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TMI Blog2013 (10) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... y the ld. Authorized Representative (AR), its counsel, that the assessee challenges the impugned order both on jurisdiction as well as on merits. The assessee was during the course of the assessment proceedings required by the Assessing Officer (A.O.) to furnish the details of the investment (vide order sheet entry dated 04.11.2008), as also the details of the Security Transaction Tax (STT) and Service Tax (ST), which was duly done. It was noted by the A.O. that the assessee is in the business of investment in shares and property. Accordingly, the capital gain arising on the sale of shares, i.e., Rs.21,26,627/-, was assessed as such u/s.111A of the Act; the entire gain being on the transfer of equity shares, being short term capital assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings by the ld. CIT at paras 6 to 9 (pgs.16-17) of his order. It would be apparent there-from that the assessee is engaged in speculative transactions, which could by no means be treated as investments, whether short term or long term. The A.O. has not applied his mind on the various aspects of the transactions entered into, viz. the nature and volume of transactions; the period of holding, and the motive behind the same, as he was in fact required to. The matter having been decided without making proper enquiry/investigation, the decisions in the case of Rampyari Devi Saraogi vs. CIT [1968] 67 ITR 84 (SC) and Smt. Tara Devi Agarwal vs. CIT [1973] 88 ITR 323 (SC) are clearly applicable in the facts of the case. Further, the ld. CIT has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s) that arise before us for adjudication. The same, or the foremost among them, in our view, is the validity of the invocation of section 263 of the Act by the ld. CIT in the facts and circumstances of the case, i.e., the jurisdictional aspect. The apex court in Malabar Industrial Co. Ltd. vs. CIT [2000] 243 ITR 83 (SC), explained the parameters for and conditions upon existence of which there is a valid assumption of revisionary jurisdiction u/s.263. The same is by way of a four-way test, which, succinctly put, is: incorrect assumption of facts; incorrect application of law; without applying the principles of natural justice; and without application of mind. The instant assessment stands impugned under the fourth category aforesaid. The la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r hand, is not only an adjudicator but also an investigator. He could not remain passive in the face of a return which is apparently in order but calls for further enquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an enquiry. It is because it is incumbent on the Income Tax Officer to further investigate the facts cited in the return when circumstances would make such an enquiry prudent that the word 'erroneous' u/s.263 includes the failure to make such an enquiry. The order becomes erroneous because such an enquiry has not been made, and not because there is anything wrong with the order if all the facts therein are assumed to be correct. This has, over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvalidate reassessment proceedings. This is as the law does not provide for review of his order by the assessing authority, while section 263 specifically confers power of review of its order by the CIT, and on the basis of record as available with the latter. The only condition though for an interference by him is that the same must exhibit the order to be erroneous and prejudicial to the interest of the Revenue. As such, we are unable to see as to how the said decision is applicable in the facts of the case, which would stands to be decided by us on the finding of existence or otherwise of proper enquiry by the A.O. 3.3 Continuing further, the absence or lack of enquiry, or not so, is a matter of fact. As such, absence or lack of enquiry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuing definite findings of fact and after allowing the assessee proper opportunity of being heard. Decision 4. We find that the assessee has not been able to controvert clear findings of fact by the ld. CIT in any manner. In fact, as also observed during hearing, the scrip-wise, date-wise detail, as reproduced at para 5 (pgs.6-15) of the impugned order, were not before the A.O., in the absence of which no meaningful analysis could in fact have been made or carried out by him. It is trite law that an absence or even lack of proper enquiry, so that there has not been proper application of mind in the matter, would lead to a valid assumption of jurisdiction u/s. 263. We, therefore, find no infirmity in the order by the ld. CIT, including hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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