2021 (3) TMI 181 - HC - Income Tax

Revision u/s 263 - immovable property were not verified and that there were huge unsecured loans, were not properly enquired by the Assessing Officer - HELD THAT - Tribunal observed that complete details were filed in the form of confirmation letters before the Assessing Office and he has examined and investigated the same in its correct perspective. The Tribunal found no error in the assessment order and also found that the CIT lacks jurisdiction to revise the assessment order in question. Ultimately, the Tribunal set aside the order passed by the CIT un/s 263 and restored the order passed by the Assessing Officer. On a perusal of the order passed by the Tribunal, it is clear that the Tribunal has categorically held that the order passed by CIT is based on no reason and he has simply given an abrupt finding that the assessment order is erroneous. Tribunal, taking into consideration all the materials available on record, found that the CIT lacks jurisdiction to revise the assessment order passed by the AO. When the Tribunal has given a categorical finding with regard to the order passed by the CIT, we do not find any error or irregularity in the order passed by the Tribunal. Further, we find no ground much less any substantial question of law to interfere with the order passed by the Tribunal. - Decided against revenue.

Summary

Issues:
1. Challenge to the order of the Income Tax Appellate Tribunal by the Revenue.
2. Jurisdiction of the Commissioner of Income Tax (CIT) to revise assessment orders under Section 263 of the Income Tax Act.

Analysis:
The High Court of Madras heard an appeal filed by the Revenue challenging the order of the Income Tax Appellate Tribunal. The case involved an assessment completed by the Assessing Officer under Section 143(3) of the Income Tax Act, where discrepancies in investments and unsecured loans were noted. Subsequently, the CIT invoked Section 263, deeming the assessment prejudicial to the revenue's interest. The Tribunal, however, found that the assessment was conducted diligently, with all necessary verifications, and that the CIT lacked jurisdiction to revise the order. The Tribunal set aside the CIT's order and reinstated the Assessing Officer's assessment.

The substantial question of law admitted for consideration was whether the Tribunal was correct in setting aside the CIT's order under Section 263 due to jurisdictional issues. The Tribunal's decision was based on the lack of valid reasons provided by the CIT for deeming the assessment erroneous. The Tribunal emphasized that all relevant details were submitted to the Assessing Officer, who duly examined them. Consequently, the Tribunal concluded that the CIT exceeded its jurisdiction in revising the assessment order.

Upon reviewing the Tribunal's findings, the High Court concurred with the decision, noting the absence of valid reasons in the CIT's order and the lack of jurisdiction to revise the assessment. The Court found no grounds or substantial questions of law warranting interference with the Tribunal's ruling. Consequently, the High Court dismissed the Tax Case Appeal, upholding the Tribunal's decision and ruling in favor of the assessee. No costs were awarded in the matter.