2023 (3) TMI 1480 - HC - Income Tax

Orissa HC Upholds ITAT Decision, Dismisses Revenue's Appeal Over Lack of Enquiry in 2009-10 Tax Assessment.

The HC of Orissa dismissed the Revenue's appeal, upholding the ITAT's decision favoring the Assessee for the assessment year 2009-10. The ITAT had ... Revisionary power under Section 263 of the Income Tax Act, 1961 - requirement of prior enquiry before exercise of revisionary jurisdiction - direction for fresh assessment in absence of enquiry - absence of enquiry versus inadequacy of enquiry - substantial question of lawRevisionary power under Section 263 of the Income Tax Act, 1961 - requirement of prior enquiry before exercise of revisionary jurisdiction - direction for fresh assessment in absence of enquiry - absence of enquiry versus inadequacy of enquiry - ITAT's setting aside of the Principal CIT's order under Section 263 on the ground that the direction to the assessing officer to undertake a fresh assessment was not preceded by any enquiry was upheld and the Revenue's appeal did not raise a substantial question of law. - HELD THAT: - The Tribunal recorded that the Principal CIT's direction for a fresh assessment was not preceded by any enquiry; characterising the defect as an absence of enquiry (and not merely inadequacy of enquiry). The High Court found the Tribunal's view to be plausible and not erroneous in law and therefore declined to entertain the Revenue's appeal. Because the Tribunal's conclusion that no prior enquiry had been conducted was sustainable, the High Court was not satisfied that any substantial question of law arose out of the case and refused to disturb the ITAT's order allowing the assessee's appeal.Appeal dismissed; order of the Income Tax Appellate Tribunal dated 29th August 2022 allowing the assessee's appeal is affirmed.Final Conclusion: The High Court dismissed the Revenue's appeal and upheld the ITAT's order setting aside the Principal CIT's revisionary direction under Section 263 on the ground that the direction for a fresh assessment was issued without any prior enquiry; no substantial question of law was found to arise. The High Court of Orissa dismissed the Revenue's appeal against the Income Tax Appellate Tribunal's decision to allow the Assessee's appeal for the assessment year 2009-10. The Tribunal set aside the Principal CIT's order under Section 263 of the Income Tax Act, noting the absence of enquiry before directing a fresh assessment. The High Court found the Tribunal's decision plausible and not erroneous in law, leading to the dismissal of the appeal.