2023 (4) TMI 278 - AT - Income Tax

Appellate Tribunal quashes revision order, finds Assessee's explanations satisfactory

Sh. Suresh Chander Kapila Versus The Pr. CIT-1 Chandigarh

Sh. Suresh Chander Kapila Versus The Pr. CIT-1 Chandigarh - TMI Issues:The judgment involves the appeal against the order of the Principal Commissioner of Income Tax-1, Chandigarh under section 263 of the Income Tax Act, regarding the assessment order passed by the Assessing Officer.Grounds of Appeal:1. The Assessee challenged the order under section 263, arguing that the assessment order was not erroneous or prejudicial to the revenue's interest.2. The Assessee contended that detailed enquiries were conducted by the Assessing Officer on various aspects like cash deposits, salary payments, investments, and submissions were made before the Principal Commissioner.3. The Assessee claimed that detailed submissions were made during the proceedings under section 263, which were not adequately considered by the Principal Commissioner.4. The Assessee objected to the lack of specification by the Principal Commissioner on how the assessment order was erroneous or prejudicial to revenue's interest.Facts of the Case:The Assessee, running a Nursing Home, declared an income of Rs. 1,59,70,983 during the relevant year. The assessment was completed under section 143(3) of the Income Tax Act, and the Principal Commissioner initiated revision proceedings under section 263. The Principal Commissioner observed that necessary enquiries were not conducted by the Assessing Officer, leading to the revision proceedings.Assessee's Submissions:The Assessee provided detailed submissions, including:- Cash deposits during demonetization period.- Salary payments to doctors.- Interest-free advances to parties for specific purposes, supported by ledger accounts.Principal Commissioner's Observations:The Principal Commissioner noted discrepancies in the cash deposits made by the Assessee during demonetization. Despite the Assessee's explanations and submission of ledger accounts for various receipts, the Principal Commissioner was not satisfied with the cash book provided.Judgment:The Appellate Tribunal found that the Principal Commissioner's revisionary jurisdiction was unjustified. The Tribunal held that the Assessee had adequately explained the cash receipts and other issues before both the Assessing Officer and the Principal Commissioner. The Tribunal concluded that the Principal Commissioner's assumptions and lack of specific faults in the Assessee's explanations did not warrant revisionary action under section 263. The appeal of the Assessee was allowed, and the revision order under section 263 was quashed.Separate Judgment:No separate judgment was delivered by the Judges in this case.