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Facts
The assessee challenged a revisional order under Section 263 of the Income Tax Act for AY 2014-15. The revisional authority found that the Assessing Officer, during the original Section 143(3) assessment, failed to examine a Rs. 1 crore bad debt claim for non-compliance with Section 36(1)(vii) and Section 36(2), and concluded the assessee had no business activity.
Held
The Tribunal noted that the original assessment was protective and the AO had not thoroughly examined other aspects. It upheld the revisional authority's Section 263 order, which directed a fresh assessment after providing an opportunity of being heard, finding no error in it.
Key Issues
Whether the revisional authority was justified in setting aside an assessment order under Section 263 for lack of enquiry by the AO regarding bad debt claims and business activity.
Sections Cited
263, 143(3), 36(1)(vii), 36(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: SH. G.S. PANNU & SH. ANUBHAV SHARMA
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI BEFORE SH. G.S. PANNU, VICE PRESIDENT AND SH. ANUBHAV SHARMA, JUDICIAL MEMBER Assessment Year: 2014-15 Ram Awadh Sharma Vs. Pr. CIT D-153, Pinnacle DLR, Phase- Central-2 5, Gurgaon New Delhi PAN No.BKBPS6630N (APPELLANT) (RESPONDENT) Appellant by None. Respondent by Sh. P.N. Baranwal, CIT DR Date of hearing: 19/03/2024 Date of Pronouncement: 05/06/2024 ORDER PER ANUBHAV SHARMA, JM:
Heard and perused the record. At the time of hearing none appeared for the appellant. The records shows notices have been issued repeatedly ever since institution of the appeal and same are received back un-served with the report that assessee has left the address. The case pertains to the year 2018 and further efforts of service are not justified. Accordingly arguments of Ld. DR were heard on the merits of the grounds raised.
After considering the material before us. It comes up that the assessee has challenged the order passed under Section 263 of the Income Tax Act, 1961 (herein after referred as ‘the Act’) by the Commissioner of Income Tax, Central-II, New Delhi ( here inafter also referred as ‘revisional authority’) by which the assessment order under Section 143 (3) of the Act dated 31.03.2016 for A.Y. 2014-15 was examined along with the assessment record and the revisional authority concluded that the AO has not examined the issue of bad debts of Rs. 1 crore claimed without fulfilling conditions of Section 36(1)(vii) read with section 36 (2) of the Act. It was concluded that assessee was not doing any business activity during the year under consideration.
As we appreciate the assessment order dated 31.03.2016 it appears that as assessment was completed in response to search and seizure and survey operations conducted on Mohan India Group and additions were made in the hands of assessee on the protective basis alone. The AO seems to have not examined any other aspect at all while completing assessment u/s 143(3) of the Act. Thus, we do not find any error in the impugned order under Section 263 of the Act whereby the AO was directed to frame afresh assessment after affording assessee an opportunity of being heard. 4. The grounds raised have no substance. The appeal of the assessee is dismissed. Order pronounced in the open court on 05.06.2024.