TMI Blog2023 (7) TMI 1354X X X X Extracts X X X X X X X X Extracts X X X X ..... imself has not entered into any minimal inquiry on the issues himself, if so considered expedient and there is not even prima facie demonstration of fallacy in the action of the Assessing Officer which rendered the order erroneous and which also simultaneously caused prejudice to the revenue. Merely because the expectations of the Revisional Commissioner are purportedly not met, it should not, in our opinion, necessarily trigger revisional action under Section 263 of the Act in every case. CIT has also invoked provisions of section 263 including explanation 2(a) which is effective from 01.06.2015 and it cannot be applied in the current assessment year. Hence, the Ld. CIT s reference to explanation 2(a) does not support the case of the Revenue. This is not a case of non-inquiry, the AO has made inquiry, thus we find that the ld. CIT s order cannot be sustained - Decided in favour of assessee. - Shri Shamim Yahya, Accountant Member And Shri Yogesh Kumar Us, Judicial Member For the Assessee : Sh. Rajesh Malhotra, CA. For the Revenue : Sh. Surendera Pal, CIT-DR. ORDER PER SHAMIM YAHYA, AM, This appeal by the assessee is against the order of the Ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter, the ld. CIT further observed that the replies were just placed on record and no independent enquiries were carried out regarding the company had the financial capability to advance such substantial amounts and whether it is a genuine corporate entity. Further, the Ld. CIT referred to the decision of the Hon ble Supreme Court in the case of Sumati Dayal vs CIT (214 ITR 801) and CIT vs Durga Prasad More (82 ITR 540). He further referred to Explanation 2(a) inserted w.e.f. 01.06.2015 to section 263 and finally held that the assessment order is erroneous and prejudicial to the interest of the Revenue and directed the AO to pass an order afresh. 4. Against this order, the assessee is in appeal before us. 5. We have heard both the parties and perused the records. The ld. Counsel for the assessee submitted that the AO has made due inquiry and he referred to the order sheet entry that where there was recorded that an independent enquiry was done. He further referred to the catena of case laws. 6. Per Contra, the Ld. DR relied upon the order of the Ld. CIT. 7. We have carefully considered the submissions of the assessee and perused the record. We note that the AO has made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us because on remit, the Assessing Officer may decide that the order is erroneous. Therefore CIT must after recording reasons hold that the order is erroneous. The jurisdictional precondition stipulated is that the CIT must come to the conclusion that the order is erroneous and is unsustainable in law. We may notice that the material which the CIT can rely includes not only the record as it stands at the time when the order in question was passed by the Assessing Officer but also the record as it stands at the time of examination by the CIT See CIT vs. Shree Manjunathesware Packing Products, 231 ITR 53 (SC)]. Nothing bars/prohibits the CIT from collecting and relying upon new/additional material/evidence to show and state that the order of the Assessing Officer is erroneous. 18. It is in this context that the Supreme Court in Malabar Industrial Co. Lid. vs. Commissioner of Income Tax, (2000) 243 IT 83 (SC), had observed that the phrase prejudicial to the interest of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer to conduct further enquiry to verify and find out whether the order passed is erroneous or not. 3-The Commissioner of Income Tax vs Ashish Raipal Delhi High Court ITA 485/2008 16- The fact that a query was raised during the course of scrutiny which was satisfactorily answered by the assessee but did not get reflected in the assessment order, would not by itself lead to a conclusion that there was no enquiry with respect to transactions carried out by the assessee. The fact that there was an enquiry can also be demonstrated with the help of the material available on record with the Assessing Officer. The material, to which a reference has been made in the impugned judgment, would show that there was no undue haste in examining the material prior to the passing of the assessment order dated 24.03.2005. At least four letters dated 27.04.2004, 22.02.2005, 28.02.2005 and 18.03.2005 were addressed by the assessee to the Assessing Officer giving details, documents and information pertaining to various queries raise the Assessing Officer. These have been examined by the Tribunal. We have no reason to believe that examination was less than exacting. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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