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Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI
Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI
आदेश / ORDER
PER R.S.SYAL, VP :
This appeal by the assessee is directed against the order dated 29-03-2022 passed by the Pr.CIT, Hubli under section 263 of the Income-tax Act (hereinafter also called `the Act’) in relation to the assessment year 2017-18.
Briefly stated, the factual matrix of the case is that the assessee is a Cooperative Urban Credit Souhard Niyamit, which filed its return declaring total income at Nil after claiming deduction
Bhagyajyoti Urban Credit Souhard Sahakari Niyamit u/s.80P. The Assessing Officer (AO) noticed on verification of bank statements that the assessee had deposited total cash of Rs.59,14,000/- in various banks after demonetisation (09-11-2016 to 30-11-2016) in old currency notes. On being called upon to explain its stand, the assessee submitted details of various amounts deposited in different bank accounts and also explained that these cash deposits were out of closing cash balance as on 08-11-2016.
The assessee also furnished a list of persons who had deposited cash before the demonetisation along with their names and amounts. A copy of subsidiary day book from 01-11-2016 to 30-11-2016 was also filed. The AO perused the cash book along with other details filed and noticed that the closing cash balance as on 08-11-2016 was Rs.60,64,247/-, out of which a sum of Rs.59,14,000/- was deposited after demonetization during the permitted window. He, therefore, accepted the assessee’s stand. The ld. Pr.CIT held the assessment order to be erroneous and prejudicial to the interest of the Revenue on the ground that the AO did not enquire into the reasons for the delay in deposit of old currency notes and further did not verify as to how the cash balance as on 08-11-2016 was made up. This is how, he set aside the assessment order and directed the Bhagyajyoti Urban Credit Souhard Sahakari Niyamit AO to frame the assessment afresh. Aggrieved thereby, the assessee has come up in appeal before the Tribunal.
We have heard the rival submissions and gone through the relevant material on record. It is seen that the assessee is a Urban Credit Souhard Sahakari Niyamit. It had normal cash balance of Rs.60,64,247/- as on 08-11-2016. When the AO enquired about the reasons for deposit of such cash in tranches, the assessee submitted that the Managers of the respective banks requested it to make deposits in stages so that a large number of people queuing for depositing cash in bank on such days could also be accommodated.
That was the raison d’etre for which the assessee deposited cash in various bank accounts on 10-11-2019, 11-11-2019, 12-11-2019, 13-11-2019, 14-11-2019, 16-11-2019, 17-11-2019, 04-12-2019 and 05-12-2019 out of closing cash balance as on 08-11-2016 at Rs.60.64 lakh. A sum of more than Rs.54 lakh, out of the total cash deposit of Rs.59.14 lakh, was deposited between 10-11-2019 to 17-11-2019. The assessee produced the cash book before the AO and also furnished the list of people who had deposited cash before the demonetisation period along with their names and amounts. The AO examined cash book of the assessee and the other relevant material and resultantly got satisfied with the tendered explanation.
Bhagyajyoti Urban Credit Souhard Sahakari Niyamit The ld. Pr.CIT jettisoned the view point of the AO by simply recording that he did not make further investigation as to how the cash balance of Rs.60.64 lakh was available on 08-11-2016 and further as to why the amount was not deposited in one go. In fact, the assessee had given explanation before the AO on both these scores by submitting the details of persons who had deposited cash with it up to 08-11-2016 backed by the subsidiary day book from 01-11-2016 to 30-11-2016. Not only that, the assessee also placed on record the reasons for depositing cash in tranches on different dates, being, the request made by the Bank Managers urging to deposit cash in stages so that other customers standing in long queues may also get opportunity of depositing cash. The ld. Pr.CIT simply found the explanation fantastic without pointing out any defect in the cash book which was produced before the AO as well showing the availability of closing cash balance as on 08-11-2016 at Rs.60.64 lakh. He further could not find out any flaw in the assessee’s explanation that it was at the instance of the Bank Managers that the cash was deposited in parts on different dates so as to facilitate other customers as well.
There are twin conditions enshrined in the Act for revision u/s
Cumulative satisfaction of both, namely, the assessment order
Bhagyajyoti Urban Credit Souhard Sahakari Niyamit is erroneous and it is prejudicial to the interest of the revenue, is sina quo non for the revision. Contextually, there can be two situations calling for revision, viz., one where the AO does not make enquiry and accepts the assessee’s version; and second where the enquiry is conducted and thereafter the assessee’s view point is accepted. In case of the former, there can be no fetters on the power of the CIT to revise the assessment order which becomes erroneous for the AO accepting the assessee’s stand on certain points which required examination from the perspective of tax collection. The second situation can be where the AO conducted proper enquiry and then accepted the assessee’s version, with or without making the necessary discussion in the assessment order. Revision in such a later situation can take place only when the CIT first shows the erroneous nature of the assessment order, which is possible only by pointing out the flaws in the AO’s understanding of the transaction or appreciation of the facts or reaching the conclusion. No revision in such a situation can take place in a generalized manner by levelling sweeping charges of the improper verification, without spelling out or pinpointing the specific reasons where the AO flawed leading to the passing of an erroneous order, which is prejudicial to the interest of the Revenue. Without a specific
Bhagyajyoti Urban Credit Souhard Sahakari Niyamit detection and the mention of the error in the assessment order in such a situation, the revisionary order itself becomes wanting.
We are confronted with a situation in which the AO not only conducted the enquiry but also recorded the explanation given by the assessee in the assessment order along with his reasons for accepting the same. The ld. Pr.CIT, without pointing out any specific infirmity in the assessment order, has characterized the assessment order erroneous and prejudicial to the interest of the Revenue in a generalized manner. In our considered opinion, this approach, in the present set of facts and circumstances, cannot be countenanced. We, therefore, vacate the impugned order.
In the result, the appeal is allowed. Order pronounced in the Open Court on 14th November, 2023.