Sanjay KumarAgarawala, Mayurbhanj V. Pr.CIT, Cuttack

ITA 254/CTK/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6203 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 07-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Difference of opinion; Change of opinion
• Section: 263

Judgement Text

आयकर अपीऱीय अधिकरण, कटक न्यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK श्री जाजज माथन, न्याययक सदस्य एवं श्री अरुण खोड़पऩया ऱेखा सदस्य के समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.254/CTK/2020 (नििाारण वषा / Asses s m ent Year :2015-2016) Sanja y Kum ar A ga r a wala, Karanj ia, Ma yu rbhanj-757037 P AN No. AAU P A 32 60 A ..................As sess ee Versus Pr.CIT , Cuttac k Ch ar ge, Cutta ck ....................Revenue Shri Mohit Sheth, Advocate for the assessee Shri M.K.Gautam, CIT-DR for the Revenue Date of Hearing : 17/08/2022 Date of Pronouncement : 17/08/2022 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order of the ld. Pr.CIT, Cuttack, passed in DIN & Letter No.ITBA/COM/F/17/2019- 20/1026812335(1), dated 20.03.2020 for the assessment year 2015-2016. 2. It was submitted by the ld.AR that the assessee is a trader of consumer goods and turnover of the assessee was Rs.36,88,200/-. It was submitted by the ld.AR that the assessee has filed his return of income u/s.44AD of the Act and had offered 8% income. It was the submission that the assessment was completed u/s.144 of the Act, wherein the AO had examined the bank account of the assessee and had arrived at total ITA No.245/CTK/2020 2 deposit of Rs.49,71,700/-. Consequently, the AO had treated the said amount of Rs.49,71,700/- as turnover of the assessee and has estimated the income of the assessee at 8%. The difference between the turnover as disclosed by the assessee and as taken by the AO was an amount of Rs.12,85,500/-. It was the submission that a show cause notice u/s.263 of the Act was issued by the ld. Pr.CIT, Cuttack wherein he proposed to bring to tax the entire amount of Rs.12,85,500/- as income of the assessee as against the 8% income estimated by the AO. It was the submission that before the ld. Pr.CIT it was explained that the amount of Rs.12,85,500/- was erroneous and the actual deposit of the bank account was Rs.43,15,000/-, insofar as the amount of Rs.6,56,200/- was an RTGS entry which was reversed. It was the submission that the balance of Rs.6,28,800/-, which was deposited in the bank account was the past savings of the assessee and his family members which had been used for the purpose of business of the assessee. It was the submission that the ld. Pr.CIT did not accept the claim of the assessee in regard to the past savings and directed the AO to add the amount of Rs.6,28,800/- in place of the addition representing 8% of Rs.12,85,500/-. It was the submission by the ld. AR that when the AO having already taken a view and having formed an opinion, the direction given by the ld. Pr.CIT was only on a change of opinion and the same is not permissible under the provisions of Section 263 of the Act. 3. In reply, ld. CIT-DR submitted that the assessment is an ex-parte assessment. No enquiry has been done by the AO. It was the submission ITA No.245/CTK/2020 3 that the fact that the AO had not considered the RTGS reversal of Rs.6,56,200/- clearly shows the non-application of mind by the AO. It was the submission that two views are not possible and the correct view should be taken to make addition of Rs.6,28,800/- as directed by the ld. Pr.CIT. It was the submission that the addition representing 8% on the amount of Rs.12,85,500/- being the difference between the turnover as disclosed by the assessee and deposit as made in the bank account bearing No.40720200000087 maintained with Bank of Baroda, Karanjia Branch was erroneous and prejudicial to the interest of revenue. It was the submission that the order of the Pr.CIT passed u/s.263 of the Act deserves to be upheld. 4. We have considered rival submissions. 5. Admittedly, the assessment was completed u/s.144 of the I.T.Act. The assessee has filed his return by applying the provisions of Section 44AD of the Act. The AO at his discretion has called for the bank account and has examined the same. Thus, clearly the AO has applied his mind when he invoked his powers to call for the bank account from the concerned bank. Non-cooperation by the assessee cannot be treated as lack of enquiry by the AO. The AO applied his mind and took a view that the estimation of 8% on the differential amount of the amount deposited in the bank and the turnover as disclosed by the assessee would meet the end of justice. It is not for the AO to look for the reversal of the RTGS even though it could have been visible. That does not mean that the AO ITA No.245/CTK/2020 4 has not applied his mind. The AO had made a conscious decision to make the addition by estimating of 8% on the differential amount of Rs.12,85,500/-. It cannot be said that the AO has not formed a valid opinion. This being so, as it is noticed that the AO has formed an opinion and has made addition based on that opinion, the addition as directed by the ld. Pr.CIT is nothing but a change of opinion and an attempt to impose the opinion of the ld. Pr.CIT over the opinion of the AO. This is not permissible in revisionary proceedings u/s.263 of the Act. This being so, we are of the view that the order passed u/s.263 of the Act by the Pr.CIT is unsustainable and consequently the same stands quashed. 6. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 17/08/2022. Sd/- (अरुण खोड़पऩया) (ARUN KHODPIA) Sd/- (जाजज माथन) (GEORGE MATHAN) ऱेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 17/08/2022 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : आदेशाि ु सार/ BY ORDER, (Assistant Registrar) आयकर अपीऱीय अधिकरण, कटक/ITAT, Cuttack 1. अऩीऱाथी / The Appellant- Sanja y Kum ar A ga r a wala, Karanj ia, Ma yu rbhanj-757037 2. प्रत्यथी / The Respondent- Pr.CIT , Cuttac k Ch ar ge, Cutta ck 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A), 4. आयकर आय ु क्त / CIT 5. पिभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, Cuttack 6. गार्ज पाईऱ / Guard file. सत्यापऩत प्रयत //True Copy//