TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 947
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....revisionary authority. The Ld. CIT-DR, on the other hand, advanced arguments supporting the impugned revisionary order. Having heard rival submissions and upon perusal of case records, the appeal is disposed off as under. 3. From the case records, it emerges that the assessee's return of income was subjected to complete scrutiny vide assessment order dated 28-09-2022. During the course of assessment proceedings, various notices were issued to the assessee u/s 142(1) along with detailed questionnaire calling for various details from the assessee. The same has been detailed on Page No.2 of the assessment order. The assessee furnished various replies and documents on all the issues as raised by Ld. AO in these notices. The assessment order specifically takes note of the fact that no variation is proposed on account of non-compliance with Income Computation & Disclosure Standards (ICDS) and large difference in opening stock of current year and closing stock of previous year. However, Ld. AO alleged that the assessee purchased raw material from various parties which were alleged to be bogus purchases. Accordingly, after rejecting assessee's submissions, Ld. AO disallowed bogus purcha....
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.... been mentioned in the Tax Audit report. However, the assessee had submitted that there was no increase/decrease in the profit as per ICDS-II of Inventories and also there was no effect on profit even if inclusive method would have been adopted. The assessee had tabulated the effect of each of the items but Ld. AO failed to call for documentary evidences for verification in this regard. On the issue of addition to building, Plant & Machinery and furniture as well as on the issue of expenses of Rs. 543.53 Lacs as debited in the Profit & Loss Account, the assessee stated that the case was selected for 'limited scrutiny' and these issues were beyond the ambit of 'limited scrutiny'. As against this, the case was selected for 'complete scrutiny' and therefore, the said plea could not be accepted. The Ld. AO failed to verify and examine these issues which make the order erroneous and prejudicial to revenue in terms of Explanation 2(a) to Sec. 263. As per said provisions, the order would be amenable to revision if the order was passed without making inquiries or verification which should have been made. Referring to various judicial decisions, the order was held to be erroneous and pre....
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....arious expenses along with supporting documents. In notice u/s 142(1) dated 03-08-2022, the assessee was again required to file details of various business expenditure along with documentary evidences. The assessee was also required to explain the additions made to various block of assets viz. building, plant and machinery. 8. From assessee's various replies as placed on record, it is quite evident that all the above notices were duly been complied with by the assessee and the requisite details as called for by Ld. AO were duly furnished by the assessee during the course of regular assessment proceedings itself. After due consideration thereof, Ld. AO felt satisfied and chose not to make any additions in all these respects except for addition of alleged bogus purchases. 9. Thereafter, again in response to revisionary show-cause notice dated 15-02-2025, the assessee furnished reply on 24-02-2025 (Page Nos. 23 to 25 of the paper-book) wherein the assessee furnished details of FTS payments along with details of deduction of tax at source. Similar details were provided for commission payments. The head under which these expenses were debited was also tabulated by the assessee. ....
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.... or opposed to any law or non-examination of any aspect was prejudicial to the interest of the revenue. We find that there is no such finding in the impugned revisionary order and therefore, the scope of assessment could not be enhanced by exercising the revisionary power u/s 263 unless the case of error as well as prejudice to revenue is made out by revisionary authority. 13. Our aforesaid view is as per the ratio of Hon'ble Delhi High Court in the case of ITO vs. DG Housing Projects Ltd. (343 ITR 329). In this decision, it was held by Hon'ble Court that AO is both an investigator and an adjudicator. A distinction has to be drawn between a case where the AO has not conducted any enquiry or examined any evidence whatsoever ("lack of inquiry") from one (i) where there is enquiry but the findings are erroneous; and (ii) where there is failure to make proper or full verification or enquiry ("inadequate inquiry"). The fact that the assessment order does not give any reasons for allowing the claim is not by itself indicative of the fact that the AO has not applied his mind on the issue. All the circumstances have to be seen. A case of lack of enquiry would by itself render the order ....
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....rest of the revenue. 15. In the case of Gabriel India Ltd. (203 ITR 108), Hon'ble Bombay High Court observed that from a reading of sub-section (1) of section 263, it is clear that the power of suo-motu revision can be exercised by revisionary authority only if, on examination of the records of any proceedings under this Act, he considers that any order passed therein by the Income-tax Officer is "erroneous in so far as it is prejudicial to the interests of the Revenue". However, this power is not an arbitrary or unchartered power. It could be exercised only on fulfilment of the requirements laid down in sub-section (1). The consideration of revisionary authority must be based on materials on the record of the proceedings called for by him. The revisionary authority could not initiate proceedings with a view to start fishing and roving enquiries in matters or orders which already stood concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial con....