The Income Tax Appeal Tribunal (ITAT), Mumbai Bench, has ruled that review jurisdiction under Section 263 of the Income Tax Act 1961 cannot be relied upon only for “lack of investigation” and not for “inadequate investigation”.
The AO accepted the statement filed by the assessee after verification of all the above documents did not have the opportunity to suspect the transactions of the assessee and therefore accepted the request for weighted deduction u / s 35(1 )(ii) of the assessee’s law and has completed the assessment u/s 143(3) of the Act.
Following the completion of the assessment, CBDT empties its Instruction into F.No. 225/351/2018-ITA(II) dated 14.12.2018 regarding a fake donation racket under section 35(1)(ii) had informed all field agents that the approval u/s 35(1)(ii) of the Income Tax Act granted to the donee trust expired on 31.03.2006 and said trust, while not recognized to receive gifts, was accustomed to receiving gifts from various donors to undertake scientific research and had issued false certificates in this regard. Following this, the revisional jurisdiction u/s 263 of the Act by the ld. PCIT, which sought to treat the order made by the AO as erroneous insofar as it is prejudicial to the interests of revenue by finding that the PCIT is that the AO had merely accepted the evidence presented by the ‘evaluated without provoking further enquiries.
The bench of the Tribunal consisting of Shri M.Balaganesh, Accounting Member and Shri Kavitha Rajagopal, Judicial Member ruled that “Anyway, we find from the narration of the above-mentioned facts, the AO had indeed carried out the required investigations on the matter of deduction u/s 35(1)(ii) of the Act Once an assessment is made after conducting investigations as detailed above, the order passed by the ld AO cannot make the subject of u/s 263 statute review. The statute is now very well settled that the u/s 263 statute review jurisdiction could be invoked by the LD. PCIT only in cases of “failure to investigate by the ld AO and not for “insufficient investigation”. In this regard, reliance is placed on the decision of the Honorable Delhi High Court in CIT v Sunbeam Auto Ltd reported in 332 ITR 167 (Del).
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