2023 (7) TMI 670 - AT - Income Tax

Revision u/s 263 - source of investment in unlisted equities was part of the proceeding - imitation by the ld. PCIT to invoke section 263 for the second time - HELD THAT - As no enquiry is said to have been made on this issue of investment in unlisted equities and thereby no addition to this extent was made. On perusal of the records, we do not find any documentary evidences furnished by the assessee in support of its claim that the impugned investment was made in F.Y. 2011-12 by way of furnishing the bank statement or any other supporting documents to explain the source of the investment made by the assessee in M/s. Armani Industries (I) Pvt. Ltd. As pertinent to point out that there was no bar on limitation by the ld. PCIT to invoke section 263 for the second time considering the order to be erroneous insofar as it is prejudicial to the interest of the Revenue for the reason that the A.O. has not gone into the issue of the impugned investment which was part of the first section 263 proceeding. It is apparent that the A.O. has not enquired into the issue of investment made by the assessee and it does not fall in the case where the assessee has enquired into the issue and taken one of the plausible view. As the order of the ld. PCIT invoking section 263 is valid since the assessment order sought to be revised was erroneous insofar as it is prejudicial to the interest of the Revenue. Decided against assessee.

Summary

Issues involved:
The appeal challenging the order of the Principal Commissioner of Income Tax under section 263 of the Income Tax Act for the Assessment Year 2014-15.

Details of the Judgment:

Issue 1: Delay in filing the appeal
The appeal was filed belatedly by 220 days. The Assessee requested condonation of the delay, stating unawareness of the appeal process. The Tribunal, after hearing both sides, decided to condone the delay to allow the Assessee to present its case.

Issue 2: Review of the assessment order
The Assessee contended that the Principal Commissioner erred in not specifying the cancellation of earlier orders while passing the second order under section 143(3) read with 263 of the Act. The Principal Commissioner had set aside the assessment order for verification of specific issues related to large expenses, interest expenses, investments, sales turnover, and related party transactions.

Issue 3: Investment scrutiny
The Principal Commissioner issued a notice for discrepancies in the assessment order regarding an investment of Rs. 1,20,00,000 in unlisted equities. The Assessee claimed the investment was made in a previous financial year and provided details, which were not considered by the Assessing Officer. The Tribunal found no supporting documents for the claim and upheld the validity of invoking section 263 due to the erroneous nature of the assessment order.

In conclusion, the Tribunal dismissed the appeal, upholding the order of the Principal Commissioner under section 263 as valid, considering the assessment order to be prejudicial to the interest of the Revenue.