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TMI Blog2022 (10) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... been made by the appellant on the basis of which deduction has been claimed whereas the appellant has neither made any investment nor claimed any deduction during the relevant assessment year. 3. That Learned Pr. CIT was not justified to set aside the assessment order to the file of the Learned Assessing Officer to pass fresh assessment order without coming to any firm conclusion as to how the order was erroneous in as much as prejudicial to the interest of the Revenue." 2. Briefly the facts of the case are that the assessee filed his return of income declaring total income of Rs. 12,20,350/- which was taken up for limited scrutiny to examine substantial increase in capital and the assessment was thereafter completed under section 143(3) of the Act, and income was assessed at the returned income. Thereafter, on examination of assessment order and the facts on record, certain discrepancies were noted by the Ld. Pr. CIT and after issuing the show cause notice and taking into consideration the submission so filed by the assessee, the assessment order so passed by the AO was set aside to pass a fresh order after making the necessary inquiry / investigations in light of the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy of the capital account and to explain the source of addition made to the capital account. In response to the said notice, it was submitted that the assessee vide his submission dt. 03/10/2018 has submitted that the addition in the capital account was on account of Rs. 2,20,43,305/- received as gift by the assessee from his son who is in Melbourne, Australia through NEFT made from Commonwealth Bank on 24/11/2015 and 04/12/2015 and in support, copy of the bank statement of the assessee was also furnished. 2.5 Further, our reference was drawn to the further query raised by the AO wherein the AO has asked the assessee to furnish the name of son of the assessee and his occupation in Melbourne, and documentary evidence establishing the relationship of father and son in the form of copy of the Passport and a confirmation from his son that he had made the gift of particular amount as so claimed by the assessee. In response, the assessee vide his submission dt. 11/10/2018 submitted the name of his son, Shri Gagandeep Singh Sachdeva and stated his occupation as door to door marketing and telemarketing of electricity, gas, solar and education in Melbourne. Further, a copy of the passpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned order thus deserve to be dismissed. 3.1 Regarding the contention of the ld AR that the revision proceedings have been initiated on the basis of proposal received from the AO, it was submitted by the ld CIT/DR that it is not in dispute that a proposal has been sent by the AO for consideration of the ld PCIT and the same is a routine administrative practice in the department where such proposals are sent by the AO to the higher authorities. At the same time, it was submitted that it is incorrect to hold that the revision proceedings have been initiated merely based on the proposal sent by the AO. Our reference was drawn to para 1 of the impugned order and it was submitted that on examination of assessment records and after due application of mind, the ld PCIT felt that the assessment order so passed by the AO is erroneous and prejudicial to the interest of the Revenue and basis the same, the proceedings under section 263 were initiated and a show-cause was issued to the assessee. It was accordingly submitted that the contention so advanced by the ld AR doesn't have any merit and deserve to be dismissed. 3.2 On merits, it was submitted by the ld CIT/DR that the assessee allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O was not justified in accepting the gifts without making further inquiry about credit worthiness of the donors as well as source of funds. 3.4 Further reliance was placed on the decision of Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Rippen Ahuja [2014] 49 taxmann.com 261 wherein it was held that where assessee except averring in his reply that donors were his family friends and had abundant source of income did not produce any evidence to prove genuineness of gift, Commissioner had rightly set aside assessment. 3.5 Further, reliance was placed on the decision of Allahabad High Court in case of Govind Prasad Agarwal Vs. CIT, Aligarh [2014] 41 taxmann.com 521 wherein it was held that where the AO allowed the assessee's claim of gift without examining the credit worthiness of donor and without considering the fact that there was no relationship between the assessee and the donor and therefore there did not seem to be any occasion for giving a gift, the order so passed by the AO was held as erroneous and was rightly set aside by the Commissioner in exercise of its revisional power under section 263 of the Act. 3.6 Further reliance was placed on the decision of Calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refer to the well-established jurisprudence laid down by the Hon'ble Courts in this regard from time to time. The Hon'ble Calcutta High Court in case of Smt. Sumitra Devi Khirwal Vs. CIT (1972) 84 ITR 26 had an occasion to examine similar contention on behalf of the assessee in that case that where it was contended that the Commissioner did not himself call for any records but certain records were placed before him and he acted thereon and therefore, the whole proceedings are vitiated. The Hon'ble High Court didn't agree with the said contention and held that merely because the records were put up before the Commissioner by his subordinates, the same is no reason to bar the Commissioner from exercising the powers under section 33B of Act of 1922, which corresponds to section 263 of the Act of 1963 and the relevant findings of the Hon'ble High Court read as under: "The next contention of Mr. Saraf is that under section 33B it is the duty of the Commissioner to call for and examine the record of any proceeding and if he considers upon such examination that the Income-tax Officer's order is erroneous in so far as it is prejudicial to the interests of the revenue he may exercise his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o place the relevant material or information before the Commissioner. There is no bar to the Income-tax Officer bringing that material to the notice of the Commissioner. What cannot, however, be denied is that the Commissioner must apply his mind to the material placed before him and satisfy himself that it is a case where he ought to exercise his revisional power. Then he may issue a show cause notice and, after affording an opportunity to the affected parties, pass final orders." 4.3 In case of Alfa Laval Lund AB (Supra), we find that the Coordinate Pune Benches didn't have the benefit of aforesaid decisions rendered by the Hon'ble Calcutta and Allahabad High Court. Further, we find that in that case, the findings of the Coordinate Benches were apparently guided by the fact that in the order so passed u/s 263 of the Act, there is a mention that a proposal for revision under section 263 has been received from DCIT(IT)- Pune and later on, on the basis of said proposal, the proceedings u/s 263 were initiated and also finally concluded. In other words, whether there was due application of mind on part of the ld CIT after receipt of proposal from the DCIT(IT) was apparently not disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation regarding creditworthiness of his son was filed except that he is engaged in door to door & telemarketing in Melbourne. Even the Assessing Officer did not enquire about creditworthiness of lender/donor. The Assessing Officer even did not insist for statement of bank account of assessee's son. In the absence of these documents /information, creditworthiness of assessee's son is not proved which is required as per provisions of section 68 of I.T. Act, 1961. No further enquiries were made during assessment proceedings which led to underassessment for amounting to Rs. 2,20,43,305/-. 4. In view of the facts stated above, it is noted that there has been omission on the part of the A.O. to investigate the issue as mentioned in above para(s). The order thus passed by the A.O. without making inquiries or verification which should have been made [explanation 2(a) of section 263(1) of the Income Tax Act, 1961] the order passed by the Assessing officer is erroneous in so far as it is prejudicial to the interest of the Revenue." 4.5 We therefore find that a prima facie finding has been recorded by the ld PCIT based on perusal of the assessment records that the Assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the gift transaction. As we have stated earlier, the fact that the money has been remitted through the Commonwealth bank account and has been received in the assessee's bank account doesn't establish the nature of the gift transaction rather it only demonstrate the mode and manner of making the payment. The passport do reflect the relationship of father and son, however, the question is what are the circumstances which necessitated such transaction of sending money by way of gift from Melbourne on two different occasions. The so called confirmation letter which is undated, handwritten and the contents thereof only talks about transfer of money by a son to his father from the Commonwealth Bank account on two different dates and the amount of transfer doesn't inspire much confidence and in any way doesn't establish the nature of such transfer as gift by son to his father. The fact that the AO has accepted the same on face value shows clearly non-application of mind by the AO. 4.8 Nothing has been called for by the AO nor there is anything on record to establish the financial capacity or creditworthiness of the son to make such payment. Therefore, where the ld PCIT states in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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