Sanjiv Kumar Mittal , Haryana V. PCIT ROHTAK , Haryana

ITA 663/DEL/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0268 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 10-10-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 11-04-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 69; 6; 263; 63; 15; 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER I.T.A. No.663/DEL/2022 Assessment Year 2017-18 Sanjiv Kumar Mittal, House No.1666, Sector No.13, Hisar. v. Principal Commissioner of Income Tax PCIT, Rohtak. TAN/PAN: AJUPM9771B (Appellant) (Respondent) Appellant by: Shri Salil Kapoor Adv. Shri Tarun Chanana Adv. Respondent by: Ms. Sapna Bhatia, CIT-DR Date of hearing: 11 10 2022 Date of pronouncement: 19 10 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: Th e cap tio n ed ap peal h as b een filed at th e in s tan ce o f th e Assessee ag a in st th e o rd er o f th e Prin cip al Co mmi ssio n er o f In co me Tax , Ro h tak [‘PCIT’ in sh o rt] d a ted 1 9 .0 3 .2 02 2 p assed u n d er Sectio n 2 6 3 o f th e In co me T ax Act, 1 9 6 1 (th e Act ) wh ereb y th e assess men t o rder p assed b y th e Assessin g Officer (AO) d ated 0 4 .1 1 .20 1 9 un d er Sect io n 1 43 (3) o f th e In co me Tax Act, 1 9 61 (the Act) co n cern in g AY 2 0 17 -1 8 was so ug h t to b e set asid e fo r refra min g as sess men t in ter ms o f su p erv iso ry d irectio n s. 2 . As p er i ts g ro u n ds o f ap p ea l, th e a s sessee h as ch al len g ed th e rev isio n al act io n o f th e P CIT wh ereb y th e Assessin g Officer (A.O.) was d irect ed to p ass th e ass essmen t o rd er d e n o vo after I.T.A. No.663/Del/2022 2 mak in g en q u iries o n th e p o in ts set o u t in th e sh o w cau se n o tice an d th e rev is io n al o rd er. Th e a ssessee h as ch a ll en ged th e assu mp t io n o f ju ri sd ict io n b y th e PCIT u n d er section 2 6 3 o f th e Act o n th e g ro u nd th at th e Asse ss men t Ord er u n d er rev isio n is n eith er erro n eo u s n o r p reju d icial to t h e in tere st of th e R ev en u e. 3 . Bri efly sta ted , th e assesse e fil ed retu rn o f inco me d eclar in g to ta l in co me a t Rs .8 3 ,1 1 ,0 7 0 /-. Th e retu rn fi led was s u b jected to li mited scru tin y th ro u g h CASS [Co mp u ter Aid ed Scru tin y Selec tio n ] o n th e fo l lo win g issu e ‘P a ymen t o f ta x in c a sh d u ring d emo n etiza tio n p erio d ’. Th e in co me o ffered b y th e as sessee was assessed u n d er Sec tio n 1 4 3 (3 ) o f th e Act wi th o u t any ad ju st men ts . 4 . Th erea fter , th e PCIT in ex ercise o f rev isio n ary p o wers, issu ed sh o w cau se n o tice d at ed 2 1 .0 1.2 0 2 2 to sho w cause wh y th e assess men t so fr amed u n d er sect io n 1 4 3 (3 ) sho u ld n ot b e mo d ified / set as id e o n th e g rou nd th at su ch o rd er is erro neo u s in so far as p reju d ic ia l t o th e in teres t o f th e Rev en u e. 5 . As p er th e sho w cau se n o tice, i t was alleg ed that th e AO h as fa il ed to ex a min e t h e lev y o f t ax @6 0 % u n d er Section 1 1 5 BBE o f th e Act o n th e in c o me su rren d ered a mo u n tin g to Rs.50 la c, h av in g reg ard to th e u n exp lain ed n atu re o f i n co me d ete ct ed in th e co u rse o f su rv ey p ro ceed in g s. Th e PCIT o b serv ed th at th e su rren d ered in co me rep resen te d ‘u nd isclo sed in c o me’ o f th e ass ess ee o n wh ich th e Assess in g Offi cer fai led to in q u ire as to wh y th e as sessee h ad n o t d eclared th e su rren d ered in co me as d eemed in co me u n d er ‘in co me fro m o th er so u rces’ ch argeab le to tax u n der Sectio n 1 1 5 BBE o f th e Act. Th e PCIT th u s o b serv ed th at th e Assessin g Officer fai led to i n q u ire as to wh y t h e assesse e h ad p a id tax es a t n o rmal tax rat e i n stead o f max i mu m