GRAND CARS INDIA PRIVATE LIMITED,SECTOR C SIRGITTI BILASPUR V. PCIT RAIPUR -1 , CENTRAL REVENUE BUILDING

ITA 192/RPR/2025

AI Insights

The case involves Grand Cars India Private Limited appealing against the order of the Principal Commissioner of Income Tax (PCIT), Raipur, which was passed under section 263 of the Income Tax Act, 1961. The PCIT's order was based on the grounds that the assessee had received cash exceeding Rs. 2,00,000 in contravention of section 269ST, which warranted a penalty under section 271DA. The Tribunal examined the financial evidence provided by the assessee, including ledger accounts and journal vouchers, and found that the amounts received were actually below the threshold limit. Consequently, the Tribunal held that the PCIT's order was not justified and struck it down.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712285 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.L.ANURAGI
• Assessee Lawyers: VINOD KUMAR KHATRI
• Keywords: Business income; Revision of order
• Section: 147; 263

Judgement Text

"आयकरअपीलीयअिधकरण ,रायपुर Ɋायपीठ,रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR Įी पाथ[ सारथी चौधरȣ, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI PARTHA SARATHI CHAUDHURY, JM & SHRI ARUN KHODPIA, AM आयकर अपील सं. / ITA No: 192/RPR/2025 (िनधाŊरण वषŊ Assessment Year: 2018-19) Grand Cars India Private Limited, Sector C Sirgitti Bilaspur, 495001, Chhattisgarh. vs PCIT Raipur-1, Central Revenue Building Civil Lines, Raipur, 492001, Chhattisgarh. PAN: AAGCG5729F (अपीलाथŎ/Appellant) .. (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से / Assessee by : Shri Vinod Kumar Khatri, CA राजˢ की ओर से / Revenue by : Shri S.L. Anuragi, CIT-DR सुनवाई की तारीख / Date of Hearing : 29.07.2025 घोषणा की तारीख / Date of Pronouncement : 30.07.2025 आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeal is filed by the assessee against the order of Principal Commissioner of Income Tax (in short, ld. PCIT), Raipur, passed u/s 263 of the Income Tax Act, 1961 (in short, ‘the IT Act’) for the AY 2018-19, dated 20.03.2025, which in turn arises from the order of the Assessing Officer, Assessment Unit (in short, ld. AO) passed u/s 147 r.w.s 144B of the IT Act, dated 13.03.2023. 2. The grounds of appeal raised by the assessee in the present appeal are culled out as under: Printed from counselvise.com 2 ITA No. 192/RPR/2025 Grand Cars India Private Limited vs. PCIT Raipur-1 “1. The impugned order is bad in law and on facts. 2. On the facts and circumstances of the case as well as in law. The LD. PCIT has grossly erred in setting aside the assessment order passed by the Ld. AO under section 147r.w.s 144B of the Act with direction to make fresh assessment by holding that the said order is erroneous in so far as it is prejudicial to the interest of the revenue. The Ld. PCIT has failed to appreciate that the said assessment order has been passed by the Ld. AO after conducting necessary & diligent enquiries and conscious application of mind & deliberation to the material on record and hence, it is prayed that the order passed under section 263 of the Act being highly unjustified and not in accordance with the provisions of law, may please be cancelled.\" 3. The learned CIT is not justified in law in invoking the jurisdiction under section 263 of the Act and setting aside the order of the AO, as being \"erroneous and prejudicial to the interest of the revenue\", which is contrary to fact, on the facts and circumstances of the case. 4. That the Ld. PCIT passed the order without conducting any satisfaction /enquiry on the evidences submitted 5. On the facts and in circumstances of the case as well as in law. The Ld. PCIT has grossly erred in holding that the Ld. AO has not conducted proper enquiries in respect of cash received on account of sale particularly without himself rendering any prima-facie findings as to the non-satisfaction of necessary ingredients of section 269ST of the Act thereby invoking provisions of section 271DA and without discussing the contents of the adverse findings of any reports etc. And merely directing the Ld. AO to make adequate enquiries in respect of such cash receipt hence, the action of the LD. PCIT is highly unjustified, unwarranted and not in accordance with the provisions of law hence, on the issue, the original order passed is neither erroneous nor prejudicial to the interest of the revenue.\" Printed from counselvise.com 3 ITA No. 192/RPR/2025 Grand Cars India Private Limited vs. PCIT Raipur-1 6. That the Ld. PCIT has erred in setting aside the order on issues other than the issues in notice u/s 263. 7. The appellant reserves the right to add, alter, and omit all or any 7 of the grounds of appeal with the permission of the Hon'ble ITAT.” 3. At the outset, Learned Authorized Representative (in short, Ld. AR) representing the assessee submitted that the re-opening assessment in the case of assessee u/s 147 r.w.s. 144B was completed on 13.03.2023 and after deliberations the returned income of the assessee has been accepted by the Ld. AO. Subsequently, the case of the assessee has been picked up for revision invoking provisions of section 263 of the Act and the main grievance to invoke the revisionary powers by the Ld. PCIT are that the assessee company has received cash amounting to Rs.2,34,318/- from Shri Radhe Shyam Soni in lieu of credit sales made during the F.Y. 2017-18 and further the assessee has received cash amount in lieu of sale made vide invoice No.145 for Rs.2,03,039/- from an unknown buyer dated 31.03.2018. It was the allegation that both the aforesaid amount received by the assessee exceeds the limit of Rs.2,00,000/- in contravention to provisions of section 269ST of the Act, so penalty u/s 271DA is attracted. In response to the aforesaid violations brought on record by the Ld. PCIT, regarding the first issue, the assessee submitted that the amount of Rs.2,34,318/- includes two amounts, i.e. Rs.1,99,000/- received on 24.01.2018 and Rs.35,318/- received on 25.01.2018 and further out of these total amounts, Printed from counselvise.com 4 ITA No. 192/RPR/2025 Grand Cars India Private Limited vs. PCIT Raipur-1 a sum of Rs.25,327/- pertains to insurance of vehicle and Rs.90,091/- pertains to RTO fees, which is payable to insurance company and government respectively, thus does not constitute the income of the assessee. Since, these two amounts were collected on behalf of the insurance company and RTO, therefore, these are not part of sale proceeds of the assessee and accordingly, the provision of section 269ST are not attracted. 