AMAN KUMAR AGRAWAL,ASHOK NAGAR V. ITO - ASHOK NAGAR, ASHOK NAGAR, M.P

ITA 14/AGR/2023

AI Insights

The case involves Aman Kumar Agarwal, a partner in a partnership firm, who did not file a return of income for the assessment year 2012-13, claiming no taxable income. The case was reopened based on AIR information, and during reassessment, the Assessing Officer verified certain credit card payments related to business activities. The Assessing Officer accepted the returned income after satisfaction with the explanations and bank verifications. However, the Principal Commissioner of Income-tax (PCIT) found the order erroneous and prejudicial to the interest of Revenue, leading to a set aside of the Assessing Officer's order. The Tribunal, after hearing the arguments, disagreed with the PCIT, emphasizing that the Assessing Officer had adequately addressed the issues within the scope of the reassessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 23186 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-10-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 24-01-2023
• Other Referred Cases: CIT vs. Jet Airways (I) Ltd. (2011) 331 ITR 236 (Bom), Ranbaxy Laboratories Ltd. vs. CIT, 336 ITR 136(Del)
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUKESH KUMAR JAIN; NOT EXAMINING
• Keywords: Set aside; Reassessment proceedings; TDS
• Section: 147; 148; 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE: SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER AND SHRI P.C. YADAV, JUDICIAL MEMBER ITA No. 14/Agr/2023 Assessment Year: 2012-13 Aman Kumar Agarwal, M/s. Mithoo Lal Hansram Agarwal, Lajpat Rai Marg, Ashok Nagar (M.P.) PAN: ABOPA4153F versus Principal CIT, Gwalior. (Appellant) (Respondent) Assessee by : None Revenue by : Sh. Sukesh Kumar Jain, CIT/DR Date of hearing : 08/10/2024 Date of pronouncement: 22/10/2024 ORDER PER P.C. YADAV, JM: Present appeal of the assessee is arising from the order of learned Principal Commissioner of Income-tax, Gwalior (hereinafter referred to as PCIT for the sake of convenience) dated 14.03.2022 and relates to assessment year 2012-13. ITA No. 14/Agr/2023 2 2. The assessee has raised five grounds of appeal. However, the solitary issue involved in this case is regarding assumption of jurisdiction u/s. 263 of the Income-tax Act by ld. PCIT. 3. Facts leading to the filing of present appeal are that the assessee is an individual working as partner in a partnership firm during the year under consideration. Assessee did not file return of income for the year under consideration as he was not having taxable income. Based on AIR information, the case of the assessee was reopened u/s. 147 read with section 148 vide notice dated 27.03.2019. During the course of reassessment proceedings, the Assessing Officer observing that assessee has made certain payments from his credit cards, issued notices u/s. 133(6) dated 27.06.2019 to the concerned banks and verified about the payments made by the assessee via his credit card on account of meetings, hoteling and travelling expenses. Satisfied with the replies of the banks and of the assessee, the Assessing Officer concluded the assessment after accepting the returned income, viz., Rs.1,42,970/-. Thereafter, ld. PCIT while examining the case record, took a view that the order of the Assessing Officer is erroneous and ITA No. 14/Agr/2023 3 prejudicial to the interest of Revenue and hence, required to be set aside. The main reasons assigned by ld. PCIT are as under : “As regards the transaction related to payments through credit card of Rs. 3,31,900/-, 5,48,956/- and 1,83,228/- made through credit cards of SBI, Axis Bank and Co-operative Bank respectively pertain to company activities i.e. meetings, hoteling and travelling etc.\" During the assessment proceedings it has not been verified whether the amounts were given by the company to the assessee in his individual account and respective vouchers were passed for the purpose of business activity of the impugned company or firm of the assessee. The AO has not examined these facts during the assessment proceedings. (ii) On perusal of records it has been observed that assessee has shown interest of Rs.77,080/- on FDRs, on which TDS of Rs. 18,088/- has also been claimed by the assessee. During the proceedings the assessee was left to be asked for submitting the total investment in FDRs and source thereof in as much as no balance sheet has been maintained/filed by the assessee at the time of assessment. (iii) Furthermore, on perusal of reply of AXIS bank in response to notice u/s 133(6) of the act, it is found that the assessee maintains as many as 17 accounts with the bank including an account in the name of Home Shoppe Direct Merchandising Pvt. Ltd., only of which statement of accounts has been furnished by the bank. Examination the nature of other bank accounts and calling for their statements were left at the time of assessment. (iv) Further it is found that the assessee in his reply stated that he is a partner in firm M/s Mithoo Lal Hansraj, Ashok Nagar from which he received profit and interest. But no copy of capital account in that firm has been obtained or filed by the assessee. The assessee has shown interest from the firm of Rs. 50,891/-, the copy of detailed capital account was left to called for to be examined.” 