Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 124933 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-06-2023
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
30-04-2023
Assessment Year
2017-2018
Appeal Filed On
09-03-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA No.168/Bang/2023 Assessment year : 2017-18 The Totgars’ Co-operative Sale Society Ltd., APMC Yard, Sirsi – 581 402. Uttara Kannada District. PAN: AACAT 0251D Vs. The Principal Commissioner of Income Tax, Hubli. APPELLANT RESPONDENT Appellant by : Shri S.K. Tulsiyan & Ms. Bhoomija Verma, Advocates. Respondent by : Shri Sunil Kumar Singh, CIT(DR)(ITAT), Bengaluru. Date of hearing : 01.05.2023 Date of Pronouncement : 12.06.2023 O R D E R Per Laxmi Prasad Sahu, Accountant Member This appeal by the assessee is against the DIN & Order No.ITBA/REV/F/REV5/2021-22/1042002761(1) dated 29.3.2022 of the Principal Commissioner of Income Tax, Hubli, [Pr.CIT] for the assessment year 2017-18. 2. There is a delay of 286 days in filing the appeal before the Tribunal. The assessee has filed petition for condonation of delay along with affidavit stating that the order u/s 263 was passed on ITA No.168/Bang/2023 Page 2 of 22 29.03.2022 but the accountant was not aware of the said order as she overlooked the email due to bulk no. of emails received. The order passed u/s 263 was known to the assessee only after receipt of notice u/s 142(1) of the Act dated 04.01.2013. Immediately on receipt of the said notice, the assessee sought for an advise from tax consultant who advised to file an appeal along with application for condonation of delay. Hence the appeal against the order u/s 263 was filed before the Tribunal with delay of 286 days. The ld. AR submitted that the delay in filing the appeal was due to reasonable and sufficient cause and prayed for condonation of delay. He relied the judgments of Collector, Land Acquisition vs. Mst. Katiji & Ors. [167 I.T.R. 471 (SC)], G. Ramegowda and Ors. vs. Special Land Acquisition Officer, Bangalore (10.03.1988 - SC) [AIR 1988 SC 897] and Royal Airways Ltd. vs ADIT [2006] 98 ITD 259 (Delhi). 3. After hearing both the parties and following the Hon’ble Supreme Court judgment in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors., we are of the opinion that there was sufficient and reasonable cause for delay in filing the appeal before the Tribunal and condone the delay of 286 days. 4. The assessee has raised the following grounds of appeal:- “1. That the Honourable Principal Commissioner of Income Tax (‘PCIT’) Hubli has erred both on facts and in law in assuming jurisdiction under section 263 of the Act Income Tax Act, 1961 (‘the Act’). 2. That the order under section 263 of the Act passed by PCIT is against the principles of law, equity and justice. ITA No.168/Bang/2023 Page 3 of 22 3. That the PCIT has erred in the facts and circumstances of the case by passing the impugned order ignoring the fact that one of the reasons for initiating the complete scrutiny under Computer Aided Scrutiny Selection (‘CASS’) by the learned Assessing Officer was ‘Large Cash Deposits during Demonetization’ and has thoroughly examined all the necessary information and documents while passing the Assessment Order under Section 143(3) of the Act and therefore, the Assessment Order is neither erroneous not prejudicial to the interests of the revenue. 4. That the PCIT has erred in the facts and circumstances of the case by passing the impugned order without considering all the submissions made by the Appellant thereby violating the principles of natural justice. 5. That the PCIT has erred in the facts and circumstances of the case by passing the impugned order without following the judicial precedence on this matter. That the appellant craves leave to add to and or to alter, amend, rescind, modify the grounds herein above or produce further documents before or at the time of hearing this appeal.” 5. The assessee is a Co-operative Society registered under Karnataka Co-operative Society Act and carrying on activity of:- (a) processing and marketing of agricultural produce grown by its members (b) providing credit facilities to its members (c) the purchase and selling of agricultural implements, seeds or other articles intended for agriculture to its members (d) running a kiranna shop (super market) (e) running a rice mill (f) hiring of vans (g) running a boarding places (h) trading in areca nut grown by its members (i) trading in areca nut in the open market from non-members (j) manufacturing and selling of scented sweet supari ITA No.168/Bang/2023 Page 4 of 22 6. The assessee for A.Y. 2017-18 filed its original return of income on 31.10.2017 declaring income of Rs.73,84,220/- after claiming deduction of Rs.20,00,00,447/- under Chapter VI-A. The ROI was processed u/s 143(1) of the Act by CPC, Bengaluru. 