SHRI R. KARTHIGEYAN (INDL.),NAMAKKAL vs. ACIT, CIRCLE-1, NAMAKKAL

This appeal filed by the assessee is directed against the order of the ld. Principal Commissioner of Income Tax, Salem dated 20.03.2020 relevant to the assessment year 2010-11 passed under section 263 of the Income Tax Act, 1961 [“Act” in short].

Facts are, in brief, that the assessee has filed his return of income on 16.07.2010 admitting an income of ₹.7,18,133/-. As per the AIR information, the assessee has deposited a sum of ₹.7,79,901/- in saving bank account maintained at ICICI Bank. In response to the notice under section 148 of the Act, the assessee filed his return of income and also assessee’s father stated that his son was working in TCS as software engineer and receiving salary through his bank account. On perusal of the Form 16 issued by the TCS and bank statement in proof of receiving salary, the Assessing Officer has accepted that no suspicious cash was deposited in his bank account except salary receipts and concluded the assessment under section 143(3) r.w.s. 147 of the Act.

Subsequently, the ld. PCIT has issued notice under section 263 of the Act on the ground that the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of Revenue as the Assessing Officer has not made any enquiry.

Against the revision order under section 263 of the Act, the assessee preferred an appeal before the Tribunal. The ld. Counsel for the assessee has submitted that after making detailed enquiry, the Assessing Officer has completed the assessment under section 143(3) r.w.s. 147 of the Act and prayed for quashing the revision order passed by the ld. PCIT.

On the other hand, the ld. DR supported the order passed by the ld. PCIT.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, the Assessing Officer has made a detailed enquiry in respect of the very same amount of ₹.7,79,901/- and after considering the detailed explanation from the assessee, the assessment was completed under section 143(3) r.w.s. 147 of the Act. The ld. PCIT, by exercising the power conferred upon section 263 of the Act, directed the Assessing Officer to redo the assessment as no enquiry was made. In our opinion, the order passed by the ld. PCIT is not correct. In fact, the Assessing Officer has made detailed enquiry with assessee’s father and verified Form 16 issued by the TCS and bank statements, etc. as required in this case and thereafter, the Assessing Officer has accepted that there was no suspicious cash deposit in assessee’s bank account except salary receipts and concluded the assessment under section 143(3) r.w.s. 147 of the Act. Thus, we are of the considered opinion that the revision order passed under section 263 of the Act is liable to be quashed and accordingly, we quashed the order.

In the result, the appeal filed by the assessee is allowed.