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TMI Blog2025 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... before the AO; it is a complete enquiry & verification made by the AO; the AO has taken a possible view which is tenable as per law; in absence of both/ twin pre- requisite condition i.e., erroneousness & prejudicial to the interest of revenue, order made u/s 263 by the ld. PCIT would be invalid and is liable to be quashed. 2. On the facts and circumstances of the case & in law, after making written submission/ explanation dt.21-2-24 along with documentary evidence (i.e., balance sheet, cash book, bank statement, Form 26AS etc.) before the PCIT against the SCN u/s 263 dt. 1-2-24; the PCIT has not given any finding on merits on the issue of 'cash deposits' that how it is incorrectly/ erroneously accepted by the AO; in absence of this factual finding on merits by the PCIT & simply passed order for making fresh assessment de novo to the file of the AO, is not permissible in the eyes of law; order u/s 263 by the PCIT would be invalid and is liable to be quashed. 3. The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing. 3. Succinctly stated, the assessee is an individual, have not filed her regular return of income u/s 139 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that the assessee having huge surplus cash more than Rs. 16 lacs, who has no perpetual expenses, such state of affairs was treated as very odd and against the human behaviour. Ld. PCIT commented that the explanation offered, and document submitted by the assessee does not explain the source of aforesaid cash deposit. With such observations, Ld. PCIT find it appropriate to consider the remaining cash of Rs. 24,59,380/- (2602000 - 142620) falls under the meaning of unexplained money u/s 69A r.w.s. 115BBE, in the hands of the assessee. A show cause notice incorporating the above facts, for initiation of revisionary proceedings u/s 263 of the Act was issued to the assessee on 01.02.2024. In response, the assessee has submitted his reply on 20.02.2024, however, the same does not find favour with the Ld. PCIT, who observed that the assessee fail to justify the cash deposited on 92 occasions which is not commensurate with the meagre income shown by the assessee in her return, in response to notice u/s 148. Ld. PCIT concluded that the assessment passed by the Ld. AO is erroneous in so far as it is prejudicial to the interest of the revenue as per provisions of section 263 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by reopening of the earlier year, but no addition on this account can be made in the AY 2013-14. It was the submission that the assessee had furnished a day- to-day cash book showing all the entries regarding receipts, payments and cash deposits and all such material was before the Ld. AO, which was queried from the assessee time and again and after satisfaction the returned income of the assessee was accepted. It was the argument that when the issue has been discussed, deliberated and a plausible view has been taken by the Ld. AO in that case revisionary proceedings to impose a different view cannot be initiated. Ld. AR further submitted that the proposal of Ld. PCIT to treat the amount remained after income shown in the ROI i.e. Rs. 24,59,380/- (26,02,000-1,42,620) as unexplained money u/s 69A also does not found to be as per the prescribed mandate of law. It is the submission that the essential conditions required to invoke provisions of section 69A, as clarified by Hon'ble Supreme Court in the case of CIT and ANR vs DN Singh dated 16.05.2013 are that 27. Turning more to s. 69A, it may be broken down into the following essential parts: (a) The assessee must be found to be th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntroduced by the assessee in the books of account. The AO during the assessment proceedings was very well aware of the fact that Rs. 11,32,626/- was stated to have been introduced in the books during the earlier assessment year and, therefore, if the said claim of the assessee was not acceptable then the proper course of action was to make the addition of this cash introduced in the books of account under section 68 in the relevant assessment year in which the said cash was introduced in the books and not in the year under consideration when it is shown as opening cash balance. The AO instead of taking up the assessment of the preceding year has made the addition of the said amount by rejecting the source of the amount as shown as opening cash balance. Further, the AO has not rejected the books of accounts of the assessee and, therefore, once the assessee has established the availability of the cash in the books of account, then the proper course of action for rejecting the said claim and making the addition is to reopen the assessment of the earlier year." d. Reliance is placed upon DCIT Vs. Smt. Veena Awasthi (ITAT) (Lucknow) Dt. 30.11.2018 That nowhere Revenue has doubted av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: "6.9 Now coming to the facts before us, from the records we observe that the issue regarding the cash deposited by the assessee during the demonetization period has been discussed in detail during the course of assessment proceedings. The assessment proceedings were initiated specifically for the reason "verifying the cash deposited during demonetization period". Accordingly, the AO issued notice for verifying the cash deposits made by the assessee, in response to which the assessee furnished the details which have been mentioned in the preceding paragraphs. Therefore, this is not a case where no enquiry was made by the AO during the course of assessment proceedings. Further, we also observe that the assessee also duly filed his reply in response to the notice issued by the AO and various details like Certificates from Lakshmi Vilas bank and Certificate from Allahabad Bank, bank statements of Lakshmi Vilas Bank and Allahabad Bank, cash book for financial year 2016-17, VAT returns for financial year 2016-17 etc were submitted before the AO in response to this query regarding the cash deposits made by the assessee during the demonetization period. We further observe that it is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . O. had taken a decision, the Income-tax Tribunal allowed the appeal of the assessee. 9. Backed by aforesaid submissions, it was the prayer by Ld. AR that the order of Ld. PCIT u/s 263 in absence of any findings on the issue, was unable to establish that the order of Ld. AO was erroneous and prejudicial to the interest of revenue, thus, the same shall be held as invalid and is liable to be quashed. 10. Ld. CIT DR, Shri S. L. Anuragi, representing the department have placed his strong reliance on the order of Ld. PCIT. He submitted that the inquiries were conducted by the Ld. AO but those are not proper and correct, therefore, provisions of explanations-2 to section 263 are very much triggered in the present case, wherein there was non application of mind by the Ld. AO and, therefore, Ld. PCIT has rightly set aside the order of Ld. AO to make necessary inquiries and re-adjudicate the issue afresh. Under such a scenario, the order of Ld. PCIT u/s 263 was reasonable, justified and well within the mandate of law, therefore, the same needs to be sustained. 11. We have considered the rival submissions, perused the material available on record and the judicial pronouncements relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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