2022 (6) TMI 948 - AT - Income Tax

Revision u/s 263 by CIT - whether there is complete lack of enquiry by the ld. AO while framing assessment? - HELD THAT - PCIT referred to two transactions, firstly, transfer of Rs. 11,00,000/- to the assessee s account from M/s. Patra Bastraiaya. Another transaction was of Rs. 27,00,000/- reflecting in the assessee s bank account received from M/s. Santosh Agency on 14.06.2010. Source and nature of transaction of Rs. 27,00,000/- with M/s. Santosh Agency remained unverified. No verification was done to this effect in the course of assessment. Also the connection between the transaction of Rs. 11,00,000/- with M/s. Patra Bastraiaya and the transaction with M/s. Santosh Agency remained unexamined. We notice that all the above observations made by ld. PCIT in the impugned order were alleged not to have been verified by the ld. AO. The submissions made by the assessee before ld. PCIT appearing in the impugned order are not sufficient to explain the said transactions. No detailed discussion is made in the assessment order also. No paper book has been filed by the assessee to demonstrate that whether ld. AO raised necessary queries/conducted enquiry on the issues referred herein above and whether the assessee had furnished a detailed reply including relevant documents to satisfy the AO. We find no reason to interfere in the finding of ld. PCIT holding the assessment order dated 07.12.2018 u/s 147 r.w.s. 143(3) of the Act as erroneous and prejudicial to the interests of the Revenue and setting aside the same for afresh adjudication. Thus, since a valid jurisdiction has been invoked by ld. PCIT, we confirm the finding in the impugned order and dismiss all the grounds raised by the assessee in the instant appeal. Appeal of the assessee is dismissed.

Summary

Issues:
Assessment order passed under section 263 of the Income Tax Act, 1961 challenged by the assessee for the Assessment Year 2011-12.

Analysis:
The appeal was filed by the assessee against the order passed under section 263 of the Income Tax Act, 1961 by the Principal Commissioner of Income-tax, Kolkata-2, challenging the assessment order framed under section 147/143(3) of the Act. The assessee did not appear during the proceedings despite multiple opportunities given. The Principal Commissioner raised concerns regarding two transactions: transfer of Rs. 11,00,000 to the assessee's account from M/s. Patra Bastraiaya and Rs. 27,00,000 received from M/s. Santosh Agency. The Principal Commissioner found a lack of independent and adequate inquiry by the Assessing Officer (AO) on these issues. The Principal Commissioner directed the AO to pass a fresh assessment order considering these issues.

Before the Principal Commissioner, the assessee submitted written arguments, but they were not found acceptable. The assessee then appealed to the Tribunal, challenging the Principal Commissioner's order under section 263. The Tribunal noted that the transactions in question were not adequately verified by the AO. The Tribunal found that the submissions made by the assessee were insufficient to explain the transactions, and no detailed discussion was present in the assessment order. The Tribunal also observed that the assessee did not provide relevant documents to satisfy the AO regarding the transactions in question.

Due to the lack of necessary details and verifications, the Tribunal upheld the Principal Commissioner's finding that the assessment order was erroneous and prejudicial to the interests of the Revenue. The Tribunal confirmed the decision to set aside the assessment order for fresh adjudication. Consequently, the Tribunal dismissed all grounds raised by the assessee and upheld the decision of the Principal Commissioner.

In conclusion, the Tribunal dismissed the appeal of the assessee, affirming the decision of the Principal Commissioner, and upheld the order to pass a fresh assessment considering the issues raised during the proceedings.