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TMI Blog2018 (2) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee - I.T.A.No.33/Vizag/2016 - - - Dated:- 9-2-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri G.V.N. Hari, AR For The Respondent : Shri Deba Kumar Sonowal, DR ORDER PER D.S. SUNDER SINGH, Accountant Member: This appeal filed by the assessee against order of the Principal Commissioner of Income Tax-2 (PCIT), Visakhapatnam vide F.No.Pr.CIT- 2/VSP/263/10/2015-16 dated 1.1.2016 for the assessment year 2011-12. 2. All the grounds of appeal are related to the order passed by the Ld. Principal Commissioner of Income Tax-2, ( PCIT in short) Visakhapatnam u/s 263 of the Income Tax Act, 1961 (hereinafter called as 'the Act'). In this case, the assessment order was completed u/s 143(3) of the Act by an order dated 31.12.2013 on total income of ₹ 13,30,125/- against the returned income of ₹ 9,23,003/-. Later on, the Ld. Principal Commissioner of Income Tax has taken up the case for revision and found that the order passed by the Assessing Officer (A.O.) was erroneous and prejudicial to the interest of the revenue due to following reasons: (i) There were current liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssues raised by the Ld. Principal Commissioner of Income Tax in the show cause notice and the revision order. The A.O. after due verification of all the aspects passed the assessment order. The A.R further submitted that with regard to the verification of expenses, low profit, additions to assets, violations u/s 40A(3), qualified remarks of audit report, increase in capital and the current assets and liabilities the A.O. has verified with the books of accounts and vouchers during the assessment proceedings. The same books of accounts were also produced before the Ld. Principal Commissioner of Income Tax at the time of revision proceedings and no defect was found by the revenue. With regard to the lorries, tanker and tractor, it was explained by the Ld. A.R. that the lorries, tanker and tractor were used by the assessee for it s business purpose, hence there were no receipts and the same was explained during the assessment proceedings. With regard to the additions to capital assets, the assessee has produced all the relevant vouchers at the time of assessment and supported by the entries in the books of accounts, which were duly verified by the A.O. In respect of Smt. Neelima, the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Ld. A.R. further argued that the Ld. Principal Commissioner of Income Tax is not permitted to make revision u/s 263 of the Act unless the assessment made by the A.O. is found to be erroneous and prejudicial to the interest of the revenue. In this case, the Ld. Principal Commissioner of Income Tax has not made out any case of error, which is prejudicial to the interest of the revenue. Therefore, the Ld. A.R. of the assessee argued that the revision order made by the Ld. Principal Commissioner of Income Tax required to be quashed. Per contra the Ld. D.R. supported the order of the Ld. PCIT. 5. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The assessee is engaged in the business of trading in paddy milling, purchase and sale of paddy rice and it s by products. The Ld. Principal Commissioner of Income Tax has taken up the case for revision u/s 263 of the Act for not conducting enquiries and investigations in respect of the expenses as per para 3.1 of the show cause notice with regard to rice cutting, salaries, bank interest, FCI cuttings, HPCL expenses, low profit, additions to assets, introducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. Principal Commissioner of Income Tax cannot intervene through revision to come to a conclusion that assessment order passed by the A.O. was erroneous and prejudicial to the interest of the revenue for lack of or inadequate enquiry. This view is supported by the decision of ITAT, Kolkata B Bench in the case of Vinod Aggarwal Vs. Principal CIT (Central) Kolkata (2018) 80 Taxmann.com 171. For ready reference and clarity we extract the relevant parts of the Hon ble ITAT s order supra which reads as under: 27. As pointed out by the Supreme Court in Malabar Industrial Co.'s case (supra), the prerequisite to the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Income-tax Officer is erroneous insofar as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent-if the order of the Income-tax Officer is erroneous but is not prejudicial to the interests of Revenue or if it is not erroneous but is prejudicial to the interests ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itution of judgment of the Commissioner for that of the ITO, who passed the order, unless the decision is held to be erroneous. 32. Since the AO conducted enquiry the question is whether there can be no revision because the power u/s 263 can be invoked only in cases of lack of inquiry and not conducting inadequate inquiry. We are of the view that where an enquiry is conducted by the AO and he is satisfied with a reply given on a query raised, then the CIT cannot intervene through revision for coming to a conclusion that the assessment order passed by the AO was erroneous and prejudicial to the interests of the Revenue for lack of or inadequate enquiry. In the instant case, the assessee has provided the entire information to A.O. at the time of assessment, which was being verified by the A.O. before completing assessment. This is evidenced by the questionnaire issued by the A.O. as well as the information furnished by the assessee at the time of assessment. Further, in the consequential order passed u/s 143(3) r.w.s 263 of the Act, the A.O. has not made any specific disallowance in respect of the issues raised by the Ld. Principal Commissioner of Income Tax u/s 263 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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