AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 279
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns of section 263 of the Act. 4. That the Ld. Pr. CIT has erred in observing that the Assessing Officer has completed the assessment without proper verification and investigation and holding that the order of the Assessing Officer is erroneous and prejudicial to the interest of revenue. 5. That the Ld. Pr. CIT has erred, in ignoring the submissions/ documentary evidence submitted by the assessee during the assessment and revisionary proceedings, and recording factually incorrect finding while holding that the order of the Assessing Officer is erroneous and prejudicial to the interest of revenue. 6. That the Ld. Pr. CIT has erred, in making observation that the payable amount of taxi hire charges payable to Mishra Tour & Travels is Rs. 2.01 Crores whereas as per the audited books of account of the appellant company, the amount payable to the said party as on 31/3/2015 was Rs. 20,10,580/- only; and therefore, the very basis of initiating revision proceedings u/s 263 is invalid. 7. That the Ld. Pr. CIT has erred in not appreciating that during the course of assessment proceedings the assessee has filed all the details in respect of the issues raised....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rest of the revenue inspite of the fact that AO after verifying and satisfactorily examining the documents during assessment proceedings passed the order u/s 143(3) of the Act. It is submitted that in view of above, for exercising revisional jurisdiction u/s. 263 following twin conditions must be met: i. Erroneous order - The order should be erroneous. Thus, if any order is not erroneous it could not be subject to revision w/s 263. ii. Prejudicial to the revenue's interests- The order should be prejudicial to the interests of the revenue. In this regard, it is submitted that the Principal Commissioner of Income tax has erred in invoking the provisions of section 263 as the assessment was framed and accepted by the Ld.AO after having examined the documents furnished. The assessee had filed the relevant documents based on which the AO had accepted and framed the order. A list of documents filed before Ld.AO is tabulated as under: Documents submitted PB (II) Page Copy of Audit Report along with Balance Sheet and P/L for AY 2015-16 1-34 Copy of reply filed on 05.09.2017 and 20.09.2017, submitting the copy of assessment order for AY....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-1 Page 12). This led him to get prejudiced against the order of the Ld. AO and concluded that the AO has failed to verify the account of Mishra Tours and Travel even though the same formed almost 40% of the total hire charges of 5.29 crore. As can be seen from Page 12 of the PB 1. The figure was Rs. 23,58, 157/- and not 2.01 crore as misread by Ld. PCIT. Further, Ld. PCIT did not check and confirm the same from the response to his SCN and persisted with the same incorrect view till the end which primarily was the reason for passing of the impugned order. Ld. PCIT also erred in holding that the AO has failed to verify about the expenses incurred on account of hiring of taxis to the tune of Rs. 5.29 crores and to examine the genuineness of these expenses as the AO did verify the same by calling for the details. AO was satisfied with the details submitted by the assessee. However, Ld. PCIT seemed dissatisfied that the details pertained to few parties amounting to Rs. l.6 crore. In this regard it is submitted that it is not uncommon in the assessment proceedings to call for the details on a sample basis. Thus, AO had not committed any error by getting satisfied with the quali....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of each and every item of deduction etc. If there was any enquiry even inadequate that would not by itself give occasion to the Ld. PCIT to pass order u/s 263 of the Act, merely because he has different opinion in the matter. The Hon'ble Delhi High Court in the case of Anil Kumar Sharma 335 ITR 83 has held that there is a distinction between "lack of enquiry" and "inadequate enquiry". If there was any enquiry, even inadequate, that would not by itself given occasion to the Commissioner to pass orders u/s 263 of the Act. It is submitted that only in the case of lack of enquiry i.e., where no enquiry whatsoever has been made by during the time of assessment proceeding, the order u/s 263 of the Act can be passed and if it is a case of "inadequate inquiry" i.e., inquiry has been made but that is not to the satisfaction of the Ld. PCIT, the same will not give rise to a situation on the basis of which the order u/s 263 can be passed by the Ld. PCIT. It is submitted that case of instant assessee falls under second situation wherein proper and adequate enquiry during the time of assessment was made by the assessing officer and therefore Ld. PCIT is not justified in revising the order....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tances when the order passed by the AO can be said to be erroneous and prejudicial to the Revenue. 20. Clause (a) of Explanation 2 to Section 263 of the Act further stipulates that if an order is passed without making an enquiry or verification which should have been made, the same would bestow a revisional power upon the Commissioner. However; the said Clause or any other condition laid down in Explanation 2 does not warrant recording of the said enquiry or verification in its entirety in the assessment order: 21. Admittedly, in the instant case, the questionnaire dated 02.11.2004, which has been annexed and brought on record in the present appeal, would manifest that the AO had asked for the allowability of the claims with respect to the issues in question. Consequently, the respondent-assessee duly furnished explanations thereof vide replies dated 09.12.2004, 20.12.2004 and 06.01.2005. Thus, it is not a case where no enquiry whatsoever has been conducted by the AO with respect to the claims under consideration. However, this leads us to an ancillary question-whether the mandate of law for invoking the powers under Section 263 of the Act includes the cases where....