TaxTMI 
TaxTMI 
2020 (3) TMI 329
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....ection 263 of the Act. 3. The brief facts of the case are that the assessee company is a private limited company deriving income from iron ore mining in the district of keonjhar of Odisha. It filed the return of income on 29.9.2014 disclosing income at Rs. 90,63,19,010/- and the assessment was completed u/s.143(3) of the Act determining the total income at Rs. 131,42,28,620/- on 29.12.2016. Thereafter, the ld. Pr. CIT by exercising his power vested under section 263(1) of the Act called for the assessment records and scrutinized the same. On verification, he found that in the profit and loss account for the year ending 31st March, 2014, the assessee has credited Rs. 167,58,34,770/- under the head " revenue from operations (gross)' i.e. (....
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....16 for examining the above two issues afresh and reframe the assessment order in accordance with law. 5. We have heard the rival submissions and perused the material placed before us. We find that the Pr. C.I.T. has invoked his powers u/s. 263 mainly on the ground that the A.O. did not make the requisite enquiry with regard to undisclosed receipts of Rs. 5,65,28,821/- and value the opening stock and closing stock of iron ore and dump workings. 6. At the time of hearing before us, Ld D.R. contended that the assessment order to be erroneous and prejudicial to the interests of revenue on the ground that the A.O. failed to make the enquiry which was warranted on the facts of the case. 7. In the case of Gee Vee Enterprises vs. Addl. CIT....
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....the order if all the facts stated therein are assumed to be correct." Similar view was reiterated by their Lorodships of Hon'ble Delhi High Court in the case of Duggal & Co. vs. CIT [220 ITR 456]. 8. In the case of Tarajan Tea Co. Pvt. Ltd. vs. CIT [205 ITR 45], the Hon'ble Gauhati High Court held as under :- "that it was not quite certain whether the tress sold in the previous year relevant to the assessment year were trees standing at the time of acquisition or trees which grew on roots and trunk existing on the date of acquisition or on roots and trunks of trees existing at the time of acquisition and cut subsequently. This was a matter which had to be investigated by the Income-tax Officer after calling upon the assessee ....
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....." 10. In the case of CIT vs. South India Shipping Corpn. Ltd. [233 ITR 546], Hon'ble Madras High Court held as under :- "Even assuming that the Income-tax Officer had called for the particulars, which were also furnished by the assessee, if the Income-tax Officer without probing into the matter further had allowed the claim of the assessee for weighted deduction and if the Commissioner on the basis of materials formed an opinion that the grant of allowance made by the officer was erroneous and not warranted by law, the jurisdiction of the Commissioner under section 263 of the Act was not ousted. The Commissioner may not have recorded his final conclusion, but the question for exercising the power of revision by the Commissioner....
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....neous' in section 263 emerges out of this context. The word 'erroneous' in that section includes cases where there has been failure to make the necessary inquiries. It is incumbent on the Assessing Officer to investigate the facts stated in the return when circumstances make such an inquiry prudent and the word 'erroneous' in section 263 includes the failure to make such an enquiry. The order becomes erroneous because such an enquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct. In the instant case, the Assessing Officer failed to make any enquiry in regard to the allowability of the provision for gratuity. As such, the order was erroneous and pre....