ITR
Revision for lack of enquiry by the officer
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Facts
The law treats an order as erroneous if it was passed without the enquiries or verification that should have been made. Your best defence is to show the officer did ask about the issue and you answered with evidence.
Provisions and law
- Sec 263, Income-tax Act 1961 (now Sec 377, Income-tax Act 2025)The Principal Commissioner or Commissioner can revise an assessment order that is erroneous and prejudicial to revenue, after giving a hearing, within 2 years from the end of the financial year of the order.
- Sec 142(1), Income-tax Act 1961 (now Sec 268(1), Income-tax Act 2025)Notices calling for documents during assessment.
Analysis
Pull out every notice where the officer asked about the issue and your replies with attachments. Show the officer considered them, even if the order does not discuss them at length. Courts have often held that an order is not erroneous just because it is brief, when enquiry was made. Place the papers in date order with a short index.
Conclusion
- Download all notices and replies from the assessment.
- Mark where the issue was asked and answered.
- Prepare an indexed paper book.
- Explain in the reply that enquiry was made.
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Revision, Sec 263 (now 377)
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