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Facts
The case involved appeals against orders concerning loans received by the assessee in AY 2012-13 and 2013-14, which the PCIT sought to revise u/s 263 alleging lack of AO's verification. The assessee contended that the assessment was completed u/s 153C r.w.s. 143(3) and was an unabated assessment, having attained finality without incriminating material found during search. The AO had issued notice u/s 142(1) and details/confirmations were filed.
Held
The Tribunal, citing the Supreme Court's ruling in PCIT vs. Abhisar Buildwell Pvt. Ltd., held that the PCIT's jurisdiction u/s 263 was invalid as it sought to revise an unabated assessment completed u/s 153C r.w.s. 143(3) without incriminating material, making the order void ab initio. The Tribunal further found that the CIT(A) correctly determined that the assessee had discharged the onus regarding the identity, genuineness, and creditworthiness of the loan creditors.
Key Issues
Whether PCIT can exercise revisional jurisdiction u/s 263 over an unabated assessment completed u/s 153C r.w.s. 143(3) in the absence of incriminating material, and if the assessee discharged the onus for loan credits.
Sections Cited
263, 153C, 143(3), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCHES : A : NEW DELHI
Before: SHRI G.S. PANNU, HON’BLE & SHRI ANUBHAV SHARMA
ORDER PER ANUBHAV SHARMA, JM: These are appeals preferred by both the Revenue and the assessee against the orders of the Commissioner of Income Tax (Appeals) (hereinafter referred
ITAs No.2843/Del/2022; & ITAs No.391 & 392/Del/2021 to as Ld. First Appellate Authority or ‘the ld. FAA’ for short)/Pr. Commissioner of Income-tax (Ld. PCIT) in appeals filed before them against the orders of the ld. Assessing Officer (hereinafter referred to as the Ld. AO, for short). Further details of the orders of the lower authorities are as under:- Appeal No. & Date AO who Section of the who passed the of order of the passed the IT Act under order CIT(A) assessment which the AO order & Date passed the of order order 263 2843/Del/2022 CIT(A)-31, 1144/22-23 DCIT, Central R.w.s. New Delhi date 22.09.2022 Cir.30, New 153C Delhi, date 29.12.2021 391/Del/2021 Pr. CIT PCIT (Central), ACIT, Central 153C/ 143(3) (Central), Delhi-3/ Revision- Cir.30, New Delhi-3 263 Delhi, date /100000168299/2021 27.12.2018 392/Del/2021 - Do - PCIT (Central), - Do - - Do - Delhi-3/ Revision- 263 /100000168298/2021
Heard and perused the record. 2.1 On hearing the ld. AR, it comes up that ITAs No.391 & 392/Del/2021 arise out of the order passed u/s 263 of the Act. The ld. PCIT, on the basis of assessment record had examined the receipt of loan of Rs.3.50 crores from M/s Beefin Commodities Ltd. and Rs.12.50 crores from M/s Jajodia Finance Ltd. in AY 2012-13; and Rs.11.50 crores in AY 2013-14. The PCIT examined the same on the basis of Investigation Wing, Kolkata inputs and had concluded that the AO had not made independent verification/inquiry. The ld. AR, however, canvassed that the AO had issued notice u/s 142(1) of the Act and requisite
ITAs No.2843/Del/2022; & ITAs No.391 & 392/Del/2021 details along with confirmations were filed before the AO. However, what is material is that the assessment was completed on 27.12.2018 u/s 153C r.w.s. 143(3) of the Act. Thus, it was a case of unabated assessment which had attained finality on the date of search. The law in this regard being that no addition over and above originally assessed income can be made unless there is incriminating material found for the said year during the course of search. It comes up from the order of the ld.PCIT that this objection of the assessee was not sustained for the reason that Revenue had preferred SLP before the Hon’ble Supreme Court in the case of M/s Apar Industries Ltd. However, now the issue stands squarely covered after the judgement of the Hon’ble Supreme Court in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 149 taxmann.com 399.
We are in agreement with the contention of the ld. AR that when the invocation of jurisdiction itself by the AO was invalid, by exercising powers u/s 263 of the Act, the PCIT could not have infused life in an assessment order void ab initio. Thus impugned assessment order could not have been subject matter of revisional jurisdiction u/s 263 of the Act.
The aforesaid findings when applied pari materia to the Revenue’s appeal in on the one hand make the effect giving order dated 19.12.2021, which was subject matter of appeal before the CIT(A) giving rise to the present appeal of the Revenue redundant. On the other hand, we are ITAs No.2843/Del/2022; & ITAs No.391 & 392/Del/2021 satisfied that the CIT(A) has duly appreciated the evidences like giving a categorical finding on the basis of evidences that the assessee was able to discharge the onus with regard to the identity, genuineness and credit worthiness of the creditors. We find no substance in the grounds of the Revenue.