D.J.DURAIRAJPANDIAN , COIMBATORE V. ITO,NON-CORPORATE WARD-1(4), COIMBATORE

ITA 184/CHNY/2022

AI Insights

The case involves an appeal by Shri D.J. Durairajpandian against a revision order passed by the Principal CIT, Coimbatore, concerning the assessment year 2017-18. The revision order questioned the validity of cash payments exceeding Rs.20,000 made to M/s. ESK Trading Company and M/s. Baby Stores, totaling Rs.33,48,904, under section 40A(3) of the Income Tax Act, 1961. The original assessment did not address these cash payments, leading to the revision. The Tribunal agreed with the PCIT's concerns about potential violations of section 40A(3) but directed the Assessing Officer to independently verify the facts without bias from the PCIT's findings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135514 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowedDismissed
• Bench Allotted: C
• Next Hearing Date: 14-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 22-03-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 40A(3)

Judgement Text

आयकर अपीलीय अिधकरण,‘ सी’ ाय पीठ, चे ई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘C’ BENCH, CHENNAI ी महावीर िसंह, उपा एवं ी अ ण खोडिपया, लेखा सद% के सम BEFORE SHRI MAHAVIR SINGH, VICE-PRESIDENT AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकरअपीलसं./I. T. A. N o. 1 8 4 / C hny / 2 0 2 2 (िनधा रणवष / A s se s s m e nt Yea r : 2 01 7- 18 ) Shri D.J. Durairajpandian 455, R.G. Street, Coimbatore-641 001. V s The Income Tax Officer, Non-Corporate Ward-1(4), Coimbatore. P AN : A D TP D 0 8 4 3 Q (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओरसे/ Appellant by : Mr. R.Vijayaraghavan, Advocate यथ क ओरसे/Respondent by : Mr. M.Rajan, CIT सुनवाईक तारीख/D a t e o f h e a r i n g : 15.03.2023 घोषणाक तारीख /D a t e o f P r o n o u n c e m e n t : 15.03.2023 आदेश आदेशआदेश आदेश / O R D E R PER MAHAVIR SINGH, VP: This appeal by the assessee is arising out of revision order passed by the Principal CIT, Coimbatore-1, u/s.263 of the Income Tax Act, 1961 (hereinafter ‘the Act’) vide order C.No. ITBA/REV/F/REV5/2021-22/1039466154(1) dated 07.02.2022. The assessment was completed by the Income Tax Officer, Non-Corporate Ward-1(4), Coimbatore, for the relevant assessment year 2017-18 u/s.143(3) of the Act vide order dated 17.12.2019. 2. The only issue in this appeal of the assessee is as regards to revision order passed by the PCIT to verify whether payments claimed as expenditure by the assessee in regard to 2 ITA No. 184/Chny/2022 payments in cash in excess of Rs.20,000/- to a single person M/s. ESK Trading Company amounting to Rs.32,69,582/- and M/s.Baby Stores amounting to Rs.79,322/- are in violation of provisions of section 40A(3) of the Act or not. 3. We have heard rival contentions and gone through facts and circumstances of the case. Brief facts are that assessment was completed originally u/s.143(3), which was passed vide order dated 17.12.2019. We have noticed from order of the Assessing Officer that the Assessing Officer has not examined issue of cash payments in excess of Rs.20,000/- to a single person for total amount of Rs.33,48,904/- in regard to two parties namely M/s. ESK Trading Company and M/s. Baby Stores. The PCIT in his revision order has recorded certain findings, but without examining actual facts that there is clear violation of provisions of section 40A(3) of the Act. 4. We agree with argument of learned CIT DR that there is error and prejudice caused to the interest of the revenue, in case there is payment in cash in excess of Rs.20,000/- for the above payments in violation of section 40A(3) of the Act, but 3 ITA No. 184/Chny/2022 everything has to be examined by the Assessing Officer and then only final conclusion can be reached. Here, the PCIT has to form only a prima-facie opinion for considering whether order of the Assessing Officer is erroneous and prejudicial to the interest of the revenue. 5. At this stage, learned counsel for the assessee also not contested revision order, but he only requested that a proper direction can be given to the Assessing Officer that without being influenced by the findings of the PCIT, he should independently examine the issue of violation of provisions of section 40A(3) of the Act, in regard to payments made in cash in excess of Rs.20,000/-. Hence, we agree with the argument of the learned counsel for the assessee that no doubt, the Assessing Officer will examine independently of what was stated by the PCIT in his order. Hence, we affirm order of the PCIT revising the assessment, but keep the issue open for the Assessing Officer to examine provisions of section 40A(3) of the Act vis-à-vis., cash payments in excess of Rs.20,000/-. The assessee has to explain all the aspects of cash payments 4 ITA No. 184/Chny/2022 in excess of Rs.20,000/- made to these two parties, in term of provisions of section 40A(3) of the Act. 6. Hence, we dismiss the appeal with the above direction. Order pronounced in the open court on 15 th March, 2023 Sd/- Sd/- (अ ण खोडिपया) ( महावीर िसंह ) ( Arun Khodpia ) ( Mahavir Singh) लेखा सद य लेखा सद यलेखा सद य लेखा सद य / Accountant Member उपा य उपा य उपा य उपा य / Vice-President चे ई/Chennai, दनांक/Date: 15.03.2023 DS आदेश क ितिलिप अ ेिषत/Copy to: 1. Appellant 2. Respondent 3. आयकर आयु (अपील)/CIT(A) 4. आयकर आयु /CIT 5. िवभागीय ितिनिध/DR 6. गाड फाईल/GF.