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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: Ms. Annapurna Gupta & Shri TR Senthil Kumar
Appellant by : Shri P.D. Shah, C.A. Respondent by : Shri A.P. Singh, CIT/DR Date of hearing : 07-03-2022 Date of pronouncement : 25-03-2022 आदेश/ORDER PER : ANNAPURNA GUPTA, ACCOUNTANT MEMBER:-
The present appeal has been filed by the Assessee against the order passed by the Pr. Commissioner of Income Tax (Appeals)-3, Ahmedabad, (in short referred to as PCIT), dated 31-03-2021, in exercise of his revisionary jurisdiction u/s. u/s. 263 of the Income Tax Act, 1961(hereinafter referred to as the “Act”) pertaining to Assessment Year (A.Y) 2016-17.
Page No 2 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT 2. As transpires from the order of the Ld. PCIT, the assessment order passed by the Assessing Officer (A.O.) was found to be erroneous so as to be prejudicial to the interest of the revenue, on account of not having made enquiries or verification which should have been made by him and as a consequence therefore accepting incorrect claim of the assessee which was not in accordance with law, on account of the following : (i) claim of additional depreciation u/s 32(1)(iia) and investment allowance u/s. 32(AC) of the Act of machineries of value of Rs. 3,97,96,055/- which were not new but transferred from earlier plant of the assessee at Uttarakhand to present plant at Gokak Karnataka. The show cause notice to the assessee u/s. 263 of the Act dated 19.03.2021 reproduced at para 2 of the PCIT orders brings out the above as under: 2. A show cause notice was issued to the assessee on 19.03.2021 to file submissions in connection with the proceedings u/s. 263 of the I. T. Act. Relevant points of the show cause notice reads as under; " Thereafter, on scrutiny of assessment records available with the Department, it is noticed that, you have claimed depreciation of Rs. 1,92,38,44,812/- including additional depreciations of Rs. 43,01,59,408/- And apart from the same also availed investment allowances u/s 32 AC for Rs. 28,05,30,843/-. It is also found that some of the machineries (total value at Rs. 3,97, 96,055), were transferred from the earlier Uttarakhand Plant of the Company to present plant at Gokak Karnataka . The website of the related company, Riddhi Siddhi Gluco Biols Ltd. gives information that in F.Y. 2009-10 it was decided to demerge existing starch business in Uttarakahand to a new company in which Roquette can have majority stake.Hence, it is apparent that such machines were not new but transferred from earlier location at Uttarakhand and as such not eligible for addition depreciation and investment allowance u/s 32AC.Thus,20% of additional depreciation u/s 32(1) (iia) and 15% of investment allowance u/s 32AC of the IT Act claimed b y you for these machineries were not allowable." The assessee vide this notice was informed that in case of non-compliance, the proceedings u/s. 263 of the Act will be finalized on the basis of materials available on record and on merits. The notice was sent by emails as well as by posts and was duly delivered. ii). The allowance of claim for payment of advertisement expenses and legal and professional fee by the A.O. when 30% of the same was disallowable on account of Page No 3 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT non-deduction of tax at source on the same, as per the provisions of Section 40(a)(ia) of the Act. The Ld. PCIT has noted this at page 4 of his order is under: “Further, the assesse has not deducted TDS on advertisement expenses of Rs. 66.55 lakh and legal & professional fee expenses of Rs. 778.49 lakh. In this regard, it is pertinent to mention here that as per section 40(a)(ia) thirty per cent of any sum payable to a resident, on which tax is deductible at source under chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139, shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession". Therefore, an amount equal to 30% of Rs. 845.04 lakh was not allowable as expenses. Under such circumstances, the allowance of additional depreciation u/s 32(1)(iia) of the Act, investment allowance u/s 32AC of the Act and expenses claimed for payment of advertisement expenses and legal and professional fee is not correct.”
