IRSHAD AHMED ANSARI,NAGPUR vs. PRINCIPAL COMMISSIONER OF INCOME TAX - 2 NAGPUR, NAGPUR

The assessee has challenged the impugned order passed by Ld. Revisional Authority where the Ld. Revisional Authority has found the assessment order dated 22.09.2022 to be erroneous so far as prejudicial to the interest on the basis that the Assessing Officer had not made enquiries and Revisional Authority found the assessment order to be prejudicial to the interest of Revenue within the meaning of explanation 2(A) and 2(B) of Section 263 of the Act.

The case of assessee was selected for limited scrutiny on the issue of investment in immovable property and Assessing Officer had passed the assessment order dated 22.09.2022 by concluding that the assessee had invested `.65/– Lacs in an immovable property and out of which payment of `.28,20,000/– was made through cheques and amount of `. 36,15,000/– was made in cash and accordingly Assessing Officer found the cash component to be unexplained and further from the bank payment, amount of `. 5/– Lacs was

Ld. Revisional Authority, however, concluded that Assessing Officer has not made enquiry with regard to source of the deposit in the bank account which were used to make the payment through the banking mode and further Assessing Officer had also not made enquiry with regard to the genuineness of the agreement on the basis of which assessee had claimed the market value to determine the applicability of Section 56(2)(x)(b) of the Act.

Ld. AR has, however, relied on the paper book where various notices have been issued to claim that Assessing Officer had made sufficient enquiries.

Ld. DR, however, defended the impugned order by submitting that the enquiries were superficial and Assessing Officer had not enquired to the source of funds to deposit cash in the bank account and also there was no enquiry with regard to genuineness of the agreement thereby accepting the fresh market value of property as given by the assessee.

During the hearing, Ld. Counsel has also pointed out that in fact on 19.09.2024, a rectification order has been passed wherein following additions have been made.

Now, if we consider this rectification order dated 19.09.2024, it appears that the same has completely escaped the attention of Ld. Revisional Authority while passing the impugned order under Section 263 of the Act on 25.03.2025. Thus, the examination of record seems to have been an incomplete exercise and Ld. Revisional Authority seems to have gone on broad allegations to improve the case of the Department which is not the purpose of Section 263 of the Act.

In the light of aforesaid facts and circumstances of the case, we sustain the ground and allow the appeal and the impugned order is quashed.