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“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

Glaxo Smith Kline Pharmaceuticals Ltd., Mumbai vs. The Pr. CIT -8, Mumbai

In the result, the appeal filed by the assessee is dismissed

ITA 826/MUM/2021[2014-15]Status: DisposedITAT Mumbai12 Oct 2022AY 2014-15

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary () Assessment Year: 2014-15 Glaxo Smith Kline The Pcit-8, Pharmaceuticals Limited, Aayakar Bhavan, M.K. Road, Gsk House, Dr. Annie Besant Vs. Mumbai-400020. Road, Worli, Mumbai-400030. Pan No. Aaacg 4414 B Appellant Respondent Assessee By : None Revenue By : Mr. Rakesh Garg, Cit-Dr Date Of Hearing : 12/10/2022 Date Of Pronouncement : 12/10/2022

For Appellant: NoneFor Respondent: Mr. Rakesh Garg, CIT-DR
Section 143(3)Section 263

view taken by the learned Pr. CIT is bas case where the view taken by the learned Pr. CIT is bas presumption that, inadequate enquiry being made by the AO presumption that, inadequate enquiry being made by the AO presumption that, inadequate enquiry being made by the AO without pointing

M/S Avtil Enterprises Limited, Mumbai vs. Principle CIT -5, Mumbai

In the result the appeal filed by the assessee is allowed

ITA 734/MUM/2022[2017-18]Status: DisposedITAT Mumbai10 Oct 2022AY 2017-18
Section 143(3)Section 14ASection 263Section 3

exempt dividend income and the AO has taken plausibly view then section 263 cannot be invoked merely on the ground that there was inadequate enquiry conducted by the AO. The assessee further submitted that the assessee’s case was for limited scrutiny to examine the issue of “expenses incurred

Ashokkumar Bhanwarlal Chhajer, Sanpada vs. Pr. CIT - (Central), Pune

In the result, the appeal filed by the assessee is allowed

ITA 1361/MUM/2022[2017-18]Status: DisposedITAT Mumbai30 Sept 2022AY 2017-18
Section 142(1)Section 143(3)Section 263Section 263(1)

aware of the fact that the assessee has not charged interest on certain loans given by him. Hence it is not a case of inadequate enquiry as observed by Ld PCIT. Accordingly, the Ld A.R submitted that the Ld PCIT was not justified in drawing conclusion that ... Income tax 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 Commissioner of Income tax must give and record a finding that the order/inquiry made is erroneous. This

The Deutsche Investments India P.Ltd, Mumbai vs. Pr CIT 12, Mumbai

In the result, appeal of the assessee is allowed

ITA 3169/MUM/2017[2011-12]Status: DisposedITAT Mumbai30 Sept 2022AY 2011-12
Section 143(3)Section 263Section 92C

recorded. Ld. CIT cannot remit the matter to the assessing officer to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but Lack of enquiry, again the Ld. CIT must give and record the finding that the order/enquiry made is erroneous. In the above decision

V.M. *& Co., Ramanathapuram vs. DCIT Circle 1, Karaikudi

The appeal stands allowed in terms of our above order

ITA 2267/CHNY/2018[2015-16]Status: DisposedITAT Chennai28 Sept 2022AY 2015-16

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri R. Meenakshi Sundaram (Advocate)-Ld. ARFor Respondent: Shri M. Rajan (CIT) – Ld. DR
Section 143(3)Section 263

inadequate without explaining how it was inadequate. 3. The learned PCIT ought to have seen that there is difference between "lack of enquiry" and "inadequate enquiry" as explained by the Honourable Delhi High Court in the case of CIT Vs Anil Kumar Sharma (335 ITR 83) and for inadequate enquiry

Nepal Singh Rathod (HUF), Hubli vs. Principal Commissioner of Income Tax, Hubli

In the result, the appeal filed by the assessee is allowed

ITA 400/BANG/2022[2017-18]Status: DisposedITAT Bangalore28 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariassessment Year: 2017-18

For Appellant: Shri K.R. Pradeep &For Respondent: Shri Sumer Singh Meena, D.R
Section 142(1)Section 143(2)Section 143(3)Section 263

duly explained by the assessee by producing the various records and cash book and there is no question of lack of enquiry or inadequate enquiry as alleged by the Ld. PCIT so as to redo the assessment once again. According to the Ld. A.R., Ld. PCIT has made a general

Sericulturists Cum Farmers Service Co-Operative Society Limited, Bengaluru vs. The Principal Commissioner of Income Tax-2, Bengaluru