The first argument of the ld. Counsel for the assessee challenging the order passed by the PCIT u/s. 263 of the Act was that the order was passed without jurisdiction. Ld.Counsel for the assessee contended that the assessees jurisdiction lay with ACIT, Circle-13(3)(2), Mumbai,and therefore the Ld.PCIT,Ahmedabad, could not have passed the impugned order u/s 263 of the Act .In this regard, he drew our attention to communication from the office of the PCIT -3, Ahmedabad dated 09.10.2019 regarding the transfer of PAN of the assessee mentioning the fact of the assessee’s jurisdiction falling in Mumbai. The said communication was placed before us paper book page 1 the contents of which are as under: To Roquette India Pvt, Ltd, 21st Floor, Coeroi Commerz-lI Oberoi Sard en City Goregaon East, Mumbai-400Q63 PAN;- AAFCR2758S Subject: Transfer of PAN-Regarding. It is informed that the PAN: AAFCR2758G is currently lying with DCIT,Circle-3(l)(2), Ahrnedabad, As per our record address mentioned, the PAN should fall under the jurisdiction of MUM, Circle-13(3){2)» Mumbai. It is therefore proposed to transfer your PAN and jurisdiction over your case to the said ACIT, Circie-13|3|(2)s Mumbai Page No 4 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT
You are therefore requested to- submit yours view on the proposed transfer of your PAN by speed post/email before 20,10,2019. If your views are not received before the said date, it shall be presumed that you have no objection regarding the; transfer of PAN/jurisdiction as proposed above.
Yours Faithfully (Prita Menon) [ITO(Tech-3)] For Pr. CIT-3, Ahd.
5. Ld. Counsel for the assessee contended that as per the aforesaid communication since the jurisdiction of the assessee, was in Mumbai which the Ld. PCIT was well aware of on 09.10.2019.; he had erred in assuming jurisdiction u/s. 263 Act subsequently by issuing show cause notice dated 19.03.2021, knowing fully well that no jurisdiction lay with him.
5.1. At this juncture, Ld. Counsel for the assessee was asked at bar as to how the aforesaid communication established the fact of transfer of jurisdiction. It was pointed out that the communication only proposed transfer of jurisdiction and stated that if no views of the assessee were received to the proposed transfer, it would be presumed that he had no objection to the same. Ld. Counsel for the assessee was further asked at bar whether any response had been submitted by the assessee to the aforesaid communication and also whether any order transferring jurisdiction of the assessee to Mumbai was passed as per Section 127 of the Act which clearly required passing of such orders. Attention was drawn to Section 127 as under: Section 127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him.
Page No 5 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT
(2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,— (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf.
Ld. Counsel for the assessee was unable to respond to the above queries of the bench. He stated that he was not aware of any response filed by the assessee to the communication nor was aware of the any order passed u/s. 127 of the Act transferring the jurisdiction of the assessee to Mumbai. Ld. Counsel for the assessee was also asked at bar to point out since when the assessee was filing his return of income in the new purported jurisdiction. Ld. Counsel for the assessee was unable to answer this query also.
In view of the above, since the assessee has been unable to substantiate his contention of jurisdiction of the assessee being transferred to Mumbai from Ahmedabad, his contention of the order u/s. 263 having been passed by the PCIT-3, Ahmedabad without jurisdiction, we hold, merits no consideration and is accordingly rejected.
Page No 6 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT
The next contention raised by the ld. Counsel for the assessee was that he had duly demonstrated to the Ld.PCIT that there was no error in the order of the AO vis-a-vis allowing his claim of additional depreciation and investment allowance and also legal professional and advertisement expenses.
8.1. Ld.Counsel contended that he had sufficiently demonstrated that his claim of additional depreciation and investment allowance was as per law, on new assets only and that no such claim had been made on the old assets transferred from Uttarakhand to Karnataka. In this regard he drew our attention to the submissions made before the Ld.PCIT vide letter dated 25.03.2021 as under: Disallowance of additional depreciation claimed under section 32(1)(iia) and investment allowance claimed under section 32 AC of the Income Tax Act.
Firstly it is most respectfully submit that in the List of the addition_of the fixed asset during, Rs.3,97,96,055/- is not included and in support of the same, the list of total addition of Rs.2,47,88,19,354/- to fixed asset for Asst Year 2016-17 on which Normal depreciation claimed and additional depreciation claimed during the year is submitted herewith as Annexure-
1. 1.
2. Further, in support of above addition to fixed asset, copy of tax audit report (Form 3CA-3CD), wherein details regarding Description of Block of asset, Date of Purchase, Date Put to use and amount is mentioned and total of all the addition comes to Rs.2,47,88,19,354/- is submitted as Annexure-2.
3. The coopy of Financial statement is attached herewith as Annexure-3, wherein at Notes-11 “Fixed Asset” total addition during the year is Rs. 2,47,88,19,354 (Rs. 24,7,88.20 Lacs) is also stated.
4. In view of the above facts, in the list of addition to fixed asset does not include addition of Machineries of Rs 3,97,96,055/- which were transferred from Uttarakhand Plant to Gokak Plant as mentioned by your good office. Therefore, no question arises with respect to claim of additional depreciation u/s 32(1) (iia) and Investment allowance u/s 32AC of the Act on the said machineries. For your ready reference copy of invoices of these machineries submitted during assessment are attached herewith as Annexure-4.
5. As no additional depreciation/ investment allowance have been claimed on said machineries of Rs. 3,97,96,055/- question of disallowance of additional depreciation @ 20 % u/s 32(l)(iia) and 15 % of Investment allowance u/s 32AC of the Income Tax Act, 1961 for Rs 1,39,28,6197- does not arise.
Page No 7 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT 9. Referring to the same he contended that the entire list of new machine on which additional depreciation and investment allowance had been claimed ,amounting in all to Rs. 2,47,88,19,354/- had been filed to the Ld.PCIT alongwith the copies of bills, in all four, of old machines transferred amounting to Rs. 3,97,96,055/-, clearing demonstrating that the said bills were not included in the list . He drew our attention to the tax audit report of the assessee for the impugned year placed at paper book page no. 1 to 157 and taking us to page no. 6 to 55 pointed out that it contained the list of all new machinery purchased during the year on which additional depreciation and investment allowance had been claimed. He contended that the said list did not contain old machineries transferred from Uttarakhand unit to Karnataka Unit and drew our attention to bills of the same placed at paper book page no. 73 to 74 representing in all assets of the value of 3,97,96,055/-. He contended that despite so sufficiently demonstrating that the old assets were not included in the list of new plant and machinery on which additional depreciation and investment allowance has been claimed , the Ld. PCIT without conducting any further enquiry on the same had proceeded to hold that the assessment order of the A.O. was erroneous for having allowed the assessee’s claim of additional depreciation and investment allowance without conducting any enquiry whether the same had been claimed on old assets transferred from one unit to another.
With regard to the TDS on advertisement and legal and professional expenses likewise, Ld. Counsel for the assessee drew our attention to the submissions made to the Ld. PCIT vide letter dated 25.03.2021 Disallowance of Advertisement Expenses and Legal & Professional fee expenses u/s 40(a)(ia) of the Income Tax Act. 1. The Copy of ledger account of Advertisement & Publicity expenses of Rs. 66.55 lakhs and Legal & Professional Fees of Rs.778.49 Lakhs is submitted herewith as Annexure-5 nd Annexure-6 respectively along with details with regards to TDS deducted on said expenses and reason in case of non deduction of TDS on the said expenses are stated.
Page No 8 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT 2. Copy of acknowledgement for Quarterly TDS return filed along with party wise and section wise details on which TDS is deducted is submitted herewith as Annexure-7 3. From the above details submitted, it is evident that TDS has been deducted and deposited on above expenses wherever applicable and accordingly no disallowance u/s 40(a)(ia) is to be made.
4. The details of Tax deducted at source section wise along with payment challans and Form 26Q filed quarterly were already submitted to Ld. AO for verification during the assessment proceedings.
The books of accounts have been subject to audit under Companies Act and Income Tax Act and no adverse remark has been made with regard to said expenses.
6. Accordingly, the said expenses have been properly and fully verified by the Id.AO.
In view of above facts and circumstances the learned AO has passed the order u/s 143(3) of the Act after full and proper verification of all the relevant details related to items listed out in your good office letter and accordingly, we request your good office to kindly drop the proceedings u/s 263 of the Act.
With respect to the same also it was pointed out that ledger account of all the expenses was filed, detail showing TDS on each payment made was filed giving reasons where not deducted and the same was evidenced with copies of TDS returns. Our attention was drawn to all the details in the relevant annexures as mentioned in the letter, placed at paper book page no. 75 to 84, which included list of advertisement and legal professional and consultancy expenses mentioning the TDS deducted therein.
12. Ld. D.R. on the other hand supported the order of the Ld. PCIT stating that the assessee had not demonstrated his claim before the Ld. PCIT but had only furnished all gross information pertaining to the issues leaving it to the Ld.PCIT to dig out relevant information there from.
Page No 9 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT 13. We have heard both the parties and have also gone through the various document’s referred to before us. On careful consideration of the same, we find, that the assessee had sufficiently demonstrated to the Ld.PCIT that both his claim of additional depreciation and investment allowance on new assets as also claim of expenses relating to legal professional and advertisement were in accordance with law. The assessee we have noted had demonstrated to the Ld.PCIT that no benefit of additional depreciation and investment allowance had been claimed on the old assets transferred from Uttarakhand to Karnataka, which as per the Ld.PCIT the assessee had been erroneously allowed since the AO had not examined the claim. The entire list of new assets purchased during the year and on which addl. Depreciation and investment allowance was claimed, as reflected in the tax audit report and in conformity with the financial statements of the assessee, was filed to the Ld.PCIT and the bills of old assets transferred also submitted to him, pointing out that the said bills were not included in the list of new assets on which addl. depreciation and investment allowance had been claimed by the assessee.
Similarly the assessee had filed all details of TDS deducted on legal, professional and advertisement expenses, correlating it with their ledger accounts in the books of the assessee and further supplementing the claim with TDS returns filed. Thus the assessee had demonstrated that the claim of the assessee to these expenses was in accordance with law, none being disallowable on account of non deduction of tax at source as apprehended by the Ld.PCIT. We have also noted that the assessee had been subjected to tax audit u/s 44AB of the Act, and the tax auditors had not reported any such incorrect /disallowable claims of the assessee.
Nothing adverse has been pointed out by the Ld.PCIT with regards to the either of the above claims. The Ld.PCIT, we find, has not even cared to consider the contention of the assessee and simply held that these issues not having been Page No 10 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT examined by the AO ,has resulted in the assessment order being erroneous so as to cause prejudice to the Revenue.
We are not in agreement with the same. The assessee having demonstrated his claim being in accordance with law and nothing adverse being pointed out by the Ld.PCIT in the explanation of the assessee, there arises no question of the assessment order being erroneous at all. No inquiry may have been conducted by the AO in the present case, but if the assessee demonstrates to the Ld.PCIT that his claim was in accordance with law,as in the present case and no infirmity is pointed out by him in the explanation of the assessee, how can the assessment order be erroneous. The fact of mere non inquiry in itself,in such circumstances, will not be sufficient to hold the assessment order erroneous so as to cause prejudice to the Revenue. Explanation 2 to section 263 of the Act, which the Ld.PCIT has relied upon, for the said purpose, mentions orders passed without making inquiries or verifications which should have been made,( italics provided by us) as resulting in erroneous orders. Clearly where orders are found to have been passed without making inquiries which were necessary, only those can be said to be erroneous. Not all and sundry non inquiries will tantamount to the orders being erroneous. The Ld.PCIT has to give a categorical finding of error with regard to necessary inquiries required, not being conducted by the AO, after considering the submissions /contentions of the assessee made before him.
