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Facts
The Pr. CIT invoked revisionary powers under Section 263 for A.Y. 2018-19, observing that the assessee accepted a cash loan of Rs. 75 lacs in violation of Section 269SS of the Income Tax Act. The Assessing Officer (A.O.) had failed to initiate penalty proceedings under Section 271D for this contravention, rendering the assessment erroneous and prejudicial to the revenue's interest.
Held
The Tribunal upheld the Pr. CIT's order under Section 263, which set aside the original assessment and remanded the case to the A.O. for fresh assessment and potential initiation of penalty proceedings under Section 271D. The Tribunal noted the assessee's claim that the cash loan was a wrong statement of fact, but since no documentary evidence was provided for transactions through banking channels, the Pr. CIT's order for factual verification was deemed appropriate.
Key Issues
Whether the Pr. CIT's order under Section 263 was justified in remanding the case for fresh assessment and initiation of penalty proceedings u/s 271D when the AO failed to address a cash loan violating Section 269SS.
Sections Cited
Section 263, Section 269SS, Section 271D
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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI ARUN KHODPIA
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM:
This appeal preferred by the assessee emanates from the order of the Ld. Pr. Commissioner of Income Tax, Raipur-1 (for short ‘Pr. CIT”) passed u/s.263 of the Income Tax Act, 1961 (for short ‘the Act’), dated 24.03.2025 for the assessment year 2018-19 as per the grounds of appeal on record.
2. This is a case where the Pr. CIT, Raipur had invoked the revisionary power u/s.263 of the Act while observing that there has been violation of Section 269SS of the Act by the assessee for the fact that the assessee had accepted an amount of loan/deposit of Rs.75 lacs in cash and the A.O while framing assessment had not initiated penalty proceedings nor had levied penalty u/s.271D of the Act. It was observed by the Ld. Pr. CIT that the assessee had received an unsecured loan from Shri Ramkinkar Agrawal in cash amounting to Rs.75 lacs which was in contravention of Section 269SS of the Act and since there has been no initiation of penalty u/s.271D of the Act by the A.O, therefore, the assessment framed by the A.O was erroneous in so far it is prejudicial to the interest of the revenue. The effective Para of the order of the Ld. Pr. CIT is extracted as follows: “8. Considering the above legal provisions of the Act and the factual position of this case as emanating from the assessment order and case records as well as the judicial precedents as discussed above, I am of the considered opinion that the assessment order is erroneous in so far as it is prejudicial to the interests of revenue in view of Section 263 of the Income tax Act. Thus, the assessment order is held to be erroneous in so far as it is prejudicial to the interests of revenue. The said assessment order is hereby set-aside to the file of the AO with a direction to pass a fresh assessment order in a speaking manner after making all necessary enquiries required and initiation of penalty u/s.271D of the Income Tax Act, 1961 after providing due and adequate opportunity of being heard to the assessee and after considering all the submissions, etc. made and counter-reply submitted by the assessee in a fair and judicious manner.”
We have heard the submissions of the parties, analyzed the facts and circumstances in this case. The facts emanating from the relevant documents i.e. order passed u/s. 263 of the Act by the Ld. Pr. CIT and the assessment order spells out clearly that the assesse had received unsecured loan in cash from Shri Ramkinkar Agrawal amounting to Rs.75 lacs. In this regard, it was held by the Pr. CIT that there is direct contravention of Section 269SS of the Act, for which, penalty u/s. 271D of the Act should have been initiated by the A.O and since this was not done, therefore, the assessment framed was being erroneous in so far as it is prejudicial to the interest of the revenue. Accordingly, the matter was remanded back to the file of the A.O for making fresh assessment after making necessary enquiries and to initiate penalty u/s. 271D of the Act. However, at the time of hearing, the Ld. Counsel for the assessee submitted that this is a wrong statement of fact mentioning that such cash loan was received by the assessee. He further submitted that there has been no cash transaction with Shri Ramkinkar Agrawal and the assessee and there has not been any contravention of Section 269SS of the Act, hence, no penalty is imposable u/s.271D of the Act. However, the Ld. Counsel failed to submit any documentary evidence regarding the claim that such loan was taken through banking channels.
In our considered view, the aforesaid submission of the Ld. Counsel is contrary to facts appearing on record. Therefore, it is all the more appropriate that the assessee should place his case before the A.O and after hearing submissions, considering the relevant documents, the A.O should verify the facts and examine all the documents on record as regards the said contention made by the assessee. In view thereof, we do not find any infirmity in the order passed by the Ld. Pr. CIT u/s. 263 of the Act, wherein he has provided another opportunity to the assessee to represent his case before the A.O. The said order is upheld.
Before parting, we state that even without going into the merits of the order passed u/s. 263 of the Act the entire genesis of the case before us is starting from assessment order, the order passed u/s. 263 of the Act by the Pr. CIT is based on the fact that cash loan has been received by the assessee but this itself has been submitted to be a wrong statement of fact as appearing on documents on record by the Ld. Counsel for the assessee and since this issue requires factual verification, therefore, when already the matter is remanded back by the Ld. Pr. CIT to the A.O with a direction to pass fresh assessment order in a speaking manner after making all necessary enquiries required for initiating penalty u/s. 271D of the Act. We therefore do not find any infirmity with the findings of the Ld. Pr. CIT and in view of submissions raised by the Ld. Counsel for the assessee, considering the totality of the facts and circumstances, the order passed u/s.263 of the Act by the Pr. CIT is thus upheld.
As per the above terms the grounds of appeal of the assessee stands dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on 05th day of June, 2025.