SMT. PRITI SOMANI,SIKKIM vs. I.T.O.,WARD-3(1), GANGTOK

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ITA 2505/KOL/2019Status: DisposedITAT Kolkata30 March 2022AY 2015-165 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Pr. CIT could not invoke Section 263 jurisdiction on matters already considered and decided in an appeal before the CIT(A). Therefore, the Pr. CIT's order was not sustainable.

What were the facts?

The assessee's assessment order was revised by the Pr. CIT under Section 263. The Pr. CIT sought to re-examine issues of cash deposits and cash in hand, which had already been considered and decided by the CIT(A) in a prior appeal.

What were the issues?

Whether the Pr. CIT has the jurisdiction to revise an assessment order under Section 263 when the issues raised have already been considered and decided by the CIT(A) in appeal.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA

Before: SRI SANJAY GARG & SRI MANISH BORAD

order

: March 30th, 2022 ORDER

Per Sanjay Garg, Judicial Member:

1.

The present appeal has been preferred by the assessee against the order passed by the Pr. Commissioner of Income Tax, Siliguri [hereinafter referred to as ld. ‘Pr. CIT’] u/s 263 of the Income Tax Act, 1961 (hereinafter the ‘Act’) dated 06.08.2019 for AY 2015-16 exercising his revisional jurisdiction and thereby setting aside the assessment order.

2.

There is a delay of 50 days in filing of the appeal. The assessee has filed a petition for condonation. After perusing the same, we are convinced that the assessee was prevented by sufficient cause from filing of the appeal in time. Hence, we condone the delay and admit the appeal of the assessee 3. The assessee in this appeal has taken the following grounds of appeal: “1. For that on the facts of the case the order passed by the Ld. Pr. C.I.T.- Siliguri, u/s. 263 of the I.T. Act on 06.08.2019 is completely arbitrary unjustified and illegal.

2. For that on the facts of the case the Ld. Pr. C.I.T.-Siliguri was wrong in initiating proceeding u/s. 263 of the I.T. Act when the assessment was completed u/s. 143(3) on 27.12.2017 wherein all the issues have been dully considered, therefore, the whole proceeding is completely arbitrary, unjustified and illegal.

Assessment Year: 2015-16 Smt. Priti Somani.

3.

For that on the facts of the case, the Ld. Pr. C.I.T. -Siliguri was wrong in passing the order u/s. 263, as he has asked the A.O. to do re-examination and re-verification, therefore, the whole order should be quashed.

4.

For that on the facts of the case, the Ld. Pr. C.I.T. -Siliguri was wrong in passing the order u/s. 263 by setting aside the order u/s. 143(3) for re-examining & re-verification, whether the cash deposit has been made from disclosed sources, although the A.O. has passed detailed order and all the materials truly and fully disclosed at the time of scrutiny assessment proceeding, therefore, the direction given by the Ld. Pr. CIT for re-examination is completely arbitrary, unjustified and illegal.

5.

For that on the facts of the case the Ld. Pr. C.I.T. -Siliguri was wrong in passing the Order u/s. 263 by setting aside the order u/s. 143(3) for re-examining and re-verification whether cash on hand shown in return of income is correct, although the following issue was duly considered by the A.O. in his assessment order and all the materials truly and fully produced at the time of scrutiny assessment proceeding, therefore, the direction given by the Ld. Pr. CIT for re- examination is completely arbitrary, unjustified and illegal.

6. For that the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal.”

4. At the outset, the ld. Counsel for the assessee has invited our attention to the impugned order passed by the ld. Pr. CIT u/s 263 of the Act to state that this was a case of limited scrutiny to examine whether the cash deposit has been made by the assessee from disclosed sources and whether the cash in hand shown in the return of income was correct. The ld. Counsel for the assessee has further submitted that the AO after making necessary enquiries had made addition of Rs.22,86,673/-in respect of the above two issues.

5. However, being aggrieved by the said addition, the assessee preferred appeal before the ld. CIT(A). Ld. CIT(A) vide order dated 24.01.2019 in Appeal No. 60/CIT(A)/SLG/2017-18 has allowed the appeal of the assessee and deleted the addition made by the AO. The ld. Counsel for the assessee has further submitted that thereafter the ld. Pr. CIT, exercising his revisional jurisdiction u/s 263 of the Act set aside the Assessment Order which already was merged into the order of the ld. CIT(A) dated 24.01.2019 (wrongly written as 05.03.2019 by the ld. Pr. CIT). The ld. Counsel for the assessee has, therefore, submitted that once the issue has already been considered and decided by the ld. CIT(A), the ld. Pr. CIT did not have jurisdiction to invoke the provisions of Section 263 of the Act.

6.

The ld. D/R, on the other hand, has relied upon the impugned order of the ld. Pr. CIT.

Assessment Year: 2015-16 Smt. Priti Somani. 7. We find force in the contention of the ld. Counsel for the assessee. It will be appropriate here to reproduce the relevant provisions of Section 263 of the Act:

263(1) ………………………… Explanation-1 ………………………… (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal [filed on or before or after the 1st day of June, 1988], the powers of the [Principal Commissioner or Commissioner] under this sub-section shall extend [and shall be deemed always to have extended] to such matters as had not been considered and decided in such appeal.]

8.

A perusal of the aforesaid Clause-‘C’ of Explanation-1 to Section 263(1) of the Act would reveal that ld. Pr. CIT/CIT can invoke his jurisdiction u/s 263 of the Act in respect of the Assessment Order which had been the subject matter of any appeal relating to such matters as had not been considered and decided in such appeal. However, in this case, the matter in relation to which the ld. PCIT has invoked his jurisdiction, by way of issue of notice dated 02.05.2019 u/s 263 of the Act, has already been considered and decided in appeal by the ld. CIT(A) vide order dated 24.01.2019.

9.

In view of this, the impugned order passed by the ld. Pr. CIT is not sustainable as per law and the same is accordingly quashed.

10.

In the result, the appeal of the assessee is allowed. Order is pronounced in the open court on 30.03.2022. Sd/- Sd/- [Manish Borad] [Sanjay Garg] Accountant Member Judicial Member Dated: 30.03.2022 Bidhan (P.S.)

Assessment Year: 2015-16 Smt. Priti Somani. Copy of the order forwarded to:

1. 1. Smt. Priti Somani, Gangtok, East Sikkim, Near Children Park, Sikkim-737 101.

2. ITO, Ward-3(1), Gangtok.

3. CIT(A)- 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata.

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