Tribunal Upholds Income Tax Revision Decision Due to Inadequate Verification

The Tribunal upheld the Principal Commissioner of Income Tax's decision to exercise the power of revision under section 263, finding that the Assessing Officer failed to conduct necessary enquiries regarding the expenditure claimed by the appellant trust. The absence of vouchers during survey proceedings indicated inadequate verification of the expenditure, rendering the assessment order erroneous and prejudicial to the Revenue's interests. Consequently, the Tribunal dismissed all ten appeals collectively, affirming the orders of the Principal Commissioner of Income Tax.

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Issues Involved:
The appeals were filed against the orders of the Principal Commissioner of Income Tax (Central) under section 263 of the Income Tax Act for the assessment years 2013-14 to 2017-18 by two different assessees.

Issue 1: Validity of assumption of jurisdiction u/s 263 by the ld. CIT (Exemption)
The issue revolved around whether the Assessing Officer had made necessary enquiries in respect of the expenditure claimed by the appellant trust. The ld. PCIT found that the Assessing Officer had not conducted adequate enquiries, leading to the assessment order being deemed erroneous and prejudicial to the interests of the Revenue. The ld. PCIT set aside the assessment order, directing a fresh enquiry and verification of the expenditure claim. The appellant contended that the assessment was completed after due verification, while the ld. CIT-DR argued that necessary enquiries were not made by the Assessing Officer.

Decision:
The Tribunal held that the Assessing Officer had failed to conduct necessary enquiries regarding the expenditure claimed by the appellant trust, as evidenced by the absence of vouchers during survey proceedings. This failure to verify the entire expenditure rendered the assessment order erroneous and prejudicial to the Revenue's interests. The Tribunal upheld the ld. PCIT's decision to exercise the power of revision under section 263, dismissing the appeal.

Separate Judgement:
The Tribunal applied the decision made in ITA No.680/PUN/2023 for A.Y. 2013-14 to the remaining nine appeals of the two different assessees in ITA Nos.681 to 689/PUN/2023 for A.Ys. 2013-14 to 2017-18, resulting in the dismissal of all ten appeals collectively.

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