TaxTMI 
TaxTMI 
2022 (10) TMI 823
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt of business sales of Rs. 14,72,581/- and remaining amount of Rs. 41,76,530/- stand assessed u/s 69A of the Act. His impugned detailed directions under challenge hold that the Assessing Officer did not enquire into all relevant issues involving the assessee's foregoing deposits and business turnover whilst framing the assessment and therefore, the same attract section 263 jurisdiction. This is what leaves the assessee aggrieved. 4. We have given our thoughtful consideration to the rival arguments and find no reason to affirm the PCIT's following detailed discussion:- "3. I have carefully considered facts of the case as well as reply of the assessee reproduced as above. It is undisputed that there were huge cash deposits in saving bank accounts to the extent of Rs. 52,48,000/- in aggregate on different dates. Moreover, the assessee had filed return of income declaring total sales of sRs. 14,72,581/- only. Inspite of these facts, the Assessing Officer treated all these cash deposits as slales made by the assessee and taxed profit @ 8% of total cash deposits. The Assessing Officer should have been enquired into details of genuineness of claim of the assessee that these cash depos....
X X X X Extracts X X X X
X X X X Extracts X X X X
....plication of mind on the part of the Assessing Officer which makes the impugned order passed by him as erroneous and prejudicial to the interest of revenue. 4. In this regard, it would not be irrelevant to point out certain judicial pronouncements which support the action u/s 263 in given facts of the case. The Hon'ble High Court of Karnataka had held in the case of Infosys Technologies Pvt. Ltd. (17 taxmann.com 203) that every conclusion and finding by the assessing authority should be supported by reasons, however, brief it May be, and it should be clearly indicated in the order of assessing authority. In the case of Malabar Industrial Co. Ltd. Vs. CIT (109 taxman 66), the Hon'ble Supreme Court had held that where Assessing Officer had accepted entry in statement of accounts filed by the assessee, in absence of any supporting material, without making any inquiry, exercise of jurisdiction by Commissioner u/s 263(1) is justified. Recently, Hon'ble jurisdictional High Court of Bombay upheld action u/s 263 for lack of proper inquiry in the case of Jeevan Investments & Finance Pvt. Ltd. Vs. CIT (145 DTR 252-Bom- 2017)(Date of order 07.12.2016). For ease of reference, rel....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ground that requisite enquiry were not conducted regarding issue of share capital including premium received by assessee company - Assessee contended that Commissioner ought to have confined his decision only to issue on which reassessment was made Whether even though question of issue of share capital was not a factor which promoted proceeding for reassessment, it was permissible for reassessing authority to widen scope of reassessment - Held, ues - Whether since issue of share capital at premium had also been examined by AO in reassessment proceeding, revisional proceeding initiated by Commissioner was valid and limitation period for passing impugned order was to be counted from date of passing order u/s 14 7 and not from date of information issued u/s 143(1)- Held, yes." 4.2. It is worth to mention that in this case, even though the Assessing Officer had examined issue of share capital at premium by notices u/s 13 on test check basis, the Hon'ble Court upheld action u/s 263 for the reason that there was inadequate inquiry. 4.3. Recently, Hon'ble Supreme Court had upheld the decision of Hon'ble High Court of Kolkata upholding action u / s 263 in the case of Rajma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3(6) on test check basis. Inspite of these, the Hon'ble Court held that it was inadequate inquiry - Lack of requisite inquiry - and therefore action u/s 263 was valid. Recently, Hon'ble jurisdictional High Court of Bombay had upheld action u/ s 263 in the case of CIT, Nagpur Vs. Ballarpur Industries Ltd. (85 taxmann.com 10) (Date of order 31.07.2017) holding that, where AO allowed claim of deduction u/s 80HHC without examining said claim with reference to unabsorbed depreciation and investment allowance as referred to in sections 32 and 32A respectively, Commissioner was justified in invoking revision u/s 263. 4.5. Similarly, Hon'ble High Court of Allahabad had held in the case of Swarup Vegetable Products Vs. CIT (54 taxmann.com 175) that it is beyond dispute that u/ s 263, the Commissioner does have power to set aside the assessment order and send the matter for afresh assessment, if he is satisfied that further inquiry is necessary and that the order of the ITO is prejudicial to the revenue. Similar view was taken by Hon'ble High Court of Gujarat in the case of Adani Agro Pvt. Ltd. Vs. DCIT, Cir.1 (32 taxmann.com 356). As discussed in preceding Paras, the Asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o interests of revenue * A. Y. 1981-82 - Whether it is not necessary for Commissioner to make further enquiries before cancelling assessment order of Assessing Officer * Held, yes * Whether Commissioner can regard order as erroneous on ground that in circumstances of case Assessing Officer should have made further enquiries before accepting statement made by assessee in his return - Held, yes. (2) Ambika Agro Suppliers Vs. ITO, Jalgaon (Pune Bench) (95 ITD 326) "Acceptance of explanation of assessee without any enquiry renders assessment order erroneous as well as prejudicial to interest of revenue, (3) Sesa Goa Ltd. Vs. CIT, Panaji (Panaji Bench) (151 ITD 679) (52 taxmann.com 176 ) Allowing claim u/s 1OB_to assessee without making an enquiry will indicate that order is erroneous and prejudicial to interest of revenue." 5. As discussed in Para 3, in the present case, the Assessing Officer did not enquire into all relevant issues to deduce correct taxable income and therefore, the order passed by the assessing Officer is found to be erroneous in so far as it is prejudicial to the interest of revenue. It would be fair and just to restore the matter to the Assessing Officer ....