4. After mentioning the above reasons, ld. PCIT issued a show cause notice to the assessee and called for the submissions of the assessee. ITA No. 14/Agr/2023 4 The assessee vide his reply dated 22.02.2022 filed his submissions and contended that the order of the Assessing Officer was neither erroneous nor prejudicial to the interest of Revenue. However, ld. PCIT vide impugned order set aside the order of Assessing Officer by holding that the order of the Assessing Officer is erroneous and prejudicial to the interest of Revenue. Aggrieved with the order of ld. PCIT, the assessee preferred the present appeal and raised the grounds as discussed hereinabove in this order. 5. Today, when the matter was called for, no one has appeared from the side of the assessee despite the service of notice. Therefore, we are deciding the matter on the basis of material on record and after hearing the arguments of ld. CIT/DR. 6. Learned CIT/DR appearing on behalf of the Revenue has vehemently argued that the Assessing Officer failed to conduct any enquiries vis a vis reasons mentioned by ld. PCIT in his order as extracted above. 7. After considering the submissions of the learned CIT/DR and perusing the material available on record, we observe that in this case, ITA No. 14/Agr/2023 5 the proceedings u/s. 147 were initiated on the ground that the assessee has made certain payments from his credit card and verification of these payments is required as assessee did not file any return of income. As observed elsewhere that the Assessing Officer issued 133(6) notice to the banks and also called for the reply from the banks. We observe that the assessee explained that the payments were made on behalf of the company and the company, in turn, reimbursed these expenses to the assessee. The Assessing Officer, satisfied with the reply of the assessee as well as information received from the banks and has taken a pragmatic view and accepted the returned income of the assessee. It is settled position of law that if the point, on which jurisdiction u/s. 148 has been assumed, could not call for any addition, then the Assessing Officer is not empowered to make other additions de hors the main ground on the basis of which jurisdiction has been assumed u/s. 148 of the Act. Reliance can be placed on the decision of Hon’ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. (2011) 331 ITR 236 (Bom) and Hon’ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs. CIT, 336 ITR 136(Del). Therefore, we are of the ITA No. 14/Agr/2023 6 firm opinion that the Assessing Officer has duly discharged his duties as an investigator by framing the assessment and the Assessing Officer has also acted in a judicious manner while discharging his duties of an adjudicator. Therefore, the view of ld. PCIT that the Assessing Officer has failed to conduct enquiries on some other issues while framing the reassessment, is patently wrong. The PCIT cannot enlarge the scope of enquiries in reassessment proceedings particularly when the point on which jurisdiction for 147 has been assumed is not taxable in law and on facts. It is incumbent upon the PCIT to point out as to what error the AO has committed and what prejudice has occurred to revenue. In this case, the Assessing Officer has taken one of the plausible views after calling for information from the banks and the assessee and hence, the view of PCIT vis-a-vis investigation on other issues by AO is not tenable. Without prejudice to our observations, it is also evident that the Ld. PCIT has failed to point out any prejudice caused to revenue by not examining other issues and hence the action of the PCIT is not in accordance with law because fishing and roving enquiries are not permissible under Income Tax Act. ITA No. 14/Agr/2023 7 8. Therefore, we quash 263 order, finding no error in the order of Assessing Officer in terms of investigation or adjudication. 9. In the result, appeal is allowed. Order pronounced in accordance with Rule 34(4) of the Income Tax Appellate Tribunal Rules, 1963 on 22.10.24. Sd/- Sd/- (RAMIT KOCHAR) (P.C. YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 22/10/2024 *aks/- "