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Facts
The assessee filed an appeal against the PCIT's order revising the assessment order under Section 263. The original assessment order was passed u/s 143(3) determining the total income at Rs. 12,32,800/- against the returned income of Rs. 10,41,350/-. The PCIT found the assessment order to be erroneous and prejudicial to the interest of revenue because the Assessing Officer (AO) failed to conduct proper inquiries regarding the assessee's business, especially concerning quantitative details of goods, expenses, and creditors.
Held
The Tribunal held that the Assessing Officer had not conducted proper inquiries and verification as required, making the assessment order erroneous and prejudicial to the interest of revenue, as per explanation 2(a) to Section 263. Therefore, the Tribunal upheld the impugned order of the learned PCIT.
Key Issues
Whether the assessment order passed u/s 143(3) was erroneous and prejudicial to the interest of revenue due to the Assessing Officer's failure to conduct proper inquiries and verifications regarding the assessee's business transactions.
Sections Cited
143(3), 263, 133(6)
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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘B’, LUCKNOW
Before: SHRI SUDHANSHU SRIVASTAVA & SHRI ANADEE NATH MISSHRA
2017-18 against impugned order dated 14/03/2022 (DIN & Order No.ITBA/REV/F/REV5/2021-22/1040692203(1) passed by learned Pr. Commissioner of Income Tax (“PCIT” for short), Bareilly u/s 263 of the Income Tax Act, 1961 (“the Act” for short).
(A.1) In this case assessment order dated 28/12/2019 was passed u/s 143(3) of the Act whereby the assessee’s total income was determined at Rs.12,32,795/- (rounded off to Rs.12,32,800/-), as against returned income of Rs.10,41,350/-. This order was revised by the learned Pr.CIT u/s 263 of the Act vide impugned order dated 14/03/2022. The relevant portion of the aforesaid impugned order of the learned Pr.CIT is reproduced as under:
(B) Although there are several ground of appeal, they are all aimed against action of the learned PCIT setting aside the assessment order to be framed de novo. For the safe of convenience, all grounds of appeal are taken up together for deciding the appeal. At the time of hearing the assessee was represented by none. The learned CIT (D.R.) for Revenue drew our attention to the fact that the reason for selection of the case for scrutiny was that quantitative details of principal items of goods traded or raw material as well as finished goods were not submitted by the assessee. The learned CIT (D.R.) submitted that during the assessment proceedings, even this aspect was not examined by the Assessing Officer. He took us through the impugned order of the learned PCIT and placed heavy reliance on it. (C) We have perused the materials on record. We have heard learned CIT (D.R.). In the impugned order, learned PCIT has discussed in detail, how the Assessing Officer did not make inquiry even in respect of the reasons for which the case was selected for scrutiny. Further, the learned PCIT has also discussed in detail how the Assessing Officer did not make relevant inquiries which were required during the assessment proceedings, having regard to nature and scale of assessee’s business. No material has been brought for our consideration to persuade us to interfere with the impugned order of learned PCIT. Therefore, the impugned order is upheld. All the grounds of appeal are treated as disposed off accordingly. (D) In the result, the appeal of the assessee is dismissed.
(Order was pronounced in the open court on 18/07/2025)