No Enquiry? No! AO Did His Job – ITAT Quashes 263 for Mere ‘Inadequate Enquiry’ Allegation

O.P Associates Vs PCIT (ITAT Lucknow)

Assessee, engaged in liquor business, was selected for complete scrutiny with two specific triggers – large cash deposits during demonetization & abnormal sales with lower profits. AO issued multiple notices, obtained month-wise cash sales & deposits, compared GP/NP ratios, verified purchases through Form 26AS, examined stock, unsecured loans, creditors, rent payments, major expenses, & accepted books (audit u/s 44AB). Only ₹1 lakh was disallowed for unverifiable expenses.

Later, PCIT invoked Section 263, claiming AO

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