TaxTMI 
TaxTMI 
2022 (10) TMI 1089
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....ns to assessment year 2010-11. 2. The brief facts of the case are that the original return of income was filed on 31.03.2011 declaring an income of Rs. 1,90,000/-, showing income of Rs. 1,20,000/- as income from Dairy farming and Rs. 70,000/- as Short Term Capital Gain on sale of buffaloes. Subsequently, on 25.3.2017, reasons were recorded for reopening of the assessment on the basis of information that during the captioned year the assessee had deposited cash in the bank account amounting to Rs. 67,83,000/-. Thereafter, the Assessing Officer (AO) issued a questionnaire requiring the assessee to explain the source of cash deposits in the bank account and after considering the response of the assessee, the Assessing officer accepted the r....
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....nts before the Assessing officer and had also explained each and every entry pertaining to the deposit of cash in the bank account but the same did not find favour with the Ld. PCIT and he proceeded to hold that the assessment order dated 30.6.2017 (passed u/s 143 (3) read with section 147 of the Act ) was erroneous as well as prejudicial to the interest of Revenue. The assessment order was set aside with the direction to the Assessing officer to pass a fresh order after considering the issues highlighted in the show cause notice. 2.1 Aggrieved, the assessee has now approached this Tribunal challenging the order passed u/s 263 of the Act by raising the following grounds of appeal: 1. That the Ld. PCIT, Patiala has erred in assum....
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....eedings, the Assessing officer had issued a query letter requiring the assessee to explain the source of bank deposits and in response to the same, the assessee had submitted copy of the bank statement and had also explained the transactions before the Assessing officer. It was submitted that the assessee had also filed a copy of the agreement for sale of plot at Rs. 37,00,000/- and it was also explained before the Assessing officer that the possession was given at the time of execution of the agreement and that the Assessing officer had not doubted the genuineness of the said agreement. It was submitted that each and every entry of the bank deposit had been explained by way of a letter during the course of assessment proceedings, a copy of....
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....receiving an audit objection(as was evident from the reading of the impugned order) and he relied upon the numerous judicial precedents, wherein, the Revisionary proceedings u/s 263 of the Act were held to be bad in law if the same were based on Audit objection. 4.0 Per contra, the Ld. CIT DR supported the order of the Ld. PCIT and vehemently argued that the fact remained that the bank deposit of Rs. 37,00,000/- had remained unexplained and the Assessing officer had not applied his mind to the issue at hand and had simply accepted the return of income. It was also submitted that the purpose of audit objection was to bring to notice the errors or omissions and the Ld. PCIT had issued show cause notice only after properly examining the iss....
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....ather. In our considered opinion, the entire documents furnished by the assessee in this regard before the Assessing officer as well in response to the show cause notice issued by the Ld. PCIT indicate that the claim of the assessee regarding the source of bank deposits is correct. The query letter issued by the AO indicates that the AO had duly applied his mind to the issue before him and further the assessee also had duly responded to the query raised by the Assessing officer in this regard and only thereafter the AO had accepted the return of income of the assessee. Therefore, on the facts of the case, it is our considered view, that there is no lack of inquiry on the part of the Assessing officer warranting invocation of revisionary pro....
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....ve already quashed the impugned order for the reasons mentioned in the preceding paragraphs, we are not inclined to adjudicate on the issue of legality of revisionary proceedings based on audit objection at the present juncture. 6.0 In the final result, the appeal of the assessee stands allowed. Order pronounced ON 06.05.2022. ============= Document 1 To The Income Tax Officer, Ward-1, Patiala. Sub: Assessment proceeding for the asstt. Year 2010-11. Reg: Surinder Kaur w/o Kundan Singh Nagra, Advocate #23, Preet Nagar, Patiala. PAN AQDPK4521B. Sir, With due respect it is submitted that above stated case is fixed before your honour on today. It is submitted that assessee family owns about 76 biga 13 biswa ag....