“inadequate enquiry”

Rectification & RevisionSection 263Section 263401 judgments

The decision most relied on for inadequate enquiry is Malabar Industrial Co. Ltd. v. CIT (243 ITR 83), cited in 2,943 judgments on BharatTax.

Leading authorities on inadequate enquiry

Malabar Industrial Co. Ltd. v. CIT

243 ITR 83 · 2000 · Supreme Court

2,943

citing judgments

For revision under Section 263, the Assessing Officer's order must be both erroneous and prejudicial to the interests of the revenue; if either condition is not met, the revisionary jurisdiction cannot be invoked. An order is not erroneous merely because the Assessing Officer did not record the details of enquiries conducted, provided due enquiries were made.

CIT v. Max India Ltd.

295 ITR 282 · 2007 · Supreme Court

1,162

citing judgments

Under Section 263, an assessment order is not erroneous and prejudicial to the interest of the revenue merely because the Principal Commissioner disagrees with the Assessing Officer's (AO) view, particularly if the AO has adopted one of two permissible views in law, unless that view is completely unsustainable. If due inquiries were made, the AO's order does not become erroneous solely because the fact of inquiries was not recorded.

CIT v. Sunbeam Auto Ltd.

332 ITR 167 · 2011 · High Court

897

citing judgments

The Commissioner cannot revise an assessment under Section 263 merely because the assessment order does not explicitly reflect an inquiry, or because the Commissioner holds a different opinion. An inquiry, even if considered inadequate, or an assessment based on a plausible view by the Assessing Officer after due examination, does not automatically make the order erroneous or prejudicial to the interests of the revenue.

ITO v. D.G. Housing Projects Ltd.

343 ITR 329 · 2012 · High Court

438

citing judgments

For exercising revisional jurisdiction under Section 263, the Commissioner must first find that the Assessing Officer's order is erroneous and unsustainable in law, as this is a condition precedent. An order is not erroneous merely because two views are possible, or if the Commissioner disagrees with the Assessing Officer's permissible view, or to simply remit the matter for further enquiries.

CIT v. Vikas Polymers

341 ITR 537 · 2012 · High Court

318

citing judgments

An assessment order is not erroneous and prejudicial under Section 263 merely because the Assessing Officer did not record an enquiry and its satisfactory answer in the assessment order, provided such an enquiry was conducted. For revision under Section 263, the Commissioner must also provide the assessee an opportunity of being heard and examine their explanation.

CIT v. Nirav Modi

390 ITR 292 · 2017 · High Court

286

citing judgments

The Principal Commissioner of Income Tax (PCIT) cannot invoke revisionary powers under Section 263 merely on the ground of "inadequate enquiry" by the Assessing Officer (AO) if the AO has conducted an enquiry, examined evidence, and formed a possible view. For Section 263 to apply, the PCIT must demonstrate that the assessment order is both erroneous (contrary to law) and prejudicial to the revenue.

CIT v. Amitabh Bachchan

384 ITR 200 · 2016 · Supreme Court

264

citing judgments

The Commissioner's revisional power under Section 263 of the Income Tax Act is not limited to the points specified in the show-cause notice, nor is the exercise of this power contingent upon issuing a show-cause notice.

CIT v. Anil Kumar Sharma

335 ITR 83 · 2011 · High Court

264

citing judgments

The Commissioner cannot invoke Section 263 for an assessment merely because of an inadequate inquiry by the Assessing Officer, provided there was some inquiry or the record demonstrates application of mind, as this constitutes a mere difference of opinion.

Judgments citing inadequate enquiry

Harmony Yarns Pvt. Ltd., Surat vs. Pr. Commissioner of Income Tax -1, Surat

In the result, the appeal filed by the assessee is partly allowed in above terms

ITA 348/SRT/2023[2018-19]Status: DisposedITAT Surat23 Nov 2023AY 2018-19

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita No.348/Srt/2023 Assessment Year: (2018-19) (Physical Hearing) Harmony Yarns Private Vs. The Pcit-1, Limited, Surat Plot-65, 1St Floor Subhash Nagar Society, Ghod Dod Road, Nr. Ram Chowk, Surat – 395001. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaach5895F (Appellant) (Respondent) Appellant By Shri Rasesh Shah, Ca Respondent By Shri Airiju Jaikaran, Cit(Dr) Date Of Hearing 12/10/2023 23/11/2023 Date Of Pronouncement

