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TMI Blog2014 (7) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... hority in the facts and circumstances of the case. A subsidiary question, where the answer to the foregoing issue is in the affirmative, is whether any modification, if any, to the direction issued by the ld. CIT to the Assessing Officer (A.O.) is required in the facts and circumstances of the case. 3.1 We shall proceed by delineating the law in the matter. The same is trite, and for which we may for reference advert to decision in the case of Malabar Industrial Company Ltd. vs. CIT [2000] 243 ITR 83 (SC), a locus classicus on the subject. The hon'ble apex court therein laid down a four-way test for invocation of a provision. Succinctly put, these are: (a) incorrect assumption of facts; (b) incorrect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made further inquiries before accepting the statements made by the assessee in his return. The reason is obvious. The position and function of the Income Tax Officer is very different from that of a civil court. The statements made in a pleading proved by the minimum amount of evidence may be accepted by a civil court in the absence of any rebuttal. The civil court is neutral. It simply gives decision on the basis of the pleading and evidence which comes before it. The Income Tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09] 121 ITD 343 (Chen) (SB), signifying the application of the concept in a variety of fact situations. 3.2 A question may arise as to what enquiry is considered enough, for surely one could possibly argue for scope of deeper enquiry in almost every case, and which definitely could not be the legislative or judicial intent, how-so-ever wide the revisionary power under section 263 may be envisaged as. This is often represented by saying that though lack of enquiry would justify revision, inadequate enquiry would not (refer the decision by the hon'ble Delhi high court in CIT vs. Gupta Spinning Mills Pvt. Ltd. (in ITA No. 410/2013 dated 13.09.2013 reported at 2013-TIOL-761-HC-DEL-IT)). At the same time, a superficial enquiry would by itself n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examination of the facts of the case to arrive at a finding of fact as to an application or otherwise of mind by the assessing authority in the matter, making inquiry as warranted, while framing the assessment. In this regard, our first observation is that the ld. CIT has assailed the assessment as framed (on this aspect) on two grounds: a) non-consideration of the lease agreement; and b) non-requisition and, thus, non-consideration of the relevant details/vouchers. 3.4 We shall proceed to consider the validity of the said finding by the ld.CIT qua these grounds. Clause 6 of the lease agreement reads as: '6. All the outgoings such as property tax, maintenance charges, etc. will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O. is concerned, is before the latter and not subsequently in the review proceedings. That is, the absence of any such explanation proves the Revenue's case of non-application of mind in matter by the A.O. 3.5 We may at this stage also consider, even though prima facie, the assessee's explanation. Though in our view it is not necessary to do so, i.e., strictly speaking, given the legal position as delineated hereinabove, so that non-application of mind itself connotes the resulting order as erroneous and prejudicial to the interest of Revenue, liable to revision, we do so as the assessee has relied on case law to the effect that the revision is in such a case, i.e., non-application of mind, subject to it being further shown that a prej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sor in the first instance, and subsequently reimbursed by the assessee. As rightly observed by the ld. AR, on being posed such relevant queries issuing from the perusal of the contract, the same could have been asked by A.O. in the assessment proceedings, and not by us. But then that is precisely the Revenue's case in the revision proceedings, i.e., that a proper enquiry, to enable a proper and informed view, was not made by the A.O. in the assessment proceedings. 3.6 With regard to the Revenue's second objection, the same may arise for consideration in the event of the assessee succeeding on the first ground, or even in the alternative. We find the same to the pertinent to the issue at hand, i.e., the allowability of the expenditure under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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