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TMI Blog2024 (1) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... ction between lack of inquiry and inadequate inquiry . If there was any inquiry, even inadequate, that would not by itself, give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has different opinion in the matter. If an Income-Tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. Therefore, in the assessee`s case, it cannot be said that it is a case of lack of inquiry . Thus we note that the AO enquired during assessment proceedings and the assessee had filed details before him. So we find that the AO s action cannot be termed erroneous . Since not only enquiry was carried out by the AO on the issue under consideration and based on the evidence gathered he has taken a plausible view, which at any rate cannot be called as an unsustainable view. Hon ble Supreme Court in the case of Malabar Industries [ 2000 (2) TMI 10 - SUPREME COURT] held that this phrase i.e. prejudicial to the interest of the revenue has to be read in conjunction with an erroneous order passed by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld AO does not in any way represent erroneous order. The action of the Ld. Pr. CIT was wholly unreasonable, uncalled for and bad in law. 5. On the facts and in the circumstances of the case as well as law on the subject, the learned Pr. Commissioner of Income Tax has grievously erred in assuming that the assessing Officer had not verified the expenditure to the tune of Rs.26,32,250/- and not made proper inquiry on finalized the order of assessment u/s. 143(3) rws.143(3A) and 143(3B) of the I.T. Act is contrary to the fact of the case. 6. On the facts and in the circumstances of the case as well as law on the subject, the entire proceedings are bad-in-law and invalid as assessment order u/s. 143(3) r.w.s. 143(3A) and 143(3B) of the Act for the same year were framed, wherein due inquiry was made. 7. On the facts and in the circumstances of the case as well as law on the subject, the learned Pr. Commissioner of Income Tax has grievously erred in setting aside the assessment order framed u/s.143(3) rws.143(3A) and 143(3B) of the I.T. Act without pointing out as to how the order is erroneous and prejudicial to interest of revenue. 8. It is therefore prayed that the above propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not made any inquiry/verification on the source of transaction and in failure of explanation of the source of the transaction, the AO was required to treat credit card payment made of Rs.26,32,250/- as unexplained expenditure u/s 69C of the Act and to make addition to the total Income of the assessee, which he failed to do so. Therefore, ld PCIT issued a show -cause notice, to the assessee to explain the transaction, vide show cause notice, bearing DIN No. ITBA/COM/F/17/2022-23/1020329929(1), dated 02.03.2023 and was duly served upon the assessee. 5. In compliance with the show cause notice u/s 263 of the Act, the assessee has furnished his reply on 09.03.2023, relevant portion of which is reproduced as under: "As per your letter it is clear that assessee has replied for AY 2018- 2019 and then assessment was completed and order u/s. 143 was passed with no liability whereas as per your letter it is pointed out that expenditure credit Card was for the online business amounting to Rs 26,32,205 and the same amount was considered in other income which is shown Rs 3,07,150 out of this amount 6% was 44AD Income Included in this which was Rs (26,32,250 * 6/100) = 157935 So out of To ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered together with the issue discussed herein above also. 7. Aggrieved by the order of ld. PCIT, the assessee is in appeal before us. 8. Shri P. M. Jagasheth, Learned Counsel for the assessee submitted that during the assessment stage, the Assessing Officer has conducted sufficient enquiry about the issue raised by the ld. PCIT. The Ld. Counsel submitted that assessee's case was selected for scrutiny for verification of transactions. The notice issued under section 143(2) clearly states that scrutiny assessment was to be conducted for verification of transactions. The Ld. Counsel stated that Assessing Officer issued notice under section 142(1) of the Act and in response to that notice the assessee has himself submitted reply which is placed at paper book page no.5, therefore, during the assessment stage, the assessing officer did enquiry about the issue raised by ld PCIT, hence order passed by the assessing officer is neither erroneous not prejudicial to the interest of revenue, therefore, order of ld PCIT may be quashed. 9. On the other hand, Learned Commissioner of Income Tax - Departmental Representative (ld. CIT-DR) for the Revenue, argued that Assessing Officer has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the ld PCIT under section 263 of the Act. 11. The Ld. Counsel submitted before us that assessee has used the credit card, for making the payment of articles / items on behalf of his clients for the purpose of things which were sold to his clients and the net profit earned by the assessee has been shown in the return of income, filed by him for assessment year (AY) 2018-19, which is placed at paper book page nos. 7 and 8 of the assessee`s paper book. The Ld. Counsel argued that during the assessment proceedings, the Assessing Officer has issued notice under section 142(1) of the Act, dated 06.11.2020, which is placed at paper book page nos. 10 and 11. In the said notice under section 142(1) of the Act, the Assessing Officer asked assessee to file the details and documents in respect of all financial transactions / business activities and the Assessing Officer also asked specifically credit card details and credit card statement for the period from 01.04.2017 to 31.03.2018 and other so many details. The details asked by the Assessing Officer by issuing the notice under section 142(1) of the Act, are reproduced below for ready reference: 12. In response to notice under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has made a detail enquiry during the assessment stage, about the issue raised by the ld. PCIT. Hence, order passed by the assessing officer is neither erroneous nor prejudicial to the interest of the Revenue. 16. Therefore, we note that during the assessment stage, the Assessing Officer asked the assessee to furnish the details and documents which are placed in paper book. In response, the assessee submitted its reply which is placed at paper book, as stated above. Thus, all the documents, details and the explanations required by the Assessing Officer were submitted by the assessee. Just because the Assessing Officer does not bring these documents and details in his assessment order does not mean that assessing officer has not conducted proper enquiry during the assessment stage. In fact, assessing officer has applied his mind. The Learned Counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate, that would not by itself, give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has different opinion in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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