In the result, the appeal filed by assessee stands allowed for statistical purposes

ITA 425/BANG/2022[2017-18]Status: DisposedITAT Bangalore26 Sept 2022AY 2017-18

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year : 2017-18 M/S. Sericulturists Cum Farmers Service Co-Operative Society Ltd., The Principal 01Sfcs Building, Commissioner Of Near Bus Stop, Income Tax – 2, Sarjapura Town, Bengaluru. Vs. Anekal Taluk, Bengaluru – 562 125. Pan: Aaaas6468H Appellant Respondent Assessee By : Shri Nitesh Ranjan, Ca Revenue By : Shri Praveen Karanth, Cit-Dr Date Of Hearing : 14-09-2022 Date Of Pronouncement : 26-09-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Order Dated 30/03/2022 Passed By Ld.Pr.Cit-2, Bangalore U/S. 263 Of The Act Relating To A.Y. 2017-18 On Following Grounds Of Appeal. Tax Effect Relating To Grounds Of Appeal Each Ground Of Appeal The Order Of The Learned Principal Commissioner Of Income-Tax, Bengaluru-2 ("Pr. Cit") Dated 30-Mar-2022, Passed Under I. Section 263 Of The Income-Tax Act,1961 ("The Act") N.A Insofar It Is Against The Appellant, Is Opposed To The Law, Weight Of Evidence, Facts & Circumstances Of The Appellant'S Case.

For Appellant: Shri Nitesh Ranjan, CAFor Respondent: Shri Praveen Karanth, CIT-DR
Section 143(2)Section 143(3)Section 263Section 57Section 68Section 80P(2)(a)Section 80P(2)(d)

09/08/2019. He submitted that as the verification of the cash deposits is not in accordance with the directions of the CBDT, there is inadequate enquiry in respect of the cash deposited during demonetisation. He thus supported the view taken by the Ld.PCIT. We have perused the submissions advanced by both

Hariyappa Kotian, Udupi vs. Principal Commissioner of Income Tax, Central, Bengaluru

In the result, the appeals of the assessee are allowed

ITA 430/BANG/2022[2017-18]Status: DisposedITAT Bangalore19 Sept 2022AY 2017-18

Bench: Shri N.V Vasudevan, Hon’Ble & Shri Laxmi Prasad Sahu

For Appellant: Shri V Srinivasan, AdvocateFor Respondent: Shri Manjunath Karkihalli, CIT (DR)
Section 139Section 143Section 153DSection 263

been declared as additional income only to buy peace with the department. It cannot be said that there was lack of enquiry or inadequate enquiry by the AO. The AO passed order after accepting the explanation and submissions made by the assessee during the course of assessment proceedings. He further

Pr. CIT Circle-2, Mumbai vs. Bharat Prtroleum Corporation Ltd., Mumbai

In the result, the appeal of the assessee is partly allowed

ITA 1601/MUM/2020[2016-17]Status: DisposedITAT Mumbai05 Sept 2022AY 2016-17

Bench: Shri Pramod Kumar, Vp & Shri Aby T. Varkey, Jm आयकर अपील सं/ I.T.A. No.1601/Mum/2020 (निर्धारण वर्ा / Assessment Year: 2016-17) Bharat Petroleum बिधम/ Pcit, Circle-2 Corporation Ltd. Room No.344, Aayakar Vs. Taxation Section, Bhavan, M. K. Road, 4Th Floor, Bharat Bhavan 1, Mumbai-400020. 4 & 6 Currimbhoy Road, Ballard Estate, Mumbai- 400001. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaacb2902M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Jehangir D. Mistry Revenue By: Dr. Mahesh Akhade (Dr) सुनवाई की तारीख / Date Of Hearing: 28/06/2022 घोषणा की तारीख /Date Of Pronouncement: 05/09/2022 आदेश / O R D E R Per Aby T. Varkey, Jm: This Appeal Has Been Preferred By The Assessee Against The Order Of The Ld. Principal Commissioner Of Income Tax-02 [Hereinafter Referred To As The “Pcit”], Mumbai Dated 21.02.2020 For Assessment Year [Hereinafter Referred To As “Ay”] 2016-17 Passed Under Section 263 Of The Income Tax Act, 1961 [Hereinafter Referred To As “The Act”].

