Brief of the case:
In the case of PVS Multiplex (India) Ltd. Vs. CIT Delhi Bench of ITAT held that CIT can pass order u/s 263 where he can hold that AO did not made adequate inquiry. ITAT observed that there is difference between “lack of enquiry” and Inadequate Inquiry”. ITAT held that the revenue does not have any right to appeal to the first appellate authority against an order passed by the Assessing Officer. Section 263 has been enacted to empower the CIT to exercise power of revision and revise any order passed by the Assessing Officer, if two cumulative conditions are satisfied. Firstly, the order sought to be revised should be erroneous and secondly, it should be prejudicial to the interest of the Revenue.
Facts of the case:
- Assessment order u/s 143(3) was passed Addl. CIT, Meerut at returned income of Rs.1,06,57,220/- without making any disallowance or additions.
- Subsequently, the case was picked up by the CIT, Meerut and notice u/s 263 of the Act was issued to the assessee.
- CIT passed order setting aside the assessment order on three issues
a. for proportionate disallowance on interest paid by the assessee of interest free advances for non-business purposes
b. for verification of TDS on certain payments
c. to exclude income on sale of shops and FDR interest from business income for the purpose of calculation of deduction u/s 80IB(7A).
Contention of the assessee:
