NADHARSHA PULUKUZHI SEETHY,ERNAKULAM vs. PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI-1, KOCHI

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ITA 570/COCH/2022Status: DisposedITAT Cochin19 December 2022AY 2017-20182 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO had examined the bank account credits and debits, partly treating them as unexplained. Therefore, the assessment was not one where the AO had failed to apply his mind or conduct adequate inquiry. The PCIT's revision directions were reversed.

What were the facts?

The Principal Commissioner of Income Tax (PCIT) initiated proceedings under Section 263, considering the Assessing Officer's (AO) earlier assessment erroneous and prejudicial to the revenue. The PCIT believed the AO failed to examine cash deposits of Rs. 8.5 lakhs in the assessee's bank account.

What were the issues?

Whether the AO's assessment was erroneous and prejudicial to the revenue due to inadequate examination of bank deposits, warranting revision under Section 263.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri Satbeer Singh Godara & Shri Manoj Kumar Aggarwal

For Appellant: Shri A. Gopalakrishnan, CA
For Respondent: Shri M. Rajasekhar, CIT-DR
Hearing: 09.11.2022Pronounced: 19.12.2022

Per: S.S. Godara, J.M.

This assessee’s appeal for A.Y. 2017-18,arises against the PCIT-1, Kochi’sorder dated 22.03.2022, involving proceedings under Section 263 of the Income Tax Act, 1961 (in short the Act).

Heard both the parties. Case file perused.

2.

It emerges during the course of hearing and from a perusal of the learned PCIT’s detailed discussion in his Section 263 revision proceedings that he has directed the Assessing Officer to reframe the assessment afresh after holding the earlier one dated 20.12.2019 as an erroneous one causing prejudice to the interest of Revenue on the ground that the latter had filed to examine the issue of assessee’s cash deposits amounting to Rs.8.5 lakhs in Axis Bank A/c No. 915010010006818. 2 Nadharsha Pulukuzhi Seethy 3. Learned CIT-DR has drawn strong support from the PCIT’s revision direction under challenge.

4.

We find that the Assessing Officer’s assessment herein in page 2 had examined all of the assessee’s credits/debits in the bank account above Rs.1,00,000/- during FY 2016-17 and partly treated the same as unexplained. That being the case, this could hardly be held as an assessment wherein the Assessing Officer had not applied his mind and not carried any enquiry or inadequate enquiry; as the case may be. Shri M. Rajasekhar vehemently argued that there is no detailed discussion in the assessment findings to this effect. We hold that there is no such precondition of a detailed discussion once the Assessing Officer examinesan issue as per CIT vs. Gabriel India (1993) 203 ITR 108 (Bom). Learned PCIT’s revision directions in issue stand reversed therefore.

5.

This assessee’s appealis allowed.

Dictated and pronounced in the open Court on 19th December, 2022.

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