Mohanlal Pirodia, Ratlam V. PCIT(Central) , Bhopal

ITA 83/Ind/2022

AI Insights

This case involves an appeal by Mohanlal Pirodia against the order of the Principal Commissioner of Income Tax (PCIT), Bhopal, which set aside the assessment order under section 143(3) of the Income Tax Act, 1961. The PCIT had found discrepancies in the reported cash deposits during the demonetization period, leading to a reassessment. The assessee contested the PCIT's order, arguing it was based on incorrect facts and lacked proper appreciation of submissions. The tribunal noted the absence of crucial bank statements during the proceedings and decided to remand the matter back to the PCIT for a detailed examination of the deposits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122612 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-12-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 21-04-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 263; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE [CONDUCTED THROUGH VIRTUAL COURT] BEFORE: SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEBER And SHRI B.M. BIYANI, ACCOUNTNT MEMBER Mohanlal Pirodia, Ratla m PAN: ADQPP7259R (Appellant) Vs The PCI T (Central ), Bhopal (Respondent) Assessee by : Shri Manish Dafaria, A.R. Revenu e by: Shri P.K . Mishra , CIT-D.R. Date of hea ring : 27-12-2022 Date of pronounce ment : 25 -01-2023 आदेश /ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This assessee’s appeal for A.Y. 2017-18, arises from order of the PCIT(Central), Bhopal dated 24-02-2022, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”. ITA No. 83/Ind/2022 Assessment Year 2017-18 I.T.A No. 83/Ind/2022 A.Y. 2017-18 Page No Mohanlal Pirodia vs. PCIT 2 2. The assessee has taken the following grounds of appeal:- “1. That on the facts and in circumstances of the case and in law. the order passed by the Principal Commissioner of Income-tax (PCIT). u/s 263 of the Income-tax Act, 1961 setting aside the assessment framed u/s 143(3) of the Act. as erroneous and prejudicial to the interest of the revenue, is without jurisdiction, bad in law and void ab-initio. 2. That on the facts and in circumstances of the case and in. law and without prejudice to above grounds of appeal, the order passed by Ld. PCIT u/'s. 263 is bad in law and deserves to be set aside as the same has been passed based on patently incorrect facts where the cash deposit in the same bank account has been added twice to reach the conclusion that cash deposited in bank does not matches with ITR of the assessee. 3. That on the facts and in circumstances of the case and in law and without prejudice to above grounds of appeal, the order passed by Ld. PCIT u/s. 263 is bad in law and deserves to be set aside as the same has been passed without properly appreciating the submissions made by the assessee in response to show cause notice of u/s. 263. 4. The appellant craves leave to add, alter or amend or vary any of the above grounds of appeal before or at the time of hearing.” 3. The brief facts of the case are that the Assessing Officer passed order u/s 263 of the Act setting aside the assessment order on the ground that during the course of assessment proceedings, the Assessing Officer had under reported cash deposit of Rs. 1,12,53,000/- during the year under consideration on account of deposits made by assessee during the demonetization period. 4. Before us, at the outset, the counsel for the assessee drew our attention to show cause notice dated 25-01-2022 issued by the Pr. CIT (at page 2-3 of such Notice) and pointed out that there are certain factual I.T.A No. 83/Ind/2022 A.Y. 2017-18 Page No Mohanlal Pirodia vs. PCIT 3 inaccuracies in the Table reproduced in the show cause notice regarding the figures of cash deposits and hence on this ground itself, proceedings u/s. 263 of the Act are liable to be set aside. However, we observe that in the 263 proceedings the ld. PCIT has corrected the above mistake after giving due opportunity of hearing to the assessee and further Ld. Pr. CIT observed that as per details in Form SFT-003 of the assessee with respect to the cash deposits or withdrawals from the Bank Account no. 3116651372 held by the assessee at Central bank, it is seen that the amount of Rs. 3,89,12,000/- is credited in cash from 09-11-2016 to 31-12-2016, which is in the demonetization period whereas the assessee has reported that it has deposited only Rs. 2,78,00,000/- during the same period, in its bank account in his return of income and during the course of during the course of assessment proceedings. Accordingly, this contention of the assessee cannot be accepted without carrying out necessary verification by Ld. Assessing Officer during the course of during the course of assessment proceedings. The Pr. CIT held that the Assessing Officer should have ascertained the exact amount of deposits from the bank statements and should have compared the same with cash book and sales figure to ascertain the correct facts. Therefore, in absence of any inquiries have not been made by the Assessing Officer on this aspect during the course of assessment proceedings, he set aside the assessment order as erroneous and prejudicial to the interest of the revenue. 5. During the course of proceedings before us, we enquired from the counsel for the assessee whether the bank statements in respect of cash deposits made during the demonetization period i.e. period under dispute, I.T.A No. 83/Ind/2022 A.Y. 2017-18 Page No Mohanlal Pirodia vs. PCIT 4 were produced before ld. Pr. CIT during the course of 263 proceedings for his analysis. However, the counsel for the assessee submitted that the said bank statements were not produced during the course of 263 proceedings before Ld. Pr. CIT for his consideration. We further observe that even in the appeal proceedings before us, such bank statements have not been produced by the assessee in support of the factual assertion made by him that during the demonetization period, only a sum of Rs. 2,78,00,000/- has been deposited by the assessee in his bank account. Accordingly, in absence of bank statement having been produced by the assessee either before Ld. Pr. CIT or before us, it is not possible to verify the correctness of the assertion of the assessee that only a sum of Rs. 2.78,00,000/- was deposited by the assessee during the period under dispute i.e. demonetization period. 6. Looking to the totality of the facts, in the interest of justice, the matter is being set aside to the file of ld. Pr. CIT to carry out necessary verification from the bank statements of the aforementioned bank account held by the assessee in Central Bank of India in order to ascertain the precise amount of cash deposits made by the assessee in his bank account during the demonetization period and to verify if there is any mismatch with the figures produced before the Ld. Assessing Officer in the course of assessment proceedings . Further, we wish to point out that the Ld. Pr. CIT has also raised certain issues in the 263 order viz. issues raised at para 3,4,5 & 6 of his order. However, these issues were not pleaded before us at the time of hearing. In the set aside proceedings, the assessee may also give necessary clarifications on these issues before Ld. Pr. CIT. I.T.A No. 83/Ind/2022 A.Y. 2017-18 Page No Mohanlal Pirodia vs. PCIT 5 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced as per Rule 34 of I.T.A.T Rules, 1963 on 25/01/2023 Order pronounced in the open court on ......./......../2023 Sd/- Sd/- (B.M. BIYANI) (SIDHHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 25 /01/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order, Sr. Private Secretary, Income Tax Appellate Tribunal, Indore Strengthened preparation & delivery of orders in the ITAT 1) Date of dictation 27/12/2022 2) Date on which the typed draft is placed before the Dictating Member & Other Member 27/12/2022 (dictation note book attached) 3) Date on which the approved draft comes to the Sr. P.S./P.S. /12/2022 4) Date on which the fair order is placed before the Dictating Member for pronouncement /12/2022 5) Date on which the fair order comes back to the Sr. P.S./P.S. /12/2022 6) Date on which the file goes to the Bench Clerk /12/2022 7) Date on which the file goes the Head Clerk 8) Date on which the file goes to the Assistant Registrar for signature on the order 9) Date of Dispatch of the order a.k