MUKUL MALHOTRA,LUDHIANA vs. PR.CIT--1, LUDHIANA

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ITA 105/CHANDI/2021Status: DisposedITAT Chandigarh08 July 2025AY 2011-12Bench: SHRI LALIET KUMAR (Judicial Member), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)1 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the revision of the order. It found that the AO had failed to make requisite inquiries regarding the assessee's bank account which reflected payments to the assessee's own proprietorship, and this had a bearing on the determination of income.

What were the facts?

The assessee is in appeal against the invocation of revisionary jurisdiction by the Pr. CIT for AY 2011-12. The Pr. CIT proposed revision of an assessment order passed under Section 143(3) read with Section 147, alleging that the AO failed to verify the assessee's bank account and commission income.

What were the issues?

Whether the Pr. CIT correctly invoked revisionary powers under Section 263 when the AO failed to conduct proper verification of the assessee's bank account and related transactions during the assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 147,Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH

Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

(िनधा�रणवष� / AssessmentYear: 2011-12) Shri Mukul Malhotra Pr. CIT-1 (Prop. M/s Shree Pitambra Alloys) Ludhiana. बनाम/ Vs. 108-C Miller Ganj Ludhiana-141003. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AYSPM-3774-D (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/Appellant by : None ��थ�कीओरसे/Respondentby : Sh. Rajat Kumar Kureel (CIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 03-07-2025 घोषणाकीतारीख /Date of Pronouncement : 08-07-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. By way of this appeal, the assessee assails invocation of revisionary jurisdiction u/s 263 by Ld. Pr. Commissioner of Income Tax, Ludhiana-1 (Pr.CIT) for Assessment Year (AY) 2011-12 vide impugned order dated 29-03-2021 proposing revision of assessment as framed by Ld. AO u/s.143(3) r.w.s. 147 of the Act on 10-12-2018. At the time of hearing, none appeared for assessee. The perusal of order sheet entries would reveal that none is appearing for assessee since past several occasions. Left with no option, we proceed with the disposal of appeal on the basis of case records. The Ld. CIT-DR advanced arguments supporting the revision of the order.

2.

It emerges that the assessee was subjected to reassessment proceedings wherein the assessee was directed to explain the source of credit of Rs.38.25 Crores. The Ld. AO determined income of Rs.3.80 Lacs in its order dated 10-12-2018. Upon perusal of case records, Ld. Pr. CIT observed that during the year, the assessee has maintained a Bank Account No.2592560005321 with HDFC Bank Ltd. which, inter- alia, reflected payment to M/s Soumya Industries (sole proprietorship of the assessee). However, the Ld. AO failed to verify this bank account. Further, no details were furnished by the assessee regarding commission income. The Ld. AO also did not verify cash payment made in contravention of Sec.40A(3) of the Act. Accordingly, the assessee was show-caused. Though the assessee opposed revision of the order, Ld. Pr. CIT held that the order was erroneous and prejudicial to the interest of the revenue. The Ld. AO was directed to pass a fresh order considering the points raised in the revisionary order. Aggrieved, the assessee is in further appeal before us. Pursuant to impugned order, another assessment has been framed on 31-03-2022 wherein Ld. AO has made further addition of Rs.5.51 Crores to the already assessed income of Rs.3.80 Lacs. The assessment has been framed on best judgement basis since the assessee has failed to make the required submissions in set aside proceedings.

3.

Upon perusal of impugned order of Ld. Pr. CIT and regular assessment order dated 10-12-2018, it could be seen that Ld. AO has failed to make requisite enquiries on issues which have been flagged by Ld. Pr. CIT in the impugned order. The assessee has maintained Bank Account No.2592560005321 with HDFC Bank Ltd. which, inter- alia, reflected payment to M/s Soumya Industries which happens to be the sole proprietorship of the assessee. Thus, few of the transactions of HDFC Bank had linked with the assessee and the same had bearing on determination of assessee’s income which Ld. AO has failed to verify. There is nothing on record to suggest that any such verification was made by Ld. AO during the course of regular assessment proceedings. This being so, we uphold the revision of the order.

4.

The appeal stands dismissed. Order pronounced on 08-07-2025.

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