marg in a l ra te charg eab le I.T.A. No.663/Del/2022 3 u n d er Sectio n 1 1 5BBE o f th e Ac t o n su ch u nd isclo se d in co me. Hen ce, th e ac tio n o f th e Asse ssin g Officer in d et ermi n in g th e tax liab il ity o n assesse d in co me is cle arly erro n eou s and p reju d icia l to th e in teres t o f th e Rev en u e. Th e PC IT acco rd in g ly ex ercised i ts ju risd ic tio n co n fer red u n d er Sectio n 2 6 3 o f th e Act an d d irected th e Assess in g Offi cer red o th e asses s men t a fresh h av in g reg ard to th e o b serv atio n s mad e in th e rev i sio n al o rd er. 6 . Ag g riev ed b y th e rev isio n al o rd er p assed b y th e PCIT, th e assesse e p referred ap p eal b e fo re th e Trib u n al to cha llen g e th e su p erv iso ry ju risd ictio n u su rp ed by th e PCIT u n d er sectio n 2 6 3 of th e Act . 7 . We h av e h eard th e riv al su b missi o n s o n th e issu e. On a b ro ad er reck on in g , th e co n ten tio n s o f th e assess ee are: i) Th e case was selec ted fo r ‘li mit e d scru tin y ’ and therefo re th e sco p e o f th e asses smen t was co n fin e d to th e p o in ts n o ted in th e scru tin y n o tice iss u ed un d er s.1 4 3(2 ) o f th e Act read with CBDT In stru ctio n No .5 /2 0 1 6 d ated 1 4 t h Ju ly , 2 0 1 6 . As p er th e a fo resaid n o tice, th e so li ta ry issu e id en ti fi e d fo r ex amin at io n was on acco u n t o f ‘p a ymen t o f ta x in ca sh d u rin g th e d emo n etiza t io n p erio d ’. ii) Th e Assessin g Officer d u ly co mp l ied with th e req u iremen t o f issu e raised in l i mi ted scru t in y and after co n sid erin g th e rep lies an d d o cu men ts s u b mit ted d u rin g th e co u rse o f assessmen t p ro ceed in g s an d framed th e assess me n t o n retu rn ed in co me . ii i) On facts , n o p aymen t o f t ax in cash as alleg ed was mad e d u rin g th e d emo n izat io n p erio d as p o in ted o u t b y asse ssee in th e I.T.A. No.663/Del/2022 4 co u rse o f ass es smen t p ro ceed in g s as wel l as rev ision al p ro ceed in g s. Th e Assessin g Officer th u s h as rig h tly wo rk ed ou t tax li ab il i ty with i n th e d o main o f li mi ted scru t in y set o u t b y th e CBDT In stru ct io n No .5 /2 0 16 d ated 1 4 .0 7 .2 01 6 an d righ tly co n fin ed h i mse lf t o ex amin e th e issu e as id en ti fied fo r issu an ce o f n o tice u n d er Sect i o n 1 43 (2) d ated 1 0 .0 8 .2 0 18 . Th u s, th e Assessin g Officer can n o t b e fau l ted fo r n o t t rav ell in g b ey o nd th e is su es d etermin ed fo r th e p u rpo ses o f li mi t ed scru tin y . Thu s, th e ac tio n o f th e Assess in g Officer can n o t b e reg ard ed as erron eo u s q ua th e sco p e o f li mit ed sc ru tin y . 8 . A referen ce was mad e to th e d ec is io n s o f th e Co-o rd in ate Ben ch es o f Trib u n al in th e case o f M een a Ch o ud h a ry vs. Pr.CIT in ITA No .7 0 /RPR/2 0 2 0 o rd er d a ted 1 2 .1 0 .2 02 1 ; M/s. S u -Raj Dia mo nd Dea lers Pvt. Ltd . vs. P CIT in ITA No . 3 0 9 8 /Mu m/2 0 19 o rd er d a ted 2 7 .11.2 0 1 9 ; Ba lvin d er Ku ma r vs. PCIT (20 21 ) 1 25 ta xma n n .co m 8 3 (Delh i-Trib . ) & Hi l l Qu een In vestment (P. ) L td . vs. PCIT (2 0 2 1 ) 1 2 7 ta xman n .co m 68 2 (Ko lka ta - Trib .) an d was su b mit ted th at th e co -o rd in ate b en ch o f Tr ib u n al h av e u n ifo rmly h eld th at wh ere t h e sco p e o f scru t in y is l i mi ted to th e issu es raised , th e rev is io n al au th o rity is n o t en ti t led u nd er s.2 6 3 o f th e Act to ex amin e t h e issu e n o t sp ecified in th e l i mi ted scru tin y assess men t . 