Revision u/s 263 can be invoked when there was lack of enquiry by AO

Radiant Life Care Mumbai Pvt. Ltd Vs PCIT (ITAT Mumbai)

Conclusion: Since AO had merely asked the assessee for filing information in respect of the grounds on which the case was selected and no meaningful enquiry had been carried out by the AO on the information filed by the assessee, therefore, revision under  section 263 by CIT was justified.

Held  Assessee-company entered into an operation and management agreement for acquiring the Operation & Management Rights of “M/s Nanavati Hospital” for 29 years and paid an amount of Rs.25 crores as a non-refundable deposit and capitalized the said amount as an intangible asset eligible for depreciation u/s 32. PCIT held that there was a lack of inquiry by AO on the issue of share premium received by assessee and depreciation on the deposit. Assessee contended that during assessment proceedings u/s 143(3), AO had issued notice u/s 142(1) and raised specific queries on the issue of details of the large share premium received by assessee and introduction addition on intangible assets during the year. It was held that AO had merely asked the assessee for filing information in respect of the grounds on which the case was selected and no meaningful enquiry had been carried out by AO on the information filed by the assessee. Facts and circumstances of the year under consideration being identical to assessment year 2015-16, following our finding in assessment year 2015-16, the grounds raised by the assessee in the year under consideration were dismissed.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

These two appeals have been preferred by the assessee against the revision orders dated 31.03.2021 and 30.03.2021 passed by the Ld. Principal Commissioner of Income-Tax-3, Mumbai (in short ‘Ld. PCIT’) for assessment years 2015-16 & 2016-17 respectively. Being common issue-in-dispute involved, both these appeals were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of facts.

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