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TMI Blog2025 (1) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the order u/s 263 and further, it has been stated that the CA, Rakesh Bansal had not been handling the appellate work at all and as such, had no knowledge of the same. It was also stated that after the order was passed u/s 143(3) r.w.s. 263 vide order dated 27.02.2023, there was a demand raised by the A.O.. The assessee got a call in March, 2024 from the Income Tax Department regarding the arrears of demand on the basis of the order passed by the A.O. dated 27.03.2023 u/s 263 /143(3) and, thereafter, the assessee consulted another Counsel and on enquiry, about the status of filing the appeal, against the order u/s 263 as passed by the PCIT dated 25.02.2022, it was appeal, against the order u/s 263 as passed by the PCIT dated 25.02.2022, it was stated by the assessee that no appeal has been filed as advised by the earlier counsel CA, Rakesh Bansal, and, thus, there was a delay in filing of appeal, which was a bonafide, on the basis of the wrong advice given by the CA, Rakesh Bansal. Reliance has been placed in the judgment of "Esha Bhattacharya" in Civil Appeal No. 8183 of 2013, in which, it has been held that delay are required to be condoned, as the assessee does not gain any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 6. On merits, it was argued by the ld. Counsel that the assessee had not filed the return of income for the AY 2011-12, since the income was below the taxable limit. Notice u/s 148, dated 30.03.2018 was issued and the case of assessee was reopened u/s 148 on account of investment in the immovable property for Rs. 1.10 crore and cash deposit of Rs. 43,52,100/- in the saving bank account with ICICI Bank. During the course of original assessment proceedings, assessee filed a reply dated 10.09.2018, stating that he had received a property from his wife, which was purchased by her in the year 2005 and filed original GPA in favour of his wife, Smt. Kanchan Aggarwal for the same immovable property and the said GPA was executed on 28.02.2005. The payment of the same to the tune of Rs. 1.10 crore was made by the wife in that year only and that GPA was registered with the revenue authorities. Thereafter, in the year under consideration on 03.12.2010, on the strength of the same GPA a sale deed was executed in favour of the assessee, from the original owner of the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money of Rs. 11,00,000/- was received in cash which was deposited in his bank account. Therefore, it is clear that the assessee had furnished all the details regarding cash deposit which was on record only. Further, it is submitted that the assessee has furnished the cash flow statement (copy enclosed and explained the debit credit entries during the year which was placed on record. Therefore, this para is not acceptable. Keeping in view the facts, objections may kindly be settles. 9. It was argued vehemently that such report of the A.O. to the audit party is part of the 'record' with the A.O., before the issue of the notice u/s 263 as per clause (b) of Explanation 1 to Section 263. 10 It was also argued that notice u/s 263 was originally issued on 04.03.2021/05.03.2021, in which there was only one issue raised by the Ld. PCIT with regard to bank account with 'ICICI Bank'. According to PCIT, the source of the said bank account had not been considered, while framing the assessment. None appeared before the Ld. PCIT, Panchkula in response to the notice u/s 263 and ex-parte order was passed by the ld. PCIT on 18.03.2021. The assessee filed an appeal before the Chandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no independent application of mind by the Ld. PCIT, which is borne out from the facts as highlighted above and assessee relied upon the following judgments to demonstrate that provisions of Section 263 of the Act cannot be invoked on the basis of the audit objections: a. Case of Punjab a Haryana High Court, Shri Surinder Pal Singh. vs. PCIT in ITA No 57/CHD/2021. b. Ganga Plywood Ltd., vs. PCIT in ITA No.196/Chd/2021 c. Jaswinder Singh vs. CIT [2013] 31 taxmann.com 80 (Chandigarh - Trib.) d. Shri Sartaj Singh vs. PCIT in ITA No. 154/Asr/2015 order dated 25.02.2016 (Asr Bench) e. CIT vs. Cyber Park Development & Constructions ltd., [2020] 122 taxmann.com 82 (Karnataka) f. M/s Dashmesh Motors vs. PCIT in ITA No. 187/Asr/2015 order dated 23.05.2016 (Asr bench) g. Shri Vikram Kaswan vs. CIT in ITA No. 519/Chd/2014 order dated 08.03.2016 (CHD Bench) 15. It was further argued that even otherwise, the ICICI Bank account, in which, the deposits were made were part and parcel of the original assessment proceedings, for which, 'annotated report' was on record and the execution of the immovable property by the assessee had been duly explained during the course of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... main reason for issue of notice u/s 148 of the IK.T. Act, 1961 to verify the following issues:- a). The assessee had made investment in immoveable property at Rs. 1,10,00,000/- + registration charges. b). Source of cash deposit of Rs. 43,52,100/- made in saving bank account maintained with ICICI Bank Ltd." 10.09.2018 i). The assessee filed the return in response to notice u/s 148 and also objected to the reopening u/s 148. ii). Further, assessee submitted that he had received the property from his wife, which was purchased by her in February 2005, under GPA. GPA is duly registered and such documents have been placed in the paper book at pages 2 to 20. iii). Further, the payment has been made at the time of execution of GPA on 28.02.2005. The said GPA is duly registered at that time. The sale deed was executed in favour of assessee, Sh. Vaneet Gupta in the year under consideration and the same was executed by the Original owner of the property, through GPA, Smt. Kanchan Aggarwal, Wife of Sh. Vaneet Gupta, mentioning the same consideration of Rs. 1,10,00,000/- as per consideration in the year 2005. October 2018 Another reply was submitted, explaining, certain deposits in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jection of the audit party as reproduced above. At the time of original assessment proceedings, even the investment in the immovable property were duly taken into consideration by the Assessing Officer. The relevant documents are part of the record of the Assessing Officer as per the clause (b) of Explanation 1 of Section 263 record, shall include and shall be deemed always to have included all records relating to any proceedings under this Act, available at the time of examination by the Principal Commissioner of clearly establishes that even the annotated report as sent by the A.O. to the audit party dated 24.10.2019 had to be considered as a part of the 'record'. Further, we find that though the A.O. has not agreed with the audit objection, the ld. PCIT initiated the proceedings u/s 263 vide notice u/s 263 dated 5/4.03.2021. The only issue raised was about the 'ICICI Bank' account having not been examined by the A.O. The issue was raised by the Audit party and, thus, the PCIT had only initiated proceedings u/s 263 on the basis of 'Audit objection' and which is not permitted as per the judgment of the Hon'ble Chandigarh Bench, where the judgment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 was initiated on the basis of same audit objection which was not warranted by law as held by Punjab & Haryana High Court in the case of 'CIT V Sohana Woollen Mills', 296 ITR 238 and in this respect filed a copy of the case law reported at 296 ITR 238. The learned AR submitted that detailed submissions were filed with CIT along with relevant case laws but learned CIT ignored all the submissions and judgments and finalized the assessment u/s 263. In view of the facts and circumstances the learned AR submitted that order passed by leaned CIT u/s 263 be quashed". 20. Similar, are the judgments as cited 'supra' of Karnataka High Court and various other Coordinate Benches of the Tribunal, and we find ourselves in agreement with the above said judgments and accordingly, the order as passed by the ld. PCIT, deserves to be quashed. 21. Further, it is also a fact on record that original order u/s 263 dated 18.03.2021 was set aside by the ITAT vide order dated 20.12.2021 and thereafter, though, the PCIT had issued the fresh notice dated 19.01.2022, raising the same issue of ICICI Bank account, but, thereafter, she had issued another notice u/s 263 dated 17.02.2022, raising certain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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