Tribunal accepts appeal, rejects jurisdiction assumption, and restores original assessment.

The Tribunal condoned the delay in the appeal by the assessee, attributing a significant portion to the Covid-19 pandemic and accepted the appeal for adjudication. It found that the Assessing Officer had conducted proper inquiries during the original assessment, including verification of unsecured loans and tax credit mismatch. The Tribunal upheld the adequacy of the AO's inquiry and concluded that the assumption of jurisdiction under Section 263 by the Pr. CIT was unjustified. Consequently, the Tribunal quashed the Pr. CIT's order and restored the original assessment order, ruling in favor of the assessee.

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Issues Involved:
1. Condonation of Delay
2. Assumption of Jurisdiction under Section 263 of the Income-tax Act, 1961
3. Examination of Unsecured Loans
4. Tax Credit Mismatch
5. Adequacy of Inquiry by Assessing Officer

Summary:

Condonation of Delay:
The appeal by the assessee was delayed by 963 days. The Tribunal noted that 707 days were due to the Covid-19 pandemic, as per the Hon'ble Apex Court's order dated 10/01/2022, and should be excluded. For the remaining 256 days, the assessee claimed non-receipt of notices and orders on its registered email. The Tribunal, citing the liberal interpretation of "sufficient cause" from various judgments, including Collector Land Acquisition Vs. Mst. Katiji & Others and N.Balakrishnan Vs. M. Krishnamurthy, condoned the delay and admitted the appeal for adjudication.

Assumption of Jurisdiction under Section 263:
The Principal Commissioner of Income Tax (Pr. CIT) invoked Section 263, claiming the assessment order was erroneous and prejudicial to the revenue. The Tribunal examined whether the Assessing Officer (AO) had conducted proper inquiries during the original assessment. It was found that the AO had indeed raised specific queries and received detailed responses from the assessee, including documents verifying the unsecured loan and tax credit mismatch.

Examination of Unsecured Loans:
The Pr. CIT questioned the unsecured loan of Rs. 1.70 Cr from M/s. Aakansha Tradevin Pvt. Ltd., alleging inadequate verification by the AO. However, the Tribunal found that the assessee had provided necessary documents, including the loan creditor's income tax return, to the AO during the assessment, which were duly examined.

Tax Credit Mismatch:
The Pr. CIT noted discrepancies in tax credit claimed in the ITR and available in Form 26AS. The Tribunal found that the assessee had addressed these discrepancies in its response to the AO, explaining the minor differences due to timing issues in TDS deposits.

Adequacy of Inquiry by Assessing Officer:
The Tribunal emphasized that the AO had conducted detailed inquiries and had applied his mind to the issues raised. The Pr. CIT did not conduct any independent inquiry to support his findings. The Tribunal cited various judicial precedents, including Malabar Industrial Co. Ltd. vs. CIT and Income Tax Officer vs. DG Housing Projects Ltd, to conclude that the Pr. CIT's assumption of jurisdiction under Section 263 was unjustified.

Conclusion:
The Tribunal quashed the order passed by the Pr. CIT under Section 263 of the Act and restored the original assessment order passed under Section 143(3) dated 25/07/2017, thereby allowing the assessee's appeal.

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