For Appellant: Shri Jehangir D. MistryFor Respondent: Dr. Mahesh Akhade (DR)
Section 10(34)Section 142(1)Section 143(3)Section 2Section 263Section 32A

therefore the assessment order cannot be held to be erroneous and prejudicial to interests of Revenue on the ground of inadequate enquiry. Having perused the order impugned before us, it is noted that 7 A.Y. 2016-17 Bharat Petroleum Corporation the Ld. PCIT has observed that the AO had failed

Mallikarjun Virupaxappa Yarasi, Gadag vs. Principal Commissioner of Income Tax, Hubli

In the result, the appeal of the assessee is dismissed

ITA 437/BANG/2022[2017-18]Status: DisposedITAT Bangalore30 Aug 2022AY 2017-18

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariassessment Year: 2017-18

For Appellant: Shri S.V. Ravishankar, A.RFor Respondent: Sri Manjunath Karkihalli, D.R
Section 142(1)Section 143(2)Section 143(3)Section 263

prejudicial to the interest of revenue. Mallikarjun Virupaxappa Yarasi, Gadag Page 5 of 24 b) There was no instance of lack of enquiry or inadequate enquiry to attract the provisions of section 263 of the Act. 10. The order passed must be both erroneous and prejudicial to the interest ... under section 142(1) of the act and the explanation offered was accepted as being true and correct. Thus, there was no instance of inadequate enquiry by the assessing officer and the revision proceedings were not called for. f) The learned P.CIT failed to appreciate that the assessing officer

Adenium Ventures Private Limited, Mumbai vs. Pr CIT, Circle-5, Mumbai.

ITA 870/MUM/2022[2017-18]Status: DisposedITAT Mumbai25 Aug 2022AY 2017-18

Bench: Shri Kuldip Singh & Shri Om Prakash Kantassessment Year: 2017-18

For Appellant: Ms. Arati Vissanji, A.RFor Respondent: Ms. Shailaja Rai, D.R
Section 143(3)Section 14ASection 263

application of mind and on consideration of submissions made by the appellant, accepted the said basis of disallowance, the same does not amount to inadequate enquiry/ lack of enquiry and hence, order passed u/s. 263 of the Act be declared as bad in law. Without prejudice jo the above

Mukesh Bhoormal Jain, Mumbai vs. Principle CIT - 19, Mumbai

In the result, the appeal of the assessee is allowed

ITA 542/MUM/2022[2015-16]Status: DisposedITAT Mumbai25 Aug 2022AY 2015-16
Section 142(1)Section 143(3)Section 263Section 68Section 69C

exercised by the CIT only when it is a case of lack of enquiry and not one of inadequate enquiry. This view has been taken by this Court in the matter of CIT v. Shreepati Holdings & Finance (P.) Ltd. [ITA 1879 of 2013 dated 5th October, 2013], by the Delhi ... power of Revision under Section 263 of the Act would normally be exercised in case of no enquiry and not in cases of inadequate enquiry. However, even in case of inadequate enquiry by the Assessing Officer, the order of the Assessing Officer could be erroneous in two classes of situation

M/S. Karthik Estate, Udupi vs. Principal Commissioner of Income Tax, Central, Bengaluru

In the result, the appeal by the assessee is allowed

ITA 432/BANG/2022[2018-19]Status: DisposedITAT Bangalore24 Aug 2022AY 2018-19

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2018-19

For Appellant: Ms. Sunaina Bhatia, AdvocateFor Respondent: Shri Rajesh Kumar Jha, CIT(DR)(ITAT), Bengaluru
Section 132Section 143Section 143(2)Section 153DSection 263

returned by the appellant. There was a thorough enquiry by the AO in the assessment proceedings and there is no lack of inquiry or inadequate enquiry which warrants the invocation of revision provisions under section 263 of the Act. The AO after duly applying his mind, has concluded the assessment ... conclusions arrived at by AO has accorded the approval. Consequently, two officers having applied their mind and there is no lack of enquiry or inadequate enquiry in concluding the assessment proceedings passed u/s. 143[3] of the Act and thus, the very Page 6 of 19 assumption of jurisdiction

Jaladurga V S S Sangha Tellaru, Karkala vs. Principal Commissioner of Income Tax, Panaji, Goa

In the result, the appeal of the assessee is partly allowed

ITA 341/BANG/2022[2016-17]Status: DisposedITAT Bangalore16 Aug 2022AY 2016-17

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2016-17

For Appellant: Shri S.V Ravishankar, Advocate by RevenueFor Respondent: Shri Manjunath Karkihalli, CIT (DR) by
Section 143(3)Section 263Section 80P(2)Section 80P(2)(a)

reasons and the same has been performed to the fullest extent and no inference could have been made that the assessing officer has made inadequate enquiry, on the facts and circumstances of the case. 8. The learned CIT failed to appreciate that the scrutiny was not converted into a full

