2012 (6) TMI 593 - HC - Income Tax

Whether Appellate Tribunal is right in law and on facts in setting aside the order passed by the CIT u/s. 263 of the Act - Assessing Officer finalized assessment of the respondent-assessee - Commissioner was of the opinion that the Assessing Officer did not carry out proper inquiries. There was nothing on the record to show that the books of account, bills, vouchers, cash book, etc., were produced by the assessee before the Assessing Officer at the time of assessment proceedings Held that - during the course of framing of the assessment, the Assessing Officer had access to all the records of the assessee, after pursuing such record the Assessing Officer framed the assessment, such assessment could not have been re-opened in exercise of revision power under Section 263 of the Act for making further inquiries. Tax Appeal dismissed.

Summary

Issues:
1. Revision of assessment order under Section 263 of the Income Tax Act, 1961.
2. Validity of the order passed by the Commissioner of Income-tax.
3. Tribunal's authority to set aside the order of the Assessing Officer.

Analysis:
1. The case involved the revision of the assessment order for the A.Y. 2005-06 under Section 263 of the Income Tax Act, 1961. The Commissioner of Income-tax set aside the order of the Assessing Officer, stating that proper inquiries were not conducted, and the books of account were not verified. The Commissioner ordered a de novo assessment to be conducted.

2. The assessee appealed to the Tribunal, which allowed the appeal, stating that the Assessing Officer had carried out full inquiries while framing the original assessment. The Tribunal found that the assessment order could not be categorized as erroneous based on the grounds stated by the Commissioner. The Tribunal emphasized that inquiries were conducted, and the necessary details were furnished during the assessment proceedings.

3. The High Court upheld the Tribunal's decision, stating that the Assessing Officer had access to all the records during the assessment process and framed the assessment accordingly. The Court concluded that there was no need to reopen the assessment for further inquiries under Section 263 of the Act. The Court found no error in the Tribunal's decision and dismissed the Tax Appeal, affirming the Tribunal's authority to interfere with the order of the Assessing Officer in this case.