TaxTMI 
TaxTMI 
2023 (3) TMI 472
X X X X Extracts X X X X
X X X X Extracts X X X X
....incipal Commissioner of Income Tax has erred in law and on facts, stating in his order u/s 263 dated 23/03/2021 that return filed by assessee was accepted by the A.O. which is not correct as ITR filed by assessee was not accepted by A.O. and an addition of Rs. 523679/- was made by A.O. in the income of assessee vide assessment order dated 21.12.2018. 4. That having regard to the facts and circumstances of the case, Hon'ble Principal Commissioner of Income Tax has erred in law and on facts, stating in his order u/s 263 dated 23/03/2021 stating that perusal of assessment records reveals that source of cash deposits of Rs. 35,50,000/- has remained unverified /unexplained and that A.O. has finalised assessment without carrying out the necessary verification regarding source of cash deposited in bank account which is not correct the A.O. has made thorough verification of evidence of source of cash deposit submitted by assessee during the assessment proceedings and only after verification of cash deposit made by assessee the A.O. issued his Assessment order. 5. That having regard to the facts and circumstances of the case, Hon'ble Principal Commissioner of Income Tax ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as therefore issued to the assessee under section 263 of the Act, vide letter No.3145 dated 16.03.2021 as follows:- Please refer to the Assessment order in your case framed u/s 143(3)r.w.s. 147 of the Income Tax Act on 21.12.2018 at an income of Rs. 7,07,679/-. The perusal of the assessment order and on examination of record for the asstt. year 2011-12, the following points have been noticed:- "The proceedings u/s 147 of the Income Tax Act, 1961 for the Asstt.Year:2011-12 were initiated in your case as you did not file any information with respect to the source of cash deposited by you at Rs.35,50,000/- in your savings bank during the relevant period. In response to the notice u/s 148 of the Act, you filed the income tax return declaring income at Rs. 1,84,000/- on 27.08.2018. Assessment in your case was framed on 21.12.2018 u/s 143(3) of the Income Tax Act and return income was accepted. The perusal of the asstt. records reveals that the source of cash deposits of Rs.35,50,000/- has remained unverified/ unexplained. 2. Accordingly, in view of above facts and circumstances, it is apparent that the assessment has been finalized in your case by the then Ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he brief facts of the case are being placed before the Honorable Bench. That the assessment proceedings in the instant case were initiated vide Notice u/s 148 of the Income Tax Act dated 27/03/2018 (copy enclosed as Annexure 1.) In response to the notice return declaring an income of Rs. 184000/-was filed. Subsequent to that notice u/s 142(1) along with questionnaire were issued by the AO and during the continuance of the assessment proceedings the Counsel of the appellant duly attended the proceedings and the case was discussed with him. A perusal of para 2 Cash Deposits of the assessment order reads as under:- "As per information available with this office, Smt. Lata Narang was maintaining saving bank account number 2991000106021490 with Punjab National Bank, Basti Danishmandan, Jalandhar, wherein cash deposits of Rs.3500000/- were made during the year under consideration. Vide Notice u/s 142(1) questionnaire dated 08/10/2018 the assessee was asked to fde details of the bank accounts maintained and explain the source of cash with supporting documentary evidence. The assessee vide her replies dated 12/11/2018 and 12/12/2018 stated the source of cash depo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ady examined by the AO while passing the order u/s 147/143(3). Aggrieved by the findings of the PCIT-1 the appeal has been preferred and our submissions are as under:- That the PCIT-1 Jalandhar was not justified in initiating the proceedings u/s 263 for reexamining the cash deposit which had already been examined by the AO during the course of proceeding held u/s 147/148 as treating the order passed by the AO u/s 147/143(3) as erroneous and prejudicial to the interest of Revenue. The AO during the course of proceedings u/s 147/148 has enquired about the source of cash and after verification had passed the order u/s 147/143(3) which has been made part of the submissions supra. Thus when the issue has already been examined by the AO during the course of assessment proceedings, the fresh examination under garb of Section 263 by the PCIT is not called for .In the above case an order has been passed after making inquiry on an issue and after having examined the replies of the assessee with due application of mind. It is not the case where no inquiry was made. Therefore, such a case cannot be treated as a case of "no inquiry" and thus proceedings u/s 263 of the Act cannot be initiated in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....regard is placed on CIT vs. Sunbeam Auto Ltd. 332 ITR 167 (Del.). Where in it was held as under: - "One has to keep in mind the distinction between 'lack of inquiry' and 'inadequate inquiry'. If there was any inquiry, even inadequate, that would not, by itself, give occasion to the Commissioner to pass orders under section 263 merely because he has different opinion in the matter. It is only in cases of 'lack of inquiry' that such a course of action would be open. " Reliance is also placed on the decision of jurisdictional lTAT Amritsar Bench, in the case of M/s Roshan lal Vegetable Products Pvt. Ltd. vs. ITO, in ITA 06(Asr)/2010, for the proposition that where the relevant issues have duly been considered and adjudicated by the Assessing Officer while making the assessment, the CIT is not competent to re-adjudicate the same issue by invoking the provisions of section 263. The Hon'ble Delhi High Court in the case of CIT Vs. Hindustan Marketing and Advertising Co. Ltd [2012] 341 ITR 180 (Delhi) held as under:-"/?ev/s/o« - Powers of Commissioner - Assessment after enquiry -No error in order - Order cannot be revised on grou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... there is no reason why the assessee should be made to suffer the consequences of that lapse." (Emphasis supplied) Reliance is also placed on the decision of the Delhi High Court, which has been affirmed by the Supreme Court in the case reported as CIT vs. Kelvinator of India Ltd.: 320 ITR 561.To the same effect is the decision of the Delhi High Court in the case of CIT v.v. Anil Kumar Sharnur. 