The revisional power under Section 263 is validly invoked when an assessment order is erroneous and prejudicial to the revenue due to a lack of proper inquiry by the Assessing Officer into unaccounted cash transactions, even if a preliminary questionnaire was issued.

आदेश / O R D E R

PER Dr. DINESH MOHAN SINHA, JM:

Captioned three appeals filed by the same assessee are directed against the separate orders passed by the Principal Commissioner of Income Tax[(in short “Ld. Pr.CIT”] u/s. 263 of the Act, vide orders dated 25.03.2024.

2. Grounds of appeal(ITA No. 378/Rjt/2024 for AY 2013-14) raised by the assessee are as follows:

“1. The learned Principal Commissioner of Income-tax - 1, Rajkot erred in holding that the assessment order dated 28-03-2022 passed u/s 147 r.w.s. 1448 of the Act was erroneous and prejudicial to the interest of revenue and thus erred in assuming jurisdiction u/s 263 of the Act, in the light of show cause notice and the order passed u/s 263 of the Act and hence the impugned order is bad in law.

2. The learned Principal Commissioner of Income-tax - 1, Rajkot erred in setting aside the assessment order framed u/s 147 r.w.s. 144B of the Act by holding that the A.O. did not conduct any inquiries in respect of cash transactions of Rs. 2,86,050/- alleged to be carried out by the Appellant with M/s National Shroff.

3. The learned Principal Commissioner of Income-tax - 1, Rajkot failed to appreciate that the impugned issue was duly examined by the assessing officer by way of specific inquiry/notice and replies thereto, while finalizing assessment proceedings u/s 147 r.w.s. 144B of the Act and hence there is no lack of inquiry thereon.

4. The learned Principal Commissioner of Income-tax - 1, Rajkot erred in improving upon the issue on which the Appellant was show- caused and further erred in passing order u/s 263 on issues not confronted to the appellant and hence on this ground also, the order u/s 263 is bad in law.

5. The learned Principal Commissioner of Income-tax - 1, Rajkot failed to appreciate the contention of the appellant raised before him that the underlying order u/s 147 itself was bad in law and therefore it was not amenable to revision u/s 263 of the Act.

6.The appellant craves leave to add, amend, alter and withdraw any ground of appeal anytime up to the hearing of this appeal.”

3. Grounds of appeal(ITA No. 380/Rjt/2024 for AY 2014-15) raised by the assessee are as follows:

1. The learned Principal Commissioner of Income-tax - 1, Rajkot erred in holding that the assessment order dated 28-03-2022 passed u/s 147 r.w.s. 144B of the Act was erroneous and prejudicial to the interest of revenue and thus erred in assuming jurisdiction u/s 263 of the Act, in the light of show cause notice and the order passed u/s 263 of the Act and hence the impugned order is bad in law.

2. The learned Principal Commissioner of Income-tax – 1, Rajkot erred in setting aside the assessment order framed u/s 147 r.w.s. 144B of the Act by holding that the A.O. did not conduct any inquiries in respect of cash transactions of Rs. 10,34,500/- alleged to be carried out by the Appellant with M/s National Shroff.

3.The learned Principal Commissioner of Income-tax – 1, Rajkot failed to appreciate that the impugned issue was duly examined by the assessing officer by way of specific inquiry/notice and replies thereto, while finalizing assessment proceedings u/s 147 r.w.s. 144B of the Act and hence there is no lack of inquiry thereon.

4. The learned Principal Commissioner of Income-tax – 1, Rajkot erred in improving upon the issue on which the Appellant was show- caused and further erred in passing order u/s 263 on issues not confronted to the appellant and hence on this ground also, the order u/s 263 is bad in law.

5. The learned Principal Commissioner of Income-tax – 1, Rajkot failed to appreciate the contention of the appellant raise