PCIT , MADURAI V. DEVI, MADURAI

MA 110/CHNY/2023

AI Insights

The case revolves around a Miscellaneous Application filed by the revenue against an order of the Income Tax Appellate Tribunal, which had previously quashed an order under section 263 of the Income Tax Act, 1961. The original dispute involved the assessment of unexplained cash deposits in a joint bank account held by the assessee and her father. The revenue contended that there was a mistake in the Tribunal's earlier decision, claiming that the facts regarding the source of the cash deposits were misrepresented. However, the Tribunal found that the revenue's arguments did not meet the threshold for a mistake apparent on record as required for rectification under section 254(2) of the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135020 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-07-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 14-05-2023
• Other Referred Cases: The Commissioner of Income Tax Vs M/ s Paville Projects Pvt Ltd
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order
• Section: 263; 143(3); 254(2)

Judgement Text

आयकर अपीलीय अिधकरण, ‘बी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ᮰ी वी दुगाᭅ राव, ᭠याियक सद᭭य एवं ᮰ी मंजुनाथ. जी, लेखा सद᭭य के समᭃ BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA. G, HON’BLE ACCOUNTANT MEMBER Misc. Application No. 110/Chny/2023 [In ITA No. 428/Chny/2022] (िनधाŊरणवषŊ / Assessment Years: 2017-18) The Income Tax Officer, Non-Corporate Ward 2(1), Madurai – 625 002. v. Smt. Devi, 5,4/2, Aparna Enclave, Velmurugan Nagar, Madurai – 625 010. [PAN: ANJPD-2937-R] (ᮧाथᭅक /Petitioner) (ᮧ᭜यथᱮ/Respondent) ᮧाथᭅक कᳱ ओरसे/ Petitioner by : Shri. D. Hema Bhupal, JCIT ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri. Shrenik Chordia, CA सुनवाई कᳱ तारीख/Date of Hearing : 28.07.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 09.08.2023 आदेश /O R D E R PER MANJUNATHA. G, ACCOUNTANT MEMBER: The revenue has filed present Miscellaneous Applications u/s. 254(2) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) against order of the Tribunal in ITA No. 428/Chny/2022, dated 04.01.2023 for assessment year 2017- 18 . :-2-: MA. No: 110/Chny/2023 2. The revenue has narrated facts of its case and mistakes stated to be apparent on record from the order of the tribunal dated 04.01.2023 and relevant contents of Miscellaneous Application filed by the assessee for assessment year 2017-18 are reproduced as under: “1. The above appeal was disposed by the Hon’ble Tribunal vide in ITA No. No.428/CHNY / 2022 dated 04.01.2023 for the Assessment year 2017-18. The appellant, in respect of assessment year 2017-18, request to present to this petition for rectification of a mistake which is apparent from record u/s 254(2) of the Income tax Act, 1961 in the said order. 2. The assessment was completed u/s 143(3) of the Income tax Act, 1961 for the assessment year 2017-18 vide order dated 28.12.2019 by the Income tax Officer ,Non Corporate Ward 2(1) ,Madurai after making an addition of Rs 1, 14,499/towards disallowance of expenses. 3. Subsequently, order u/s 263 was passed by PCIT on 29.03.2022 for the assessment year 2017-18, directing the Assessing officer to make an addition of Rs 97,29,000/- towards unexplained cash deposit in the hands of the assesee on protective basis as the cash deposit of Rs.97,29,000/- was reflected in assesee's books of account. Further, PCIT has stated that the bank account in which both the assesee and assesee's father are joint account holder, is reflected in assesee's books of account, even though addition has been made in the hands of assesee's father, addition ought to have been made in assesee's hands as protective basis as the cash deposit of Rs.97,29,000/- was reflected in assesee's books of account,. Moreover assessee's father Sri.M.Kathiresan has appealed against the assessment order u/s 143(3) passed by the ACIT Non Corporate Circle-2 Madurai on 26.12.2019, before the CIT(A),Madurai. 4. The assesee filed an appeal before Hon'ble ITAT against the order u/s 263 passed by the PCIT vide order :-3-: MA. No: 110/Chny/2023 dated 28.12.2019.The assesee's appeal was disposed by Hon’ble ITAT"B" BENCH vide order in ITA No.428/CHNY /2022 dated 04.01.2023, quash the order u/s 263 passed by PCIT on 28.12.2019 on the following grounds. 