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TMI Blog2024 (3) TMI 1345X X X X Extracts X X X X X X X X Extracts X X X X ..... sing order under section 263 of the Income Tax Act, 1961 ('the Act' for short) holding the order passed by the National e-Assessment Centre, Delhi to be erroneous and pre judicial to the interest of revenue and directing the Assessing officer to make a fresh assessment de novo. " 3. The assessee society is an educational society running two Colleges at Hisar, one for Nursing and another for Ayurveda. The assessee filed return of income on 31.03.2018 declaring income of Rs. Nil. After a complete scrutiny u/s 143(3) of the Income Tax Act, 1961 by the Income-tax Officer (Exemptions) Ward Rohtak, the assessment u/s 143(3) of the Act was completed on 20.11.2019 at an income of Rs. 2 lacs. The Assessing Officer taxed the income u/s 115BBE of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner or Principal] Commissioner or Commissioner, - (a) the order is passed without making inquires or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board U/s 119. 2. Here in the order u/s 263 da ted 23/03/2022 Cit Exemption Chandigarh has clearly written that the AO did not conduct inquiry into the creditworthiness of the parties and the case of assessee is covered by clause 'a' of Explanation 2. 3. Secondly, it is contended that Explanation 2 clearly refers to opinion of the Principal Commissioner. Here he is not required to do an independent inqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of the case is such to provoke inquiry. If there is a failure to make such inquiry, order is erroneous and prejudicial to revenue. An order is erroneous on Assessing Officer's failure to make inquiries. In Tara Devi Aggarwal Vs. CIT, 88 ITR 323 (SC), the supreme court observed that where an income has not been earned, it is not assessable merely because the assessee wants it to be assessed in his/her hands in order to assist someone else who would have been assessed to a larger amount and rate of tax and the assessment so made will erroneous and pre judicial to the interests of the revenue and that the Commissioner of Income-Tax has jurisdiction to cancel that assessment and direct the Assessing officer to make the assessment a fres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication of mind and so it was erroneous and prejudicial to the interest of the Revenue. 10. The Ld. CIT(E) invoked Explanation 2 to Section 263 of the Act for that purpose and directed the AO "to pass order afresh in accordance with law keeping the view above observations and after affording reasonable opportunity of being heard to the assessee". 11. The Ld. CIT(E) has invoked Explanation-2 to the Section 263 of the Act to propose the re-examination of the case by the AO. 12. So far Section 263 of the Act as the main part of the Act is concerned, the same can be invoked only if there is de finitely an error in the order of the Authority under review and that error has to be identified by the Commissioner. On the alibi that the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame is attached. So the onus on us to prove the fact that donation was towards corpus fully established. Kindly drop the objection relating to donation towards corpus and oblige. "(at Paper Book 4) 14. In this background, the opinion of the Ld. CIT(E) that corpus donations were not enquired of by the AO and so they remained unverified is palpably wrong. No mistake of any nature has been identified by the Ld. CIT(E) on this issue in his entire order. The Ld. CIT(E) has detailed what according to him should be the method for verification of corpus donations but as pointed out above the AO's discretion and judgment cannot be vetoed by the Ld. CIT(E) without citing a mistake in the action of the AO. 15. As to the unsecured loans specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Para 19. The CIT in the order has recorded that the consideration receivable was examined by the Assessing Officer but was not properly examined and therefore the assessment order is "erroneous". The said finding will be correct, if the CIT had examined and verified the said transaction himself and given a finding on merits. As held above, a distinction must be drawn in the cases where the Assessing Officer does not conduct an enquiry; as lack of enquiry by itself renders the order being erroneous and prejudicial to the interest of the Revenue and cases where the Assessing Officer conducts enquiry but finding recorded is erroneous and which is also prejudicial to the interest of the Revenue. In latter cases, the CIT has to examine the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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