The reliance placed by the Ld.Counsel for the assessee in this regard on the decision of the Hon’ble Guahati High Court in the case of Smt. Lila Choudhury vs. CIT 289 ITR 226 is apt wherein it has been held so as under:
“ This would bring the Court to the core issue in the case i.e., whether the impugned order dt. 1st Nov., 1996, setting aside the assessment and directing a fresh assessment has been made without recording any firm conclusion that the assessment order is erroneous and prejudicial to the interests of the Revenue. There can be no manner of doubt that the power conferred by s. 263 of the Act to interfere with an assessment Page No 11 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT made can be exercised only if the CIT is of the opinion that such assessment order is erroneous and prejudicial to the interests of the Revenue.
Though much argument has been advanced as to what is the correct meaning of the two expressions i.e., "erroneous" and "prejudicial to the interests of the Revenue", the aforesaid aspect of the matter need hardly detain the Court. The matter has been succinctly explained by the Bombay High Court in CIT vs. Gabrial India Ltd. (supra), wherein the view taken by a Division Bench of this Court in Rajendra Singh vs. Supdt. of Taxes (1990) 79 STC 10 (Gau), appears to have been reiterated. An erroneous order does not mean a wrong order; it does not mean an order with which the CIT is unable to agree. An erroneous order would be an order which suffers from a patent lack of jurisdiction; the error must be with reference to jurisdiction. Prejudicial to the interests of the Revenue would mean an erroneous order which goes against the interests of revenue collection. Both the conditions must pre-exist to enable the CIT to exercise the power under s.
263. Having said that, it will not be necessary to burden this order with any further description or narration. The foundation for the exercise of the power being the formation of an opinion or conclusion, there is no escape from the view that the CIT must record his conclusions in the matter before setting aside an order of assessment in exercise of the power under s.
It will again be futile to embark upon any discussion as to the "intensity" or "strength" of the conclusion that must be reached by the CIT before setting aside an assessment under s. 263 as the answer to the said question would really depend on the facts that may be confronting the CIT in any given case. The position can be best resolved by saying that in certain situations the opinion or conclusion recorded would be the final opinion; in other situations it may be "less than final". What would be necessary for our purposes is to take note of the fact that there has to be an opinion that the assessment which has been set aside is, indeed, erroneous and prejudicial to the interests of the Revenue. Furthermore, the power under s. 263 being quasi-judicial such conclusion must be reached after hearing the assessee which is mandated by the statute itself and after recording the reasons for the conclusions reached, a requirement, imposition or which, would be consistent with the well-settled principles of exercise of quasi-judicial powers.