M/S. Haris Marine Products, Mangaluru vs. Principal Commissioner of Income Tax (Central), Bengaluru

In the result, the appeal by the assessee is allowed

ITA 383/BANG/2022[2017-18]Status: DisposedITAT Bangalore29 Jul 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Smt. Susan Dolores George, CIT(OSD)
Section 143Section 153DSection 263

submitted that there was a thorough enquiry by the AO in the assessment proceedings and there is no lack of inquiry or inadequate enquiry which warrants the invocation of revision provisions under section 263 of the Act. The AO after duly applying his mind, has concluded the assessment under section ... accorded the approval as well. Consequently, two officers having applied their mind, there is no lack of enquiry or inadequate enquiry in concluding the assessment proceedings passed under section 143[3] r.w.s. 153C of the Act and thus, the very assumption of jurisdiction under section 263 of the Act fails

Kabir Tripat Oberoi, Mumbai vs. The Pr. CIT -20, Mumbai

In the result, assessee's appeal stands allowed

ITA 685/MUM/2021[2016-17]Status: DisposedITAT Mumbai28 Jul 2022AY 2016-17
Section 143(3)Section 2Section 263Section 49(1)

holding the order of AO as erroneous in so far as prejudicial to the interest of revenue on account of inadequate enquiry made by AO while passing order u/s. 143(3) of the Act. However, we find that proper and sufficient enquiries were conducted by the AO at the time

Kapil Tripat Oberoi, Mumbai vs. The Pr. CIT -20, Mumbai

In the result, assessee's appeal stands allowed

ITA 684/MUM/2021[2016-17]Status: DisposedITAT Mumbai28 Jul 2022AY 2016-17
Section 143(3)Section 2Section 263Section 49(1)

holding the order of AO as erroneous in so far as prejudicial to the interest of revenue on account of inadequate enquiry made by AO while passing order u/s. 143(3) of the Act. However, we find that proper and sufficient enquiries were conducted by the AO at the time

Sadhu Salian, Udupi vs. Principal Commissioner of Income Tax, Central, Bengaluru

In the result, the appeal by the assessee is allowed

ITA 457/BANG/2022[2018-19]Status: DisposedITAT Bangalore27 Jul 2022AY 2018-19

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2018-19

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Smt. Susan Dolores George, CIT(OSD)
Section 143Section 153DSection 263

assessment proceedings and has accepted the income reported by the assessee after proper application of mind. There is no lack of enquiry or inadequate enquiry on the part of the AO to warrant invoking the revision proceedings u/s. 263 of the Act. The ld AR further submitted that ... considering the observations and conclusion arrived at by the AO. When two Officers have applied their mind, there is no lack of enquiry or inadequate enquiry in concluding the assessment proceedings passed u/s. 143(3) of the Act. 6. The ld. DR submitted that in paras

Om Sai Co-Operative Credit Souharda Sahakari Niyamit, Gadag vs. The Principal Commissioner of Income Tax, Hubli

In the result, the appeal by the assessee is allowed

ITA 454/BANG/2022[2017-18]Status: DisposedITAT Bangalore27 Jul 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2017-18

For Appellant: Shri Ravi Shankar, AdvocateFor Respondent: Smt. Susan Dolores George CIT(OSD)
Section 143(2)Section 143(3)Section 263Section 80P

cash on hand, along with the denomination deposited were explained in great detail and the inference that there was a lack of enquiry or inadequate enquiry, was contrary to fact, on the facts and circumstances of the case. 7. The learned PCIT was not justified in stating that the deposits ... under section 142(1) of the act and the explanation offered was accepted as being true and correct. Thus, there was no instance of inadequate enquiry by the assessing officer and the revision proceedings were not called for. Thus the AO passed the order on appreciation of the submissions

Arjunsa Megharajasa Kathwate, Gadag vs. The Principal Commissioner of Income Tax, Hubli

In the result, the appeal by the assessee is allowed

ITA 386/BANG/2022[2017-18]Status: DisposedITAT Bangalore27 Jul 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2017-18

For Appellant: Shri Ravi Shankar, AdvocateFor Respondent: Smt. Susan Dolores George, CIT(OSD)
Section 142(1)Section 143(2)Section 143(3)Section 263

under section 142(1) of the act and the explanation offered was accepted as being true and correct. Thus, there was no instance of inadequate enquiry by the assessing officer and the revision proceedings were not called for. 15. The PCIT failed to appreciate that the AO has considered