MANMOHAN SINGH SEHGAL,DELHI vs. PR, CIT DELHI -10, NEW DELHI

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ITA 791/DEL/2021Status: DisposedITAT Delhi14 September 2023AY 2011-12Bench: Sh. C. M. Garg, Judicial Member Dr. B. R. R. Kumar (Accountant Member)5 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the PCIT's revisionary order under Section 263 was a 'damp squib' because the issues raised in the original assessment order, which were the subject of the revision, had already been adjudicated by the ITAT. Therefore, the revisionary proceedings and the consequent assessment order were rendered infructuous.

What were the facts?

The assessee's original assessment order was deleted by the CIT(A) and upheld by the ITAT. However, a subsequent reassessment order was passed under Section 147, which was then subjected to revision under Section 263 by the PCIT. This revisionary order led to a fresh assessment order with similar additions.

What were the issues?

Whether a revisionary order under Section 263 can be passed when the issues sought to be revised have already been adjudicated by a higher appellate authority. Whether the PCIT can initiate revisionary proceedings without conducting independent inquiry.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 263,Section 69C,Section 68,Section 40(a)(ia),Section 2(22)(e)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: Sh. C. M. GargDr. B. R. R. Kumar

Hearing: 20.07.2023Pronounced: 14.09.2023

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI Before Sh. C. M. Garg, Judicial Member Dr. B. R. R. Kumar, Accountant Member Asstt. Year : 2011-12 Manmohan Singh Sehgal, Vs PCIT, C/o Ajay Arun Mehta & Associates, Delhi-10, Chartered Accountants, Shop No. 25, DDA Market, B Block, Preet Vihar, Delhi-110092 (APPELLANT) (RESPONDENT) PAN No. ABAPS6153M Assessee by : Sh. C. S. Anand, Adv. Revenue by : Sh. Subhra J. Chakraborty, CIT-DR Date of Hearing: 20.07.2023 Date of Pronouncement: 14.09.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member:

The present appeal has been filed by the assessee against the order of ld. PCIT, Delhi-10 dated 15.03.2021.

2. Following grounds have been raised by the assessee:

“1. That since the re-assessment order dt.11.07.2018 passed u/s 147/143(3) by the learned ITO Ward 48(4) Delhi (which is sought to be revised by the learned PCIT Delhi 10) was patently without jurisdiction, the impugned revisionary proceedings were also without jurisdiction and illegal.

2.

That the impugned revisionary proceedings initiated and conducted by the learned PCIT Delhi 10 w.r.t. the assessment order dt.11.07.2018 passed by the learned ITO Ward 48(4) Delhi working under the learned PCIT Delhi-16' Charge, are without jurisdiction and illegal.

2 Manmohan Singh Sehgal 3. That the impugned order passed u/s 263 on 15.03.2021 is liable to be annulled /quashed because the learned PCIT Delhi-10 had not taken into consideration the submissions which were made by the assessee in the form of a letter (containing 24 points) which were e-mailed on 15.03.2021 4. That the impugned order passed u/s 263 is liable to be annulled because the re-assessment order dt. 11.07.2018 u/s 147/143(3) was not erroneous in so far as it is prejudicial to the interest of Revenue.

5. That the impugned order passed u/s 263 is liable to be annulled/quashed because the learned PCIT Delhi- 10 had himself not conducted any enquiry /investigation, in order to verify as to whether the import purchases were bogus.

6. That the impugned order passed u/s 263 is liable to be annulled because the learned PCIT Delhi-10 had failed to disprove that the assessee had not made import purchases.

7. That the learned PCIT Delhi-10 had failed to appreciate that since all the import purchases of Rs.1,27,13,757/- were fully accounted for and recorded in the books of account, the provision of section 69C were not at all attracted in the case of the assessee.

8. That the learned PCIT Delhi-10 had failed to appreciate that since the material representing import purchases of Rs.1,27,13,757/- were already sold (duly credited to the Trading and P & L A/c for FY 2010-11 & FY 2011-12), no addition on account of so called bogus purchases could had been made.

9.

That the learned PCIT Delhi-10 had failed to appreciate that during the first round of assessment proceedings (which travelled upto ITAT), the sources of the funds were thoroughly examined.”

3 Manmohan Singh Sehgal 3. The pertinent facts of the appeal are as under:  Assessment u/s 143(3) has been completed on 28.03.2014 making certain additions/disallowances.  Aggrieved, the assessee filed appeal before the ld. CIT(A) who after getting the remand report from the Assessing Officer deleted the additions.  The revenue filed appeal before the ITAT against the order of the ld. CIT(A) which has been adjudicated vide order dated 28.11.2019.  Meanwhile, the case has been reopened u/s 147 and Assessment Order u/s 143(3) r.w.s. 147 has been passed on 11.07.2018, after duly considering the order of the ld. CIT(A) in the case of the assessee and accepted the returned income.  The said Assessment Order passed u/s 143(3) r.w.s. 147 dated 11.07.2018 was the subject matter of provisions of Section 263 invoked by the ld. PCIT who set aside the Assessment Order dated 28.03.2014.  Consequent to the order u/s 263 of the ld. PCIT, the Assessing Officer passed order u/s 143(3) r.w.s. 263 r.w.s. 144B on 30.03.2022 making the same additions/disallowances made in the Assessment Order dated 28.03.2014.

4 Manmohan Singh Sehgal 4. For the sake of ready reference, the addition made in both the Assessment Orders is tabulated as under:

Addition/disallowanc Addition/disallowance e made by AO vide made by AO vide Reassessment Order Assessment Order dt. dt. 30.03.2022 28.03.2014 passed u/s passed u/s 143(3) 143(3) r.w.s. 263 r.w.s. 144B Addition made u/s 69 by 79,10,335 79,10,385 doubting the sale of old gold ornaments Addition made towards 5,90,376 5,90,376 Business Income Disallowance of Business 10,00,000 10,00,000 Expenses Addition made u/s 40(a)(ia) 2,81,514 2,81,514 Addition made u/s 68 on 42,80,624 42,80,624 account of Sundry Creditors Addition made u/s 68 on 1,15,43,077 1,15,43,077 account of accretion in Capital Addition made u/s 2(22)(e)- 10,00,000 10,00,000 Deemed Dividend

5.

Thus, we find that the assessee was a subject matter of,

 Assessment u/s 143(3) dated 28.03.2014.  Assessment u/s 143(3) r.w.s. 147 dated 11.07.2018.  Revision u/s 263 dated 15.03.2021.  Assessment u/s 143(3) r.w.s. 263 dated 30.03.2022.

6.

Hence, it can be said that the assessee has been scrupulously scrutinized by various provisions of the Income Tax Act by examining the same issue multiple times.

7.

It is also an undisputed fact on record that all the additions made by the AO vide Assessment Order dated 28.03.2014 were subject matter of appeal before the Tribunal which are the same additions made by the AO vide order dated 30.03.2022 r.w.s. 263 of the Income Tax Act, 1961 and the 5 Manmohan Singh Sehgal issues in the Assessment Order dated 28.03.2014 stands adjudicated in vide order dated 28.11.2019. Hence, the order passed by the ld. PCIT u/s 263 of the Income Tax Act, 1961 becomes damp squib and hence the appeal of the assessee is liable to be allowed.

8.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 14/09/2023.

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