RAKESH SATYANARAYANA AGARWAL,HYDERABAD. vs. ITO., WARD-3(1), HYDERABAD

The brief facts of the case are that the assessee filed his return of income on 29.03.2018 declaring a total income of Rs.7,86,310/-. Subsequently, the case of the assessee was reopened u/s.147 of the Income Tax Act, 1961 (“the Act”) and notice u/s.148 of the Act was issued on 31.3.2021. Finally the Learned Assessing Officer (“Ld. AO”) completed the assessment u/s.147 r.w.s. 144 r.w.s. 144B of the Act on 29.03.2022 determining the total income of the assessee at Rs.44,77,330. Later on, the case of the assessee was taken up by Ld. PCIT for revision u/s.263 of the Act. During the proceedings u/s.263 of the Act, the Ld. PCIT came to the conclusion that the assessee could not explain the sources of cash deposited in his bank account of Rs.24,02,500/-. Therefore the Ld. PCIT issued a direction to the Ld. AO to pass suitable order disallowing the cash deposit of Rs.24,02,500/- treating the same as unexplained cash deposit u/s.69A of the Act.

Aggrieved by the order of Ld. PCIT, the assessee is in appeal before us. The solitary issue of the assessee before us was that the Ld. PCIT directed the Ld. AO for making addition of Rs.24,02,500/- u/s.69A of the Act without making any direction to conduct any enquiry by the Ld. AO or affording any opportunity of hearing by Ld. AO to the assessee.

The Ld. AR submitted that the Ld. PCIT should have also made a direction to the Ld. AO to verify from the assessee regarding the sources of cash deposit in the bank account and after verifying the Ld. AO should have made any addition as per law. The Ld. AR also submitted that the Ld. PCIT also had not given any direction regarding providing any opportunity of hearing by the Ld. AO to the assessee. Therefore, the Ld. AR submitted that the order of Ld. PCIT is bad in law because the Ld. PCIT straightaway directed the Ld. AO to make the addition.

Per contra, the Ld. DR relied on the order of Ld. PCIT and requested the bench to uphold the order of Ld. PCIT.

We have heard the rival contentions and also gone through the record in the light of the submissions made on either side. There is no case of the assessee before us that no opportunity of hearing was given to the assessee by Ld. PCIT. The solitary objection of the assessee is that, no direction was given by the Ld. PCIT to the Ld. AO to make any verification or to provide any opportunity of being heard to the assessee by the Ld. AO. For the sake of clarity, the relevant portion of section 263 is extracted as under : “ Revision of orders prejudicial to revenue. 263. (1) The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer 81a[or the Transfer Pricing Officer, as the case may be,] is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, 81b[including,— (i) an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment; or (ii) an order modifying the order under section 92CA; or (iii) an order cancelling the order under section 92CA and directing a fresh order under the said section.]”

In the result, the appeal filed by the assessee is dismissed.