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2017 (4) TMI 299 - HC - Income TaxRevision u/s 263 - Held that - On a careful perusal of the record, it is apparent that the Commissioner of Income Tax as well as the Income Tax Appellate Tribunal both have recorded a finding to the effect that though the records were filed before the Assessing Officer and a detailed questionnaire was also issued to the appellant by the Assessing Officer to which a reply was filed by the appellant in that regard, the Assessing Officer did not apply his mind nor did he conduct an enquiry into the matter although he has recorded in the note-sheet that the reply filed by the appellant was not satisfactory and did not explain all the facts. The Income Tax Appellate Tribunal on the basis of this finding of fact correctly recorded by it has held that the present case is one of total lack of enquiry and by placing reliance on the decisions rendered by the Supreme Court in the cases of Malabar Industrial Co. Ltd. (2000 (2) TMI 10 - SUPREME Court) has recorded a conclusion that such an order is erroneous and prejudicial to the interest of revenue - Decided against assessee.
Issues:
1. Appeal under Section 260-A of the Income Tax Act against order by Income Tax Appellate Tribunal for assessment year 2010-11. 2. Validity of Commissioner's order under Section 263 of the Income Tax Act. 3. Correctness of Tribunal's decision upholding Commissioner's order. 4. Whether the order passed by Assessing Officer was erroneous and prejudicial to the interest of revenue. Issue 1: The appellant filed an appeal under Section 260-A of the Income Tax Act against the order passed by the Income Tax Appellate Tribunal for the assessment year 2010-11. The appellant contended that the Commissioner of Income Tax issued a notice under Section 263 proposing to revise the assessment order, which was remitted back to the Assessing Officer for proper assessment. Issue 2: The main contention was the validity of the Commissioner's order under Section 263 of the Income Tax Act. The appellant argued that the power under Section 263 can only be invoked if the order is both erroneous and prejudicial to the interest of revenue. The appellant claimed that the Commissioner did not consider the documents on record or the appellant's reply before passing the order, which was challenged in the appeal. Issue 3: The Tribunal's decision upholding the Commissioner's order was questioned on the grounds that the finding was without any sound basis and was considered perverse. The correctness of the view taken by the Commissioner in invoking powers under Section 263 without considering the documents on record was a significant point of contention in the appeal. Issue 4: The crux of the matter was whether the order passed by the Assessing Officer was erroneous and prejudicial to the interest of revenue. The Tribunal found that the Assessing Officer did not conduct a proper enquiry or apply his mind to the documents filed by the appellant, leading to the order being considered both erroneous and prejudicial to the interest of revenue. The Tribunal relied on various precedents, including the Supreme Court's decisions in similar cases, to support its conclusion. In conclusion, the High Court dismissed the appeal, stating that there was no substantial question of law arising for adjudication. The Court found that the Assessing Officer's lack of enquiry rendered the order erroneous and prejudicial to the interest of revenue, in line with the Supreme Court's decisions in similar cases. The dismissal was based on the peculiar facts of the case and the established legal principles.
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