INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - No lack of enquiry on AO's part -

Pr. CIT invoked jurisdiction under section 263 on the ground that in support of various expenses incurred by the assessee there were no details filed by assessee during the course of proceedings and there was no copy of ledger accounts in respect of these expenses. The expenses observed by Pr. CIT were salary and wages, shop rent, license fee and house rent, etc. Further, assessee had not given the details of excise duty tax paid by it and quantitative records were not maintained. Therefore, Pr. CIT held that order passed by AO was erroneous and prejudicial to the interest of revenue. Held: On all the issues on which Pr. CIT invoked jurisdiction under section 263 were examined during the assessment proceedings. AO had raised the queries during original assessment proceedings and assessee had filed necessary explanations to which AO was satisfied and, therefore, he had passed the assessment order. AO took a plausible view and merely because from a preferential point of view it was apparent that some more enquiry and verification could have been made by AO while making assessment order could not be declared to be erroneous and prejudicial to the interest of the revenue.

Relied:CIT v. Vikas Polymers (2010) 194 Taxman 57 (Del-HC) : 2010 TaxPub(DT) 2189 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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