TMI Blog2022 (9) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... en a lack of inquiry or non-application of mind. Therefore, if the records prove otherwise, non-mentioning of the issues examined by the AO would not make the assessment order erroneous and prejudicial to the interest of the Revenue. In the present case no inquiry has been carried out by the Ld. PCIT and he has simply directed the Assessing officer to carry out detailed inquires. In our considered opinion, the Ld. PCIT, without making further inquiries on his own account, has simply stated in the impugned orders that the Assessing officer was required to make more inquiries. The Ld. PCIT has not pointed out as to what further inquiries was the AO required to make and as to how without those inquires the order of the AO were erroneous in so far as prejudicial to the interest of the Revenue. We are not inclined to agree with the observations of PCIT that the assessment order was passed without conducting any inquiry by the AO and, therefore, the same was erroneous in so far as being prejudicial to the interest of the Revenue - Decided in favour of assessee. - ITA No. 816/CHD/2019 - - - Dated:- 10-8-2022 - SHRI N. K. SAINI , VICE PRESIDENT And SHRI SUDHANSHU SRIVASTAVA , J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducted by the AO and that he had blindly accepted the claim of the assessee by completely relying upon the documents furnished by the assessee and, therefore, it was apparent that the AO had blindly accepted the claims of the assessee without conducting any inquiry. The Ld. PCIT, vide the impugned order, proceeded to hold that the assessment order was erroneous and prejudicial to the interest of Revenue and he, accordingly, set aside the assessment order to the file of the AO for passing a fresh order in respect of the issue highlighted in the order passed u/s. 263 of the Act. 2.3. Now, the assessee has approached this Tribunal and has challenged the order passed u/s. 263 of the Act by raising the following grounds of appeal:- 1. That the Ld. Pr. Commissioner of Income Tax has wrongly assumed jurisdiction u/s. 263 of the Act to set-aside the assessment order dated 28.07.2016 passed by the AO in as much as the order is neither erroneous nor prejudicial to the interest of Revenue and as such the assumption of jurisdiction u/s. 263 of the Act is beyond his competence. 2. That the Ld. Pr. CIT has erred in failing to consider the various replies and submissions placed on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as further submitted that in response thereto, the assessee had filed detailed replies as well as documentary evidences and it was only after considering the replies and documentary evidences filed by the assessee that the AO had completed the assessment at returned income. He drew our attention to the observations of the AO in the assessment order that Large Agricultural Income Stands Explained And The Assessment Is Finalized At The Returned Income Of The Assessee . 3.2. The Ld. AR submitted that subsequently, the Ld. PCIT proceeded to issue a Show Cause Notice u/s. 263 of the Act alleging that the assessment had been completed without verifying the facts in the light of the documentary evidences placed on record. Pointing out to the impugned order, the Ld. AR submitted that in the said impugned order, it has been alleged that not a shred of investigation had been conducted by the AO who had blindly accepted the claim of the assessee in spite of the fact that this issue had specifically been flagged for the purpose of scrutiny. The Ld. AR submitted that the allegations of the Ld. PCIT were far from facts as a perusal of the questionnaire issued by the AO and further query lett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t remained that cash sales and cash expenditure were not verified by the AO. It was further submitted that the vouchers submitted by the assessee would show that he has sold the cotton crop throughout the year which does not seem to be possible and, thus, apparently, even these vouchers submitted by the assessee were fabricated but the AO had failed to inquire into this aspect also. While vehemently supporting the order of the Ld. PCIT, the Ld. CIT DR submitted that the appeal of the assessee deserves to be dismissed. 5. We have heard the rival submissions and have also gone through the records as well as various documentary evidences filed by the assessee in the form of paper book. We have also gone through the questionnaires issued by the AO and also the replies filed by the assessee in response to the queries raised by the AO from time to time. Copies of all the questionnaire and the replies filed by the assessee have been filed by the assessee in the paper book and the contents of the same are not disputed. We have carefully perused the questionnaire as well as replies furnished by the assessee in response to the various queries raised by the AO and a perusal of these replie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke or error committed by the Assessing Officer, if is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase prejudicial to the interests of the Revenue is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income-tax officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. The phrase prejudicial to the interests of the Revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of the Revenue, for example, when ..... X X X X Extracts X X X X X X X X Extracts X X X X
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