2011 (10) TMI 43

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....sed as not pressed. 2. The facts relating to the ground regarding the jurisdiction of CIT under section 263 are that assessment for assessment year 2005-06 had been completed by AO under section 143(3) on 7.12.2007. Subsequently CIT on examination of records noted that employees' remuneration paid by the assessee during the year had increased 5-fold to Rs.2,04,98,187/- as compared to Rs.46,35,046/- in the immediately preceding year, though there was no substantial rise in the turnover. The AO has allowed the same without examination. CIT therefore, issued a show cause notice dated 2.3.2010 asking the assessee to explain as to why the assessment should not be treated as erroneous and prejudicial to the interest of the revenue as AO had ac....

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....for exorbitant rise in salaries from Rs.28.00 lacs to Rs.1.49 crores. The assessee had given reply vide letter dated 19.11.2007 copy of which has been placed at page-9 of the paper book in which the assessee had explained that the reason for substantial increase in salary compared to the assessment year 2004-05 was that in that year the assessee had engaged job workers who had been separately and which had been added to the cost of sales whereas in assessment year 2005-06 under consideration, the said job workers were taken on pay roll and were paid salary. The ld. Authorised Representative also referred to the letter dated 25.2.2010 addressed to CIT a copy of which is placed at page 16 of the paper book in which the AO mentioned that reaso....

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....n'ble Supreme Court in the case of Rampyari Devi Saraogi (67 ITR 84). The same view was followed by the Hon'ble Supreme Court in the case of Taradevi Aggarwal (88 ITR 323). Following the aforesaid judgments the Hon'ble High Court of Delhi in case of Gee Vee Enterprises (99 ITR 375) have held that an order is erroneous not only because it contains some apparent error of reasoning or of law or of fact in the face of it but also because it is a stereotyped order which simply accepts what the assessee has stated and fails to make enquiries which are called for on the facts and in the circumstances of the case. It is thus settled legal position that an order passed without necessary examination/enquiry which are required on the facts of the case....