MR. MANDANNA AIYANNA MUNDACHADIRA ,KODAGU vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, HASSAN

Present appeal of the assessee is arising from the order of ld. PCIT dated 21.3.2024 having DIN No.ITBA/COM/M/17/2023- 24/1063191602(1) and relates to assessment year 2020-21.

Brief facts of the case are that the assessee had been searched by the Income tax department on 16.1.2020. During the course of search, cash amounting to Rs.25 lakhs belonging to the assessee was found. Thereafter, the AO completed the assessment at an income of Rs.81,30,000/-, assessing the unexplained cash seized as well as advance paid for property purchase and business receipts not accounted for by the assessee in the books of accounts.

The assessee has come up in appeal before us and challenged the jurisdiction of the ld. PCIT on the ground that the document is neither signed by the assessee and nor accepted by the assessee. It is pertinent to note that the assessee has challenged the additions made by the AO in original proceedings before the ld. CIT(A) and the same is pending before the ld. CIT(A). It is the contention of the assessee that the document relied upon by the ld. PCIT was never served to the assessee in the proceedings u/s 263 of the Act despite being asking specifically.

We have heard the rival submissions and perused the materials available on record. We observe that the impugned document which is relied upon by the ld. PCIT is there in paper book from pages 30 to 35. On page 35, certain figures are mentioned, taking cognizance of these figures, the ld. PCIT concluded that the AO failed to enquire into the veracity of these documents and hence, its order is erroneous and prejudicial to the interest of the revenue. It is worthy to note here that this document was found from the premises of the assessee and hence as per the presumption provided in section 292C of the Act, this documents belong to the assessee. Therefore, the burden is on the assessee to rebut the contents of the documents with cogent material. However, the ld. AO could not be able to look into this document during the course of assessment proceedings for the reasons best known to him. Therefore, we are of the view that it is a case of lack of enquiry and hence, we are of the firmed view that the jurisdiction assumed by the ld. PCIT u/s 263 of the Act is legally tenable. Therefore, we do not find any error in the order of ld. PCIT.

Before parting, we make it clear that we have not made any comments on the merits of the additions and the assessee is at liberty to explain the contents during the consequential proceedings.