OM PARKASH DAHIYA,CHANDIGARH V. PRINCIPAL COMMISSIONER OF INCOME TAX-1, CHANDIGARH

ITA 486/CHANDI/2024

AI Insights

The case involves Shri Om Parkash Dahiya, the appellant, who contested the revisionary jurisdiction invoked by the Pr. CIT under section 263 of the Income Tax Act for the Assessment Year 2015-16. The Pr. CIT had revised the assessment order initially accepted by the AO, alleging that the AO did not conduct a pragmatic inquiry into the sources of cash payments amounting to Rs. 65 Lacs made for property investment. The Tribunal examined the submissions and evidence presented during the reassessment proceedings and concluded that the AO had adequately addressed the issues raised, thus restoring the original assessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714245 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Other Referred Cases: Malabar Industrial Co. Ltd. vs. CIT, CIT vs. Max India Ltd., Grasim Industries Ltd. vs. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUSUM BANSAL LD
• Assessee Lawyers: PARIKSHIT AGGARWAL LD
• Keywords: Reassessment proceedings; Revision of order
• Section: 142(1); 263

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ ITA No.486/CHANDI/2024 (िनधाŊरण वषŊ / Assessment Year: 2015-16) Shri Om Parkash Dahiya H. No 261 Sector 35-A Chandigarh-160002. बनाम/ Vs. Pr. CIT-1 C.R. Building Sector 17, Chandigarh. ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. ABIPD-9378-D (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Sh. Parikshit Aggarwal (CA) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Smt. Kusum Bansal (CIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 23-07-2025 घोषणाकीतारीख /Date of Pronouncement : 04-08-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. By way of this appeal, the assessee assails invocation of revisionary jurisdiction u/s 263 by Ld. Pr.Commissioner of Income Tax, Chandigarh-1 (Pr. CIT) for the Assessment Year (AY) 2015-16 vide impugned order dated 16-03-2024 proposing revision of assessment as framed by Ld. Assessing Officer [AO] u/s.143(3) r.w.s. 147 of the Act on 29-03-2022. Printed from counselvise.com 2 2. The Ld. AR advanced arguments supporting the assessment order whereas Ld. CIT-DR advanced arguments supporting the impugned revisionary order. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 3. The assessee’s return of income was subjected to reassessment proceedings on the ground that the assessee made investment of Rs.65 Lacs in certain house property. The source of the investment was alleged to have remained unexplained. To verify the same, the case was reopened. The assessee filed same return of income and also filed various submissions in response to notices u/s 142(1). Convinced with assessee’s explanations, the returned income was accepted and the assessment was framed by NFAC on 29-03-2022. 4. The Ld. Pr. CIT, while revising the order, alleged that pragmatic enquiry was not conducted by Faceless Assessment Officer (FAO) and the assessment was framed by merely accepting the returned income. As per statement given by the assessee before investigating officer of Enforcement Directorate, the assessee admitted to have made payment of Rs.60 Lacs in cash during FYs 2013-14 and 2014-15 which was not retracted till date. The issue was to examine the sources of payments made. The assessee made payment of Rs.45 Lacs to M/s United Engineers Construction Co. during this year. However, Ld. AO did not make any enquiry / examination with respect to sources of cash payments and genuineness and creditworthiness of alleged cash flow which was apparently not genuine. Printed from counselvise.com 3 5. The assessee opposed proposed revision on the ground that Ld. AO, after due verification of evidences and after verifying the withdrawals from the bank from the bank statement and related cash flows, completed the assessment. The FAO duly examined the source of cash payments and genuineness and creditworthiness of alleged cash flows. The credit entries in bank were furnished with complete narration. However, rejecting the same, Ld. AO was directed to make proper, detailed, satisfactory and complete inquires into genuineness and creditworthiness of the source of investment of Rs.65 Lacs. Aggrieved, the assessee is in further appeal before us. 6. Upon perusal of reasons recorded to reopen the case of the assessee as placed in the paper-book, it could be seen that the case of the assessee was specifically reopened to examine the investment of Rs.65 Lacs as made by the assessee for construction / renovation of house property during FY 2014-15. It has been alleged that the source of investment of Rs.45 Lacs remained unexplained and the return of income was not commensurate with the investment made by the assessee. To examine the same, the case was reopened and notices u/s 142(1) was issued. In notice dated 06-12-2021, the assessee was required to provide the details of investment of Rs.65 Lacs and the assessee was directed to supply the two bank accounts as maintained by the assessee along with sources of all the credits in the bank accounts. The assessee, vie reply dated 16-02-2022, furnished cash flow statements for FYs 2013-14 and 2014-15 reflecting the investment so made. The assessee also furnished copies of bank statement along Printed from counselvise.com 4 with narration of bank entries which include payments made to M/s United Engineers Const. Co. After due consideration of all the submissions, returned income was accepted by Ld. AO. Upon perusal of all these replies and documents, it could very well be said that whatever information was called for by Ld. AO, the same was duly been supplied by the assessee. The Ld. AO considered the replies of the assessee and after having satisfied with aforesaid explanation as furnished by the assessee, chose to accept the returned income of the assessee. It could thus be seen that Ld. AO had raised a specific query on issues as flagged in the impugned revisionary order and accepted the claim of the assessee with due application of mind. Therefore, it is a case of acceptance of one of the plausible views which was more on facts and the said view could not be said to be opposed to any law or statutory provisions. The Ld. AO, in our opinion, had taken one of the plausible views in the matter and therefore, Ld. Pr. CIT could not be said to be justified in substituting the view of Ld. AO with that of his own view. Simply because some further verification was required or simply because the verification was not done in a particular manner, the same could not justify revision of the order unless it was shown that the view of Ld. AO was erroneous or opposed to any law. 7. The Hon’ble Supreme Court in Malabar Industrial Co. Ltd. vs. CIT (supra) has held that the phrase 'prejudicial to the Printed from counselvise.com 5 interests of the revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or 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. The said principal has been reiterated by Hon’ble Court in its subsequent judgment titled as CIT V/s Max India Ltd. (295 ITR 282). Similar principal has been followed in Grasim Industries Ltd. V/s CIT (321 ITR 92). The ratio of all these decisions is that where two views are possible and AO has preferred one view against another view, order could not be said to be erroneous or prejudicial to the interest of the revenue. 8. Therefore, on the given facts, the impugned revision of assessment order could not be sustained in law. We order so. The assessment as framed by Ld. AO stand restored back. Printed from counselvise.com 6 9. The appeal stands allowed in terms of our above order. Order pronounced on 04-08-2025. Sd/- Sd/- (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 04-08-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "