TMI Blog2004 (2) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... , delete any of the grounds of appeal before or at the time of hearing and all the above grounds are without prejudice to each other." 3. Briefly, the facts of the issue are that the assessment under s. 143(3) was completed on total income of Rs. 2,35,110 as against returned income of Rs. 2,24,789 by the Dy. CIT, Circle 2(1), Agra, by making disallowance out of conveyance and out of repair and maintenance of Rs. 6,210 and Rs. 4,000 respectively. The assessee runs coaching classes for the students appearing in medical entrance examinations. It is noted by the CIT that the assessment was completed in haste and hurry without making proper enquiries. In this case, survey under s. 133A of the Act was conducted on 12th Nov., 1999 at the business premises of the assessee. During the course of survey, it was found that the assessee was charging Rs. 34,200 as admission fee and Rs. 700 per month as monthly tuition fee from each student. This was verified from one student, namely Shri Yogesh Kumar Kushwaha, who had also filed a suit against the assessee that he charged Rs. 32,000 as admission fee. The survey report was with the AO since 15th Nov., 1999. 4. On 31st Dec., 2001, a show-cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting assessment order, which was made subjective conclusion in the order under s. 263 that no "proper enquiry" was made which has not been specified in the impugned order itself. It is further argued that in para 3 of the impugned order, it is mentioned that the assessment was completed in haste and hurry while in notice issued under s. 263 no such charge was made. 7. During the course of hearing, the learned counsel for the assessee filed a paper book containing total pages 31, which is placed on record. Our attention was invited to notice under s. 263 of the Act issued on 31st Dec., 2001, for the asst. yr. 1998-99 wherein it is mentioned that: "................during the course of survey, the enquiries were made from students regarding admission fee and monthly fee. About 10 students, at the time of survey admitted the payment of admission fee of Rs. 34,200 and thereafter monthly fee of Rs. 700. These facts were relevant to asst. yr. 2000-2001. These facts were also required to be considered for making necessary enquiries at the time of finalisation of assessment for the asst. yr. 1998-99. Thus, the AO did not make proper enquiries regarding admission fee charged and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 is reply dt. 26th Nov., 1999, given to the AO by the Authorised Representative of the assessee. Our attention was drawn that the survey was conducted on 12th Nov., 1999 and just after completion of survey, assessment proceedings were started, which is evident from the above letter dt. 26th Nov., 1999. In the said letter, the assessee explained to the AO that the assessee does not maintain any data of the students except their names. However, names and addresses of eleven students were given, which were based on memory. Page 11 is another reply to the AO, wherein it is mentioned that during the assessment proceedings, the AO has taken the copies of students' fee register, which covers the names of the students, who studied in the year under consideration. The books of account, vouchers and receipt books were once again produced for verification and satisfaction of the AO. Page 12 is another reply, wherein, it is explained that only two students were given special guidance, which is duly reflected in the register of fee received along with their names, father's name etc. Page 13 is also a reply dt. 14th Feb., 2000, wherein the AO was explained about the special coaching given in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nations, as we have seen in the foregoing paragraphs. We also noted that it is not a case of no enquiry, but a case of no proper enquiry. According to CIT's notice as well as order under s. 263, the AO has conducted enquiries, but he failed to conduct proper enquiries. The use of word "proper enquiries" is a matter of subjectivity. It is for the AO to decide what enquiry and upto what extent he would like to conduct the enquiry and not the CIT. The Tribunal, Delhi Bench 'C' in the case of Hindustan Marketing Advertising Co. Ltd. vs. ITO (1989) 28 ITD 231 (Del) has held as under: "In view of the Supreme Court's decision in the case of Jain Bros. vs. Union of India Ors. (1970) 77 ITR 107 (SC), for examination of record to see whether s. 263 applies, one has to proceed with the presumption that the officers involved in making the assessment acted in a bona fide manner. The record is to be examined to see whether in the discharge of duties in this manner there has been an error, which has resulted in prejudice to the Revenue and has thus, made the order erroneous so as to be prejudicial to the interests of Revenue. The contention of the CIT regarding non-compliance of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese circumstances, the CIT was not justified in branding the assessment order as erroneous and prejudicial to the interests of the Revenue. Therefore, the order of CIT under s. 263 was cancelled." 15. The Tribunal, Calcutta Bench 'B' in the case of Progressive Services Ltd. vs. ITO (1991) 40 TTJ (Cal) 595 held that when the AO has made enquiries regarding share subscription money and also called for confirmation and test checked, and the interest income had been shown by the assessee-company as per accounting system followed regularly, the CIT was not justified in taking action under s. 263 on both counts. 16. In the instant case we have seen that it is not a case of no enquiry, but a case of no proper enquiry, which is a matter of subjectivity. It is not the CIT to decide that upto what extent enquiry is to be made, but in fact, it is the AO to decide the matter and to draw inferences. Once the AO has drawn inference after making enquiry, the CIT does not have any jurisdiction under s. 263 to cancel the assessment order. Endless enquiry is not possible and the enquiry has to be closed at some stage. It is for the AO to decide to end the enquiry. The CIT cannot transgress th ..... 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