No revision u/s 263 if AO has done enquiries. AO has not given reasons in the assessment order is not indicative, always, of whether or not he has applied his mind. : Delhi HC

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No revision u/s 263 if AO has done enquiries. AO has not given reasons in the assessment order is not indicative, always, of whether or not he has applied his mind.  : Delhi HC

 

M/S BRAHMA CENTRE DEVELOPMENT PVT. LTD (ITA 116/2021, ITA 118/2021)

 

Short overview of the case:

 The Principal CIt (PCIT) interfered with the orders of assessment U/S 143(3) on the ground that it had been passed without making any enquiries as to whether the interest earned by the assessee had any nexus with the real estate project, the construction of which was undertaken by the assessee.

 The PCIT contended that interest income on FD should be included under Income from other sources and not business income.

Thus, according to the PCIT, the assessment orders were “erroneous” insofar as they were prejudicial to the interests of the revenue and so revision order was passed by the PCIT U/S 263.

 The AO had during the course of assessment raised queries on why should income from FD interest not be included in income from other sources.

So the moot point was whether PCIT could pass revision order U/S 263?

Hon Delhi HC, on the above issue held as under:

Having regard to the the relevant documents pertaining to assessment, it cannot be said that the enquiry or verification was not carried out by the AO.

 The fact that the AO has not given reasons in the assessment order is not indicative, always, of whether or not he has applied his mind.

 It is only important to determine whether inquiries have been made by the AO and has applied his mind.

 The appreciation of material placed before the AO is, exclusively within his domain which cannot be interdicted by a superior officer while exercising powers U/S 263.

  So no revision can be made by the PCIT U/S 263.

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