ASHOK KUMAR YADAV ,DELHI V. ITO WARD-69(1), DELHI

ITA 906/DEL/2022

AI Insights

The case revolves around the appeal by Ashok Kumar Yadav against the order of the PCIT-Delhi-15, which pertained to the Assessment Year 2011-12. The PCIT had invoked Section 263 of the Income Tax Act, claiming that the assessment order was erroneous and prejudicial to the interest of the revenue, primarily due to unverified cash deposits in the assessee's bank accounts. The Tribunal examined whether the A.O. had conducted adequate enquiries during the original assessment and whether the PCIT's order under Section 263 was justified. The Tribunal concluded that the A.O. had indeed made sufficient enquiries and that the PCIT's order was based on an incorrect assumption of lack of enquiry, leading to the quashing of the PCIT's order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314356 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Other Referred Cases: Ranbaxy Laboratories Ltd. vs. CIT, 336 ITR 136 (Del)
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: VINOD KUMAR GARG; R. S
• Keywords: Valuation report; Assessment record; Revision of order
• Section: 147; 148; 143(3); 263

Judgement Text

" 1 ITA No. 906Del/2022 Ashok Kumar Yadav Vs. ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘C’ NEW DELHI) BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 906/DEL/2022 (A.Y. 2011-12) Ashok Kumar Yadav House No. 36/2, Main Najafgarh Road, New Delhi PAN: AAOPY1339E Vs. ITO Ward-69(1) New Delhi Appellant Respondent Assessee by Sh. Vinod Kumar Garg, CA and Sh. R. S. Negi, Adv Revenue by Sh. Dayainder Singh Sidhu, CIT(DR) Date of Hearing 09/04/2025 Date of Pronouncement 07/05/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of the Principal Commissioner of Income Tax (‘PCIT’ for short)-Delhi-15 dated 27/03/2021 pertainingto Assessment Year 2011-12. 2. The grounds of appeal are as under:- “1. The order of the Hon'ble Pr. CIT-15, New Delhi u/s 263 of the IT Act is erroneous in law as well as facts of the case and thus the assessment framed on the basis of invalid proceedings is also bad in law. 2. That assumption of jurisdiction u/s 263 of the Income Tax Act 1961 by Principal CIT for cash deposit in bank account is bad in law 2 ITA No. 906Del/2022 Ashok Kumar Yadav Vs. ITO as no addition for deposit of cash of Rs.9,49,500/- in AXIS Bank and Corporation Bank account and Rs.1477/- on account of interest can be made when the primary ground, on the basis of which reassessment proceeding u/s 147 were initiated, cease to exist as held in case of Ranbaxy Laboratories Ltd. vs. CIT', 336 ITR 136 (Del), therefore the order passed by CIT is un-jurisdictional. 3. That, the Ld. Pr. Commissioner of Income Tax has erred in law as well as on facts in assuming that no verification was made during the course of the assessment failing to appreciate that assessment was passed after due enquiry and as per records available on file/NMS data relevant for the AY 2011-12, hence assumption of jurisdiction u/s 263 of the Act on misconceived premise is unsustainable in law. 4. That the Ld. CIT is not justified in reopening the assessment by applying the provisions of clause (b) of explanation 2 to section 263 which provides that an order of AO is deemed to be erroneous if in the opinion of Pr. CIT, the order is passed by allowing any relief without inquiring into the claim, whereas no relief is claimed by assessee in his ITR or during the assessment proceedings. 5. That the learned Principal CIT erred in holding that the assessment framed by the AO is erroneous in so far prejudicial to the interest of revenue under the provisions of section 263 of the Act, as the Ld. CIT has failed to show as to how the assessment order passed by the Ld. Assessing officer is erroneous in as much as prejudicial to the interest of Revenue in the facts and circumstances of the case, whereas the order was passed on the basis of facts on file and independent application of mind and there is no mention of deposit of cash of Rs.9,49,500/- in MNS data for AY 2011-12. 6. That the Ld. Pr. CIT was not justified to hold, that lack of enquiry on the part of the Ld. Assessing Officer is clearly established from perusal of the record, without pin-pointing as to what sort of enquiry should have been made by him. 7. That the order u/s 144//263 passed by the Id. AO on 23.03.2022 consequent to order u/s 263 is invalid as the same is passed without generating any DIN which is against the CBDT Cir. No.19/2019 dated 14.08.2019, which requires that no communication by Income tax Authority shall be issued after 3 ITA No. 906Del/2022 Ashok Kumar Yadav Vs. ITO 01.10.2019 to the assessee unless a computer generated DIN has been generated and is duly quoted in the body of the order, whereas no such DIN is given in the assessment order. 