Dharam Singh v. PCIT · ITAT Delhi on §263: 'lack of inquiry' must be shown from the record, not asserted

Can PCIT revise under §263 by merely alleging the AO didn't inquire?

No. A §263 revision alleging lack of inquiry is invalid unless the allegation is substantiated with evidence from the assessment record.

Facts in brief

• Scrutiny was taken up to verify 'large turnover shown in the ITR but audit report not filed'.
• The AO examined the books against bills and vouchers and disallowed car running and repair & maintenance expenses.
• PCIT held the order erroneous and prejudicial for want of proper inquiries.

Issue before the bench

Whether an unsubstantiated 'lack of inquiry' allegation sustains revision.

Held

The §263 order was ruled invalid: the allegation must be borne out by the record, and here the AO had examined the material.

Practitioner takeaway