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Deniel Merchants P. Ltd. vs Income Tax Officer on 29 November, 2017

8. The ld.CIT-DR, R.Mohan Reddy, supporting the order of the Ld.CIT(A), submitted that the assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue, which is evident from the fact that the AO has completed assessment without carrying out required enquiries, he ought to have been carried out in the given facts of the case. He further submitted that although, the AO has initiated penalty proceedings u/s.270A of the Act, but, such proceedings have been mechanically initiated without recording any satisfaction 'as to how' penalty is leviable in the given facts of the case. Further, it is a well settled principle of law by the decision of the Hon'ble Supreme Court in the case of Daniel Merchants (P) Ltd. v. ITO reported in [2018] 95 taxmann.366 (SC) that if the AO did not make any proper enquiry while making assessment and accepting the explanation of the assessee in so far as receipt of share application money was concerned, Commissioner rightly set aside such assessment order u/s.263 of the Act.
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