TMI Blog2016 (5) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... ut proper enquiry and examination of the records - Held that:- It is settled law that the commissioner of income tax can exercise his jurisdiction u/s 263 of the Act only in cases where no enquiry is made by the Assessing Officer. In the instant case, it is admitted by the Income Tax Department that the Assessing Officer had made some enquiries though according to them it was not a proper enquiry. In view of the above we find no reason to hold the order of the AO erroneous and prejudicial to the interest of the Revenue. Non disclosure of sale of property - Held that:- As from the provision of the section 263 of the Act we find that the CIT is bound to make necessary enquiry before arriving at the conclusion that order is erroneous and prejudicial to the interest of Revenue. In the instant case the CIT should have enquired from the office of sub registrar jitaran, Rajasthan to ascertain whether there was any transaction of sale of the property. In our view the CIT held the order of AO erroneous and prejudicial to the interest of revenue without making necessary enquiry. Accordingly we are inclined to reverse the order of the CIT passed under section 263 of the Act. - Decided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness. In this case, some information was received from ACIT, Range-8, New Delhi regarding the present assessee that he had provided accommodation entries to M/s Skyline Engineering Contracts (India) Pvt. Ltd. Accordingly the Ld. ACIT, New Delhi requested to issue notice u/s. 131(1)(d) of the Act to DCIT, CC-XX, Kolkata to verify the genuineness of assessee s business by making field enquiries. However, Ld. CIT found that no such inquiry has been conducted. Besides the above in the instant case, assessee was paid a sum of ₹ 16,86,87,593/- for undertaking earth work for development of agricultural land by M/s Skyline Engineering Contracts (India) Pvt. Ltd. Accordingly, Ld. CIT opined that order passed by AO is erroneous and prejudicial to the interest of revenue, hence, Ld. CIT issued notice u/s 263 of the Act on the following points:- a) That AO failed to make necessary inquiries as required by Ld. ACIT, New Delhi u/s. 131(1)(d) of the Act for verifying the genuineness of the assessee, b) That assessee has made payment to three parties (1) Upasana Distributors, (2) Anukul Fiscal Services Pvt. Ltd. and (3) Adventure India towards the sales promotion expenses, however, AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee were produced before AO at the time of assessment is not correct. As per the examination of assessment records, the assessee has produced its books of account on 28.03.2014 and AO passed assessment order on the same date. Therefore, it is clear and beyond doubt that AO has not examined or carried out necessary inquiries or investigation as required. iii) That there was no inquiry u/s. 131(1)(d) of the Act as required by ACIT, New Delhi regarding the genuineness of assessee s business activities. But from the record, it revealed that no such inquiry was conducted by AO. In this case, Ld. CIT relied in the case of Rampyari Devi Saroogi v. CIT 67 ITR 84 (SC); iv) Since the books of account of assessee were produced before AO on 28.03.2014 and AO passed order on same date, hence, it is clear that sales promotion expense shown by assessee has not been verified by AO. v) That AO has relied on the affidavit submitted by assessee regarding the sale of property for an amount of Rs. 3 crore. However, AO should have taken the registered documents of the sold property in question from sub-registrar of Rajasthan. So it is very much apparent that the AO failed to collect th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or modifying the assessment, or cancelling the assessment and directing a fresh assessment . The sum and substance of the above reproduced section 263(1) can be summarized in the following points:-: 1) The commissioner may call to examine the record of any proceeding under the Act; 2) If he considers that the order passed by the AO is (i) Erroneous; and (ii) Is prejudicial to the interest of Revenue; 3) He has to give an opportunity of hearing in this respect to the assessee; and 4) He has to make or cause to make such enquiry as he deems necessary; 5) He may pass such order thereon as the circumstances of the case justify including, (i) An order enhancing or, (ii) Modifying the assessment or (iii) Cancelling the assessment and directing a fresh assessment. 4.1 Now in the light of the above words, we have to examine as to whether the order of the ld. CIT is a valid order in the light of the above stated points/ provisions of section 263 of the Act. In the present case in hand, we find that the learned CIT has treated the order of the AO erroneous and prejudicial to the interest of the Revenue on account of four reasons. The first reason was th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he instant case, it is admitted by the Income Tax Department that the Assessing Officer had made some enquiries though according to them it was not a proper enquiry. In view of the above we find no reason to hold the order of the AO erroneous and prejudicial to the interest of the Revenue. 4.3 The 4th reason was that as per the information collected from the source of AIR, the assessee has sold the property amounting to ₹ 3 crores but the assessee did not make any disclosure in the books of accounts. So the CIT treated the order of the AO erroneous and the prejudicial to the interest of the Revenue. However from the provisions of section 263 we find that the CIT was supposed to make such enquiries as he deems necessary before arriving to the conclusion that the order passed by the AO is erroneous and prejudicial to the interest of revenue. The CIT has failed to make or cause to make such enquiry as he deems necessary. The term deems necessary is open ended. There could be cases that the Commissioner can take a stand that there was no necessity to make such enquiry. If that is the case it should be specifically recorded that the facts emanating from the records requires no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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