TaxTMI 
TaxTMI 
2022 (6) TMI 1002
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....w, the ld. Principal Commissioner of Income-tax has erred in setting aside the assessment order passed on 10/12/2018 u/s 143(3) of the Income-tax Act, 1961" "2. In the facts and circumstances of the case and in law, the ld. Commissioner of Income-tax (Appeals) has erred in not adverting upon the written submissions and evidences enclosed therewith filed during proceedings u/s 263 of the Act and in cancelling the assessment solely on the basis of suspicion without any cogent material" "3. In the facts and circumstances of the case, the impugned order is arbitrary and bad in law" "4. The appellant craves leave to add, alter or omit all or any grounds of appeal in the interest of justice" (Emphasis Supplied) 4. Before getting the ball rolling, we shall make a mention that, the instant appeal was filed after the expiry of statutory period with a delay of 74 days (approx.), however in the light of direction of Hon'ble Apex Court vide MA 21 & 29 of 2022, MA 665 of 2021 and Suo-motu WP 3 of 2020, the said delay falls within the permitted relaxation period of limitation i.e. between 15/03/2020 to 28/02/2022, consequently the appeal is allowed and proceeded. 5. The facts as accentua....
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....dvanced arguments supporting the grounds of appeal and assailed the revisional jurisdiction and adverting the copy of notice issued u/s 142(1) drawn our attention to the contents of Annexure attached therewith, the reproduction of which makes it necessary for adjudication of matter; a. To file computation of income b. To explain the nature of business c. To file personal balance sheet and capital account d. To give bifurcations with evidence of the assets and liabilities shown in the balance-sheet and e. To furnish justification for high value of cash in hand of shown during the year. 7.4 Ld AR methodically taken us through paper book filed before the bench, to showcase the submission made consisting of audited financial statement, copy of cash book for the year under consideration, bank statements, ledger account of both the debtors from the considerable cash claimed to have received, copy of capital account and written submission substantiating with reasoning the cash position as at the closure of the financial year. 7.5 Appreciating the submission of the assessee ostensibly, the Ld on being satisfied with assessee's claim of closing cash balances, the assessment u/s ....
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....verbatim as it stood and applicable to the AY under consideration; 9.1 "263. Revision of orders prejudicial to revenue - (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (Emphasis Supplied) 9.2 A plain reading of this provision makes it clear that, the precondition to exercise revisionary jurisdiction by the PCIT/CIT suo moto under it, is that the order of AO is erroneous insofar as it is prejudicial to the interests of the revenue is concern. Consequently, the provision mandates the satisfaction of e....
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.... and d. There should be even-handed application of mind by the adjudicating authority in reaching out the allowability or dis-allowability of claim under consideration, e. And finally, the adjudication must ensure the correct application of law as regards to aforesaid upholding the principle of natural justice. 10. In the instant appeal, considering the facts of the case extenso, we find that, pursuant to explicit queries raised by the Ld AO, the unreserved submissions were made by the appellant and a consequential due inquiry into the substantial closing cash balance were carried out without finding any cavilling evidence with respect thereto and flag end receipt from aforementioned debtors. In the absence of adverse finding on the subject of limited scrutiny, the Ld AO completed the assessment accepting the returned income without any addition. 11. However the Ld PCIT doubting the action of lower tax authority merely redid the exercise and formed adverse opinion on the same facts & circumstances, without any refuting material on record to demonstrate fulfilment of twin conditions. 12. The Hon'ble Bombay High Court while adjudicating the similar issue in the case of CIT Vs ....