TMI Blog2023 (7) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... ad also discussed this aspect as part of assessment order. So, in our view, this is not a case where no enquiry has been made by the assessee officer during the course of assessment proceedings. Principal CIT, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-visit the entire assessment and determine the income himself at a higher figure. We thus find no error in the order of Ld. AO so as to justify initiation of 263 proceedings by the Ld. Pr. CIT. - Decided in favour of assessee. - ITA No. 175/Ahd/2021 - - - Dated:- 5-7-2023 - Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Shri Vivek Chavda, A.R. For the Revenue : Shri Sudhendu Das, CIT-D.R. ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the assessee against the order of the ld. Principal Commissioner of Income Tax, PCIT Vadodara-3, in proceeding u/s. 263 vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the aforesaid order passed by the Principal Ld. CIT(Appeals) u/s 263 of the Act. Before us, the counsel for the assessee submitted that a perusal of the assessment order shows that details of all the remunerations paid by the assessee to related parties under section 40A(2)(b) of the Act were examined by the AO during the course of assessment proceedings. After detailed enquiry on this aspect, the AO on analysis of the facts of the case made a disallowance in the case of one of the directors, Shri Thakkar. It is not a case where inadequate enquiries or no enquiries were made by the AO, but it is a case where vide the aforesaid 263 proceedings, the Principal CIT is seeking to supplant his own view against the view taken by the AO in the assessment proceedings. Accordingly, it was submitted that this is not a fit case for invoking proceedings under section 263 of the Act for the reason firstly, this issue was discussed at length during the course of assessment proceedings and all details regarding remuneration paid to related parties under section 40A(2)(b) of the Act were furnished by the assessee and duly analysed by the Ld. Assessing Officer during the course of assessment and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income Tax by invoking revisionary powers under section 263 of the Act cannot impose his own understanding of the extent of inquiry. There were a number of judgments by various High Courts in this regard. 7.2 Delhi High Court in the case of CIT Vs. Sunbeam Auto 332 ITR 167 (Del.) , made a distinction between lack of inquiry and inadequate inquiry. The Hon ble court held that where the AO has made inquiry prior to the completion of assessment, the same cannot be set aside u/s 263 on the ground of inadequate inquiry 12. .. There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between lack of inquiry and inadequate inquiry . If there was any inquiry, even inadequate, that would not by itself, give occasion to the Commissioner to pass orders under section 263 of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (page 113) The consideration of the Commissioner as to whether an order is erroneous in so far as it is prejudicial to the interests of the Revenue, must be based on materials on the record of the proceedings called for by him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. 7.4 The Mumbai ITAT in the case of Sh. Narayan Tatu Rane Vs. ITO, I.T.A. No. 2690/2691/Mum/2016, dt. 06.05.2016 examined the scope of enquiry under Explanation 2(a) to section 263 in the following words: 20. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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