S. 263: Lack of inquiry vs. Inadequate inquiry: Revision on the ground that the AO did not conduct a detailed inquiry on account of paucity of time is unfair to the assessee and invalid (Amitabh Bachhan 384 ITR 200 (SC) & Maithan International 375 ITR 123 (Cal) distinguished

(i) What is interesting in the present case is that this exercise under Section 263 of the Act was undertaken after a full-fledged exercise has already been undertaken by the AO under Section 153A of the Act. Incidentally, it may be mentioned that, from the facts that have emerged, if so-called incriminating material was found during the course of the search in the case of K.S. Dhingra & G.S. Dhingra Group, the assessment proceeding ought to have been initiated against the Assessee under Section 153C of the Act. The Assessee of course did not question this because the assessment order ultimately was not adverse to the Assessee. The AO had a full-fledged opportunity to undertake a detailed enquiry, and having not done so on account of paucity of time, there cannot be any inference that the inadequate inquiry led to the AO to arrive at incorrect facts.

(ii) Reliance is also placed by Mr. Rahul Chaudhary on the decision of the Supreme Court in CIT v Amitabh Bachhan [2016] 384 ITR 200 (SC). There the Supreme Court found, on facts, that the Assessee after having claimed an exemption during the course of the assessment proceedings, withdrew such claims despite which no enquiry was undertaken by the AO into this aspect. This, according to the Supreme Court, ought not to have resulted in the proceedings simply being dropped by the AO.

(iii) The facts in the present case, however, are different. As noticed by the ITAT, following the notices issued in the course of the assessment proceedings by the AO, on more than one occasion the Assessee furnished the complete details sought. Where the Assessee has in fact furnished the details that are available with him along with explanation to the queries raised by the AO, to permit the exercise of the revisionary jurisdiction only on the ground that the AO did not have sufficient time to verify the details furnished would be unfair to the Assessee. The PCIT must be satisfied, after application of his mind, that the order of the AO was erroneous with respect to the material made available to him. No such application of mind by the PCIT is evident from the impugned order which was under challenge before the ITAT.