TaxTMI 
TaxTMI 
2017 (12) TMI 1858
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.... the Act but also very assumption of revision jurisdiction by the Ld.PCIT u/s 263 of the Act. 2. The Ld. Counsel has invited our attention to the show cause notice issued dated 16.11.2016 vide which the assessee was asked to explain regarding various issues and pointing out that the said issues have not been examined by the Assessing officer. In response to the said notice, the assessee filed reply, copy of which is placed at pages 5 to 7 of the paper book, wherein, it was explained that each of the issue raised by the PCIT was duly examined by the Assessing officer, queries were raised which were explained to the Assessing officer and that the Assessing officer had applied his mind on each of the issue. The Assessing officer after conside....
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....dition of examining the reply and explanation of the assessee in response to the show cause notice concluding that the order of the Assessing officer was erroneous or prejudicial to the interest of the Revenue has not been complied with. The Ld. A.R has further stressed that there is a difference between lack of enquiries and inadequate enquiries. That where the Assessing officer has applied his mind and the view taken by him is one of the possible views, then the order cannot be said to be erroneous or prejudicial to the interest of Revenue, even, if the Commissioner has a different view from that of the Assessing officer; where the AO has made enquiries in respect of the claim of the assessee, order cannot be said to be erroneous even if ....
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....into the merits of each of the issue, proceeded to independently examine each issue and totally ignored the contention of the assessee that the Assessing officer had applied his mind to each of the issue and that the view formed by the Assessing officer was one of the possible views and that there was no error in the order of the Assessing officer. The above contention od the assessee is corroborated with the relevant evidences such as the copies of the order sheet entries pertaining to the assessment proceedings/records, copies of various notices/queries issued by the Assessing officer, copies of the replies thereto field by the assessee. The Assessing officer has also put a note at the end of the assessment order mentioning separately abo....
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....claims of the assessee, that itself, does not mean that the Assessing officer had not made enquiries in this respect. As per the relevant provisions as they stood during the relevant period, whatever required by the Assessing officer was to look into the claim of the assessee. Admittedly, the Assessing officer asked the assessee to furnish the necessary details from time to time which were duly furnished by the assessee and after considering the same the Assessing officer passed the assessment order. The Hon'ble Supreme Court in the case of Malabar Industrial Co Ltd Vs. CIT (2000) 243 ITR 83 (SC) has held that when an ITO adopted one of the courses permissible in law and it has resulted in loss of Revenue, or where two views are possibl....
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....eous but was also prejudicial to the interest of the Revenue. The Hon'ble High Court has observed that the provisions of section 263 when read as a composite whole make it incumbent upon the Commissioner before exercising revisional powers to (i) call for and examine the record and (ii) give the assessee an opportunity of being heard and thereafter, to make or cause to make such an enquiry as he deems necessary. It is only on fulfillment of these twin conditions that the Commissioner may pass an order exercising powers of revision, the assessee must be called for, his explanation sought for and examination by the Commissioner and thereafter if the Commissioner still feels that the order is erroneous and prejudicial to the interest of the Re....
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....not possible being legally unsustainable and incorrect and this finding must be recorded. The Commissioner cannot remand the matter to the AO to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but not lack of enquiry, the Commissioner must give and record a finding that the order/enquiry made is erroneous. This can happen if an enquiry and verification is conducted by the Commissioner and he is able to establish and show the error or mistake made by the AO making the order unsustainable in law. The matter cannot be remitted for a fresh decision to the AO to conduct further enquiries without a finding that the order is erroneous and the Commissioner further must also satisfy the second limb of t....