7. The case was selected for complete scrutiny under CASS to verify the following issues:- (i) Large Deduction under Chapter VI-A form Total Income (ii) Large Cash Deposit during Demonetization (iii) High Value Cash Receipt of Cash shown from third parties 8. A notice u/s 142(1) dated 08.04.2019 was issued to which the reply was filed manually on different dates. A notice u/s 142(1) dated 04.12.2019 was issued to which the reply was filed electronically providing the details of cash deposited during demonetization. It was also explained that the debtors have deposited the cash directly in the bank account of the assessee during the period of demonetization as per the RBI Guidelines vide reply dated 28.12.2019. The assessment order u/s 143(3) was passed on 30.12.2019 making addition u/s 80P(2)(d) of the Act and 57(iii) of the Act and total income was assessed at Rs. 6,63,56,142/-. No addition made for cash deposits during demonetization. 9. The ld. Pr.CIT, Hubli observed that the assessee society has made cash deposits of Rs.3,67,23,820/- (Rs. 3,67,52,590 – Rs. 28,770) in the Axis Bank, Sirsi Branch and Rs.75,00,000/- in Axis Bank, Hubli Branch during demonetisation period in SBNs. The assessee was not authorized to accept SBNs and any acceptance of SBNs after ITA No.168/Bang/2023 Page 5 of 22 demonetisation was in violation of law and the cash deposits were liable to be treated as unexplained. The AO did not make necessary inquires about the genuineness of the source for cash deposited during demonetisation and not obtained necessary details of persons from whom SBNs were claimed to have been received. The assessee failed to explain the same, but no such addition is made in the assessment order. He therefore considered the assessment order to be erroneous and prejudicial to the interests of revenue in terms of section 263 of the Act. Thereafter, a show cause notice dated 07.03.2022 was served on the assessee. 10. The assessee furnished its reply that most of its customers are traders and cash was deposited in its bank account by the traders. The ld. Pr.CIT rejected the plea of the assessee holding that no evidence was filed to substantiate the same and the assessee has not established the identity, creditworthiness of the persons from whom it received SBNs and these credits do not satisfy the test of genuineness. He also noted that the SBNs received after demonetisaton were not legal tender and do not satisfy the test of genuineness and were therefore, unexplained credits in terms of section 68 The ld. Pr.CIT passed the impugned order u/s 263 was passed on 29.03.2022 setting aside the order passed u/s 143(3) with the direction to the AO to make fresh assessment after conducting necessary inquiries in accordance with law and CBDT guidelines. ITA No.168/Bang/2023 Page 6 of 22 11. Before us, the ld. AR has filed written submissions and submitted that the assessee filed its reply on 14.03.2022 providing the details of cash deposits by the third parties along with the ledger of parties which is at page 143-186 of the paper book. The assessee also furnished additional reply via email on 28.03.2022 challenging why the provision of section 68 would not attract to the cash deposited during the demonetisation period which is at page 187-198 of the paper book. 12. The ld. AR further submitted that the cash deposits in SBNs were made by the trade debtors in the bank accounts of the assessee. It was not accepted by the assessee directly. As per Notification dated 8.11.2016[ F No. 10/03/2016-Cy.1] and RBI Guidelines, the GOI as well as RBI has provided power to the assessee to provide authorisation to the third parties to deposit SBNs in their bank account. The bank can accept the deposit of SBNs from such third party in the bank account of assessee provided the specific authorisation obtained from the assessee is presented by the third party to the bank. 13. He further submitted that the AO vide notice u/s 142(1) of the Act dated 08.04.2019 has called for the following details: Questionnaire 11: Details of bank account along with Bank reconciliation statement and Bank statement. Questionnaire 14: Details of debtors in requisite format Questionnaire 19: Details of purchases and sales from parties in excess of Rs.10,00,000/- from the parties who are not covered under sundry debtors and creditors list 14. In response the assessee filed reply on 24.04.2019 & 13.05.2019 (page 12-22 of the PB) and furnished Copy of Bank Statement during ITA No.168/Bang/2023 Page 7 of 22 the course of assessment proceeding (page 23-74 of PB), copy of Relevant Sundry Debtors and Creditors list (page 75-78 of the PB) and copy of list of parties to whom sales is made in excess of Rs.10,00,000/- (page 79-80 of the PB). Hence it is evident that the AO has duly verified the details of sales, trade debtors and bank transactions. 