2022 (5) TMI 1377 - AT - Income Tax

Revision u/s 263 - Unexplained cash deposits - as argued during the course of the assessment proceedings completed the assessment after conducting an enquiry into the source of cash deposits as now the revision is not possible on the same set of facts because the AO has formed an opinion which is a possible view as per law - HELD THAT - AO while framing the assessment has gone into the details of the cash deposits and the other two more amounts - She stated before the AO that the cash deposits is out of the gift received from her husband and the AO has verified the return of income of the Assessee's husband and the bank accounts. We noted that the Assessee's husband sold one immovable property located at Uthandi, Chennai to one Smt. Mangaiyarkarasi who has paid a sum to the Assessee by way of demand draft on 28.02.2014. As claimed that the husband has gifted a sum of Rs. 30.00 lakhs and Rs. 10.00 lakhs to the Assessee and the same was deposited in the above said bank accounts, i.e. Axis Bank account maintained in the name of the Assessee. The date of the sale of this property, the date of depositing the demand draft and the date of the gift is the same, i.e. 28.02.2014. We find that the Assessing Officer has examined the same facts and reached to a conclusion that the transactions of gift are genuine and explained. Hence, we find no merit in the revision order passed by the PCIT and hence the same is quashed as the Assessing Officer had a reasonable view while framing the assessment. Thus, the revision order is thereby quashed and the appeal of the Assessee is allowed.

Summary

Issues:
1. Condonation of delay in filing appeal.
2. Validity of revision order u/s. 263 of the Income Tax Act, 1961.
3. Adequacy of enquiry into cash deposits by Assessing Officer.
4. Justification for quashing the revision order by the PCIT.

Condonation of Delay:
The appeal by the Assessee was found to be time-barred by 79 days, with the Assessee filing a petition for condonation of delay due to receiving wrong advice from the initial Chartered Accountant. The Tribunal, after considering the reasons provided, condoned the delay and admitted the appeal for adjudication.

Validity of Revision Order:
The Assessee contended that the revision order u/s. 263 of the Act was invalid as the Assessing Officer had conducted a proper enquiry into the source of cash deposits during the assessment proceedings. The PCIT was criticized for not providing adequate reasons for setting aside the assessment completed under section 143(3) and for failing to establish error and prejudice causing revenue loss. The Tribunal found that the revision was not justified as the Assessing Officer had formed a reasonable opinion based on the available facts.

Adequacy of Enquiry by Assessing Officer:
The PCIT initiated revision proceedings due to alleged lack of enquiry by the Assessing Officer into cash deposits. The Assessee argued that the cash deposits were explained as gifts from the Assessee's husband, supported by relevant documents, and were properly verified by the Assessing Officer. The Tribunal noted that the Assessing Officer had adequately examined the source of cash deposits and concluded that the PCIT's revision order lacked merit.

Justification for Quashing Revision Order:
The Tribunal examined the facts presented by both parties and determined that the Assessing Officer had thoroughly investigated the cash deposits, including verifying the source of funds provided by the Assessee. The Tribunal found the transactions to be genuine and explained, leading to the quashing of the revision order by the PCIT. Consequently, the Assessee's appeal was allowed, and the revision order was deemed unjustified and quashed.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, including the condonation of delay, validity of the revision order, adequacy of enquiry by the Assessing Officer, and the justification for quashing the revision order. The Tribunal's decision was based on a thorough examination of the facts and legal arguments presented by both parties, ultimately leading to the allowance of the Assessee's appeal and the quashing of the revision order by the PCIT.