2023 (5) TMI 879 - AT - Income Tax

Revision u/s 263 - addition on account of income from undisclosed sources - CIT noticed that the AO had completed the assessment without examining the case properly - HELD THAT - Looking to the facts CIT has categorically pointed out errors in the assessment order and the finding of Pr. CIT is not rebutted by the assessee by placing any contrary evidence, therefore, in the absence of material rebutting the finding of the Pr. CIT, no reason to interfere in the finding of CIT. Order pass u/s 263 stands accordingly affirmed. Decided against assessee.

Summary

Issues involved:
The appeal challenging the order of the Principal Commissioner of Income-tax u/s 263 of the Income-tax Act, 1961 for the assessment year 2013-14.

Summary:

Issue 1: Lack of Inquiry or Verification
The assessee contended that the order u/s 263 was "bad in law" as no inquiry or verification was conducted. However, the Pr. CIT found discrepancies in the accounts, such as high debtors and creditors compared to sales and purchases, leading to the conclusion that the assessment order was erroneous and prejudicial to revenue. The Pr. CIT set aside the assessment for fresh consideration.

Issue 2: Erroneous Assessment Order
The assessee argued that the order u/s 263 was unjustified as the original assessment under section 143(3) was not erroneous or prejudicial to revenue. Nevertheless, the Pr. CIT identified discrepancies in the assessee's accounts, including bogus creditors, which were not adequately addressed during the assessment. The Pr. CIT's decision to set aside the assessment was upheld.

Issue 3: Reasoning of the Pr. CIT
The assessee claimed that the order u/s 263 was "cryptic, self-contradictory, unreasonable, and based on conjectures." However, the Pr. CIT's findings regarding the unreliable nature of the assessee's accounts, particularly regarding creditors, were deemed valid due to lack of contrary evidence from the assessee. The Tribunal upheld the Pr. CIT's decision.

Issue 4: Consideration of Submissions
The assessee contended that the order u/s 263 did not fully consider their submissions. Despite this claim, the Tribunal found that the Pr. CIT had identified errors in the assessment order, which were not effectively rebutted by the assessee. Consequently, the Tribunal upheld the decision to set aside the assessment.

Issue 5: Opportunity of Being Heard
The assessee argued that they were not afforded a proper opportunity to be heard before the order u/s 263 was passed. However, as the assessee did not attend the proceedings and failed to provide a current address, the appeal was heard based on the available record. The Tribunal upheld the decision of the Pr. CIT.

In conclusion, the Tribunal dismissed the appeal of the assessee, affirming the order passed u/s 263 by the Pr. CIT.