15. Further, the AO issued a notice u/s 142(1) of the Act (pg. 82-85 of PB) raising query on account of demonetisation. In response, the assessee furnished reply on 12.12.2019 (pg. 86-89 of PB). The ld. AR submitted that this query was raised several times by the AO during the course of hearing on several dates. Therefore the reply in relation to demonetisation was filed on 16.12.2019, 27.12.2019 and 28.12.2019 (pg. 90 to 128 of PB). The assessee vide reply dated 28.12.2019 (page 115-123 of PB) submitted that the deposits were made by the debtors directly to the banks account of the assessee as per RBI Guidelines as follows:- SL No Name of the party PAN No. Axis Bank Hubli Branch Axis Bank Sirsi Branch Reason for depositing 1 Gurunanak Traders AROPC3148E 50,00,000/- 3,11,92,980/- Realisation from Debtors 2 Jai Maa Enterprises BJWPS6167C - 34,16,710/- 3 Kerala Spices & Nuts AGRPC9294R - 1,34,044/- 4 Sangam Trading Company AFKPM6503M - 5,34,791/- 5 Vimal Trading GIEPS5368M - 4,32,200/- 6 Yadav Trading Company ACJPY1069Q - 7,37,000/- 7 TSS Ltd, Sirsi AACAT0251D - 28,770/- 8 Marbasil Enterprises Not Available - 12,895/- 9 Rising Sun Agencies Anchatageri AALFR4574M 25,00,000/- - 10 Siddhivinayaka Enterprises ADRPT4137D - 97,000/- 11 Uttam Sales AWRPV0227B - 1,67,200/- ITA No.168/Bang/2023 Page 8 of 22 16. The ld. AR submitted that after considering the above reply, the AO called for the date-wise details of cash deposited by the aforesaid parties in SBNs during demonetisation period in the Axis Bank Account, Sirsi Branch, which was duly furnished vide email on 28.12.2019 (pg. 124-128 of PB) and the same comprises of details of deposit of Rs.3,67,24,820/- credited in the Axis Bank, Sirsi Branch and Rs.75,00,000/- in Axis Bank, Hubli Branch. He submitted that it is evident from the same that the amount of deposit during the demonetisation period has been duly examined, enquired and verified by the AO. Also, details of deposit by the parties at page 125-128 of the PB matched with the bank statement at page 23-74 of the PB, and it is evident that the cash has been deposited by the trade debtors in the bank account of the assessee. He submitted few transactions as examples in this regard which are reproduced as under:- Axis Bank, Sirsi Branch Date Amount of deposit Branch Page of Paper Book Deposited by party Page of paper book 10.11.2016 1,80,000 Junagadh (GJ) 27 Gurunanak Traders 125 11.11.2016 1,90,000 Junagadh (GJ) 27 Gurunanak Traders 125 11.11.2016 31,00,000 Hubli (KT) 28 Jai Maa 128 23.11.2016 1,99,000 Relief Road, Ahmedabad (GJ) 42 Sangam Trading Company 128 12.11.2016 1,85,900 Shahibaug, Ahmedabad (GJ) 29 Vimal Trading 128 01.12.2016 1,90,000 Sion, Mumbai [MH] 53 Yadav Trading Co. 128 ITA No.168/Bang/2023 Page 9 of 22 17. On perusal of sale details, debtors list, banks statement, reply furnished in relation to demonetisation and reply furnished on 28.12.2019, the ld. AR submitted that it is evident that the AO has duly verified the cash deposit in SBNs during demonetisation from trade debtors formed part of revenue from operation and therefore has not made any further disallowance in this regard. Hence the AO has duly conducted necessary enquiries for verification of cash deposit during demonetisation. As such, it cannot be said that the AO had failed to examine this issue during the assessment stage in spite of the fact that the main object of the Scrutiny was for verification of large cash deposit during demonetisation. All the above facts clearly shows that there was no lack of enquiry or inadequate of enquiry.. 18. The ld. AR further submitted that if a query has been raised at the time of assessment and the same was duly responded to by the assessee, it would not lead to the conclusion that the AO has passed the assessment order without making adequate enquiries/verification which he was required to make so as to render the assessment order erroneous and prejudicial to the interests of the revenue. Further, it is a trite proposition that in a case where the AO has taken a plausible view, then the ld. Pr.CIT is not permitted to substitute his own view because he disagrees with the view of the AO to warrant initiation of proceedings u/s 263 of the Act. Reliance in this regard is placed on the following decisions:- - J L Morison (India) Ltd Vs ACIT (ITA No. 786 (Kol) of 2010). Hon’ble Calcutta High Court dismissed the appeal of the ITA No.168/Bang/2023 Page 10 of 22 revenue, vide its judgment dated 15-05-2014 [2014] 46 taxmann.com 215 (Calcutta) - CIT v. Sunbeam Auto Ltd. [2011] 332 ITR 0167-Del - CIT v. R. K. Construction Co. [2009] 313 ITR 0065-Guj - K.R. Satyanarayana vs CIT, [2021] 126 taxmann.com 22 (Karnataka) - The Peerless General Finance & Investment Company Limited vs DCIT (I.T.A. No. 892/KOL/2019) 19. In the present case also, it is reiterated that proper enquiries were made by the Ld AO during the course of assessment with respect to all the grounds raised by the Ld.Pr.CIT. Detailed Submissions were filed during assessment stage and the same were carefully looked into and properly examined by the learned AO and after due application of mind, the learned AO took a possible view and allowed the claim of the assessee. Hence, the assessment order cannot be said to be erroneous or prejudicial to the interest of the revenue. 20. He submitted that as held in Hon’ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. Commissioner of Income-tax (243 ITR 83) and CIT v. Max India Ltd [2007] 295 ITR 0282-SC, in order to invoke the revisionary provisions u/s 263 of the Act, the Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. 21. An incorrect assumption of facts, an incorrect application of law will satisfy the requirement of the order being erroneous. If an Income Tax Officer acting in accordance with law, makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply ITA No.168/Bang/2023 Page 11 of 22 because, according to him, the order should have been written or is to be calculated in a different manner. This section does not visualize a case of substitution of the judgment of the Commissioner for that of the Income Tax Officer, to pass the order, unless the decision is held to be erroneous. The said provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer. It is only when the assessment order is both erroneous and prejudicial to the interest of the revenue, rigors of section 263 of the Act can be invoked. 22. In the present case, even if the order is prejudicial to the interest of the revenue, the same cannot be said to be erroneous since proper enquiries were conducted by the learned AO during the course of assessment proceedings. Hence, the twin condition stipulated in section 263 of the Act is not met in the present case to warrant the initiation of proceedings u/s 263 of the Act. 23. Further, the Ld.Pr. CIT in the SCN u/s 263 of the Act as well as in the order passed u/s 263 of the Act has alleged that the Ld.AO has not added the cash deposits during the demonetisation period as unexplained cash credits u/s 68 of the Act. He referred to various CBDT SOPs/Guidelines/notifications issued for handling cases related to substantial cash deposit during the demonetisation period as under:- - Instruction No.3/2017 dated 21.02.2017 issued vide F.No. 225/100/2017 ITA-II - Instruction No.3/2017 dated 21.02.2017 issued vide F.No. 225/100/2017 ITA-II - SOP dated 15.11.2017 issued vide F.No. 225/363/2017/ITA-II. - SOP dated 03.03.2019 issued vide F.No. 225/363/2017/ITA-II. [Not available in public domain] ITA No.168/Bang/2023 Page 12 of 22 - Internal Guidance Note dated 13.06.2019 issued vide F.No.225/145/2019/ITA-II. [Not available in public domain] 24. Further the CBDT has issued verification check list for assistance of AO’s for OCM cases and framing assessment in demonetisation related cases on 09.08.2019 which is produced at page 6-7 of the Paper Book – Additional with case laws. On perusal of the same, the ld. AR submitted that it is evident that the notice u/s 142(1) of the Act dated 04.12.2019 at page 82-85 of PB calling for information relating to cash deposit during demonetisation is as per said checklist issued by the CBDT. A further enquiry was made by AO as per the submission of the assessee furnished on 28.12.2019. Thus the AO has verified the details of cash deposit during the demonetisation period as per the instructions and SOPs issued by the CBDT and then only the AO has taken plausible view that the cash deposits are genuine and not required to be added to the income of the assessee. 