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TMI Blog2024 (12) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... oned that the 26AS of the appellant/assessee showed receipt of Rs. 5,71,044/- from National Aviation Company of India Ltd. and Air India Ltd. whereas the ITR showed Rs. 2,22,540/-. PCIT has also held that transactions of demat accounts and bank account were not examined/enquired/investigated and consequentially dealt in the assessment order. This finding of the Ld. PCIT has not been categorically rebutted by the appellant/assessee though the factum of inquiry is always verifiable with reference to record. PCIT has amply demonstrated in the impugned order that three issues; transactions in the demat account, transactions in the bank account and receipts as per 26AS vis- -vis receipts as per the ITR were not examined/enquired/investigated by the AO though he should have carried out adequate examinations /enquiries/ investigations to come to a logical conclusion. Further, neither any reply/document nor any notice under section 142(1) of the Act demonstrating the fact that these issues had been examined by the AO was brought on the record, which may substantiate the claim of the appellant/assessee that it is a case of change in opinion. In view of the facts in entirety and above discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 3. Briefly, the relevant facts giving rise to this appeal are that the appellant/assessee, who was an employee of Air India, had (i) deposited cash in his bank account, (ii) made investments in property, (iii) acquired vehicle and also involved/associated in/with the business in the relevant year, which were not in commensurate to the income disclosed in the return of income. Therefore, based on this information, the present case was reopened under section 147 r.w.s. 148 of the Act. The consequential assessment was completed at income of Rs. 8,83,750/- vide order dated 18.12.2018 passed under section 147 r.w.s. 143(3) of the Act. Later on, the Ld. PCIT found the Assessing Officer (hereinafter, the AO ) had not carried out proper enquiry and investigated the case properly as detailed in para 2 of the impugned order. The para 2 of the impugned order is reproduced hereunder: 2. The assessment records of the case were called for and examined. It was observed that the assessment order so passed was erroneous in so far as it was prejudicial to the interests of the revenue due to the following reason(s): (a) On perusal of the assessment records it is seen that out of total credits of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries other than cash deposits and salary credits in the bank account of the assessee totaling to Rs. 16.73 Lakhs which were not examined by the assessing officer. Further, it is observed that as per 26AS the assessee has total receipts of Rs. 5,71,044/- whereas the assessee has declared income in the ITR of Rs. 2,22,640/- which were not examined by the Assessing Officer. 8. In this regard, it would also be of particular relevance to look into Explanation 2 to section 263 of the Act inserted in section 263(1) w.e.f. 01.06.2015, which provides that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal commissioner or commissioner, (a) made; (b) the order is passed allowing any relief without inquiring into the claim. Facts emerging from this case make it abundantly clear that the assessing officer has passed assessment order without making proper enquiry in respect of cash deposits and credit receipts in the bank account of the assessee and without making enquiries in respect of commodity transaction made by the assessee and total receipts received by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner or Commissioner, (a) the order is passed without making inquiries 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 under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. [Emphasis supplied] 7. The case was reopened under section 147 of the Act and consequential assessment was completed at income of Rs. 8,83,750/-. The Ld. Counsel was not able to demonstrate and establish with the help of any statutory notice or order sheet noting that the issues raised by the Ld. PCIT in the impugned order were examined /investigated /inquired during the reopened assessment proceedings. There is no categorical mentioned of the issues raised by the Ld. PCIT in the reopened assessment order. This shows completely lack of examination/investigation/inquiry and also non-application of mind on the part of the AO at the time of passing of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to order being erroneous in so far as prejudicial to the interest of revenue if the Commissioner or Principal Commissioner forms an opinion about the existence of four situations stated therein. 10. The words used in provision to section 263 of the Act are if the order is passed with making inquiries or verification which should have been done . The expression which should have been done suggests an objective test to be applied so as to highlight necessity of making appropriate inquiry for assessing the correct income and absence of which may cause prejudice to the revenue. The impugned order passed by the Ld. PCIT demonstrates that he has examined the record and has found certain issues as detailed in the impugned order that the AO has not examined/enquired/investigated certain issues which should have been made. In the present case the Ld. PCIT has clearly mentioned that the 26AS of the appellant/assessee showed receipt of Rs. 5,71,044/- from National Aviation Company of India Ltd. and Air India Ltd. whereas the ITR showed Rs. 2,22,540/-. Further, the Ld. PCIT has also held that transactions of demat accounts and bank account were not examined/enquired/investigated and consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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