IN HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : NAGPUR. INCOME TAX APPEAL NO. OF 90 OF 2004 APPELLANT: Commissioner of Income Tax III, 2nd Floor Saraf Chambers, Sadar, Nagpur. VERSUS RESPONDENT: Shri Dhanraj Harichand Khandelwal, Amravati. Shri. Bhushan Mohta with Shri Anand Parchure, Advocates for Appellant. Shri. C.J. Thakkar, Advocate for Respondent. CORAM: R.K.DESHPANDE & MANISH PITALE, JJ DATED: SEPTEMBER 7th, 2017 Oral Judgment (Per R.K.Deshpande, J) 1. Commissioner of Income Tax, exercising his jurisdiction under Section 263 of Income Tax Act, 1961, (for short said Act ) passed order on 28/03/2003, whereby order passed by Assessing Officer on 28/02/2001, was held to be erroneous and prejudicial to ITA90.odt 2/5 interest of Revenue and thus, order regarding Block Assessment has been set aside with direction to Assessing Officer to make proper inquiry into genuineness of sub contract. 2. aforesaid order was subject matter of appeal before Income Tax Appellate Tribunal, at Nagpur which has been allowed by order dated 30/01/2004, setting aside order passed by Commissioner of Income Tax under Section 263 of said Act. Tribunal records finding that order passed by Assessing Officer cannot be said to be erroneous and prejudicial to interest of Department and therefore sets aside order of Commissioner of Income Tax. 3. On 22/03/2007 this Court has passed order as under : Heard Shri Jaiswal, learned counsel for appellant. Admit, on following question: Where Income tax Appellate Tribunal was justified in setting aside ITA90.odt 3/5 order passed by C.I.T. under Section 263 of Income tax Act even though Assessing Officer in block assessment had failed to consider vital evidence in form of recovery of Bank Account books, cheque book from possession of assessee duly signed by sub contractors together with statement of sub contractor which was noticed during course of search? We have heard Shri Mohta, learned counsel for Department; and Shri C.J. Thakkar, learned counsel for Assessee. 4. We have gone through order passed by Income Tax Appellate Tribunal. What we find is that in facts and circumstances of this case, before recording finding that order passed by Assessing Officer cannot be said to be erroneous as contemplated under Section 263 of Income Tax Act, Tribunal ought to have recorded finding as to whether it is case of lack of inquiry or inadequate inquiry , on issue as to genuineness of sub contract in question. None of counsels could point out to us any such finding recorded by Tribunal in its order. ::: Uploaded on - 18/09/2017 ::: Downloaded on - 19/09/2017 12:13:27 ::: ITA90.odt 4/5 In our view recording of finding as to lack of inquiry or inadequate inquiry became sine qua non in facts and circumstances of this case for holding that order is erroneous. In absence of such finding by Tribunal, it is not possible for us to consider substantial question of law, which was framed by this Court on 22/03/2007. We are, therefore, left with no alternative but to set aside order passed by Tribunal with order of remand. 5. learned counsels appearing for parties also agree for remand of matter back to Tribunal and to leave all questions open to be adjudicated by Tribunal, after recording finding as to whether it is case of lack of inquiry or inadequate inquiry . In view of above, petition is allowed and following order is passed: ORDER 1) order dated 30/01/2004 passed by Income Tax Appellate Tribunal, Nagpur in appeal No. IT(SS) No.45/Nag/2003 is hereby quashed and set aside. ::: Uploaded on - 18/09/2017 ::: Downloaded on - 19/09/2017 12:13:27 ::: ITA90.odt 5/5 2) matter is remitted back to Tribunal to decide it afresh, keeping in view observations made by this Court. We have not recorded any finding on merits of matter, and all questions are required to be decided by Tribunal. JUDGE JUDGE nandurkar TheCommissionerofIncome-tax-III, Nagpur v. DhanrajHarichandKhandelwal