Section 143(3)Section 263Section 36(1)(va)Section 68

could not be held to be erroneous and prejudicial to the interests of revenue. There is difference between ‘Lack of enquiry’ and ‘inadequate enquiry’. It is for the AO to decide the extent of enquiry to be made as it is his satisfaction as what is required under law. Reliance

Sourabh Sharma, Jaipur vs. PCIT, Jaipur-2, Jaipur

In the result, appeal of the assessee is allowed

ITA 240/JPR/2023[2018-19]Status: DisposedITAT Jaipur22 Nov 2023AY 2018-19

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Mahendra Gargieya (Adv.)For Respondent: Sh. Arvind Kumar (CIT) a

Section 142(1)Section 143(2)Section 263

terms of mismatch of sales turnover is concerned the Principal CIT has not recorded any adverse findings in terms of lack of enquiry or inadequate enquiry on part of the AO—Therefore, the order passed by the Principal CIT under s. 263 is set aside and the order ... issue in hand. The law is well settled that the Assessment order cannot be held to be erroneous simply on the allegation of inadequate enquiry unless there is an established case of total lack of enquiry. Kindly refer CIT vs. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del) (wherein Delhi

DCIT Circle-1(1) Exemption, New Delhi vs. India International Centre, New Delhi

In the result, both the appeals of the revenue are dismissed

ITA 1872/DEL/2020[2017-18]Status: DisposedITAT Delhi16 Nov 2023AY 2017-18

Bench: Shri M. Balaganesh & Shri Anubhav Sharma

For Appellant: Shri Pradeep Dinodia, CAFor Respondent: Ms. Meenakshi Dohare, Sr. DR

Section 10Section 143(3)Section 2(15)Section 263

cannot be initiated by the Id. PCIT.. Further revision proceedings u/s 263 of the Act cannot be initiated for inadequate enquiry and the same could be done only for lack of enquiry. Reliance in this regard is placed on the decision of Hon'ble Supreme Court in the case

DCIT Circle-1(1) Exemption, New Delhi vs. India International Centre, New Delhi

In the result, both the appeals of the revenue are dismissed

ITA 1871/DEL/2020[2016-17]Status: DisposedITAT Delhi16 Nov 2023AY 2016-17

Bench: Shri M. Balaganesh & Shri Anubhav Sharma

For Appellant: Shri Pradeep Dinodia, CAFor Respondent: Ms. Meenakshi Dohare, Sr. DR

Section 10Section 143(3)Section 2(15)Section 263

M/S. S.R. Ferro Alloys, Jhabua vs. The PCIT, Bhopal

In the result, the appeal of assessee is allowed

ITA 148/IND/2021[2015-16]Status: DisposedITAT Indore09 Nov 2023AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanis.R. Ferro Alloys Pr. Cit, Central 9, Siddheswar Colony Bhopal Vs. Jhabua (Appellant / Assessee) (Revenue) Pan: Abhfs7377Q Appellant By Shri Sumit Nema, Sr. Adv. & Gagan Tiwari, Ar Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 12.10.2023 Date Of Pronouncement 09.11.2023

Section 263

even venture out to ascertain the interest of revenue or any supposed prejudice/error. 7. That there is a distinction between "lack of enquiry" and "inadequate enquiry". In the present case the Assessing Officer collected necessary details, examined the same and then framed the assessment ... recorded. CIT cannot remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding that the order/inquiry made is erroneous. This can happen

Hitesh Golchha, Raipur vs. Assistant Commissioner of Income Tax, Central Circle-1, Raipur

Appeals of the assessee are partly allowed, in terms of our observations herein above

ITA 104/RPR/2022[2017-18]Status: DisposedITAT Raipur02 Nov 2023AY 2017-18

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं./Ita Nos.101, 102, 103 & 104/Rpr/2022 (िनधा"रण वष" /Assessment Years: 2014-15, 2015-16, 2016-17 & 2017-18) V. Hitesh Golchha Acit, Prop. Of Mouli Investment, Central Circle-1 Jeevan Ganga, Near Dani Bada, Raipur Budha Para, Raipur – 492 001 Chhattisgarh [Pan: Agjpg 7698 F] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/ Appellant By : Shri B. Subramanyam, C.A. ""यथ" क" ओर से /Respondent By : Shri S. K. Meena, Cit-D.R. सुनवाई क" तार"ख/Date Of Hearing : 13.09.2023 घोषणा क" तार"ख /Date Of Pronouncement : 02.11.2023