335 ITR 83, where it was held that "though the assessment order did not patently indicate that the issue in question had been considered by the assessing officer, the record showed that the assessing officer had applied his mind and once such application of mind was discernible from the record, proceedings under Section 263 of the Act would fall into the arena of the Commissioner having a different opinion, which was impermissible in law." The Honorable jurisdictional Amritsar Bench while disposing and allowing the appeal in I.T.A. No.75/Asr/2022 vide order dated 15/9/2022 in the case of Leela Gupta vs PCIT-1, Jalandhar has held that "During the notice u/s 142(1) the assessee submitted the relevant documents before the revenue authorities. On basis of these documen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r passed by the PCIT -1, Jalandhar u/s 263 would be cancelled." 5. Per contra, the Ld DR although supported the impugned order, however, he has not filed any rebuttal to the contention raised by the counsel. 6. Heard rival contentions, perused the material on record, impugned order, written submission and case law cited before us. It is noted that the AO based on AIR information stated that Smt. Lata Narang was maintaining saving bank account number 2991000106021490 with Punjab National Bank, Basti Danishmandan, Jalandhar, wherein cash deposits of Rs.3500000/- were made during the year under consideration. Appellants case was reopened by issuing notice u/s 148 of the act and subsequently, the assessee was issued Notice u/s 142(1) vide questionnaire dated 08/10/2018, she was asked to file details of her bank accounts maintained as above to explain the source of cash deposit therein with supporting documentary evidence. The assessee vide her replies dated 12/11/2018 and 12/12/2018 stated that the source of cash deposits in the bank accounts have been explained with supporting evidences as detailed mentioned in paras 2.1 to 2.4 of the order passed by the AO. The AO being satisfi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... proceedings, whose statement was recorded. In the statement recorded, he confirmed having made the said agreement; filed documents in support of advance given and further stated that the said agreement was subsequently cancelled as he couldn't get loan due to the fact that the property in question was not transferred in the name of Sh. Rajeshwar Kumar. He further stated that advance of Rs.20,00,000/- given in lieu of said agreement had been returned to him in the months of January 2011 and February 2011. 2.3 In view of above facts, the assessee, vide order sheet entry dated 19.12.2018, was asked to furnish the evidence of refund of Rs.20,00,000/- along with supporting documents. In response, the assessee filed detailed reply stating that the agreement was made by her husband, and the amount was refunded by him. Further, she filed the details of sources of payment made, along with copy of bank account of Sh. Rajeshwar Kumar, as under- Cash received from Lata Narang as per cash flow filed on 12/12/2018 9,60,000 Cash withdrawal from Salaried Saving Bank Account 1,00,000 Cash Withdrawal from Personal Saving Bank Account 4,50,000 Cash Received from fri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2011. 8. It is seen that in compliance to the show cause notice dated 16/03/2021 issue by the Ld. PCIT, the appellant has filed a detailed reply with supporting material evidence, however, the PCIT-1 has failed to consider and appreciate the documentary evidence. In our view, the Ld. PCIT ought to have rebutted the documentary evidences filed by the assesse and the view of the AO in accepting the source of cash deposits as explained by way of pointing out deficiencies and directing specific enquiries in respect of source of particular amount of cash deposit or the source of cash deposit of Rs.3550000/- remained unverified or unexplained. Meaning thereby, the PCIT's general and vague observation that the source of cash deposit of Rs.3550000/- remained unverified or unexplained and same need verification at assessment stage without appreciating the facts on record and holding the order passed by the AO to be erroneous and prejudicial to the interest of Revenue is against the intention of the legislation and bad in law. It is pertinent to mention that by way of the impugned order passed u/s 263, it can be said the PCIT-1 has attempted to made a case for reexamination of facts and e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ecause he has different opinion in the matter. It is only in cases of 'lack of inquiry' that such a course of action would be open". 12. On similar facts, the coordinate Bench has allowed the appeal in I.T.A. No.75/Asr/2022 vide order dated 15/9/2022 in the case of 'Leela Gupta vs PCIT-1', Jalandhar wherein it has held that- "During the notice u/s 142(1) the assessee submitted the relevant documents before the revenue authorities. On basis of these documents the order was passed by the Id. AO. It cannot be said that the issue was untouched and unverified by the assessing authority. Mere change of opinion an order cannot be called as erroneous. We directed that the order passed by the PCIT is unjust for, and the order is setting aside." Thus the action of the PCIT on this account is bad and the revision order passed deserves to be cancelled. The other issue which requires consideration of the Honorable Bench is that the assessee against the order passed by the AO had preferred an appeal before the CIT(A) challenging the addition made by the AO. During the pendency of the appeal the assessee opted for Vivad Se Viswas Scheme by filing form 1 and t....