2013 (7) TMI 964 - AT - Income Tax

Summary

Issues involved:
The appeal for condonation of delay in filing against the order under section 263 of the Income Tax Act, 1961.

Condonaion of Delay:
The appeal was filed by the assessee against the order dated 28th Aug., 2012 of the CIT, Bikaner, which was belated by 6 days. The assessee submitted an application for condonation of delay stating reasonable cause for the delay, which was supported by an affidavit. After hearing both parties, the delay was condoned and the appeal was admitted.

Grounds of Appeal:
The main ground raised in the appeal was that the CIT erred in invoking section 263 of the IT Act, 1961, setting aside the assessment made under section 143(3) as neither erroneous nor prejudicial to the interest of Revenue.

Case Background:
The assessee declared total income of Rs. 120 and agricultural income of Rs. 2,75,000. The assessment was completed under section 143(3) based on the income declared. The CIT initiated proceedings under section 263 due to lack of proper enquiry regarding a cash deposit of Rs. 15,92,500 made by the assessee.

Assessee's Submissions:
The assessee explained that the cash was given by his mother-in-law for land purchase, supported by detailed family and financial background. However, the CIT found the explanation unsatisfactory and directed fresh enquiry by the AO.

Arguments and Precedents:
The assessee argued that the AO had conducted detailed enquiries and passed the assessment order after due consideration of relevant material. Citing various case laws, the assessee contended that the assessment order was not erroneous or prejudicial to Revenue.

Decision and Analysis:
The Tribunal noted that the AO had made proper enquiries during the assessment proceedings and had taken a possible view. Quoting the powers of the CIT under section 263, it was emphasized that mere disagreement with the assessment method does not warrant revision. Relying on Supreme Court precedent, the Tribunal allowed the appeal, setting aside the CIT's order and restoring the assessment order passed by the AO.

Conclusion:
The appeal was allowed in favor of the assessee, with the Tribunal finding that the assessment order under section 143(3) was not erroneous or prejudicial to Revenue, thereby rejecting the CIT's decision under section 263.