Dharam Singh Vs PCIT (ITAT Delhi)
In the case of Dharam Singh vs PCIT, the ITAT Delhi adjudicated on the exercise of revisionary power under section 263 of the Income-tax Act, 1961. The case involved allegations by the PCIT that the Assessing Officer (AO) had not conducted adequate inquiries during the assessment, prompting revision proceedings.
The appellant, Dharam Singh, contested the invocation of revisionary powers, arguing that the AO had diligently conducted inquiries, including scrutiny of cash deposits during demonetization and disclosure of scrap sales. The AO had issued multiple notices and questionnaires, and had obtained relevant documents and statements. However, the PCIT insisted that crucial inquiries were overlooked, such as the scrutiny of bank statements and the audit report.
The ITAT reviewed the sequence of events and documentation presented during assessment. It noted that the AO had indeed conducted comprehensive inquiries, documented in meticulous detail in the order-sheets and supported by replies from the assessee. These inquiries encompassed not only cash deposits and scrap sales but also extended to VAT returns and profitability analysis.
Contrary to the PCIT’s assertions, the ITAT found substantial evidence that the AO’s inquiries were thorough and exhaustive. The assessment order, therefore, did not meet the criteria of being both erroneous and prejudicial to revenue interests, as required under section 263 of the Act. The ITAT emphasized that revisionary powers cannot be exercised based solely on perceived inadequacies in inquiry without concrete evidence.