25. Next, the ld. AR submitted that the provision of section 68 cannot be applied in the case of the assessee being the receipt from the Trade Debtors. The sales made to the trade debtors during the year is already recorded in the books of accounts of the assessee and offered to tax as revenue from operations. All the details like sales details, Trade Debtors Details, bank statement and statement showing date wise receipts from the said party to show that cash receipts was from the debtors were duly furnished before the AO. Thereafter, after examining the entire details and documents, the AO was satisfied that ITA No.168/Bang/2023 Page 13 of 22 the receipts in bank account are out of sales already recorded as income of the assessee and receipts by the bank from such trade debtors in the bank account of the assessee are only from such trade debtors as per the RBI Guidelines. Hence the AO has taken plausible view to not to add it u/s 68 of the Act as it would lead to double taxation of the same amount, one under the head Revenue from Operations already offered to tax by the assessee and another one under section 68 of the Act. 26. Further, the provision of section 68 has been invoked alleging that the acceptance of SBNs during demonetised period is in violation of law. In this regard it is submitted that the acceptance of SBNs [Rs. 500 and Rs.1000 denomination] by the assessee was not permissible as per law. However, the acceptance of cash deposit in the bank account of the assessee by third parties was permitted to the banks by GOI and RBI. Hence the contention of the ld. Pr. CIT is not correct and so the initiating of proceedings u/s 263 of the Act for invoking proviso of section 68 of the Act is bad in law. 27. A bare reading of Section 68 of the Income-tax Act, 1961, suggests that for a sum so credited to be charged to income-tax as the income of the assessee of that previous year by the AO; (i) there has to be credit of amounts in the books maintained by the assessee ; (ii) such credit has to be a sum of money during the previous year ; and (iii) either (a) the assessee offers no explanation about the nature and source of such credits found in the books or ITA No.168/Bang/2023 Page 14 of 22 (b) the explanation offered by the assessee, in the opinion of the Assessing Officer, is not satisfactory. 28. Thus, it is clear from the above that in order to establish the receipt of the sum as explained cash credit, as required u/s. 68 of the Act, the assessee must satisfy three conditions, viz., (i) identity of the creditor, (ii) genuineness of the transaction, and (iii) creditworthiness of the creditor as held in the case of CIT vs. Precision Finance Pvt. Ltd. (1994) 208 ITR 465 (Cal). 29. It is submitted that the identity and creditworthiness of the trade debtors is not in doubt by Ld.Pr. CIT. It is only the genuineness of the receipts which has been questioned. In this respect it is submitted that the genuineness of the payments received has been duly established by the assessee by furnishing ledger copies of the trade debtors who has deposited the cash, Bank Statement in which cash was deposited along with the branch details in which it was deposited, and date wise deposit details along with the name of parties. Moreover PAN of the Trade Debtors depositing cash in a bank account has been mentioned by the assessee in its submission. Hence the Ld.AO has duly verified the transaction and found it to be genuine. Thus the question of invoking provision of section 68 in case of receipts from debtors through deposits made by them directly in the bank as per RBI and GOI guidelines cannot be said to be unexplained cash credit. Reliance was placed on the following decisions of Bangalore Tribunal wherein the Hon’ble Tribunal has quashed the proceedings u/s 263 of the Act on the addition u/s 68 of the Act:- ITA No.168/Bang/2023 Page 15 of 22 - Shree Hanuman Credit Souhard Sahakari Limited vs PCIT, Hubli [ITA No. 29/Bang/2023] - Om Sai Coop Credit Souharda Sahakari Niyamit vs PCIT, Hubli [ITA No. 454/Bang/2022] 30. Thus, the ld. AR submitted that the impugned order passed by the ld. Pr.CIT setting aside the original assessment order for fresh assessment is clearly not as per law and liable to be quashed. 31. On the other hand, the ld. DR relied on the order of the ld. Pr.CIT and submitted that the assessment order is rightly set aside. The AO is an investigating office and thereafter he is an adjudicating officer. But from the assessment order it does not come out whether the AO has conducted any enquiry on the issues pointed out by the ld. Pr.CIT. 32. After hearing both the sides, perusing the entire material on record and the orders of the lower authorities, we note that the assessee’s case was selected for scrutiny under CASS on the above noted points. The AO issued notice u/s. 142(1) on different dates and the assessee has filed the reply. The assessment order was passed by the AO on 30.12.2019. The ld. Pr.CIT has set aside the assessment order as erroneous and prejudicial to the interests of the revenue because the AO did not conduct necessary enquiries as per CBDT guidelines. On going through the questionnaire issued u/s. 142(1) by the AO and reply submitted by the assessee which are placed at pg. 1 to 198 of the Paper Book (PB), we note that three questions in the questionnaire are important which are Sl.No.11, 14 & 19 and the assessee has filed reply on various dates. The AO