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2023 (8) TMI 437 - AT - Income TaxRevision u/s 263 - assessee has deposited cash during demonetization period - HELD THAT - It is an admitted fact that the assessee has made cash deposit during the demonetization period which was accepted by him from various hospitals in demonetized currency in violation of the extant provisions regarding dealing in demonetized currency. AO in the instant case has failed to investigate this aspect and passed the order u/s 143(3) accepting the income returned. In our opinion, the order passed by the AO in the instant case without enquiring the huge cash deposit in demonetized currency in violation of the extant provisions regarding dealing in demonetized currency has rendered the order erroneous and prejudicial to the interest of the Revenue. Therefore, the learned PCIT, in our opinion, is fully justified in invoking the provisions of section 263 - Decided against assessee.
Issues: Delay in filing appeal, Validity of order u/s 263 of the I.T. Act, Cash deposit during demonetization period.
Delay in filing appeal: The appeal was filed with a delay of 277 days, and the assessee submitted a condonation application with reasons for the delay. The delay was condoned after considering the contents of the application and hearing the learned DR. Validity of order u/s 263 of the I.T. Act: The order u/s 263 was passed by the learned PCIT setting aside the Assessing Officer's order u/s 143(3) due to the acceptance of a large cash deposit during demonetization. The PCIT held that the AO's acceptance of the cash deposit without taxing it was erroneous and prejudicial to the Revenue's interest. Cash deposit during demonetization period: The assessee deposited Rs. 39,74,500 in demonetized currency, which was accepted from private hospitals. The PCIT found this acceptance to be in violation of demonetization provisions and issued a notice u/s 263. The assessee argued that the cash was accepted due to prevailing circumstances and requested to drop the proceedings. Judgment: The Tribunal upheld the PCIT's decision, stating that the AO failed to investigate the cash deposit issue, rendering the order u/s 143(3) erroneous. The Tribunal found the PCIT's invocation of section 263 justified, as there was no enquiry into the significant cash deposit during demonetization. The grounds raised by the assessee were dismissed, and the appeal was ultimately rejected.
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