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2019 (2) TMI 1770 - AT - Income TaxRevision u/s 263 - unexplained investment - case of assessee was selected for scrutiny under CASS - HELD THAT - AO had summoned unsecured creditors u/s. 131 of the Act and recorded their statements. The creditors appeared before the AO and admitted to have advanced money for the purchase of property by the assessee. AO in the assessment order accepted the source of investments furnished by the assessee. The documents on record clearly establish that the AO had made necessary enquiries to track the source of investments made by the assessee for purchasing the property. Documents on record clearly reveal that the Assessing Officer had applied his mind and has made enquiries/investigation with respect to the source of investments. The Assessing Officer recorded the statements of unsecure creditors. No discrepancies in the statements made by the unsecured creditors and the explanation furnished by the assessee were pointed by the Assessing Officer at the time of assessment. It is evidently a case of change of opinion by the Assessing Officer which the Assessing Officer successfully substituted by initiating proposal for invoking provisions of section 263 of the Act. We find merit in the submissions of assessee. As is evident from the documents on record we invoke the provisions of section 263 of the Act have been invoked in blatant abuse to revisional jurisdiction. - Decided in favour of assessee.
Issues:
Challenge to order u/s. 263 of the Income Tax Act, 1961 for assessment year 2011-12. Detailed Analysis: 1. Background: The case involves an appeal by the assessee against the order of the Principal Commissioner of Income Tax-6, Pune under section 263 of the Income Tax Act, 1961 for the assessment year 2011-12. The assessee, a builder and developer, declared total income under section 44AD of the Act. The dispute arose regarding the source of investment in property worth ?1.29 crores. 2. Grounds of Appeal: The assessee challenged the order on various grounds, including procedural lapses, lack of thorough investigation by the Assessing Officer, and the Pr. Commissioner's alleged failure to consider assessment records. Additional grounds questioned the validity of the revisional order based solely on the Assessing Officer's proposal. 3. Assessee's Contentions: The representative for the assessee argued that the Assessing Officer conducted detailed enquiries during the assessment proceedings, including summoning unsecured creditors whose statements supported the assessee's claims. It was contended that the Assessing Officer's actions were in compliance with the requirements, and the revision proceedings were initiated without independent assessment by the Pr. Commissioner. 4. Revenue's Defense: The Department defended the Pr. Commissioner's order, arguing that the Assessing Officer failed to conduct proper enquiries despite the significant property investment relative to the total income. It was asserted that the Pr. Commissioner applied independent judgment in invoking revisional jurisdiction. 5. Tribunal's Decision: After considering the submissions and reviewing the records, the Tribunal found that the Assessing Officer had diligently investigated the source of investments, including recording statements of unsecured creditors. It was noted that the Assessing Officer's actions did not reflect a lack of enquiry. The Tribunal held that the Pr. Commissioner's reliance on the Assessing Officer's proposal, citing time constraints, amounted to a change of opinion rather than a valid basis for invoking section 263. Consequently, the Tribunal quashed the impugned order and allowed the assessee's appeal. 6. Conclusion: The Tribunal's decision emphasized the necessity for the Pr. Commissioner to independently assess the order's errors and prejudicial impact on revenue before invoking section 263. The case highlighted the importance of proper investigation by the Assessing Officer and the limitation on revisional jurisdiction based solely on the Assessing Officer's proposal. This detailed analysis provides an overview of the issues, contentions, and the Tribunal's decision in the legal judgment concerning the challenge to the order under section 263 of the Income Tax Act, 1961 for the assessment year 2011-12.
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