For Appellant: Shri B. Subramanyam, C.AFor Respondent: Shri S. K. Meena, CIT-D.R

Section 153ASection 263Section 43C

Income Tax Act is unsustainable as power to revise can be invoked in the case of no/lack of enquiry, not in the case of inadequate enquiry. 7. On the facts and circumstances of the case, of the case, Pr. CIT has erred both on facts and in law in setting ... Income Tax Act is unsustainable as power to revise can be invoked in the case of no/lack of enquiry, not in the case of inadequate enquiry. 7. On the facts and circumstances of the case, of the case, Pr. CIT has erred both on facts and in law in setting

Hitesh Golchha, Raipur vs. Assistant Commissioner of Income Tax, Central Circle-1, Raipur

Appeals of the assessee are partly allowed, in terms of our observations herein above

ITA 103/RPR/2022[2016-17]Status: DisposedITAT Raipur02 Nov 2023AY 2016-17

For Appellant: Shri B. Subramanyam, C.AFor Respondent: Shri S. K. Meena, CIT-D.R

Section 153ASection 263Section 43C

Hitesh Golchha, Raipur vs. Assistant Commissioner of Income Tax, Central Circle-1, Raipur

Appeals of the assessee are partly allowed, in terms of our observations herein above

ITA 102/RPR/2022[2015-16]Status: DisposedITAT Raipur02 Nov 2023AY 2015-16

For Appellant: Shri B. Subramanyam, C.AFor Respondent: Shri S. K. Meena, CIT-D.R

Section 153ASection 263Section 43C

Hitesh Golchha, Raipur vs. Assistant Commissioner of Income Tax, Circle-1, Raipur

Appeals of the assessee are partly allowed, in terms of our observations herein above

ITA 101/RPR/2022[2014-15]Status: DisposedITAT Raipur02 Nov 2023AY 2014-15

For Appellant: Shri B. Subramanyam, C.AFor Respondent: Shri S. K. Meena, CIT-D.R

Section 153ASection 263Section 43C

Sewa Sahkari Sammittee Maryadit, Beed, Mundi Khandwa vs. PCIT-1, Indore

In the result, appeal by the assesse is allowed

ITA 44/IND/2022[2016-17]Status: DisposedITAT Indore30 Oct 2023AY 2016-17

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanisewa Sahkari Sammittee Pr. Cit-2 Maryadit Beed Indore Vs. Beed Mundi Khandwa (Appellant / Assessee) (Revenue) Pan: Aaufs0703N Assessee By Shri Gagan Tiwari, Ar Revenue By Ms. Simran Bhullar, Cit-Dr Date Of Hearing 05.10.2023 Date Of Pronouncement 30.10.2023

Section 12ASection 138Section 143(3)Section 263

even venture out to ascertain the interest of revenue or any supposed prejudice/error. 7. That there is a distinction between "lack of enquiry" and "inadequate enquiry". In the present case the Assessing Officer collected necessary details, examined the same and then framed the Page 3 of 32 Sewa Sahakari Sammittee ... recorded CIT cannot remand the matter to the assessing officer to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding that the order/enquiry made is erroneous. This can happen

Sajal Nema, Narsinghpur vs. Principal Commissioner of Income Tax 1 Jabalpur, Jabalpur

In the result, the appeal of the assessee is allowed

ITA 24/JAB/2022[2017-18]Status: DisposedITAT Jabalpur20 Oct 2023AY 2017-18

Bench: Shri Om Prakash Kant () & Shri Pavan Kumar Gadale () Assessment Year: 2017-18 Sajal Nema, Pr. Cit, Jabalpur-1, 01, Jalgaon Jwellers, Sunka Annexe Building, Aayakar Vs. Chouraha, Kandeli, Bhavan, Napier Town, Narsinghpur-487001. Jabalpur-482001. Pan No. Aeppn 9632 Q Appellant Respondent Assessee By : Mr. Dhiraj Ghai, Fca Revenue By : Mr. Saad Kidwai, Dr Date Of Hearing : 22/09/2023 : Date Of Pronouncement 20/10/2023

For Appellant: Mr. Dhiraj Ghai, FCAFor Respondent: Mr. Saad Kidwai, DR

Section 143(3)Section 263

enquiry, not in the case of to revise can be invoked in the case of lack of enquiry, not in the case of inadequate enquiry. inadequate enquiry. 8. On the facts and circumstances of the case, the learned Pr. On the facts and circumstances of the case, the learned

