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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: Ms. MADHUMITA ROY & SHRI BHAGIRATH MAL BIYANI
PER Ms. MADHUMITA ROY - JM:
The instant appeal filed by the assessee is directed against the order dated 23.03.2020 passed by the Ld. PCIT, Ujjain under Section 263 of the Income Tax Act (hereinafter referred to as “the Act”) arising out of the order dated 23.05.2017 passed by the ITO-2(2), Ujjain under Section 143(3) of the Act, 1961 (hereinafter referred to as “the Act”) for A.Y. 2015-16.
We have heard the rival submissions made by the respective parties, and we have also perused the relevant materials available on record.
There is a delay in filing the instant appeal before us. As submitted by the Ld. Counsel appearing for the assessee and supported by the affidavit
ITA No.251/Ind/2021 Shakuntala Daga vs.ITO Asst.Year –2015-16 - 2 – filed by the assessee the appeal could not be filed by 23.05.2020 due to the pandemic Covic-19. However, the same may be condoned in the view of the order dated 23.09.2021 passed by the Hon’ble Supreme Court granting extension for filing of appeals commencing from dated 23.03.2020 to 27.04.2021. Such submission made by the Ld. A.R. fairly not been controverted by the Ld. D.R. Thus, having regard to the facts and circumstances of the case respectfully relying upon the order passed by the Hon’ble Apex Court we condone the delay in preferring the appeal before us by the assessee.
The brief facts leading to the case is this that the assessment under Section 143(3) of the Act was completed on 23.05.2017 upon assessing income of the assessee at Rs. 12,57,250/- as against the returned income of Rs. 12,31,490/-. On 28.02.2020 a show-cause notice under Section 263 was issued by the PCIT as to why the original assessment order should not be treated as erroneous and prejudicial to the interest of the Revenue. As per Form 26AS the assessee had total receipts of Rs. 3,25,60,929/- and an amount of Rs. 4,15,891/- was deducted at source which was claimed by the assessee in the return of income. The assessee had shown receipts of Rs. 3,02,90,260/- in the Profit & Loss Account. Accordingly, the Ld. PCIT contended that the assessee had shown less receipts of Rs. 22,70,669/- which deserves to be added to the total income of the assessee. However, it appears from the records the assessee filed the written notes of submission alongwith relevant documents before the Ld. PCIT and before the Ld. AO as well. In fact, a reconciliation statement has been submitted by the assessee before the Ld. AO reconciling the difference which has been
ITA No.251/Ind/2021 Shakuntala Daga vs.ITO Asst.Year –2015-16 - 3 – examined by the AO and found to be correct. It was contended by the assessee that the reason of difference between two receipts had duly been explained before the Ld. AO which is evident from the order passed in the original proceeding. However, the plea of the assessee was not found to be acceptable by the Ld. PCIT and the impugned order under Section 263 of the Act was issued treating the original assessment order is erroneous and prejudicial to the interest of the Revenue with the following observation: “3.3 During the course of the proceedings u/s. 263, the assessee filed written submission. However, the assessee did not reconcile as well as file proper explanation with regard to the total receipts shown u/s 194C of Rs. 3,23,06,920/- as per Form No. 26AS and as per the P&L A/c of Rs.3,02,90,260/-. So far as the interest income u/s 194C of Rs.2,54,009/- shown in the Form No.26AS is concerned, the assessee declared interest income of Rs.2,83,599/- in the revised computation of total income filed during the course of assessment proceedings. However, the revised computation of total income filed during the course of assessment proceedings was not having signature of the assessee.”
The main contention of the Ld. PCIT is this that the AO is required to examine the issue in detail in order to ascertain the true state of the facts which is failed to have been performed by the Ld. AO.
We have carefully considered the order passed by the Ld. AO on 23.05.2017 the Paragraph 4 whereof clearly demonstrates that the issue of difference between receipts as per Form 26AS and as per Profit & Loss Account has been specifically examined by the said Ld. AO during the course of original assessment proceeding. For reconciliation of receipts as per Form 26AS and P&L Account a reconciliation statement has been prepared and submitted by the assessee which has been examined by him as it is evident from Paragraph 4 of the order passed by the Ld. AO. Furthermore, as per reconciliation statement there is a difference of Rs.
ITA No.251/Ind/2021 Shakuntala Daga vs.ITO Asst.Year –2015-16 - 4 – 2,52,525/- which has also been examined by him and not found having any impact on taxable income. Under this circumstances whether the PCIT’s direction upon the AO to examine the issue further in detail in order to ascertain the true state of the facts is maintainable or not is the moot question before us.
As we have already discussed that it is evident from the entire set of records that the Ld. AO allowed the claim of the assessee upon an enquiry made during the course of assessment proceeding and upon being satisfied with the explanation rendered by the assessee. On this count we have considered the judgment relied upon by the Ld. AR in the case of Narottam Mishra, reported in (2015) 25 ITJ 206. While quashing the order issued under Section 263 of the Act the Coordinate Bench was pleased to observe as follows: “Even this is not the case of the Ld. CIT that certain evidences were overlooked which were very much on record or in the knowledge of the AO. Even this is not the case of Ld. CIT that certain new facts or evidences were brought to the notice of the Revenue Department which were having a direct impact on the income assessed by the AO. Neither there was an escapement of evidence nor there was any evidence now brought to the notice of the revenue department, therefore if that was not the position, then we are not inclined to give our approval to such directions.”
It is also a fact that not only the Ld. AO examined the matter but also recorded a categorical finding on the issue as evident from AO’s order sought to be reopened by the Ld. PCIT in the order impugned. The Ld. PCIT has set-aside the original assessment to the file of the Ld. AO in effect requires to do the same exercises which has already been done during the course original proceeding. Thus, in our considered, opinion the order passed by the Ld. AO in the original proceeding, when neither erroneous
ITA No.251/Ind/2021 Shakuntala Daga vs.ITO Asst.Year –2015-16 - 5 –
nor prejudicial to the interest of the Revenue the same is not required to be reopened by the impugned order passed by the Ld. PCIT. In that view of the matter we do not find any merit in the impugned order passed by the Ld. PCIT under Section 263 of the Act which is found to be not sustainable and thus, quashed.
In the result, the appeal filed by the assessee is allowed.
Order pronounced on 28 /07/2022 by placing the result on the Notice Board as per Rule 34(4) of the Income Tax (Appellate Tribunal) Rule, 1963. This Order pronounced in Open Court on 28 /07/2022
Sd/- Sd/- Sd Sd/- Sd/- (BHAGIRATH MAL BIYANI) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 28 /07/2022 TRUE COPY TANMAY, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)- 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Indore 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, (Dy./Asstt.Registrar) ITAT, Indore 1. Date of dictation 21.07.2022 2. Date on which the typed draft is placed before the Dictating Member 21.07.2022 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 26 .07.2022 5. Date on which the fair order is placed before the Dictating Member for pronouncement .07.2022 6. Date on which the fair order comes back to the Sr.P.S./P.S .07.2022 7. Date on which the file goes to the Bench Clerk .07.2022 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order……………………………………