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TMI Blog2022 (3) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... onal powers and justify another interpretation. It is settled position of law that for the purpose of exercising jurisdiction u./s. 263 of the Act, the conclusion that the order of the AO is erroneous and prejudicial to the interest of the revenue has to be preceded by some minimal enquiry. If the Revisional authority is of the view that the AO did not undertake any enquiry, it becomes incumbent on the Revisional Authority to conduct such enquiry. If the Revisional Authority does not conduct such basic exercise then the he is not justified in setting aside the order u/s. 263. However, it appears from the record that when the show cause notice u/s 263 of the Act was issued the Ld. Revisional Authority had then merely raised query seeki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R PER ANUBHAV SHARMA, JM: The present appeal is preferred by the assessee against order dated 20.02.2019 u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as The Act) passed by Principal Commissioner of Income Tax, Dehradun ( hereinafter referred as Ld. Revisional Authority) in regard to the assessee who had filed return of income for assessment year 2014-15 declaring NIL income after deduction u/s 80-IC amounting to ₹ 1,48,06,156/- and it was selected for compete scrutiny for the reason of mismatch in amount paid to related persons u/s 40A(2)(b) reported in Audit Report and large deduction claimed under Chapter VI-A. Income Tax Officer, Ward 1 (3), Dehradun (hereinafter referred to as the Ld. AO ). Considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of the reasons for selection of case under Complete scrutiny through Computer Assisted Scrutiny Selection (CASS) was Mismatch in amount paid to related persons u/s 40A(2)(b) reported in Audit Report and ITR. During the assessment proceedings, the AO verified the issue to the extent of mismatch only, whereas being the case under complete scrutiny the AO should have also examined the admissibility of such expenses as per the provisions of the Income Tax Act, 1961 which was not done. 2.2 Thus finding the assessment order u/s 143(3) dated 08.09.2016 passed by the Ld. AO to be erroneous and also prejudicial to the interest of the direction were issued to AO to examine the eligibility of deduction u/s 80 IC for activity of assessee in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Authority had a possible different view the same was not sufficient for interference by invoking provisions of Section 263 of the Act. In this context, the judgment of Hon ble Supreme Court of India in CIT vs. Amitabh Bachchan 2016, 384 ITR 200 (SC) was relied. 4.1 On the other hand, Ld. CIT-DR submitted that there is no illegality in the impugned order and he stands with the order passed by Ld. Revisional Authority. 5. After considering the arguments and the matter on record it can be observed that grounds raised in appeal are common in nature and arise from the question of exercise of revisional powers by the PCIT. It can be observed from the paper book that in consequence to notice u/s 142(1) of the Act the Ld. AO had raised q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If the Revisional Autjhority does not conduct such basic exercise then the he is not justified in setting aside the order u/s. 263 of the Act. Reliance can be placed for this on the judgement of Hon ble Delhi High Court in PCIT Vs. Delhi Airport Metro Express Private Limited vide ITA No.705/2017 order dated 05.09.2017 as relied by Coordinate bench of Delhi ITAT in M/S. Dwarkadhis Buildwell Pvt. vs Cit, Hisar vide ITA No.3097/Del/2014 decided on 1 July, 2019. 8. However, it appears from the record that when the show cause notice u/s 263 of the Act was issued the Ld. Revisional Authority had then merely raised query seeking explanation from assessee to satisfy how the business of computer programming, data processing entitles benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, the AO verified the issue to the extent of mismatch only, whereas being the case under complete scrutiny the AO should have also examined the admissibility of such expenses as per the provisions of the Income Tax Act, 1961 which was not done. 9. In the case in hand the Ld Revisional Authority has done no homework on any aspect for which further enquiry was expected from the ld. AO but restricted to interpretation of relevant entry of nature of business activity and held that enquiry done by Ld. AO in complete scrutiny proceedings were not satisfactory. In fact specifically with regard to observations made in para 2.7, as reproduced above, it can be observed that in notice dated 8/7/16 the Ld. AO had specifically put a qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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