TMI Blog2024 (1) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... he details and replies and subsequently, at request of the respondent/assessee, manual scrutiny assessment on account of technical difficulties faced by the respondent/assessee was carried out with necessary approvals and hearings were held on various dates during which the documents and replies submitted by the respondent/assessee were duly considered. As reflected from records produced before the Tribunal, AO had sent notice u/s 142(1) along with a detailed questionnaire comprising 38 questions to which replies were submitted by the respondent/assessee and the AO duly applied mind to the same before passing the Assessment Order. That having been done, it could not be labelled as a case of lack of enquiry and consequently, invocation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R AND HON'BLE MR. JUSTICE GIRISH KATHPALIA For the Appellant Through: Ms Dacchita Shahi, Standing Counsel. For the Respondent Through: None. GIRISH KATHPALIA, J.: 1. By way of this appeal brought under Section 260A of the Income Tax Act ( the Act ), the revenue has assailed order dated 25.05.2023 of the Income Tax Appellate Tribunal, whereby the appeal bearing no. ITA 1068/Del/2021 pertaining to the Assessment Year 2016-17 filed by the present respondent/assessee was allowed. Having heard learned counsel for the appellant/revenue, we found it not to be a fit case for issuance of notice. 2. Briefly stated, circumstances relevant for present purposes are as follows. On 15.10.2016, the respondent/assessee filed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary to law and facts, so liable to be set aside. For, the Assessing Officer had failed to obtain necessary records like income tax return, balance-sheet and bank statements etc. of M/s DLF Commercial Projects Corporation with whom the respondent/assessee had entered into development agreement and had received Rs. 14,06,00,000/- as advance, therefore, invoking the provisions under Section 263(1) of the Act was justifiable. However, learned counsel for appellant/revenue did not dispute that order under Section 263 of the Act did not at all deal with the submissions of the respondent/assessee in reply to the show-cause notice. 4. At this stage, it would be apposite to briefly refer to the legal position pertaining to Section 263 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessing officer, where the order is erroneous and the error has resulted in prejudice to the interests of the Revenue. As is clear from the language of the provision, there has to be a proper application of mind by the Commissioner to come to a firm conclusion that the order of the assessing officer is erroneous and prejudicial to the interests of the Revenue. Thus, two conditions need to be satisfied for invoking such a power by the Commissioner, which are: (i) the order of the assessing officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. (See Malabar Industrial Co. Ltd. v. CIT) 8. At the same time, this Court has also laid down that this provision cannot be inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Principal Commissioner of Income Tax gets vitiated; that the Principal Commissioner of Income Tax has to record reasons in order to justify exercise of jurisdiction under Section 263 of the Act; and that where the aforesaid was not carried out, the order passed under Section 263 of the Act was not sustainable. 4.4 In the case of CIT vs Sunbeam Auto Ltd. (2010) 332 ITR 167, a coordinate bench of this court held that one has to keep in mind the distinction between lack of enquiry and inadequate enquiry; and that merely because the enquiry carried out was inadequate, that by itself would not justify invoking Section 263 of the Act. 4.5 In the case of CIT vs New Delhi Television Ltd., (2014) 220 Taxman 43 , a coordinate bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act along with a detailed questionnaire comprising 38 questions to which replies were submitted by the respondent/assessee and the Assessing Officer duly applied mind to the same before passing the Assessment Order. That having been done, it could not be labelled as a case of lack of enquiry and consequently, invocation of Section 263 of the Act was not justified in the light of judicial precedents quoted above. 6. Further, according to records, prior to passing the order under Section 263 of the Act, the PCIT had issued show-cause notice dated 15.02.2021, which was duly served on the respondent/assessee. As mentioned in the order under Section 263 of the Act, on behalf of the respondent/assessee, not just written submissions in response ..... X X X X Extracts X X X X X X X X Extracts X X X X
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