TMI Blog2019 (4) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the AO had applied his mind to the issue of long term capital gains and it was only after having been satisfied with the correctness of the claim that he accepted the return filed by the assessee. Therefore, we can safely conclude that proper inquiries had been made by the AO while accepting the claim of the assessee and, therefore, the contention of the Pr.CIT that no inquiry was made by the AO is factually incorrect. It is not the case where no inquiry has been made by the AO. Merely because the Ld. Pr. CIT felt that further inquiry should have been made does not make the order of the Assessing Officer erroneous and prejudicial to the interest of the revenue. Pr.CIT has merely remitted the matter back to the AO without making an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef facts of the case are that in this case the return of income was filed declaring total income at ₹ 5,55,100/-. The case was selected for scrutiny under CASS and vide order dated 14.03.2016, the Assessing Officer accepted the returned income which included income from long term capital gains and income from other sources. Subsequently, a show cause notice was issued u/s 263 of the Act on 19.12.2017 by the Ld. Pr. CIT stating that the Assessing Officer did not make proper inquiries nor he investigated/verified the various details filed and even omitted issues specially with respect to suspicious transactions relating to long term capital gain in shares, rendering the assessment so made to be erroneous and prejudicial to the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng appropriate inquiry. Aggrieved by this order of the Ld. Pr.CIT, the assessee is now in appeal before the ITAT. 3.0 The Ld. AR submitted that it is not the case of the Ld. Pr.CIT that no inquiry was conducted by the Assessing Officer during the course of original assessment proceedings. He drew our attention to the copy of notice u/s 143(2) of the Act dated 24.09.2015 issued during the course of original assessment proceedings and also a copy of questionnaire dated 04.04.2015 wherein the Assessing Officer had required the assessee to submit details of and substantiate long term capital gain. Our attention was also drawn to copy of replies submitted to the Assessing Officer in this regard along with copies of ledger accounts of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave heard the rival submissions and perused the material available on record. From the records produced before us, it is very much evident that the Assessing Officer had made detailed inquiries regarding the assessee s claim of long term capital gain and, thereafter, after considering the reply submitted by the assessee, the Assessing Officer had made further inquiries also which is evident from the copy of questionnaire as well as the reply thereto which has been placed in the Paper Book filed by the assessee before us. Thus, in view of the documentary evidences as called for and examined by the Assessing Officer, it is very much evident that the Assessing Officer had applied his mind to the issue of long term capital gains and it was only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r.CIT vs. Delhi Airport Metro Express Pvt. Ltd. in ITA No.705/2017 has categorically held that for the purpose of exercising jurisdiction u/s 263 of the Act and reaching a conclusion that the order is erroneous in so far as being prejudicial to the interest of the revenue, the CIT has to make some minimal inquiry and where the CIT is of the view that the Assessing Officer had not undertaken any inquiry, it becomes incumbent upon the CIT to conduct such inquiry. We are afraid that in the present case the Ld. Pr.CIT has not conducted any such inquiry. 5.3 Further, the Hon ble Delhi High Court in the case of Pr.CIT vs. Modicare Ltd. in ITA 759/2017 has held that the exercise of jurisdiction u/s 263 of the Act cannot be outsourced by the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there has been an amendment in the provisions of section 263 of the Act by which Explanation 2 has been inserted w.e.f. 1.6.2015 but the same does not give unfettered powers to the Commissioner to assume jurisdiction under section 263 to revise every order of the Assessing Officer to re-examine the issues already examined during the course of assessment proceedings. The Mumbai ITAT Bench has dealt with Explanation 2 as inserted by Finance Act, 2015 in the case of Narayan Tatu Rane vs. ITO reported in (2016) 70 taxman.com 227 to hold that the said Explanation cannot be said to have overridden the liability as interpreted by Hon ble Delhi High Court, according to which the Commissioner has to conduct the inquiry and verification to establish ..... X X X X Extracts X X X X X X X X Extracts X X X X
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