4. Apropos, the second amount of Rs.2,03,039/-, it was the submission by the Ld. AR that this amount was not received from a single party but has been received on account of cash sale of spare parts during the entire month of March, 2018 under various transactions. To substantiate the aforesaid contention, Ld. AR drew our attention at page No. 25 of the assessee’s paper book containing the ledger account of Shri Radhe Shyam Soni showing receipt of Rs.1,99,000/- dated 24.01.2018 and receipt of Rs.35,318/- dated 25.01.2018. In order to support the said contention further, the Ld. AR place before us a copy of Journal Voucher No.161 dated 23.01.2018 showing bifurcation of amount wherein the insurance amount is Rs.25,327/- and RTO Rs.90,091/- included in the total amount received from Shri Radhe Shaym Soni. Ld. AR also placed before us a copy of ledger account, namely, “RTO” and “Insurance” to fortify the aforesaid facts and contentions. Regarding the amount of Rs. 2,03,039.82/-, Ld. AR took us to page No. 26 of the assessee’s paper Printed from counselvise.com 5 ITA No. 192/RPR/2025 Grand Cars India Private Limited vs. PCIT Raipur-1 book, showing total cash sales of spare parts for Rs.2,03,039.82/- under various sale transactions during the month, which includes sale amount of Rs.1,72,067.64/- and remaining is CGST and SGST. Ld. AR also shown us the sale register of spare parts of the assessee for the month of March, which is placed in paper-book at page Nos. 27 and 28 showing sales of spare parts in various dates having no amount exceeding the amount of Rs.2,00,000/- and the total sales for the month of Rs.2,03,039.82. 5. In terms of aforesaid facts and circumstances, it was the submission by the Ld. AR that the amount received by the assessee are less than of Rs.2,00,000/- in all the aforesaid transactions which are alleged by the revenue to be exceeds the limits, accordingly, the provision of section 269ST does not attracted. It was the submission that since the allegation made by the department are not on the basis of correct verification of facts, therefore, the issue raised to restore back the matter to the file of the AO to initiate penalty proceedings against the assessee u/s 271DA of the IT Act are against the mandate of law and revisionary proceedings initiated u/s 263 are without application of mind, thus, are liable to be struck down. 6. Per contra, Ld. CIT-DR vehemently supported the order of Ld. PCIT. 7. We have considered the rival submissions, perused the material available on record and the case laws relied upon by the assessee. Printed from counselvise.com 6 ITA No. 192/RPR/2025 Grand Cars India Private Limited vs. PCIT Raipur-1 8. Admittedly, on perusal of the financial evidences furnished before us by the assessee in the form of ledger account of Shri Radhe Shyam Soni, spare parts sales 18%, sale register, ledger account of insurance, RTO and the journal voucher showing bifurcation of sale to Shri Radhe Shyam Soni, this clearly demonstrates that the receipts by the assessee, which are alleged to be in excess of Rs.2,00,000/- as observed by the Ld. PCIT in order u/s 263 of the IT Act, are actually less than the said limit, therefore, no further verification on this count would be necessary since all such information are there before the Ld. PCIT, a plausible view would have been taken so as to curb the legal proceedings which are not at all necessary and would cause prolonged litigation between the assessee and revenue, which can be avoided. 9. In view of the aforesaid facts and circumstances, we are of the considered view that the revisional proceedings initiated against the assessee are not in terms of the mandate of law and the facts furnished by the assessee before the Ld. PCIT, which clearly establishes that there was no amount exceeding of Rs.2,00,000/- during year under consideration to attract the provisions of section 269ST, therefore, the proceedings under section 263 of the IT Act to initiate penalty u/s 271DA is bereft of merits and devoid of any substance. Printed from counselvise.com 7 ITA No. 192/RPR/2025 Grand Cars India Private Limited vs. PCIT Raipur-1 10. Resultantly, the order passed u/s 263 of the Act is liable to be quashed, which therefore, is hereby struck down and the appeal of the assessee is allowed, in terms of our aforesaid observations. Order pronounced in the open court on 30/07/2025. Sd/- (PARTHA SARATHI CHAUDHURY) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर / Raipur; िदनांक Dated 30/07/2025 **HKS आदेशकी Ůितिलिप अŤेिषत / Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, //True copy// (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर / ITAT, Raipur 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. The Pr. CIT, Raipur (C.G.) 4. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 5. गाडŊ फाईल / Guard file. Printed from counselvise.com "