'In this case the AO has considered cash deposits found in bank account and assessed the same in the hands of one joint account holder and chose not to make addition in another joint account holder, although both cases have taken up scrutiny to verify cash deposits. 5. i. It is submitted that there is a mistake apparent from the record in ITAT order dated 04.01.2023. In page no.9 of the said ITAT order, it rendered its decision on the wrong facts that Sri.M.Kathiresan has never disputed the addition made in his hands towards cash deposit but in the Ground of Appeal filed before the CIT(A),Sri.M.Kathiresan has disputed the addition made of Rs 1,64, 17,000 /-(Inclusive of Rs.97,29,000/-cash deposit made in Axis Bank) in the Joint account. ii. ITAT has also stated in its order in page no 9 that, "once the AO has taken a view and has accepted the claim of assesee, when two views are possible, it cannot be said that the assessment order passed by the AO is erroneous in so far as prejudicial to the interest of the revenue". It is also submitted that as per latest Supreme Court order dated 06.04.2023 in the case of" The Commissioner of Income Tax Vs M/ s Paville Projects Pvt Ltd, in page no 18 it is stated that, "where two views are possible and the Income Tax Officer has taken one view with which the commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the Revenue unless the view taken by the Income Tax Officer is unsustainable in law. It has been held by this Court held where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing officer accepting the same as such will be erroneous and prejudicial to the interest of the Revenue,". In para 4 of the ITAT's order, it has been mentioned that "it was explained during the course of assessment proceedings, that it was out of revenue collections generated from hotel business." Thus the assesee has admitted that the cash deposits in the joint account :-4-: MA. No: 110/Chny/2023 are from her hotel business. Whereas, her father, the joint holder of the bank account has stated in his grounds of appeal before the CIT(A) that the source of cash deposits in the very same joint account was amount received from his daughters living abroad during their visits to India, out of pin money of his wife and other savings for the past several decades. Thus, the explanations given by the assesee and her father regarding the source of deposits in the same joint account are vastly different. 6. The appellant, therefore prays that the Hon'ble Tribunal may be pleased to rectify the order dated 04.01.2023 which allowed the appeal of the assesee by entertaining this Miscellaneous petition of the department which is filed u/ s 254(2) of the Income Tax Act 1961.” 3. We have heard both the parties and considered relevant contents of Miscellaneous Application filed by the revenue and we find that the Assessing Officer could not make out a case of prima facie, mistake apparent on record from the order of the Tribunal dated 04.01.2023, which could not be rectified u/s. 254(2) of the Act. Further, after going through the pleading of the Assessing Officer, we find that the Assessing Officer has although made a fresh arguments in light of submissions of the assessee, before the Assessing Officer during assessment proceedings, which is not at all relevant to decide the appeal filed by the assessee against order of the PCIT passed u/s. 263 of the Act. Therefore, we are of the considered view that :-5-: MA. No: 110/Chny/2023 there is no merit in Miscellaneous Application filed by the revenue and thus, same is dismissed. 4. In the result, Miscellaneous Application filed by the revenue is dismissed. Order pronounced in the court on 09 th August, 2023 at Chennai. Sd/- (वी दुगाᭅ राव) (V. DURGA RAO) ᭠याियकसद᭭य/Judicial Member Sd/- (मंजुनाथ. जी) (MANJUNATHA. G) लेखासद᭭य/Accountant Member चे᳖ई/Chennai, ᳰदनांक/Dated: 09 th August, 2023 JPV आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ/CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF