The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the power of revision under Section 263 of the Income Tax Act, 1961 cannot be exercised when there is proper enquiry made by the Assessing Officer.
A survey under Section 133A of the Income Tax Act was carried out at the premises of the assessee, proprietor of M/s. Fancy Jewellers, Purana Sarafa Bazar, Karnal, Haryana wherein an additional income of Rs. 90,63,000/- was admitted by the assessee on account of unexplained cash and stock. The assessee filed his return declaring income of Rs. 94,60,870/-. His case was selected for compulsory scrutiny.
The Assessing Officer issued statutory notices along with a questionnaire in response to which the assessee filed a written reply along with documents and evidence mentioned therein. The Assessing Officer perused and considered them. He called for the books of account of the assessee which were produced and were verified. Thereafter, he completed the assessment under Section 143(3) of the Income Tax Act on the income returned at Rs. 94,60,870/-.
The Principal Commissioner of Income Tax (PCIT) stated that the surrendered income was in the nature of unexplained cash/stock, and the same was liable to be added as income from other sources and tax was liable to be paid at 60% under Section 115BBE of the Income Tax Act which the Assessing Officer failed to do. Therefore, his order was erroneous and prejudicial to the interest of Revenue which he set aside with direction to the Assessing Officer to pass a fresh order in accordance with the law.
The Authorized Representative submitted that the facts of the assessee’s case are exactly the same as those of his son. He submitted a chart showing therein the facts of the case of the assessee and facts in the case of his son. He therefore urged that the decision of the Tribunal in the case of the son of the assessee be followed in the case of the assessee also.
The Departmental Representative conceded that the facts of the assessee’s case are exactly the same as those of his son’s case. It was also agreed that the applicability of the amended provision of Section 115BBE of the Income Tax Act is debatable. It was, however, contended that the Assessing Officer had not conducted the enquiry in the case.
The Two-member bench comprising of Shamim Yahya (Accountant member) and Astha Chandra (Judicial member) held that the Assessing Officer had issued a questionnaire along with statutory notices sent to the assessee in response to which the assessee had filed a written reply along with necessary documents and evidence. He perused and considered them. Not only this, the Assessing Officer called for books of account which he verified. So, there was not a case of no enquiry.
Therefore, the bench vacated the order of the PCIT and restored the assessment order passed by the Assessing Officer under Section 143(3) of the Income Tax Act.
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