Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (10) TMI 1089 - AT - Income TaxRevision u/s 263 by CIT - Unexplained source of cash deposits - HELD THAT - The entire documents furnished by the assessee in this regard before the AO as well in response to the show cause notice issued by the Ld. PCIT indicate that the claim of the assessee regarding the source of bank deposits is correct. The query letter issued by the AO indicates that the AO had duly applied his mind to the issue before him and further the assessee also had duly responded to the query raised by the AO in this regard and only thereafter the AO had accepted the return of income of the assessee. Therefore it is our considered view, that there is no lack of inquiry on the part of the Assessing officer warranting invocation of revisionary proceedings by the Ld. PCIT. We would like to place reliance on the judgement in the case of Sunbeam Auto Ltd. 2009 (9) TMI 633 - DELHI HIGH COURT wherein as held that if there was any inquiry, even inadequate, that would not by itself give the powers to the Commissioner to pass order u/s 263 of the Act, merely because the Commissioner has a different opinion in the matter and that it is only in those cases where there was no enquiry, that the powers u/s 263 of the Act can be exercised. PCIT cannot pass an order u/s 263 of the Act merely on the ground that further or thorough enquiry should have been made by the AO - We also note that in the case of Malabar Industries Co. Ltd. 2000 (2) TMI 10 - SUPREME COURT has held that if the Assessing officer adopts one of the possible courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the AO adopts one view with which the Commissioner does not agree, it would not be an order prejudicial to the interests of the Revenue for the purpose of invoking the revisionary powers u/s 263 - Therefore, we are of the considered opinion, that the impugned order was definitely outside the purview of section 263 of the Act and, we hold the impugned order to be bad in law and quash the same. Appeal of the assessee stands allowed.
Issues:
Jurisdiction under section 263 of the Income Tax Act, 1961; Assessment order set aside by Ld. PCIT; Validity of original assessment order; Legal tenability of proceedings initiated after 10 years; Consideration of replies to show-cause notice; Setting aside order based on audit objection. Analysis: The appeal was filed by the assessee against the order passed under section 263 of the Income Tax Act, 1961 by the Ld. Principal Commissioner of Income Tax. The original return of income declared income from Dairy farming and Short Term Capital Gain. Reasons for reopening the assessment were recorded based on cash deposits in the bank account. The Assessing Officer accepted the returned income but later issued a notice for rectification of a mistake apparent from the record. Subsequently, a show cause notice under section 263(1) was issued, questioning the cash deposits and sale of a plot. The Ld. PCIT set aside the assessment order, directing a fresh order. The assessee challenged this decision on various grounds, including lack of jurisdiction, proper application of mind by the Assessing Officer, and validity of the show cause notice. The Ld. AR argued that all bank deposits were explained during assessment proceedings, with supporting documents like the agreement for sale of the plot. The possession was given at the time of execution, and the Assessing Officer did not doubt the agreement's genuineness. The husband deposited the money in the assessee's account as per his father's wishes. The Ld. PCIT's decision was deemed incorrect both factually and legally. The Ld. AR also contended that setting aside the order based on audit objections was not valid, citing judicial precedents. On the other hand, the Ld. CIT DR supported the Ld. PCIT's decision, emphasizing the unexplained bank deposit and lack of inquiry by the Assessing Officer. It was argued that the audit objection was to highlight errors, and the show cause notice was issued after proper examination of the issue. After hearing both sides, the Tribunal reviewed the documents and responses submitted during assessment proceedings. It was noted that the Assessing Officer had applied his mind, and the assessee adequately responded to queries. Citing legal precedents, the Tribunal emphasized that revisionary powers under section 263 could not be exercised merely due to a different opinion. The order under section 263 was held to be outside the Act's purview, quashed, and the appeal of the assessee was allowed. In conclusion, the Tribunal found the Ld. PCIT's order to be legally unsustainable, emphasizing the importance of proper inquiry by the Assessing Officer and the limitations on revisionary powers under section 263. The decision was based on a thorough review of the facts and legal precedents, leading to the allowance of the assessee's appeal.
|