Rajasthan High Court - Jodhpur
Pr. Commissioner Of Income Tax vs Dilip Kumar Swami on 26 April, 2019
Bench: Sangeet Lodha, Abhay Chaturvedi
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Income Tax Appeal No. 19/2018
Pr. Commissioner Of Income Tax, Bikaner.
----Appellant
Versus
Shri Dilip Kumar Swami S/o Shri Harsukh Dass Swamin, Ward
No. 05, Suratgarh Rajasthan
----Respondent
For Appellant(s) : Mr. K.K.Bissa with Mr.G.S.Chouhan
For Respondent(s) : Mr. Sharad Kothari
HON'BLE MR. JUSTICE SANGEET LODHA
HON'BLE MR. JUSTICE ABHAY CHATURVEDI Judgment 26/04/2019
1. This appeal is directed against order dated 19.5.17 of the Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, Jodhpur, whereby the appeal preferred by the respondent-assessee against the order dated 28.3.16 passed by the Principal Commissioner of Income Tax (Appeals) [PCIT(A)], Bikaner under Section 263 of Income Tax Act, 1961 (for short "the Act") setting aside the order passed by the Assessing Officer (AO) and directing him to examine the case afresh after giving opportunity to the assessee, has been allowed.
2. The facts relevant are that during financial year relevant to Assessment Year(AY) 2009-10, the assessee made cash deposits of Rs.33,31,700/- in his Saving Bank account maintained with the State Bank of India (SBI) Branch-Suratgarh. The assessee was asked to explain the source of the said deposit but he did not file any reply. The assessee was served with notice dated 22.4.13, issued under Section (Downloaded on 28/06/2019 at 12:46:08 AM) (2 of 5) [ITA-19/2018] 148 of the Act, in response whereof the assessee vide letter dated 9.7.13 submitted that he had already filed his return of income for AY 2009-10 in the office of ITO, Suratgarh on 29.9.09 declaring income of Rs.1,91,680/-. Notice under Section 147/143(2) was issued and served on the assessee, in response thereto, Authorised Representative of the assessee appeared before the AO and supplied the required information. The assessee submitted that the amount in the said bank account was deposited out of the amount received from various purchasers against the sale of the goods i.e. tractor and accessories thereof. The copies of the bills issued on account of sale of tractors were also placed on record. The assessee stated that in the bank statement, the entries appearing are through transfer from another bank accounts of customers for purchase of tractors either by cheque or other mode. The AO found that the entries appearing in the bank statement are verifiable from the cash book and also the bills produced by the assessee. The deposits being reconciled, the AO arrived at the finding that no other addition is feasible. Accordingly, the income shown by the assessee at Rs.1,91,680/- was accepted vide Assessment Order dated 30.12.13.
3. The records of the assessment year in the question were called for and examined by the PCIT(A), who after examination of the record, being of the opinion that order dated 30.12.13 passed by the AO is prejudicial to the interest of Revenue issued a show cause notice under Section 263 of the Act to the assessee on 5.2.16, raising the issue regarding the cash deposits of Rs.33,31,700/- being not satisfactorily explained by the assessee and failure of AO to bring the same to tax. That apart, the issue with regard to withdrawal of meagre Rs.57,525/- by the assessee towards household expenses considering the same to be very low keeping in view the financial status of the assessee was also raised. After due consideration, the PCIT(A) vide order dated 28.3.16 set aside the Assessment Order dated 30.12.13 passed by the (Downloaded on 28/06/2019 at 12:46:08 AM) (3 of 5) [ITA-19/2018] AO and restored the case to the AO for examination afresh in light of the observations made in the order after giving an opportunity of hearing to the assessee.
4. Aggrieved by the order passed by PCIT(A) as aforesaid, the assessee preferred an appeal before the ITAT, which has been allowed by the order under appeal dated 19.5.17 and while setting aside the order passed by the PCIT(A) under Section 263 of the Act, the order passed by the AO dated 30.12.13 under Section 147/143(3) of the Act, has been restored. Hence, this appeal.
5. The ITAT arrived at the finding that from bare perusal of the show cause notice, it is evident that PCIT(A) has not applied its mind and it was not even sure as to whether the AO has examined the issues and if examined, he has not taken the same to the logical end. Accordingly, while holding the notice to be invalid and the revisional proceedings under Section 263 as void ab initio, the appeal preferred by the assessee was allowed.
6. Learned counsel appearing for the appellant contended that though the AO obtained the information in respect of sources of the cash deposits made in Saving Bank Account of the assessee, no inquiry was made that the part of the deposits were made out of the amount received from the purchasers of the tractors and spare parts and not even the confirmation of the purchasers were obtained and thus, the reasoned order passed by the PCIT(A) under Section 263 of the Act was not required to be interfered with by the ITAT. Learned counsel submitted that order impugned passed by the ITAT ignoring the material on record is ex facie illegal and deserves to be set aside.
7. On the other hand, the counsel appearing for the respondent submitted that on the basis of the information supplied by the assessee, the AO after conducting a proper inquiry arrived at a categorical finding that the entries appearing in the bank account of the assessee were (Downloaded on 28/06/2019 at 12:46:08 AM) (4 of 5) [ITA-19/2018] verifiable from the cash book and also the bill produced by the assessee and thus, the reason assigned for initiating the proceedings under Section 263 of the Act by the PCIT(A) were apparently contrary to record and thus, the ITAT has committed no error in setting aside the proceeding initiated by the PCIT(A) as invalid and void ab initio. Learned counsel would submit that in view of the categorical finding arrived at by the AO, affirmed by the ITAT no substantial question of law arises for consideration of this court in the present appeal.
8. We have considered the rival submissions and perused the material on record.
9. Indisputably, the power of revision of orders passed by the AO under Section 263 of the Act is in the nature of supervisory jurisdiction which is permissible to be exercised only when the two circumstances specified therein are satisfied; (i) the order passed by the AO is erroneous and (ii) on account of order being erroneous, prejudice has been caused to the interest of revenue.
10. In the instant case, while recording the conclusion that the order passed by the AO is erroneous and prejudicial to the interest of the revenue, apparently the record of the assessment proceedings was not examined by the PCIT(A) in its entirety and objectivity. The PCIT(A) while relying upon certain decisions of the High Court has merely recorded its ipse dixit that the AO has not examined the genuineness of the deposits claimed in the name of various persons.
11. A perusal of the order passed by the AO reflects that the conclusion arrived at that the deposits stand reconciled was preceded by a proper inquiry. The office note appended to the Assessment Order categorically records that the assessee had produced the statement of the bank account, the copies of the bills issued to the purchasers of the tractors as also the books of account showing the entries of the deposits made in the bank. It is pertinent to note that the assessee had (Downloaded on 28/06/2019 at 12:46:08 AM) (5 of 5) [ITA-19/2018] produced the bank statement showing that entries appearing are through transfer from another bank accounts from the account of customers for purchase of tractors either by cheque or other made. That apart, after perusal of the record, the AO recorded the categorical finding that entries in the bank account are verifiable from the cash book and also the bills produced by the assessee. In this view of the matter, ignoring the factum of inquiry by the AO, the material on record and the conclusions arrived at , the proceeding initiated by the PCIT(A) under Section 263 of the Act without application of mind, has rightly been held invalid by the ITAT.
12. In view of the discussion above, no substantial question of law arises for consideration of this court in the present appeal.
13. The appeal is therefore, dismissed. No order as to costs.
(ABHAY CHATURVEDI),J (SANGEET LODHA),J
38-Aditya/-
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