The ITAT, Delhi bench has held that if the Revisional authority is of the view that the AO did not undertake any enquiry, it becomes incumbent on the Revisional Authority to conduct such enquiry to invoke section 263 of the Income Tax Act, 1961.
Assessee, a society had filed return of income declaring income at NIL figure for the assessment year 2015-16. The Assessing officer, after conducting inquiry, completed the assessment accepting NIL income. However, the Commissioner of Income Tax (Exemption) invoked provisions of 263 of the Act.
The two-Member bench of the Tribunal comprise of Sh. R.K.Panda, Accountant Member And Sh. Anubhav Sharma, Judicial Member observed that the settled position of law is that for the purpose of exercising jurisdiction u./s. 263 of the Act, the conclusion that the order of the AO is erroneous and prejudicial to the interest of the revenue has to be preceded by some minimal enquiry.
“If the Revisional authority is of the view that the AO did not undertake any enquiry, it becomes incumbent on the Revisional Authority to conduct such enquiry. If the Revisional Authority does not conduct such basic exercise then the he is not justified in setting aside the order u/s. 263 of the Act,” the Tribunal said.
Quashing the impugned order, the Tribunal held that “Reliance can be placed for this on the judgement of Hon’ble Delhi High Court in PCIT Vs. Delhi Airport Metro Express Private Limited vide ITA No.705/2017 order dated 05.09.2017 as relied by Coordinate bench of Delhi ITAT in M/S. Dwarkadhis Buildwell Pvt. vs Cit, Hisar vide ITA No.3097/Del/2014 decided on 1 July, 2019. In the case in hand the Ld Revisional Authority has done no homework on its end but merely on basis of letter of JCIT pointing short comings, held that enquiry done by Ld. AO was not satisfactory. Infact where the Revisional Authority intends to set aside assessment order for lack of enquiry the direction in the order exercise of Revisional power should set or indicate the possible and prospective path of enquiry that the AO should follow further. Which is also not done in present case.”
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