9 . On ap p raisal o f th e ev id en ces p laced b efo re u s, we fin d th at v id e n o tice d at ed 1 0 .0 8 .20 1 8 sp ecifi c q u eries were rai sed b y th e AO in rela tio n to th e issu e rais ed fo r th e p u rp o ses o f l i mi ted scru tin y , i .e ., ‘Pa ymen t o f ta x in ca sh d u rin g d emon etiza t io n p erio d ’. In respo nse, th e as sesse e h as fi led rep l ies ex p lain in g th e relev an t fact s in th is reg ard . Th e Assessin g Officer was satis fied I.T.A. No.663/Del/2022 5 with th e an swers mad e av ai lab le in resp o n se to alleg at io n to wards p ay men t o f t ax in cash . Th u s, in th e ab sen ce o f an y erro r in th e act io n o f th e Assessin g Officer q u a th e issu e o f li mit e d scru tin y , th e rev is io n al ac tio n in th e in st an t cas e is u n su stain ab l e i n law. 1 0 . We also fin d mer it in th e p l ea o f th e asses see th at h av in g reg ard to CBDT i n stru ctio n No s. 7 / 2 0 15 , 2 0 /2 0 15 & 5/2 0 1 6 and also CBDT l et ter d ated 3 0 .1 1 .2 0 17 , th e AO was n o t en tit led to g o b ey o nd th e reaso n s fo r se lec tio n o f matt er fo r li mit ed sc ru tin y . As a co ro llary , i t is n o t o p en to th e P CIT to p ass revis i o n ary o rd er an d remit th e mat t er to th e Assessin g Offi cer o n o th er asp ects b y ren d erin g assessmen t o rd er as erro n eo u s an d p reju d icia l to th e in teres t o f th e Rev en u e. Th is is th e v iew co n sistent ly ta k en by th e co -o rd in ate b en ch es in s ev eral d ecis i o n s, so me o f wh ic h are n o ted earl ier. Th e act io n o f th e PCIT u nd er Sectio n 2 6 3 of th e Act th u s can n o t b e ap p ro v ed o n th is p ara me te r also . 1 1 . No tice ab ly , it is also th e case o f Assessee that th e erro r all eg ed b y th e PCIT o n th e to u ch sto n e o f Sect io n 6 8 is fu n d amen ta l ly in co rrect wh ere th e Assessee h as o wned u p and su rren d ered th e amo u n t o f in v est men t in fir m as i ts in v est men t an d co n trib u tio n . In th e ab sen ce o f an y cred it in th e b o o k s of assesse e p artn er, t h e p ro v isio n s o f Sect io n 6 8 h as n o ap p licat io n o n wh ich th e al leg atio n is b ased . In su ch fac tu al matr i x , we fin d mer it in d efen se o f th e assess ee th at ch arg eab il i ty o f tax with referen ce to Sec t io n 1 1 5 BBE is n o t p ermissib le in th e p resen t ca se to ward s p u rp o rted u n d isclo sed in co me d eclared b y the assesse e in th e co u rse o f su rv e y . As p o in ted o u t, th e ass essee b ein g p artn er o f th e fir m, cla i ms t o h av e inv ested th e imp u g n ed amoun t in th e p artn ersh ip firm a n d su rrend ered as i ts u n d isc lo sed i n co me. Th e I.T.A. No.663/Del/2022 6 Pr.CIT in th e rev isio n al p ro ceed in g s co u ld n o t h ave in v o k ed Sect io n 6 8 o f th e Act to ward s su ch u n ex p lain ed in v est men ts in th e fir m in th e ab sen c e o f an y cred it in th e b o o k s o f asses see p er se an d th e rig h t co u rse, p o ssib ly , co u ld b e Sect io n 6 9 o f th e Act a t b est fo r wh ich n o case h as b een mad e o u t b y th e P r.CIT. As co n ten d ed , th e Tri b u n al can n o t u p ho ld th e rev isio n al ac tio n o f th e Pr.CIT o n a d ifferen t g ro un d th en wh at is al leg ed in th e rev isio n al p ro ceed in g s as h eld in CIT vs. Ja g a dh ri Elec tri c S u p p ly a nd In d u stria l Co mp a ny, 1 4 0 ITR 4 9 0 /P & H. We th u s fin d trac tio n in th e co n ten tio n th at wh ere Sectio n 68 as all eg ed an d in vo k ed b y th e Pr.CIT is n o t ap p l icab l e, Se ct io n 1 15 BBE co u ld n o t b e trig g ered b y mo d ify in g th e p remise o f rev is io n al d irect io n s. Th e rev isio n al act io n o f th e Pr. CIT th u s fa ils o n th is co u n t al so . 1 2 . In th e resu l t, th e a p p eal o f th e asses s ee is a llo wed . Order pronounced in the open Court on 19/10/2022. Sd/- Sd/- [NARENDER KUMAR CHOUDHRY] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /10/2022 Prabhat