| The Tax Publishers2020 TaxPub(DT) 2488 (Kol-Trib) INCOME TAX ACT, 1961
Section 263
AO having examined books of accounts namely cash book, Ledger, Bank book, Purchase book, Sales Registers, Stock Registers, etc., bills and vouchers invocies and the bank statements, etc. and having satisfied himself about correctness of the same and explanation of assessee in regard to capital introduced, completed assessment and, hence there could not be a reason to say that AO failed to conduct necessary enquiry before accepting claim of assessee.
|
Revision under section 263 - Erroneous and prejudicial order - No lack of enquiry on AO's part -
Pr. CIT invoked jurisdiction under ssection 263 and held that on account of no proper verification doen by AO with regard to capital introduced in the proprietor's capital account assessment order was erroneous and prejudicial to the interest of revenue in view of Explanation 2(a) to section 263. Held: What is relevant for clause (a) of Explanation 2 to section 263 is whether AO has passed the order after carrying out enquiries or verification, which a reasonable and prudent officer would have carried out or not. It does not authorize or give unfettered powers to Pr.CIT revise each and every order, if in his opinion, same has been passed without making enquiries or verification which should have been made. It is responsibility of Pr.CIT to show that enquiries or verification conducted by AO was not in accordance with enquiries or verification that would have been carried out by a prudent officer. Hence, said explanation, which was inserted by Finance Act 2015 with effect from 1-4-2015, would not be applicable to the year under consideration. Accordingly, if there was any inquiry, even inadequate, that would not by itself, give occasion to Pr.CIT to pass order under section 263 merely because CIT had a different opinion in the matter and that only in cases where there was no enquiry, the power undr section 263 could be exercised. In assessee's case, AO having examined boks of accounts namely cash book, ledger, bank book, Purchase book, Sales Registers, stock registers etc., bills and vocuhers invoices and the bank statements, etc., and having satisfied himself about correctness of the same and explanation of assedssee in regard to capital intorduced, completed assessment and, hence there could not be a reason to say that AO failed to conduct necessary enquiry before accepting claim of assessee and, therefore, assessment order could not be termed as erroneous and prejudicial.
 SUBSCRIBE FOR FULL CONTENT
|