Income Tax Appellate Tribunal (ITAT), Kolkata bench consisting of Rajpal Yadav, Vice President and Manish Borad, Accountant Member held that order passed by PCIT (Principal Commissioner of Income Tax) u/s 263 for making fresh assessment without considering the submission made by the appellant on sole ground that were duly verified by the AO in course of assessment is bad in law.
The assessee, Debdas Ghoshal is an individual engaged in business. As per records, revised return of income declaring total income of Rs. 5,93,510/-. A survey u/s 133A of the Act was conducted on 28.11.2014. Thereafter, notice u/s 148 of the Act was issued and served upon the assessee. The assessment was completed after making addition for unsecured loan at Rs. 17,00,000/- and income assessed at Rs. 22,93,510/-. Subsequently PCIT, Kolkata called for assessment records and after examining the same, issued the following show cause notice u/s 263 of the Act. After issuing the show cause notice, revisionary proceedings were carried out and after considering the submissions of the assessee and PCIT came to a conclusion that relevant issues relating to computation of gross profit, capitalization of the amount of Rs. 16,00,000/-, genuineness of unsecured loans and sundry creditors remained to be examined by the Assessing Officer (AO) and, therefore, the assessment order is erroneous insofar as prejudicial to the interests of the Revenue. AO was directed to re-compute the total income and the order was set aside for the limited purpose of examination of issues relating to gross profit at the time of survey u/s 133A of the Act. Aggrieved, the assessee preferred appeal before this Tribunal.
The Tribunal said” PCIT setting aside the assessment order passed u/s 143(3) of the Act. In the grounds the assessee has also submitted that all the issues raised by ld. PCIT were duly verified by the ld. AO in the course of the assessment and, therefore, the order u/s 263 of the Act is bad in law and against the principle of res judicata and natural justice.”
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