9911796707
TMI Blog2025 (1) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, it is an admitted position that after the assessment order was passed, audit objections were raised with regard to inquiry said to have been conducted by the AO and the audit - party recorded several major audit objections with respect to the investment made by the assessee in mutual funds/shares. There was no verification done by the AO during the assessment proceedings relating to the explanation to be forwarded by the assessee. We, therefore, are satisfied that the order passed by the CIT un/s 263 of the Act in the facts and circumstances of the case cannot be said to be such which was to be interfered with by the ITAT. The view taken by the ITAT based on the judgment passed in B A Plantation and Industries Ltd. and another.[ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer, the audit objections were raised and it was pointed out in the objections that the inquiry was not conducted as required by the concerned Assessing Officer relating to the ownership and entitlement of the cars and houses which were said to be the alleged source of income for investment in the mutual funds amounting to Rs.58.30 Lakh approximately. 3. While admitting this appeal, the following question of law was framed on 03.10.2016:- Whether on the facts and in the circumstances of the case and in law, the Hon ble ITAT was right in quashing the order passed under Section 263 of the Income Tax Act, 1961, by the Pr. Commissioner of Income Tax directing the AO to pass an order afresh after making necessary inquiries in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if he considers that any order passed therein by the Assessing Officer [or the Transfer Pricing Officer, as the case may be,] is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, [including] (i) an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment; or (ii) an order modifying the order under section 92CA; or (iii) an order cancelling the order under section 92CA and directing a fresh order under the said section]. Explanation 1. For the removal of doubts, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipal Commissioner or Commissioner under this sub- section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. Explanation 2. For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer [or the Transfer Pricing Officer, as the case may be,] 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 [Chief Commissioner or Chief Commissioner or Principal] Commissioner 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; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions as noticed above i.e. that the order passed by Assessing Officer is erroneous and secondly that the order results in prejudice to the revenue. 7. In the present case, it is an admitted position that after the assessment order was passed, audit objections were raised with regard to inquiry said to have been conducted by the Assessing Officer and the audit - party recorded several major audit objections with respect to the investment made by the assessee in mutual funds/shares. There was no verification done by the Assessing Officer during the assessment proceedings relating to the explanation to be forwarded by the assessee. 8. We, therefore, are satisfied that the order passed by the CIT under Section 263 of the Act in the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as information within the mean- ing of Section 147(b) of the Income Tax Act. The audit party has merely pointed out a fact which has been overlooked by the In- come Tax Officer in the assessment. The fact that the recognition granted to this charitable trust had expired on 22-9-1992 was not noticed by the Income Tax Officer. This is not a case of in- formation on a question of law. The dispute as to whether reo- pening is permissible after audit party expresses an opinion on a question of law is now being considered by a larger Bench of this Court. There can be no dispute that the audit party is en- titled to point out a factual error or omission in the assessment. Reopening of the case on the basis of a factual error pointed out by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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