TaxTMI 
TaxTMI 
2015 (9) TMI 63
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....foregoing, the finding of the Ld. CIT that the book results for the trading activity were unreliable and were no amenable to verification and that the rest of the assessment had to be set aside is fallacious, capricious and untenable and must be quashed with direction for abiding by the book version and as per the assessment order already passed by the Assessing Officer on all points; iv. That the order of the Ld. CIT setting aside the assessment order in exercise of his powers u/s 263 of the I.T. Act, 1961 being perverse and preposterous must be quashed; v. That the assessment order dated 27.12.2010 being without blemish or short- coming and being correct on facts and law must be restored as before. 2. The brief facts of the case are that the assessee company is engaged in the business of printing, processing and sale of handloom. The return of income for the assessment year 2008-09 was filed on 23.09.2008, declaring income of Rs. 3,19,970/-. Against the said return of income, the assessment was completed under Section 143(3) of the Income-tax Act, 1961 (for short "the Act") vide order dated 27.12.2010 at a total income of Rs. 3,61,080/-. Subsequently, a notice under Section 26....
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.... CIT, 99 ITR 375 (Del.) Being aggrieved with the order CIT, the assessee company is before us with the present appeal. 4. It was submitted by the learned counsel for the assessee company that no assessment can be set aside in exercise of the power under Section 263 of the Act on the ground that no proper inquiry was made. He has drawn our attention to the questionnaire issued by the Assessing Officer placed at page no. 1 of the paper book and also filed replies of the assessee before the Assessing Officer in response to the questionnaire issued by him at page 4 to 259 of the paper book. He further submitted that it was not a case of non-inquiry when a valid jurisdiction under Section 263 can be exercised and in support of this proposition he relied on the following decisions of the Hon'ble Jurisdictional High Court: i. Director of Income Tax Vs. Jyoti Foundation, (2013) 357 ITR 388 (Del.) ii. ITO Vs. D.J. Housing Projects Ltd., 343 ITR 329 iii. CIT Vs. Sunbeam Auto Ltd., 332 ITR 167 iv. CIT Vs. New Delhi Television Ltd, (2014) 360 ITR 44 (Del.) v. CIT Vs. International Travel House Ltd., (2012) 344 ITR 554 (Del.) 5. On the other hand, learned CIT-DR relied on the order of CI....
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....extent that the Commissioner of Income Tax can exercise his jurisdiction under Section 263 of the Act only in cases where no inquiry has been made by the Assessing Officer and reliance in this regard can be placed on the mother decision of the Hon'ble Bombay High Court in the case of CIT Vs. Gabriel India Ltd., (1993) 203 ITR 108 (Bom.). This decision was followed subsequently by the jurisdictional High Court in the case of CIT Vs. Sunbeam Auto Ltd., 332 ITR 167 where it has been held as under: ".....There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under Section 263 of the Act, merely because he has a different opini....
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....the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the Officer concerned was on the power side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to reexamine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be formed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion..... There must be some prima facie material on record to show that tax which was lawfully exigible has not be imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed." 8. It is very clear that if there is an inquiry even inadequate that would n....
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....icer for the purposes of further inquiry/investigation and to come to the conclusion that the assessment order is erroneous. The CIT himself has to conduct the inquiry before the order under Section 263 is passed. 10. The decision held in the case of Gee Vee Enterprises Vs. Addl. CIT, 99 ITR 375 (Del.) was distinguished by the Hon'ble Delhi High Court in the case of Director of Income Tax Vs. Jyoti Foundation, (2013) 357 ITR 388 (Del.) as follows: " The Delhi High Court in Gee Vee Enterprises V. Addl. CIT [1975] 99 ITR 375 (Delhi), has observed as under (page 386) 'The reason is obvious. The position and function of the Income-tax Officer is very different from that of a civil court. The statements made in a pleading proved by the minimum amount of evidence may be accepted by a civil court in the absence of any rebuttal. The civil court is neutral. It simply gives decision on the basis of the pleading and evidence which comes before it. The Income-tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in....