M/S Hardayal Singh Patel, Raipur vs. Principal Commissioner of Income Tax, Raipur-1, Raipur

In the result, the appeal of the assessee is allowed in terms of our aforesaid observations

ITA 189/RPR/2023[2018-19]Status: DisposedITAT Raipur19 Oct 2023AY 2018-19

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No. 189/Rpr/2023 "नधा"रण वष" / Assessment Year : 2018-19 M/S. Hardayal Singh Patel 43, Golden Homes, Vip Estate, Khamardih (C.G.)-492 001 Pan : Aabfh5997A .......अपीलाथ" / Appellant बनाम / V/S. The Pr. Commissioner Of Income Tax, Raipur-1 ……""यथ" / Respondent

For Appellant: Shri B. Subramanyam, CAFor Respondent: Smt. Ila M Parmar, CIT-DR

Section 139(1)Section 143(1)Section 143(2)Section 143(3)Section 263Section 43B

unsustainable as power to revise can be invoked in the case of no NIL enquiry and not in the case of inadequate enquiry. The order made by the Ld. Pr.CIT u/s 263 of the Act, is illegal, invalid, void and bad in law and is liable to be quashed

Gopal Sponge & Power Pvt. Ltd, Raipur vs. Assistant Commissioner of Income Tax, Circle-1(1), Raipur

In the result appeal filed by the assessee stands dismissed, in terms of our observations here in above

ITA 226/RPR/2022[2017-18]Status: DisposedITAT Raipur17 Oct 2023AY 2017-18

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am (Ita No. 226/Rpr/2022) (Assessment Year: 2017-18) Gopal Sponge & Power Pvt. Ltd., Vs Assistant Commissioner Of Income Village- Siltara, Near Industrial Tax, Circle-1(1), Raipur, (C.G.) Growth Centre, Phase- 2, Raipur, (C.G.) Pan: Aaccg1525F (अपीलाथ" /Applicant) (""यथ" / Respondent) .. िनधा"रती क" ओर से /Assessee By : Shri B. Subramanyam, Ca राज"व क" ओर से /Revenue By : Shri S.K. Meena, Cit-Dr सुनवाई क" तार"ख / Date Of Hearing : 02-08-2023 घोषणा क" तार"ख/Date Of Pronouncement : 17-10- 2023

For Appellant: Shri B. Subramanyam, CAFor Respondent: Shri S.K. Meena, CIT-DR

Section 143(3)Section 263Section 801A(4)(iv)

Income Tax Act is unsustainable as power to revise can be invoked in the case of no/lack of enquiry, not in the case of inadequate enquiry. 5. On the facts and circumstances of the case, Pr. CIT has erred both on facts and in law in setting aside the issue

Guala Closures (India) Pvt. Ltd., Panaji vs. The Principal Commissioner of Income Tax, Panaji., Select City

Appeal is dismissed in above terms

ITA 205/PAN/2019[2012-13]Status: DisposedITAT Panaji13 Oct 2023AY 2012-13

Bench: Shri Satbeer Singh Godara & Dr. Dipak Ripote

For Appellant: Shri Ketan VedFor Respondent: Shri P.S. Shivshankar, CIT-DR

Section 143(3)Section 144(3)Section 144CSection 253Section 263Section 4

earlier years, in absence of any supportive evidence. That being the case, this is an instance of clear-cut instance of an inadequate enquiry during assessment attracting PCIT’s sec.263 revision in light of Explanation-2 thereof and therefore, the same has been rightly subjected to PCIT’s jurisdiction

Kalinga Institute of Social Scinces(Kiss), Patia vs. CIT (Exemption)- Hyderabad, Hyderabad

In the result, appeal of the assessee is allowed

ITA 124/CTK/2023[2018-19]Status: DisposedITAT Cuttack10 Oct 2023AY 2018-19

For Appellant: Shri S.K.Agrawalla, CAFor Respondent: Shri Dr. Abani Kanta Nayak, CIT-DR

Section 12ASection 143(3)Section 263Section 40

Pr.CIT is liable to be quashed. 4. In reply, ld. CIT-DR submitted that the Explanation to Section 263 provides that if there is inadequate enquiry by the AO, the ld. Pr.CIT 4 should invoke his powers u/s.263 of the Act. Ld. CIT-DR drew our attention to the assessment

