TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 135
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....f law in its memorandum of the Tax Appeal : "i) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT has erred in holding that the ld. PCIT was incorrect in revising assessment order u/s. 263 of the Act r/w Explanation 2 thereto by ignoring the fact that the A.O. has passed the assessment order without making inquiries/verification in the light of the survey report which should have been made? ii) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has erred in quashing the notice u/s. 263 of the Act issued by the PCIT and order passed thereof?" 3. The assessee filed his return of income for the Assessment Year 2014-15 on 26.09.2014 declaring the total income at Rs. 1,77,....
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.... of the Act dated 28.10.2016 by the Assessing Officer was erroneous in so far as it was prejudicial to the interest of the Revenue. The CIT(A) in exercise of its power under Section 263 of the Act set aside the assessment order with a direction to frame the assessment de-novo. 5. The assessee being dissatisfied with the order passed by the CIT(A) preferred an appeal before the Appellate Tribunal. The Tribunal took the view that the CIT(A) while holding that the assessment order was erroneous in exercise of its power under Section 263 of the Act, ought to have indicated that the conclusion or findings recorded by the Assessing Officer were either not based on correct facts or the order had been passed in breach of the provisions of the Act....
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....l relevant documents pertaining to the investment but also called copies of the assessment orders for immediately preceding three years including AY 2012-13, wherein the assessee made investments and earned income therefrom in AY 2014-15. Therefore, allegations of the ld. PCIT have not been supported by any inquiry/verification conducted by the Revising Authority and in this scenario impugned order cannot be held as correct and justified. AT the same time we observe that the ratio of the order of ITAT, Jaipur in the case of Pooja Synthetics Ltd. (supra) is not supportive to the contention of the ld. CIT(A)-DR that the AO has not made any inquiry in the present case. Therefore, we respectfully to hold that the benefit of the proposition rend....
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....nfair to the assessee. Ratio of this decision also supports contention of the appellant-assessee. 32. Furthermore, as per ratio of the decision of Hon'ble High Court of Delhi in the case of CIT vs. Sunbeam Auto Ltd. (supra), wherein it was held that there is a distinction between "lack of enquiry" and "inadequate enquiry" if there is an enquiry, even inadequate, that would not be itself give occasion to the CIT to pass order under s. 263 of the Act, merely because he has a different opinion in the matter such a course of action is open only in cases of "lack of enquiry" contention of the Revenue that the AO did not consider as to whether the expenditure in question was capital or revenue expenditure cannot be accepted. In the present cas....
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.... and justified. At the cost of reputation, we may point out that the ld. PCIT before holding an order to be erroneous, should have conducted necessary enquiries or verification in order to show that the finding given by the AO is erroneous. The ld. PCIT should have shown that the view taken by the AO is unsustainable in law. In the instant case, the ld. PCIT has failed to do so and has simply expresses the view that the AO should have conducted inquiry in a particular manner as desired by him and thus, the action of the ld. PCIT is not in accordance with the mandate of the provisions of s. 263 of the Act. In the resent case, the ld. PCIT has taken support of the newly inserted Explanation 2(a) to s. 263 of the Act, which is effective from 0....
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....n each and every inadequacy in the matter of inquiries and verification as perceived by the Revisional Authority. Powers u/s. 263 of the Act are extraordinary and draconian in nature thus, the same cannot be interpreted as an uncontrolled, unguided and uncanalised powers of the Revising competent authority and these powers are not blanket and arbitrary. 36. The mandate of provision of s. 263 of the Act r/w Explanation 2 does not expect the AO to go to the last corner or point in the inquiry on the issue or to hold a fleeting inquiry but the realistic and justified expectation from the AO on the issue of sufficiency and adequacy of inquiry would be that the AO should have conducted an inquiry which itself is sufficient and adequate to jus....