“Principal Commissioner of Income-tax”
The decision most relied on for Principal Commissioner of Income-tax is CIT v. Max India Ltd. (295 ITR 282), cited in 1,162 judgments on BharatTax.
Leading authorities on Principal Commissioner of Income-tax
Under Section 263, an assessment order is not erroneous and prejudicial to the interest of the revenue merely because the Principal Commissioner disagrees with the Assessing Officer's (AO) view, particularly if the AO has adopted one of two permissible views in law, unless that view is completely unsustainable. If due inquiries were made, the AO's order does not become erroneous solely because the fact of inquiries was not recorded.
An assessment can be reopened if there is tangible material indicating escapement of income, demonstrating a live link between the material and the reasons recorded for reopening. The Assessing Officer must apply their mind to the material facts, and the sanction under section 151 should not be based on borrowed satisfaction.
Approval of draft assessment orders under Section 153D must be granted with due application of mind, not mechanically. Approving multiple cases, such as 38 in a single day, without proper scrutiny amounts to mechanical approval, rendering the assessment invalid.
The Principal Commissioner can revise an assessment under Section 263 if the Assessing Officer's inquiry into share application money or cash credits under Section 68 was inadequate, constituting an order erroneous and prejudicial to the revenue. The primary onus to prove the identity, creditworthiness, and genuineness of such credits remains with the assessee.
The amended Section 151 of the Income-tax Act, governing the sanction for reassessment proceedings under Sections 148 and 148A, applies to cases initiated under the new reassessment regime. The specified authority for granting such sanction becomes the Principal Chief Commissioner or Principal Director General if more than three years have elapsed from the end of the relevant assessment year.
Rule 27 of the ITAT Rules allows a respondent to defend a favourable order of the CIT(A) by raising grounds decided against them, even without filing an appeal or cross-objection. Such issues can be raised orally and for the first time before the Tribunal.
When an assessee maintains proper books of accounts without defects, cash deposits made into a bank account from the available cash balance recorded in the cash book cannot be treated as unexplained cash credits under Section 68 or unexplained money under Section 69A of the Act.
The date of initiation of penalty proceedings for the purpose of Section 275(1)(c) is when the Assessing Officer records a satisfaction or recommends penalty, not the later date when the Joint/Additional Commissioner of Income Tax issues the penalty notice.
