Reopening of case u/s.263

This query is : Resolved

YOGESH (Querist)
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06 July 2011 Can an order passed by ITO u/s143(3)by disallowing certain expenses be reopened by the CIT by adding back bad debts which was allowed or not considered by ITO in his earlier order?
Can CIT pass an order u/s 263 by introducing his own grounds & dissallowing bad debts which was earlier not yet considered by ITO in his order?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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06 July 2011 Proceedings U/s 143(3) are proceeding under the Income TAx Act and the order passed U/s 143(3) is an order passed therein.

The commissioner can disallow the expenditure which is not genuine and prejudicial to the interest of the revenue.
The assessee has to be given an opportunity of being heard in this regard. Further no such order can be made after expiry of 2 years from the end of the financial year in which order U/s 143(3) has been passed.