DURBAR GANGULY,DELHI V. PR, CIT DELHI-1, NEW DELHI

ITA 624/DEL/2021

AI Insights

The case involves Sh. Durbar Ganguly, who appealed against the revision order of the Principal Commissioner of Income Tax, Delhi-1, for the assessment year 2015-16. The revision was based on the grounds that the original assessment order was erroneous as it did not address the discrepancies in the income declared by the assessee and the TDS deducted by his employer, M/s CMYK Printech Ltd. The Tribunal noted that the assessee failed to appear or provide necessary reconciliations during the proceedings, leading to the conclusion that the original assessment did not adequately investigate these discrepancies, thus justifying the revision under section 263.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26155 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2015-2016
• Other Referred Cases: Malabar Industrial Co. Ltd. vs. CIT, CIT v. Paville Projects Pvt. Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BALJEET KAUR
• Keywords: Set aside; Salary income; TDS; Assessment record; FORM 26AS
• Section: 143(3); 263; 2

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘E’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No.624/Del/2021 Assessment Year: 2015-16 Sh. Durbar Ganguly, Farm No.-13, Palm Beach Road, Fatehpuribrei, Mehrauli, South West Delhi, Delhi Vs. Pr. CIT, Delhi-1, New Delhi PAN :ABAPG7535R (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2015-16, arises against the Principal Commissioner of Income Tax [in short, the “PCIT”], Delhi-1’s DIN and order no. ITBA/REV/F/REV5/2020- 21/10317665903(1), dated 25.03.2021 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Assessee by None Department by Ms. Baljeet Kaur, CIT(DR) Date of hearing 20.01.2025 Date of pronouncement 20.01.2025 ITA No.624/Del/2021 2 | P a g e 2. Case called twice. None appears at the assessee’s behest. It appears that the assessee has not appeared on the earlier occasions as well. We thus proceed ex-parte against the assessee. 3. Learned CIT-DR invites our attention to the PCIT, Delhi-1’s impugned order invoking section 263 revision jurisdiction dated 25th March, 2021 terming the corresponding regular assessment framed on 26.12.2017 by the Assessing Officer, as an erroneous one causing prejudice to the interest of the Revenue, as under: “7. On perusal of the assessment record and submission made by the assessee. It is observed that the assessee has claimed huge amount, received in cash and kind as exempt perquisites, but the assessee failed to disclose the nature of perquisites and how these are not taxable. Further, no reconciliation of the above mismatch has been clarified by the assessee neither during the assessment proceedings nor in the current proceedings. 7.1 Hence, it is prima-facie apparent that Salary income to the extent of Rs. 12,72,600 (Rs.36,00,600 - Rs. 23,80,000) has been short declared. It is not a case where any reimbursement, like conveyance reimbursement was received by the assessee from the employer and in the capital account it has taken the gross amount received and the corresponding expense has been shown as drawings. Thus, salary income to the extent of Rs. 12,72,600/- has been apparently short declared by the assessee, and the AO has failed to take the issue to the logical conclusion 7.2 Further, as per the TDS claimed and allowed, the assessee has earned Professional Receipt of Rs. 84,50,000/- from M/s CMYK Printech Ltd. However, the assessee in the Profit Loss Account has shown Gross Professional Income of Rs. 67,63,500/-. After claiming various expenses, the net profit of Rs. 22,36,597/- has been declared. However, the assessee submitted that in accordance with the settlement with CMYK Printech Limited, the assessee got benefits of Rs. 59,09,500/- by way of demand draft and a car of the value of Rs. ITA No.624/Del/2021 3 | P a g e 17,00,000/-. Therefore. M/s CMYK deducted the TDS on Rs. 84,50,000/- 7.3 The assessee has shown this amount of Rs. 22,36,597/- as addition in the Capital account. However, no such amount similar to the value of car (as declared by the assessee) has been reflected in the capital account/balance sheet produced by the assessee. The AO has failed to enquire into the issue and take it to logical conclusion 7.4 Further, no reconciliation of the above mismatch has been submitted by the assessee during the assessment proceedings. The assessee has claimed entire TDS, but has not shown the corresponding income. Hence, it is apparent that professional income to the extent of Rs. 16,86,500/-(84,50,000- 67,63,500) has been short declared. 8. Explanation 2 of Section 263 of IT Act, 1961 is reproduced as under: \"For the purpose of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of revenue, if, in the opinion of the Principal Commissioner or Commissioner. a) the order is passed without making inquiries or verification which should have been made. b) the order is passed allowing any relief without inquiring into the claim, c) the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119, or d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.\" 9.3 Accordingly, as per mandate of Explanation 2 of section 263 of the 1. Tax Act, I hold that the assessment order is erroneous and prejudicial to the interest of revenue on afore-stated facts. Hence, I hereby set aside the assessment order passed by the Assessing Officer on 26.12.2017 u/s 143(3) of the Income Tax Act for necessary verification and inquiry and the Assessing Officer is directed to make a fresh assessment de nave in terms of the direction given above.” ITA No.624/Del/2021 4 | P a g e 5. Ms. Kaur further takes us to the assessment order dated 26.12.2017 not indicating any factual verification or detailed inquiries carried out by the Assessing Officer during the course of scrutiny. Her case accordingly is that the learned PCIT’s impugned revisional discussion be upheld in these facts and circumstances. 6. We have given our thoughtful consideration to the assessee’s pleadings and Revenue’s vehement contentions. We make it clear that the assessee has not even bothered to file all the relevant scrutiny notices issued by the Assessing Officer seeking the corresponding reconciliation in the capital account vis-à-vis the corresponding figures in the assessee’s form 26AS as well as the increase in capital, so as to rebut the PCIT’s revision findings concluding the said failure triggering his jurisdiction herein under section 263 of the Act. 7. Faced with this situation, we quote Malabar Industrial Co. Ltd. vs. CIT. (2000) 243 ITR 83 (SC) as well as CIT v. Paville Projects Pvt. Ltd. (2023)453 ITR 447 (SC) to affirm the learned PCIT’s impugned revision directions in very terms. The assessee fails in the instant appeal therefore. 8. This assessee’s appeal is dismissed. ITA No.624/Del/2021 5 | P a g e Order pronounced in the open court on 20th January, 2025 Sd/- Sd/- (S. RIFAUR RAHMAN) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 20th January, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "