ANAND KUMAR,KUBERPURI vs. PR.CIT-1, BHUBANESWAR

आयकर अऩीऱीय अधधकरण, कटक न्यायऩीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK (THROUGH VIRTUAL HEARING) BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER आयकर अऩीऱ सं/ITA No.133/CTK/2023 (ननधाारण वषा / Assessment Year : 2018-2019) Anand Kumar, Vs Pr.CIT, Bhubaneswar B-20, Kuberpuri, Aiginia, Bhubaneswar-19 PAN No. :ABZPK 7558 D (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) .. ननधााररती की ओर से /Assessee by : Shri P.K.Mishra, Advocate राजस्व की ओर से /Revenue by : Dr. Abani Kanta Nayak, CIT-DR सुनवाई की तारीख / Date of Hearing : 29/11/2023 घोषणा की तारीख/Date of Pronouncement : 29/11/2023 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order of the ld. Pr.CIT, Bhubanesar-1, dated 29.03.2023, passed u/s.263 of the Act in DIN & Order No.ITBA/REV/F/REV5/2022-23/1051581672(1), for the assessment year 2018-2019. 2. It was submitted by the ld. AR that the assessee is an individual engaged in the wholesale and retail trade of potato, onion and other agricultural products. It was the submission that the return of the assessee came to be processed and the assessment came to be framed u/s.143(3) of the Act on 17.12.2020, wherein the return submitted by the assessee was accepted. It was the submission that the assessment in the case of the assessee was on limited scrutiny assessment and the same was also been recognized by the ld. Pr.CIT in his order passed u/s.263 of

2 ITA No.133/CTK/2023 the Act. The reason for the limited scrutiny was on the large cash deposit in the bank account. The AO had examined the deposit in the bank account and had accepted the transaction of the assessee. It was the submission that the ld. Pr.CIT had issued a show cause notice u/s.263 of the Act on 25.11.2022, wherein he has raised the following issues in para 3, 3.1, 3.2 & 4 of his order :- 3. On verification of assessment record revealed from the notice u/s.142(1) that Rs.8,42,23,350/- was deposited in six bank accounts and assessee was asked to furnish source of cash deposit with documentary evidence. But no compliance was furnished in this regard. In spite of no compliance, scrutiny assessment was completed by accepting the returned income. 3.1. Further verification of assessment record, it is revealed from the computation of income and tax that gross business receipt shown by the assessee is Rs.44,75,747/- and it has computed income from the said business receipt u/s. 44AD of the I T Act @ 12% which comes to Rs. 5,41,059/-. 3.2. When assessee has not offered any explanation in respect of huge cash deposit of Rs. 8,42,23,350/-, the said cash deposit was required to be treated as business receipt of the assessee for the P.Y. 2017-18 relevant to A.Y. 2018-19. 4. Going through the Profit & Loss account for the year ending 31st March, 2018 submitted by the assessee, it is seen that assessee has shown Net Profit of Rs.17;27,424/- but had filed return of income showing total income at Rs. 6,99,690/-. During assessment proceedings u/s.143(3) of the Act, AO had accepted the returned income and completed the assessment as the assessee had not submitted the reply of notice u/s.142(1) of the Act. Hence Rs.10,27,734/-(Rs.17,27,424 - Rs.6,99,690/- should have been added to the total income of the assessee. 3. It was the submission that after considering the reply filed by the assessee, ld. Pr.CIT had in para 6.1.3.5 had accepted the contention of the assessee in regard to the cash deposit in the bank account of the assessee.

3 ITA No.133/CTK/2023 4. It was the submission that the ld. Pr.CIT went on to further set aside the assessment order with the direction to consider the other issues also which were not part of the limited scrutiny assessment. It was the submission that in view of the decision of the Hon’ble Jurisdictional High Court in the case of Shark Mines and Minerals (P.) Ltd., reported in [2023] 151 taxamnn.com 71 (Orissa) as the AO has examined the issue on which the limited scrutiny was made and the same has also been accepted by the ld. Pr.CIT in his order u/s.263 of the Act, the ld. Pr.CIT could not go into the issues which was not in the limited scrutiny to hold the order passed by the AO to be erroneous and prejudicial to the interest of revenue. 5. In reply, ld.CIT-DR vehemently supported the order of the ld. Pr.CIT passed u/s.263 of the Act. 6. We have considered the rival submissions. A perusal of the order of the ld. Pr.CIT clearly shows that it is an accepted fact that the original assessment order was a limited scrutiny assessment. It is also noticed that the ld. Pr.CIT has accepted the fact that the AO has considered the issues on which the limited scrutiny has been done and the proposed revision on the said issue which was the subject matter of the limited scrutiny has also been dropped by the ld. Pr.CIT. This being so, it is not open to the ld. Pr.CIT while exercising the power u/s.263 of the Act to find fault with the assessment order on the ground of it being the erroneous of an issue nor covered by the limited scrutiny when the AO could not possibly examine such an issue. This being so, respectfully following the principle laid down by the Hon’ble Orissa High Court in the case of Shark

4 ITA No.133/CTK/2023 Mines and Minerals (P.) Ltd., referred to supra, the order passed u/s.263 of the Act is held to be unsustainable and consequently the same is hereby quashed. 7. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 29/11/2023. Sd/- Sd/- (GIRISH AGRAWAL) (GEORGE MATHAN) ऱेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 29/11/2023 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतलऱपऩ अग्रेपषत/Copy of the Order forwarded to : अऩीऱाथी / The Appellant- 1. Anand Kumar, B-20, Kuberpuri, Aiginia, Bhubaneswar-19 प्रत्यथी / The Respondent- 2. Pr.CIT, Bhubaneswar 3. आयकर आयुक्त(अऩीऱ) / The CIT(A), आयकर आयुक्त / CIT 4. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, 5. ITAT, Cuttack गार्ड पाईऱ / Guard file. 6. सत्यावऩत प्रतत //True Copy// आदेशानुसार / BY ORDER,

(Assistant Registrar) आयकर अऩीऱीय अधधकरण, कटक/ITAT, Cuttack