Turning to the facts of the present case what is noticeable from the impugned order dt. 1st Nov., 1996, is that the CIT has not recorded any opinion that the order of assessment of the petitioner for the asst. yr. 1992-93 is erroneous and prejudicial to the interests of the Revenue. That was the opinion recorded in the notice dt. 14th/19th Aug., 1996, but the said opinion being recorded in a notice issued to the petitioner asking to show cause, the same must be understood to be a highly rebuttable view. Such view/opinion was required to be reiterated after hearing the petitioner and after holding the necessary enquiry. On receipt of the show-cause notice dt. 14th/19th Aug., 1996, the petitioner submitted an elaborate reply laying materials before the CIT to show that sufficient proof of income of the assessee was laid before the AO to enable the said authority to come to the conclusion that the investments in the house property were made from the known sources of income of the assessee. The said materials were in the form of balance sheets and details of the funds available to the petitioner from time to time. In the above facts, the petitioner assessee had contended that the assessment order in question was not erroneous and prejudicial to the interests of the Revenue. The Page No 12 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT CIT on receipt of the reply of the petitioner could not have ignored the same. Rather, it was incumbent on the CIT to consider the explanations offered and on that basis to record his opinion/conclusion as to whether he still considered the assessment order in question to be erroneous and prejudicial to the interests of the Revenue and, if so, the reasons therefor. The CIT did not do that. Instead, in the order dt. 1st Nov., 1996, the CIT has recorded that the assessee has filed a written submission giving an exhaustive explanation in 7 pages and enclosing copies of various deeds, certificates, etc., which were required to be verified in detail. The CIT, in the above facts, set aside the assessment order and directed the AO to make a fresh assessment after examining the submissions and contentions advanced by the assessee and after due scrutiny of the documents adduced. The course of action adopted was clearly impermissible in law in the absence of a finding that on consideration of the explanations submitted and for the reasons shown the assessment has to be reiterated to be erroneous and prejudicial to the interests of the Revenue. Unfortunately, the CIT did not do so which omission will have the effect of rendering the impugned order dt. 1st Nov., 1996, legally fragile.”
The ITAT Mumbai Bench has considered Explanation 2 to section 263, in the case of Narayan Tatu Rane vs ITO (2016) 47 CCH 309, holding that it cannot be said to have overridden the law interpreted by courts that before holding any order to be erroneous, the PCIT should have conducted inquiries to show that the finding of the AO was erroneous. That the provision would apply only if an order has been passed without making inquiries which a prudent officer should have carried out .the relevant findings of the ITAT are as under:
“19.The law interpreted by the High Courts makes it clear that the Ld Pr. CIT, before holding an order to be erroneous, should have conducted necessary enquiries or verification in order to show that the finding given by the assessing officer is erroneous, the Ld Pr. CIT should have shown that the view taken by the AO is unsustainable in law. In the instant case, the Ld Pr. CIT has failed to do so and has simply expressed the view that the assessing officer should have conducted enquiry in a particular manner as desired by him. Such a course of action of the Ld Pr. CIT is not in accordance with the mandate of the provisions of sec. 263 of the Act. The Ld Pr. CIT has taken support of the newly inserted Explanation 2(a) to sec. 263 of the Act. Even though there is a doubt as to whether the said explanation, which was inserted by Finance Act 2015 w.e.f. 1.4.2015, would be applicable to the year under consideration, yet we are of the view that the said Explanation cannot be said to have over ridden the law interpreted by Hon’ble Delhi High Court, referred above. If that be the case, then the Ld Pr. CIT can find fault with each and every assessment order, without conducting any enquiry or verification in order to establish that the assessment order is not sustainable in law and order for revision. He can also force the AO to conduct the enquiries in the manner preferred by Ld Pr. CIT, thus prejudicing the independent application of mind of the AO. Definitely, that could not be the intention of the legislature in inserting Explanation 2 to sec. 263 of the Act, since it would lead to unending litigations and there would not be any point of finality in the Page No 13 M/s. Roquette India Pvt. Ltd. . vs. Pr. CIT legal proceedings. The Hon’ble Supreme Court has held in the case of Parashuram Pottery Works Co. Ltd Vs. ITO (1977)(106 ITR 1) that there must be a point of finality in all legal proceedings and the stale issues should not be reactivitated beyond a particular stage and the lapse of time must induce repose in and set at rest judicial and quasi- judicial controversies as it must in other spheres of human activity.
Further clause (a) of Explanation states that an order shall be deemed to be erroneous, if it has been passed without making enquiries or verification, which should have been made. In our considered view, this provison shall apply, if the order has been passed without making enquiries or verification which a reasonable and prudent officer shall have carried 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.”
18. In view of the above, in the absence of finding of any error in the order of the AO, the impugned revisionary order passed by the Ld.PCIT is held to be not in accordance with law and is therefore set aside.
In effect, appeal of the Assessee is allowed.