Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (5) TMI 189 - AT - Income TaxRevision u/s 263 - cash deposits in his bank account -whether the Ld. PCIT was justified u/s 263 in setting aside the assessment order and directing the A.O. to make more/further enquiries? - HELD THAT:- Notices issued by the A.O. and replies thereto furnished by the assessee reveal that all the queries raised by the A.O. including about the source of deposits were duly answered by the assessee supported with the documentary evidence. PCIT was of the view that the A.O. had not made the requisite enquiries. However, in reply to the show cause notice, when the assessee had shown from the record that the necessary enquiries were made by the AO and the AO had applied his mind and the view adopted by him was one of the possible views, then without considering the reply of the assessee and without recording his reasoned disagreement/dissatisfaction there to, it was not open to the Ld. PCIT to brand the order of the A.O. as erroneous. Admittedly, the AO asked the assessee to furnish the necessary details from time to time which were duly furnished by the assessee and after considering the same the AO passed the assessment order. Second step for the Ld. PCIT, as per the provisions of section 263 before passing an order of modifying, enhancing or cancelling the assessment, he was supposed either to himself make or cause to make such an enquiry as he deems necessary. The words “as he deems necessary”, in our view, do not mean that the Ld. PCIT was left with a choice either to make or not to make an enquiry. As per the relevant provisions of section 263, it was incumbent upon the Ld. PCIT to make or cause to make an enquiry. So far as the words “as he deems necessary” are concerned, the said words suggest that the enquiries which are necessary to form a view as to whether the order of the AO is erroneous and prejudicial to the interest of Revenue or not? Admittedly, in this case also, the Ld. PCIT had asked the assessee to furnish the necessary details and explanations, to which the assessee had given a pointwise detailed reply. We agree with the submissions of assessee as to when there was no such issue or fact on the file regarding the source of any investment made by the assessee, where was the question of examining the issue on purely and imaginary suspicions. Opening cash in hand was carried/ brought forward from the closing cash in hand of the previous assessment year. DR could not convince us as to how the Ld. PCIT was justified to direct the A.O. to make enquiries regarding the source of cash in hand of the previous assessment year in the assessment proceedings for the subsequent year i.e. in the assessment year under consideration - regarding the source of the amount received from Smt. Gulshan Gupta and Ranjan Gupta, the assessee duly explained that the same were the repayments of the amounts earlier received by them from the assessee. Then the Ld. PCIT observed that no interest has been charged by the assessee from Smt. Gulshan Gupta and Mr. Ranjan Gupta. We fail to understand how this fact was relevant, when there was neither any observation made by the A.O. nor by the Ld. PCIT that assessee had used interest bearing funds to give advances to Smt. Gulshan Gupta and Mr. Ranjan Gupta. PCIT did not even bother to consider reply and details furnished by the assessee what to say of calling for any enquiry etc. PCIT has directed the A.O. to make further fishing and roving enquiries which even do not germane from the facts and issues involved. Even we find that the Ld. PCIT has directed the A.O. to make further fishing and roving enquiries which even do not germane from the facts and issues involved. In the case of “CIT vs. G.M. Mittal Stainless Steel (P) Ltd. [2002 (12) TMI 13 - SUPREME COURT] has observed that the satisfaction by the Commissioner must be one objectively justifiable and based on material either legal or factual when available, it cannot be mere ipse dixit of the Commissioner. Order of the Commissioner exercising jurisdiction u/s 263 cannot held to be sustainable in law and the same is accordingly set aside. - Decided in favour of assessee.
|