TaxTMI 
TaxTMI 
2020 (9) TMI 273
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....e Assessing Officer u/s. 263 of the Act. In response, the assessee filed the reply stating that each of the issues were duly examined by the Assessing Officer and after being satisfied, the Assessing Officer accepted the explanation given by the assessee, therefore, the order of the Assessing Officer was neither erroneous nor prejudicial to the interest of Revenue. However, the Ld. PCIT observed that since the Assessing Officer did not make the necessary inquires, hence, the explanation to section 263 of the Income Tax Act inserted w.e.f. 1.6.2015 was applicable, as per which, the order of the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interest of Revenue, if in the opinion of the Ld. PCIT or Commissioner the order is passed without making inquiries or verification which should have been made. He accordingly set aside the order of the Assessing Officer and directed the Assessing Officer to make assessment afresh on the aforesaid specific issue after conducting proper enquires and after affording of opportunity of being heard to the assessee. 3. Being aggrieved by the above order of the Ld. PCIT, the assessee has come in appeal before us....
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....f A/C from his books of accounts and form the books of accounts of sundary creditors. The Ld. A.O. Circle, Sangrur called information u/s. 133(6) from the sundry creditors which is on the file. There was no discrepancy. Moreover the assessee paid total payments through bank. All the creditors are genuine. The assessee deal with these creditors regularly. 4. Verification of unsecured loans-In this regard it is submitted that this issue was not part of limited scrutiny. In view of above noted facts the Ld. A.O. Circle, Sangrur after making vast inquiries passed order under section 143(3) of the IT Act, 1961. Order passed under section 143(3) is not erroneous and prejudicial to the interest of the revenue. Moreover the Ld. A.O. Barnala assessed the case of the assessee under section 143(3) of the IT Act for the A.Y. 2014-15 vide order dated 29.02.2016 and found no discrepancy on these issues. That your honour had used the expressions 'erroneous and prejudicial to the interest of revenue' but did not cite any reason or ground for the said conclusion. Use of the words without elucidation indicates that the said observations are presumptive or a suspicion and mere repetitio....
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....essee has invited our attention to the page 17 of the paper book to submit that the Assessing Officer had duly examined the entire list of sundry creditors and even copies of account of the parties were filed before him. Copies of the ledger accounts of the parties in their books of account were also submitted. Further, that there was no mismatch in sales turn over. The total sales as per books of account and as per return of income were at Rs. 71,46,06,546/-. So far as the verification of unsecured loans were concerned, the Ld. counsel explained that the said issue was not selected for limited scrutiny purposes. The Ld. counsel, therefore, has submitted that the Ld. PCIT without considering the reply and evidences filed by the assessee proving that the Assessing Officer had made adequate and vast inquires on all the issues wrongly set aside the assessment order. 6. The Ld. DR, on the other hand, has submitted that Assessing Officer had not made adequate enquires, therefore, the Ld. PCIT has rightly exercised revision jurisdiction u/s. 263 of the Act. 7. We have heard the rival contentions of both the Ld. Representatives of the parties and have gone through the record. To arrive ....
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....o which the assessee had given a detailed reply. Once a point wise reply was given by the assessee, then a duty was cast upon the Ld. PCIT to examine the reply of the assessee and form a prima-facie opinion as to whether the order of the AO was erroneous so far as it was prejudicial to the interest of Revenue. However, a perusal of the impugned order of the Ld. PCIT reveals that the Ld. PCIT without considering the submission of the assessee and even without giving any prima-facie findings that explanation given by the assessee was not correct or that the same was not reliable, proceeded to hold that the order of the Assessing Officer was erroneous and prejudicial to the interest of Revenue because of the inadequate inquires. In our view, the action of the Ld. PCIT without considering the explanation given by the assessee and without pointing out as to what other enquires were required to be made by the Assessing Officer in the facts and circumstances of the case, has set aside the order of the Assessing Officer and remanded the matter back to the file of the Assessing Officer for passing of the assessment order afresh. The above action of the Ld. PCIT cannot be held to be justif....