CHANAKYA NAGARI SAHKARI PATSANSTHA,AURANGABAD vs. PR. COMMISSIONER OF INCOME-TAX -2, AURANGABAD

This assessee’s appeal for AY 2014-15 arises against the Pr.CIT-2, Aurangabad’s order dated 09/01/2019, involving proceedings u/s 263 of the Income Tax Act, 1961; in short "the Act”. Case called twice. None appears at assessee’s behest. The very factual position has been continuing since 28.08.2020 wherein none has represented

A perusal of the assessee’s pleadings reveals that it has raised four substantive grounds whilst challenging correctness of the PCIT’s section 263 revision directions holding the corresponding regular assessment framed by the Assessing Officer on 15.06.2016 as an erroneous one causing prejudice to interest of the Revenue. Mr. Garg invited our attention to the detailed revision discussion on page 6 in para 4.1 of the PCIT’s order wherein the assessee was found to have deposited cash in Axis Bank and Bank of Baroda thereby deriving interest income which was claimed as eligible for section 80P(2) deduction. Mr. Garg vehemently submitted that the Assessing Officer had not verified the genuineness of assessee’s cash deposits giving rise to interest income eligible for section 80P deduction. The factual position is hardly any different so far as the other issues of deposits in banks and opening balance of Rs.2,00,000/- in SBI account are concerned. Hon’ble apex court’s landmark decision in Malbar Industrial Co. V/s CIT(2000) 243 ITR 83(SC) has settled long back that such an instance of lack of enquiry on the assessing authorities’ part renders an assessment both erroneous as well as causing prejudice to the interest of the revenue; simultaneously. Faced with this situation, we uphold the PCIT’s revision directions in issue. Ordered accordingly.

This assessee’s appeal is dismissed in above terms. Order pronounced in the Open Court on this 17th day of November, 2022.