2024 (10) TMI 1579 - HC - Income Tax

Revision u/s 263 - scrutiny assessment order u/s 143(3) - HELD THAT - Insofar as the scrutiny assessment that has been made by the AO is concerned, as we have seen the order passed by the assessing officer u/s 143(3) on 30.12.2019, where nothing has been stated as to what are all the inputs and documents which have been sought for under the scrutiny assessment order from the assessee and what are all the documents which have been filed by the assessee, whether those documents have been perused and verified and only thereafter the assessing officer has come to the conclusion to confirm the income as admitted under the return. These are the issues which ought to have been gone into by the assessing officer. But, those issues are conspicuously absent in the assessment order dated 30.12.2019. The issues that have been found out by the revisional authority with regard to the increase of share premium to the extent of Rs. 14.84 Crores and also the non-disclosing of the source or non-verification of the source if it is disclosed by the assessee with regard to the cash deposits during demonetization period to the extent and also so much of cash deposits in the bank account of the assessee are all the issues which had been found by the revisional authority. When those issues have not been verified or scrutinized properly by the assessing officer, there would be prejudice to the Revenue. Hence, the revisional authority has invoked the revisional power u/s 263(3), which of course, in the considered opinion of this Court, rightly. Therefore, absolutely there is no reason to interfere with the decision taken by the revisional authority in passing the assessment order u/s 263 on 29.03.2022 as well as the order passed by the Tribunal which is impugned herein.

Summary

Issues:
1. Validity of the assessment order passed by the assessing authority under Section 143(3) of the Income Tax Act.
2. Jurisdiction of the revisional authority under Section 263 of the Act to revise the assessment order.
3. Appeal against the order passed by the Income Tax Appellate Tribunal.

Analysis:
1. The assessing authority passed a scrutiny assessment order under Section 143(3) of the Income Tax Act, which the appellant found to be cryptic and lacking detailed examination. The order merely confirmed the income as admitted in the return without specifying the inputs, documents sought, or verification process. The appellant contended that crucial issues were not addressed in the assessment order, leading to dissatisfaction with the assessing officer's decision (para 2, 9).

2. The revisional authority, Commissioner of Income Tax, invoked Section 263 of the Act after identifying discrepancies in the assessment, including unaccounted cash deposits, significant increase in share premium, and lack of verification of sources for these transactions. The revisional authority set aside the assessment order and directed a detailed inquiry by the assessing officer. The appellant challenged the revisional order, questioning the jurisdiction of the revisional authority to revise an already scrutinized assessment order (para 3, 4, 10).

3. The appellant appealed to the Income Tax Appellate Tribunal, which upheld the revisional order. The Tribunal rejected the appellant's arguments and affirmed the revisional authority's decision. Subsequently, the appellant filed a Tax Case Appeal against the Tribunal's order, seeking a review of the decision (para 5).

4. During the hearing, the appellant's counsel raised the issue of jurisdiction based on a previous case, emphasizing the necessity to consider whether the revisional authority could intervene in an assessment already scrutinized by the assessing officer. However, the Court found the appellant's arguments unconvincing, noting the lack of detailed examination in the original assessment order and the significant discrepancies highlighted by the revisional authority. The Court upheld the revisional order and the Tribunal's decision, dismissing the appeal (para 6-12).