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TMI Blog2025 (2) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... t, in 263 proceedings, set aside an assessment order merely because he has different opinion in the matter. In our view, Section 263 of the Act does not visualise a case of substitution of the judgment of the PCIT for that of the AO who passed the order unless the decision is held to be wholly erroneous.
PCIT, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-visit the entire assessment and determine the income himself at a higher figure. Appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings in pursuant to the order u/s 263 of the Act." 3. The appeal filed by the assessee is barred by limitation of 55 days. The Assessee has filed Condonation Application, along with affidavit, explaining the reasons for delay. The Bench was satisfied that the assessee had a reasonable cause for non-filing of the appeal within the stipulated time; therefore, the delay was condoned and the Appeal was admitted for hearing. 4. The brief facts of the case are that the assessee filed original return of income declaring loss of Rs. (-) 89,92,807/-. During the course of assessment, the Assessing Officer made addition of Rs. 4,01,941/- on account of excess claim of bonus and disallowance of Rs. 3,47,446/- being bogus book losses. On going through the records, the PCIT observed that the Assessing Officer made disallowance of loss of Rs. 3,47,446/- arising out of scrap purchased from M/s. Global Metals and sold to M/s Yug Tradelink Pvt. Ltd. The additions were made on the basis of report of DDIT(Investigations), Vadodara to enquire into the genuineness of the sales made to M/s. Yug Tradelink Pvt. Ltd. As per the report of DDIT(Investigations), the identity and genuineness of M/s Yug Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mit month-wise details of purchases and sales of steel scrap and also asked the assessee to submit ledger confirmation of M/s Global Metals and M/s Yug Tradelink Pvt. Ltd. The Assessing Officer observed that in the report issued by the DDIT (Inv.), Vadodara, it is found that the company to whom the sales had been made by the assessee viz. M/s Yug Tradelink Pvt. Ltd. was not a genuine company and is not carrying on any business activity. Keeping in view the above facts, the Assessing Officer disallowed the loss of Rs. 3,47,446/- claimed by the assessee on sale of steel scrap. 7. On going through the case records, we observe that there is evidently no lack of inquiry by the Assessing Officer. The Assessing Officer had called for various details with regard to sales and purchase of steel scrap from the assessee during the course of assessment proceedings. On the basis of information available on record, the Assessing Officer held that the loss of Rs. 3,47,466/- on account of sale to M/s Yug Tradelink Pvt. Ltd. is a bogus loss and hence the same was liable to be disallowed. In the given facts, we note that, evidently, there is no apparent lack of inquiry by the Assessing Officer on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out in such cases, which means that the opinion formed by Ld. Pr. CIT cannot be taken as final one, without scrutinising the nature of enquiry or verification carried out by the AO vis-à-vis its reasonableness in the facts and circumstances of the case. Hence, in our considered view, what is relevant for clause (a) of Explanation 2 to sec. 263 is whether the AO has passed the order after carrying our enquiries or verification, which a reasonable and prudent officer would have carried out or not. It does not authorise or give unfettered powers to the Ld Pr. CIT to revise each and every order, if in his opinion, the same has been passed without making enquiries or verification which should have been made. In our view, it is the responsibility of the Ld Pr. CIT to show that the enquiries or verification conducted by the AO was not in accordance with the enquries or verification that would have been carried out by a prudent officer. Hence, in our view, the question as to whether the amendment brought in by way of Explanation 2(a) shall have retrospective or prospective application shall not be relevant. 12. We observe that this is not a case where there was an omission on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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