A3Logics (India) Private Limited, Jaipur vs. PCIT, Jaipur -1, Jaipur

In the result, appeal of the assessee is dismissed

ITA 190/JPR/2023[2018-19]Status: DisposedITAT Jaipur27 Sept 2023AY 2018-19

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Mahendra Gargieya (Adv.)For Respondent: Sh. Ajay Malik (CIT)

Section 143(1)Section 143(2)Section 143(3)Section 201Section 263Section 36(1)(va)Section 40Section 40a

issue in hand. The law is well settled that the Assessment order cannot be held to be erroneous simply on the allegation of inadequate enquiry unless there is an established case of total lack of enquiry. Kindly refer CIT vs. Sunbeam Auto ... PCIT inquiry—Law is well settled that the assessment order cannot be held to be erroneous simply on the allegation of inadequate enquiry—Reason for selection of the case for scrutiny does not speak of s. 56(2)(viib)—Therefore, the AO could not have made enquiries on this aspect

Jai International, Udaipur vs. Principal Commissioner of Income Tax, Udaipur

In the result, appeal of the assessee in ITA no

ITA 23/JODH/2022[2015-16]Status: DisposedITAT Jodhpur26 Sept 2023AY 2015-16

Bench: The Date Of Hearing. 4. That The Hon’Ble Pcit Has Not Given Any Specific Instance About Rejecting The Details Submitted By Us In Response To Their Query. 5. That The Hon’Ble Pcit Has Not Given Any Specific Reason/Speaking Order Contradicting Case Laws Submitted By Us. The Hon’Ble Pcit Only Says That The Facts Are Different.”

Section 142(1)Section 143(2)Section 143(3)Section 263Section 40A(2)(b)

Delhi High Court in the case of CIT v. Anil Kumar Sharma – [2010] 194 Taxman 504 (Delhi) Lack of enquiry/no enquiry is different from inadequate enquiry and it is only in case of no enquiry by the AO, Pr. CIT/CIT can exercise jurisdiction

Gayatri Devi, Jaipur vs. PCIT(Central), Jaipur

In the result, this appeal of the assessee is allowed

ITA 405/JPR/2022[2019-20]Status: DisposedITAT Jaipur20 Sept 2023AY 2019-20

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Mahendra Gargieya Advocate &For Respondent: Shri Ajay Malik, CIT-DR

Section 127Section 133ASection 143(1)Section 143(2)Section 143(3)Section 263

issue in hand.The law is well settled that the Assessment order cannot be held to be erroneous simply on the allegation of inadequate enquiry unless there is an established case of total lack of enquiry. Kindly refer CIT vs. Sunbeam Auto ... complete/total lack of inquiry—Law is well settled that the assessment order cannot be held to be erroneous simply on the allegation of inadequate enquiry—Reason for selection of the case for scrutiny does not speak of s. 56(2)(viib)—Therefore, the AO could not have made enquiries

Shri Amritpal Singh (Prop), Jalandhar vs. Principal Commissioner of Income Tax- 1, Jalandhar

In the result, appeal of the assessee ITA No

ITA 425/ASR/2019[2014-15]Status: DisposedITAT Amritsar13 Sept 2023AY 2014-15

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 110Section 263Section 54D

step into section 263 revision. Though the proceedings before the assessing officer cannot be construed as a case of either lack of enquiry or inadequate enquiry, but for the subjective satisfaction of the Hon’ble Bench, it is prayed that reference can be drawn to Page

Raj Kumar Karanwal, Muzaffarnagar vs. Pr.CIT, Dehradun

In the result, the appeal of the assessee is allowed

ITA 644/DEL/2021[2010-11]Status: DisposedITAT Delhi11 Sept 2023AY 2010-11

Bench: Shri Shamim Yahya & Ms. Astha Chandraasstt. Year 2010-11

For Appellant: Shri Sankalp Malik, AdvocateFor Respondent: Ms. Sapna Bhatia, CIT-DR

Section 133(6)Section 142(1)Section 143(2)Section 143(3)Section 147Section 148Section 151Section 263

highlights non-application of mind by the Ld. PCIT while assuming jurisdiction. In support of the proposition that ‘no enquiry’ is different from ‘inadequate enquiry’ and where the Ld. AO made enquiries as seems appropriate on the facts and in the circumstances of the case, assumption of jurisdiction under section