The Pune Bench of Income Tax Appellate Tribunal has quashed the revisionary order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, 1961.
The ITAT held that the PCIT’s order was unsustainable in law as the Assessing Officer (AO) conducted due inquiry before framing of the assessment.
The Assesse, Ashok Khimraj Jain, assessed his income tax return for the assessment year 2015-16, stating total income of 4,14,670/-.The case was chosen for limited scrutiny under CASS to determine “whether the cash deposit of 15,95,000/- during the demonetization period was made from disclosed sources.”
The AO completed the assessment processes under section 143(3) of the Income Tax Act, and added 1,64,098/- as unexplained money under section 69A of the Act.
After reviewing the case records, the PCIT concluded that the assesse had failed to provide persuasive material and a convincing explanation in support of the closing sum of 10,19,188/-. As a result, the PCIT asked the AO to for reassessment for the assessment year 2015-16. The assesse challenged the PCIT’s order
The assessee claimed that, the AO had done its research before drafting the assessment, the PCIT’s ruling was not legally tenable. The assesse claimed that the AO had looked through the taxpayer’s justification for the origin of the cash deposits and, after carefully weighing all of the relevant details, had come to the conclusion that the taxpayer had not offered an adequate justification. In accordance with Section 69A of the Income Tax Act, the AO added 1,64,098/- to the taxpayer’s income.
The PCIT contended that the AO had not properly investigated the origin of the cash deposits. It was also stated that the AO had not requested any documentation to support the taxpayer’s justification.Thus, the PCIT directed the AO to re-do the assessment.
The PCIT’s ruling was deemed to be legally unsustainable by the ITAT, who concurred with the assesses position. The ITAT found that the AO had made a sufficient investigation and that the PCIT had not taken into account all of the relevant facts. The Tribunal thus maintained the AO’s assessment order while reversing the PCIT’s ruling.
The bench consisting of S S Viswanethtra Ravi (Judicial Member) and G. D. Padmahshali (Accounting Member) allowed the appellant’s appeal and quashed the PCIT’s revisionary order.
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