- (1.) These appellate proceedings under Section 260A of the Income Tax Act, 19611 arise from an order of the Income Tax Appellate Tribunal2 dated 22 November 2013. The assessment year to which the proceedings relate, is Assessment Year 2003-04. The revenue has framed the following substantial questions of law: A. Whether the ITAT erred in law in interpreting the language of Section 263 in the context of the present case where no finding or enquiry has been done by the AO; B. Whether the ITAT erred in law in interpreting the phrase 'erroneous insofar as prejudicial to the interest of the revenue' specially when the order under Section 263 highlighted the lacunae in the assessment order; C. Whether the ITAT erred in law in curbing the legislative powers of the CIT under Section 263 when it concluded that inadequacy of enquiry cannot be a ground for invoking powers under Section 263; and D. Whether in the facts and circumstances of the case, the learned ITAT has erred in law and in fact in holding that the Assessing Officer had conducted the enquiry and was satisfied with the quality of evidence produced by the assessee during the course of assessment proceedings and, therefore, did not make any addition ignoring the fact that the Assessing Officer is not only an adjudicator but is also an investigator and it is his duty to ascertain the truth.
(2.) The appeal is admitted and, by consent, is taken up for hearing and final disposal at this stage. The assessee filed a return of income on 29 March 2004 and disclosed a total income of Rs. 1,56,210/-. The return was initially processed under Section 143 (1) but, later on, the case was selected for scrutiny. The Assessing Officer completed the assessment under Section 143 (3) and accepted the income as returned in the amount of Rs. 1,56,210/-. The Commissioner of Income Tax, Meerut3 passed an order under Section 263 on 19 March 2008, by which he came to the conclusion that the order of the Assessing Officer was erroneous and was prejudicial to the interest of the revenue. The assessee challenged the order under Section 263 before the Tribunal. The Tribunal by its impugned judgment dated 22 November 2013 came to the conclusion that the Assessing Officer had conducted an enquiry and had taken a possible view in law and was satisfied with the quality of evidence produced by the assessee. Hence, the order under Section 263 was quashed and set aside.
(3.) The revenue is in appeal.;