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2021 (9) TMI 194 - AT - Income TaxRevision u/s 263 - CIT set aside the reassessment order u/s 147 rws 143(3) to verify the source of cash deposits into bank to conduct necessary enquiry - HELD THAT - Admittedly, this case is not case of complete lack of enquiry. As noted above, the Assessing Officer during the assessment proceedings required the assessee to furnish detail income tax return, computation of income, details of bank statement and the reply of questionnaire raised to assessee about the source of deposits - assessee vehemently submitted that assessee s declared income of ₹ 1.80 lakh from business of transportation under section 44AE and ₹ 1.39 lakh from trading in building material respectively (being @ 8% of total turnover of ₹ 17.44 lakh). To support his contention, the assessee filed balance-sheet, trading of profit and loss account as on 31.03.2015, cash book and bank statement. The assessee also claimed that assessee was having cash balance of ₹ 12.41 lakh as on 15.01.2015 and the cash balance in the immediately preceding months was ₹ 12.23 lakh, ₹ 12.02 lakh and ₹ 10.29 lakh as on 31.12.2014, 30.11.2014 and 30.10.2014 respectively. All these facts are not disputed by the Ld. CIT-DR. We find that the Assessing Officer made sufficient enquiries during the assessment and took reasonable and plausible view - if the view taken by Assessing Officer is not acceptable Ld. PCIT, which is otherwise reasonable and plausible order under section 263 cannot be treated as erroneous. For invoking power under section 263 of the Act the twin condition i.e., order is erroneous and in so far as prejudicial to the interest of Revenue must be fulfilled simultaneously at the cost of repetition. We may further add that it is not a case of lack of enquiry, the Ld. PCIT while passing the order under section 263 held that Assessing Officer has not made adequate enquiry. Therefore the order passed by Ld. PCIT u/s 263 is not sustainable and the same is quashed. Assessee s appeal is allowed.
Issues:
Appeal against order of ld. Principal Commissioner of Income tax for AY 2015-16 challenging direction under section 263 to set aside reassessment order for verification of cash deposits source. Analysis: 1. The case involved an appeal by the assessee against the order of the Principal Commissioner of Income Tax for AY 2015-16. The main issue was the direction under section 263 to set aside the reassessment order for verification of the source of cash deposits into the bank. The assessee contended that the reopening of assessment under section 147/148 was invalid and without jurisdiction, hence the order under section 263 was also invalid. 2. The brief facts revealed that the Assessing Officer issued a notice under section 148 after receiving information about cash deposits by the assessee. The assessee, engaged in business activities, declared income under sections 44AE and 44AD. The Assessing Officer accepted the return of income after due verification and examination of details submitted by the assessee. 3. Subsequently, the assessment order was revised by the PCIT under section 263, citing inadequate enquiry by the Assessing Officer regarding the cash deposits. The PCIT directed further enquiry into the genuineness of the business and source of cash deposits. The assessee challenged this revision before the Tribunal. 4. During the hearing, the AR for the assessee argued that the Assessing Officer conducted a detailed enquiry before accepting the return of income. The AR emphasized that there was a distinction between "lack of enquiry" and "inadequate enquiry," citing relevant case laws to support the contention that inadequacy of enquiry is not sufficient ground for revision under section 263. 5. The Revenue, represented by the CIT-DR, supported the PCIT's order, claiming that the assessment order lacked discussion on various enquiries conducted by the Assessing Officer. 6. The Tribunal analyzed the submissions and observed that the Assessing Officer had made sufficient enquiries during the assessment proceedings and took a reasonable view based on the facts presented by the assessee. The Tribunal noted that the PCIT's assertion of inadequate enquiry was not substantiated, and the order under section 263 was not sustainable. 7. Ultimately, the Tribunal allowed the assessee's appeal, holding that the PCIT's order under section 263 was not justified as the Assessing Officer had conducted adequate enquiries and arrived at a reasonable decision based on the available information. This detailed analysis highlights the legal nuances and arguments presented in the case, ultimately leading to the Tribunal's decision in favor of the assessee.
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