2022 (7) TMI 538 - AT - Income Tax

Tribunal upholds reopening of case under Income-tax Act, 1961 for lack of substantive reason

The Tribunal dismissed the Assessee's appeal against the Principal Commissioner's order under section 263 of the Income-tax Act, 1961 for the assessment ... Revision u/s 263 - case of the Assessee was selected for scrutiny on the reason 'large cash deposit in saving bank account(s), whether cash deposits have been made from disclosed sources' - Assessee before us contended that detailed and proper enquiry was done by the AO in this case and therefore the impugned order is liable to be set aside - HELD THAT:- We have given thoughtful considerations to the contention of the Assessee and realize that the AO has failed to verify the basic foundation i.e. Licence for doing the business of money lending by the Assessee, on the basis of which the Assessee claimed to have deposited the amount under consideration. Hence the contention of the Assessee is untenable. All the facts enumerated goes to show that foundation of enquiry qua claim of the Assessee is missing and the AO made the assessment order in cursory manner by conducting farce enquiry, which infact can not be termed as enquiry, hence we are of the considered view that in the instant case no enquiry qua issue involved, was done by the AO and therefore the Ld. PCIT was fully justified to reopen the case of the Assessee u/s. 263 of the ACT by holding the assessment order for A.Y. 2016-17 as erroneous and bad in law in so far as prejudicial to the interest of Revenue. Considering the conclusion drawn by Ld. PCIT and peculiar facts and circumstances of the case narrated above, we do not find any substantive reason and justification to interfere in the impugned order as the same do not suffer from any perversity or impropriety or illegality, consequently no interference is warranted. Appeal filed by the Assessee is dismissed. Issues:Appeal against order under section 263 of the Income-tax Act, 1961 for assessment year 2016-17.Analysis:The appeal was filed by the Assessee against the order passed by the Principal Commissioner of Income-tax under section 263 of the Income-tax Act, 1961. The Assessee declared an income of Rs. 8,78,090 and filed the return of income. The case was selected for scrutiny due to large cash deposits in saving bank accounts. The Assessing Officer accepted the returned income. However, the Principal Commissioner, after scrutinizing the assessment order, found that the deposits made by the Assessee were not properly examined. The Assessee argued that the assessment order was passed in haste without proper analysis. The Assessee relied on a judgment from the Hon'ble Bench at Agra to support their case. The Departmental Representative supported the impugned order as reasoned and appropriate.The Assessee claimed the deposits were made from trading and Girvi receipts. The Assessing Officer did not verify the opening balance of advances and its return by the borrowers, KYC documents, or reconcile bank accounts. The Assessee failed to provide necessary documentation, including a money lending license, to support the claim of Girvi receipts. The contention that books of account were produced during assessment proceedings was found to be untenable. The judgment relied upon by the Assessee was deemed factually dissimilar and not useful to their case. The Tribunal concluded that the Assessing Officer conducted a cursory inquiry without proper examination, justifying the Principal Commissioner's decision to reopen the case under section 263.The Tribunal dismissed the Assessee's appeal, upholding the Principal Commissioner's order as not suffering from any perversity, impropriety, or illegality. The decision was based on the lack of substantive reason or justification to interfere with the impugned order. The appeal was therefore rejected, and the order was pronounced in open court on 30/06/2022.