If there is a lack of enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason is obvious. The position and function of the Incometax Officer is very diffident from that of a civil court. The statement made in a pleading proved by the minimum amount of evidence may be adopted by a civil court in the absence of any rebuttal. The civil court is neutral. It simply gives decision on the basis of the pleading and evidence which comes before it. The Income-tax Officer is not only on adjudicator but also an investigator. He cannot remain passive in the face of the return which is apparently in order but called for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry It is because it is incumbent on the Income-tax Officer to further investigate the facts stated in the return when circumstances would made such an inquiry prudent that the word erroneous in section 263 includes the failure to make such an enquiry. The order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct. 10. In the light of the above, let us examine the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making any effort to investigate the issues. 12. The ld.counsel for the assessee, during the course of hearing, relied upon the judgment of Hon ble Gauhati High Court in the case of B A Plantation and Industries Vs. CIT, 290 ITR 395. He contended that on basis of auditors objection proceedings under section 263 cannot be initiated. As far as the proposition of law laid down in this decision is concerned, there is no dispute qua that. If the ld.Commissioner initiated the proceedings under influence of audit objection and took such objection as gospel truth, then, probably, the ld.counsel for the assessee may be justified to raise this plea that on the basis of auditors objection proceeding under section 263 ought not to be initiated, but in case where, the role of auditors objection is only assumption of a information, which has been evaluated by the ld.Commissioner, and after such evaluation, he was satisfied to initiate the action under section 263 of the Act, then, law does not prohibit the ld.Commissioner to initiate proceeding. His opinion ought not to be influenced by any objection. The role of objection is only as a source of information to decide whether any action ..... 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