Sec. 11, 13(8) & 263 of Income-tax Act, 1961— Revision- Case of assessee was a case of lack of enquiry and not inadequate enquiry.

Facts: (i) Whether the Tribunal was correct in holding that the order under s. 263 is not sustainable in view of insertion of s. 13(8), when the subject-matter of revision under s. 263 was regarding eligibility of the assessee to claim deduction under s. 80-IB(10) ?

Held, that from perusal of the order passed by AO, it is evident that the AO has not made any enquiry with regard to the claim of the assessee for deduction under s. 80-IB(10). DIT (Exemption) in the order passed under s. 263 has held that AO has not applied its mind on the issue of allowance of deduction under s. 80-IB(10) and application of income under s. 11. Therefore, it has been held that order passed by AO is erroneous and is prejudicial to the interest of Revenue. The distinction between lack of enquiry and inadequate enquiry was also noted. Therefore, the Tribunal grossly erred in law in applying the aforesaid decision to the fact situation of the case and ought to have appreciated that the instant case was a case of lack of enquiry and not inadequate enquiry with regard to claim of the assessee with regard to deduction under s. 80-IB(10). The Tribunal thereafter could not have proceeded to examine the matter on merits after setting aside the order under s. 263 with reference to s. 13(8) as the merits of the matter was not the subject matter of the appeal before the Tribunal. In view of preceding analysis, the substantial questions of law framed by a Bench of this Court are answered in favour of the Revenue and against the assessee. - DIT V/s INDIA HERITAGE FOUNDATION - [2020] 28 ITCD Online 007 (KARN)