further issued notice ITA No.168/Bang/2023 Page 16 of 22 u/s. 142(1) dated 04.12.2019 calling for details of demonetisation which is at pg. 82 to 85 of PB and reproduced as under:- ITA No.168/Bang/2023 Page 17 of 22 ITA No.168/Bang/2023 Page 18 of 22 ITA No.168/Bang/2023 Page 19 of 22 32.1 From the above, it is clear that the assessee filed details of notes for different denomination giving details as required by the AO which is at pg. 86 to 128 of PB. From these details, we note that the entire ITA No.168/Bang/2023 Page 20 of 22 cash deposits into Axis Bank account were directly made by the Debtors of the assessee and the details of cash deposits from 11 parties were furnished before the AO vide submissions dated 28.12.2019 at pg. 124 to 128 of PB which comprises the amounts of Rs.3,67,24,820 in Axis Bank, Sirsi Branch and Rs.75 lakhs deposited in Axis Bank, Hubli Branch. We also note that the assessee has explained the questionnaire issued by the AO. After the reply of the assessee dated 28.12.2019, the AO did not ask further questions which clearly shows that the AO was satisfied with the reply submitted by the assessee and passed the assessment order. 32.2 We also note from the press release issued by Department of Economic Affairs, Ministry of Finance, Govt. of India, dated 8.11.2016, it has given power to the Bank to accept SBNs from the third parties. The AO has also issued questionnaire u/s. 142(1) in the line of the CBDT Notification for examination of cash deposited during demonetisation period and the assessee has also submitted reply on different dates which is placed at page 86 to 123 of PB. Firstly, the AO is an investigation officer and thereafter he is an adjudicating officer. We note from the paperbooks filed by the assessee that the AO has issued notice u/s. 142(1) for investigating the matter which were subject matter of issues selected for scrutiny under CASS and from the submissions by the assessee, the AO was satisfied. When the AO has formed one possible view, then the ld. Pr. CIT cannot exercise jurisdiction u/s. 263 of the Act. We find substance in the submissions of the ld. AR that in respect of the impugned issue it cannot be said ITA No.168/Bang/2023 Page 21 of 22 that the AO has not applied his mind while passing the assessment order and it is not necessary to give a detailed reason in the assessment order in respect of each and every questionnaires issued u/s 142(1) for the completion of assessment. In view of the above, the order passed by the AO is not erroneous & prejudicial to the interests of the revenue. On going through the notice issued by the AO u/s 142(1) and reply submitted by the assessee there is no lack of enquiry. On perusal of the show cause notice issued by the ld. Pr.CIT, notice u/s 142(1) dated 04.12.2019 and paper book filed by the assessee, we find that all the issues questioned by the ld. Pr.CIT in the revision proceedings, were already examined by the A.O. at the time of assessment proceedings. Therefore, the ld. Pr. CIT is not correct in observing that the A.O. did not conduct proper enquiry on the issues before completion of assessment.. A similar view has been expressed by the co-ordinate bench of the Tribunal in the case of Vegesina Kamala v. Income Tax Officer, Ward-1, Palakad reported in [2016] 66 taxmann.com 280 (Visakhapatnam - Trib.) in ITA NO. 268 (VIZAG.) OF 2014 [AY 2009-10] order dated January 22, 2016. The decisions cited by the ld. AR in the written synopsis as well as case laws in the paperbook which is placed on record supports the case of the assessee. Considering the entire submissions, we set aside the impugned order of the ld. Pr.CIT. ITA No.168/Bang/2023 Page 22 of 22 33. In the result, the appeal by the assessee is allowed. Pronounced in the open court on this 12 th day of June, 2023. Sd/- Sd/- ( GEORGE GEORGE K) (LAXMI PRASAD SAHU ) JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore, Dated, the 12 th June, 2023. / Desai S Murthy / Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore.
AI Insights
The case revolves around the appeal by The Totgars' Co-operative Sale Society Ltd. against the order of the Principal Commissioner of Income Tax, Hubli, which set aside the original assessment order under section 143(3) of the Income Tax Act. The Pr.CIT had invoked section 263, deeming the original assessment order as erroneous and prejudicial to the interests of the revenue, primarily due to unexamined cash deposits during the demonetization period. The Tribunal, after examining the detailed submissions, evidence, and the procedural adherence by the AO, concluded that the AO had adequately investigated the issues raised and had taken a plausible view, thus setting aside the Pr.CIT's order.
