Tribunal rules in favor of assessee, emphasizing proper inquiry by Assessing officer. Commissioner's revisionary order under section 263 set aside.

The Tribunal allowed the appeal of the assessee, highlighting that the Assessing officer had conducted proper inquiries, rejecting the claim of lack of inquiry by the CIT DR. The delay in filing the appeal was condoned due to valid reasons beyond the assessee's control. The Tribunal emphasized that the Commissioner must establish inadequacy in the Assessing officer's inquiry before passing revisionary orders, ultimately setting aside the order under section 263 and ruling in favor of the assessee.

---

---

Issues:
1. Revisionary powers under section 263 of the Income Tax Act.
2. Condonation of delay in filing appeal.
3. Lack of inquiry by the Assessing officer.
4. Invocation of Explanation 2 to section 263 of the Act.

Revisionary Powers under Section 263:
The appeal was filed against an order passed by the Ld. Principal Commissioner of Income Tax (Appeals) for the assessment year 2011-12. The Ld. PCIT had canceled the assessment and directed a fresh order, leading to the assessee challenging this action. The Ld. AR argued that the assessment proceedings were conducted appropriately, and the returned income was accepted after due examination. The Ld. CIT DR, on the other hand, emphasized the lack of inquiry by the Assessing officer and supported the revision proceedings. The Tribunal analyzed the facts, including the source of deposits and withdrawals, and concluded that the Assessing officer had conducted proper inquiries, contrary to the CIT DR's claims. The Tribunal referred to legal precedents highlighting the distinction between 'lack of inquiry' and 'inadequate inquiry,' emphasizing that the Commissioner cannot pass orders solely based on a different opinion.

Condonation of Delay:
The delay of 147 days in filing the appeal was attributed to the serious illness and subsequent demise of the assessee's wife, coupled with COVID-19 lockdowns and the advanced age of the assessee. The Tribunal, after considering the circumstances, condoned the delay and admitted the appeal for hearing, noting that the delay did not benefit the assessee and was due to valid reasons beyond their control.

Lack of Inquiry by the Assessing Officer:
The Ld. CIT DR argued that there was a lack of inquiry by the Assessing officer regarding the source of deposits. However, the Tribunal found that most deposits were made on the same day as withdrawals, supporting the contention that the funds were legitimately used for fresh Fixed Deposits. The Tribunal highlighted that the Assessing officer had examined the necessary documents and accepted the explanation provided by the assessee's daughter. Legal precedents were cited to emphasize that the order of the Assessing officer cannot be considered erroneous solely based on a different opinion by the Commissioner.

Invocation of Explanation 2 to Section 263:
The Tribunal addressed the invocation of Explanation 2 to section 263 of the Act, emphasizing that the Commissioner must conduct an inquiry to establish the erroneous nature of the assessment order. Legal precedents were cited to support the view that the Commissioner must show inadequacy in the Assessing officer's inquiry before passing revisionary orders. The Tribunal concluded that the revisional jurisdiction exercised by the Ld. PCIT lacked justification as it attempted to reassess evidence under the guise of revisional jurisdiction, ultimately setting aside the order passed under section 263 and allowing the appeal of the assessee.

In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing the importance of proper inquiries, adherence to legal precedents, and the necessity for the Commissioner to establish inadequacy in the Assessing officer's inquiry before passing revisionary orders.

---