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TMI Blog2024 (3) TMI 1345X X X X Extracts X X X X X X X X Extracts X X X X ..... so they remained unverified is palpably wrong. No mistake of any nature has been identified by the Ld. CIT(E) on this issue in his entire order. CIT(E) has detailed what according to him should be the method for verification of corpus donations but as pointed out above the AO's discretion and judgment cannot be vetoed by the Ld. CIT(E) without citing a mistake in the action of the AO. As to the unsecured loans specific query was raised by the AO. After examining of the material and evidence as provided by the Assessee, the AO came to the conclusion that Rs. 2 lacs of loans remained unexplained. CIT(E) in his order does not point out any error or defect in the assessment order so far as it concerns unsecured loans. The Ld. CIT(E) only allege s lack of enquiry. That impression of the CIT(E) was insufficient to invoke proceedings u/s. 263 of the Act. The said proceedings would get ignited only when there is an error in the order of assessment. Since, the order has been passed by the AO after conducting due enquiries, we hold that the CIT(E), Chandigarh erred in passing order u/s 263 - Decided in favour of assessee. - Dr. B. R. R. Kumar, Accountant Member AND Ms. Astha Chandra, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of this section, it is hereby declared that an order passed by the Assessing Officer [or the Transfer Pricing Officer, as the case maybe, ] shall be deemed to be erroneous in so far as it is prejudicial to the interests of revenue, if, in the opinion of Principal [Chief Commissioner or Chief Commissioner or Principal] Commissioner or Commissioner, - (a) the order is passed without making inquires or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board U/s 119. 2. Here in the order u/s 263 da ted 23/03/2022 Cit Exemption Chandigarh has clearly written that the AO did not conduct inquiry into the creditworthiness of the parties and the case of assessee is covered by clause a of Explanation 2. 3. Secondly, it is contended that Explanation 2 clearly refers to opinion of the Principal Commissioner. Here he is not required to do an independent inquiry to establish his contention. It is only the opinion that is being emphasized here. 4. Thirdly to quote from the order u/s 263 dated 23/03/2022 where in page 13 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en made in undue haste and without proper enquiry, It is incumbent on the Assessing Officer to investigate the facts stated in Income tax return particularly when the circumstances suggest that the enquiry would have been necessary or prudent. Hence the word erroneous would also include a failure to make such an enquiry. 8. Heard the arguments of both the parties and perused the material available on record. 9. In the Revision proceedings u/s. 263 of the Act, the Ld. CIT(E) was provided with comprehensive and complete answers to his various queries. Thereafter the Ld. CIT(E) being of the opinion, that the genuineness of the corpus donations remained unverified and unexamined by the AO and further that the unsecured loans had not been properly verified and after holding that the replies provided by the assessee are shallow, unsubstantiated, incomplete, unsatisfactory and violate factual and logical consistency and applicable statutory provisions and standards and further noting that these issues remained unexplained on the part of the assessee and unexamined on the part of the AO observed that the assessment order passed by the AO was without application of mind and so it was errone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. In this background, the opinion of the Ld. CIT(E) that corpus donations were not enquired of by the AO and so they remained unverified is palpably wrong. No mistake of any nature has been identified by the Ld. CIT(E) on this issue in his entire order. The Ld. CIT(E) has detailed what according to him should be the method for verification of corpus donations but as pointed out above the AO's discretion and judgment cannot be vetoed by the Ld. CIT(E) without citing a mistake in the action of the AO. 15. As to the unsecured loans specific query was raised by the AO. After examining of the material and evidence as provided by the Assessee, the AO came to the conclusion that Rs. 2 lacs of loans remained unexplained. The Ld. CIT(E) in his order does not point out any error or defect in the assessment order so far as it concerns unsecured loans. The Ld. CIT(E) only allege s lack of enquiry. That impression of the Ld. CIT(E) was insufficient to invoke proceedings u/s. 263 of the Act. The said proceedings would get ignited only when there is an error in the order of assessment. 16. The Hon ble Delhi High Court has held in ITO vs. D.G. Housing Projects Ltd. (2012) 343 ITR 329 in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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