8. That the appellant craves leave to add, delete or amend any of the grounds of appeal on or before the disposal of the same.” 3. Brief facts of the case are that, based on the information regarding some financial activities for Financial Year 2010-11 that the Assessee had deposited cash of Rs. 10,00,500/- in his saving bank account and had not filed his return for the relevant Assessment Year 2011-12, proceedings u/s 147 of the Income Tax Act, 1961 (‘Act’ for short) were initiated. In response to the notice issued by the A.O., the Assessee field a reply by explaining the source for cash deposited in his bank account with supporting documents. Thereafter the assessment was completed u/s s143(3)/147 of the Act vide order dated 13/11/2018 by making an addition of Rs. 4,053/- on account of interest income earned by the Assessee in his saving account. The Assessee opted not to challenge the same and tax due has been paid by the Assessee. 4. The Ld. PCIT by invoking the provision of Section 263 of the Act, examined the assessment record and observed that the assessment order so passed was erroneous in so far as it was prejudicial to the interest of the revenue. An order u/s 263 of the Act came to be passed on 27/03/2021, wherein the Ld. PCIT remanded the matter to the file of the 4 ITA No. 906Del/2022 Ashok Kumar Yadav Vs. ITO A.O. to examine the case afresh specially with regard to the cash deposits. Aggrieved by the order of the Ld. PCIT dated 27/03/2021, the Assessee preferred the present Appeal on the grounds mentioned above. 5. The Ld. Assessee's Representative not pressed the Ground No. 4 of the Appeal accordingly, Ground No. 4 is dismissed. The Ld. Counsel for the Assessee canvassing on Ground No. 2 & 3 vehemently submitted that the Ld. PCIT has reopened the case merely because no action for Assessment Year 2011-12 could be initiated u/s 148 of the Act in view of the fact that Assessment Year 2011-12 is already barred by limitation on 31/03/2018 itself. The Ld. Counsel further submitted that the A.O. has made proper enquiry as per MNS data available for the year and there is no lack of enquiry on the part of the A.O., therefore, invocation of provision of Section 263 of the Act is erroneous. The Ld. Counsel also submitted that the assumption of jurisdiction u/s 263 of the Act by the PCIT on account of cash deposit in the bankaccount is bad in law as no addition for deposit of cash of Rs. 9,49,500/- in Axis Bank and Corporation Bank Account and Rs. 1,477/- onaccount of interest can be made when the primary ground, on the basis of which re-assessment proceedings u/s 147 of the Act were initiated was ceased to exit. The ld. Assessee's Representative relying on the ratio laid down in the case of 5 ITA No. 906Del/2022 Ashok Kumar Yadav Vs. ITO Ranbaxy Laboratories Ltd. vs. CIT, 336 ITR 136 (Del) sought for allowing the Appeal. 6. Per contra, the Ld. Departmental Representative submitted that the Assessee has not disclosed the cash deposit of Rs. 9,00,000/- made on 07/02/2011 in Axis Bank and Rs. 49,500/- in the Corporation Bank during the assessment proceeding and the same has escaped assessment, therefore, assessment order passed u/s 143(3) of the Act was erroneous in so far as prejudicial to the interest of the Revenue. Thus, submitted that the Ld. PCIT has rightly invoked Explanation 2 to Section 263 of the Act and passed the order impugned. The Ld. Departmental Representative relying on the order of the PCIT sought for dismissal of the Appeal. 7. We have heard both the parties and perused the material available on record. The case of the Assessee was reopened u/s 148 of the Act for the reason that the Assessee has deposited cash of Rs. 10,00,500/- in the Central Bank of India. The Assessee filed reply before the A.O. that the Assessee sold his ancestral property collectively with the other legal heirs and receivedhis share of consideration amount in cash and deposited the same in his bank account. The Assessee has also filed copy of the ancestral property valuation report having four legal heirs 6 ITA No. 906Del/2022 Ashok Kumar Yadav Vs. ITO including the Assessee before the A.O. Further contended before the A.O., that the whole sale consideration in cash was used to purchase another house property along with his wife. Afterverifying the reply and the document produced by the Assessee,A.O. made no addition on account of cash deposit in the bank account and passed assessment order u/s 147/143(3) of the Act on 13/11/2018. Further, it is also contended by the Assessee that the Assessee has deposited the cash of Rs. 9,00,000/- on 07/02/2011. Thus, it is clear that, the Ld. A.O. made proper enquiry and it is not the case that no enquiry has been made by the A.O. to invoke the provision of Section 263 by the PCIT. Thus, in our considered opinion, invocation of provision of Section 263 was nothing but fishing and rowing enquiry. Considering the above facts and circumstances, we find merits in the Ground Nos. 2 &3 of appeal of the Assessee. Accordingly, the impugned order of the PCIT is hereby quashed. 8. In the result, the Appeal of the Assessee is allowed. Order pronounced in the open court on 07th May, 2025 Sd/- Sd/- (NAVEEN CHANDRA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 07 .05.2025 R.N, Sr.P.S* 7 ITA No. 906Del/2022 Ashok Kumar Yadav Vs. ITO Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "