2023 (5) TMI 1092

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.... assessee has filed this appeal on following grounds: "1. That Learned Commissioner of Income Tax has earned in set asiding the order passed by AO u/s 143(3) dated 03.12.2019 on the ground that AO without making enquiry allowed the expenses of Rs.703970/- which are not allowable in nature as a business expenditure. 2. That learned commissioner of income Tax appeals without considering the documents as submitted before him reached the conclusion that in absence of any document regarding approval under section 12A, benefit of section 11 cannot be allowed." 2. Heard the learned Representatives of both sides at length and case-records perused. 3. Briefly stated the facts are such that the assessee filed return of income ....

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....produced below, had been introduced therein, the assessment-order is deemed to be erroneous-cum-prejudicial to the interest of revenue if the same had been passed without inquiries or verification which should have been made: "Explanation 2 - "For the purpose of this section, it is hereby declared that an order passed by 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 Principal Commissioner or Commissioner - (a) The order is passed without making inquiries or verification which should have been made; (b) The order is passed allowing any relief without inquiring into the claim; (c) .... 6. Accordingly, the Ld. PCIT....

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.... as understood by Ld. PCIT; therefore the revision-order is not in accordance with section 263 and deserves to be quashed. 9. Per contra, Ld. DR argued that there is no enquiry whatsoever having been done AO qua the claim of twin-expenses noted by PCIT. He submitted that simply because those expenses are recorded in the documents filed by assessee; it cannot be said that the AO has made enquiries or verification with respect to those expenses. Ld. DR submitted that the "enquiries" or "verification" has to be active or tangible. Ld. DR strongly emphasised that the AO has passed assessment-order without making inquiry or verification which should have been done and, therefore, the assessment-order is erroneous, more so in view of the Expla....