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2022 (1) TMI 418 - AT - Income TaxRevision u/s 263 by CIT - Unexplained transaction of receipt of advance and subsequent repayment - CIT-A seeking to revise the assessment order passed u/s 143(3)/147 - HELD THAT - Chronological events which led to the Assessing Officer to pass assessment order u/s.143(3)/147 of the Act accepting the cash deposits we are of the considered opinion that the Assessing Officer in the instant case has verified all the aspects and therefore, the view taken by the CIT is only a second view which is not permissible under Section 263 of the Act. It is the settled proposition of law that for invoking jurisdiction under Section 263, the twin conditions, namely, the order is erroneous and the order is prejudicial to the interest of the Revenue must be satisfied. In the instant case, since the Assessing Officer has called for various details and after verification of the same has passed the order, therefore, the same cannot be treated as erroneous, as held by Hon ble Supreme Court in the case of Malabar Industrial Co. Ltd. 2000 (2) TMI 10 - SUPREME COURT We also get support from the decisions of Mumbai Bench in the case of Narayan Tatu Rane, 2016 (5) TMI 1162 - ITAT MUMBAI and Delhi bench in the case of Amira Enterprises Ltd 2017 (12) TMI 188 - ITAT DELHI and Co-ordinate Bench in the case of P.Narasihma Reddy 2018 (7) TMI 1865 - ITAT HYDERABAD . Accordingly, we set aside the order passed by the ld.CIT u/s. 263 of the Act and decide the issue in favour of the assessee.
Issues:
- Condonation of delay in filing appeal - Validity of assessment order passed u/s 263 - Source of cash deposits in NRO account - Acceptance of cash credits by Assessing Officer - Jurisdiction under Section 263 Condonation of delay in filing appeal: The assessee filed an appeal against the order of the CIT (IT&TP) dated 26th February, 2020 for the assessment year 2013-14, which was delayed by 291 days. The delay was attributed to the COVID-19 pandemic, and the Hon'ble Supreme Court's order dated 23rd March, 2020, extending the period of limitation. The ITAT Hyderabad condoned the delay and admitted the appeal for adjudication. Validity of assessment order passed u/s 263: The CIT (IT&TP) sought to revise the assessment order passed u/s 143(3)/147 of the Act, stating that proper inquiries were not made before accepting cash deposits in the NRO account of the assessee. The CIT set aside the assessment order, directing the AO to reexamine the source of cash deposits. The ITAT Hyderabad considered the submissions and held that the Assessing Officer had conducted thorough inquiries and verifications before passing the assessment order, thus rejecting the CIT's view as a second opinion not permissible under Section 263. Source of cash deposits in NRO account: The assessee received a sum of ?2.25 crores as advance from two agriculturists for the purchase of an ancestral house property. The amount was returned in subsequent years due to non-fulfillment of terms. The AO accepted the source of cash deposits after examining various documents and conducting inquiries. The ITAT found that the AO had verified the transactions adequately, supporting the genuineness of the cash credits. Acceptance of cash credits by Assessing Officer: The AO accepted the cash credits of ?2.25 crores but disallowed ?7,00,000 in the SBI account. The AO completed the assessment u/s 143(3)/147 after verifying the details provided by the assessee and the farmers. The ITAT noted that the AO had made proper inquiries and accepted the cash credits, indicating a thorough examination of the source of funds. Jurisdiction under Section 263: The ITAT emphasized that for invoking jurisdiction under Section 263, the order must be both erroneous and prejudicial to the revenue's interest. Since the AO had conducted detailed inquiries and passed the assessment order after due verification, the ITAT held that the CIT's decision was a second view, not meeting the conditions of Section 263. Relying on legal precedents, the ITAT set aside the CIT's order under Section 263 and decided the issue in favor of the assessee. In conclusion, the ITAT Hyderabad allowed the appeal of the assessee, emphasizing the importance of thorough inquiries and verifications by the Assessing Officer before passing assessment orders to avoid being deemed erroneous under Section 263 of the Income Tax Act.
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