RAVINDER SINGH, KHANNA,LUDHIANA V. PRINCIPAL COMMISSIONER OF INCOME TAX-1, LUDHIANA, LUDHIANA

ITA 558/CHANDI/2025

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The case involves Shri Ravinder Singh, the proprietor of M/s New Darshan Bakers, who appealed against the revisionary order issued by the Principal Commissioner of Income Tax, Ludhiana-1. The revision was based on the grounds that the Assessing Officer had not adequately verified the source of cash deposits amounting to Rs.105.43 Lacs in a bank account linked to the assessee's PAN. The Tribunal examined whether the revisionary authority was justified in overriding the Assessing Officer's decision, which had accepted the returned income after considering the explanations and documents provided by the assessee. The Tribunal concluded that the Assessing Officer had made a thorough examination and taken a plausible view, thus restoring the original assessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714250 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• 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: SUDHIR SEH GAL LD
• Keywords: Reassessment proceedings; Revision of order
• Section: 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 आयकर अपील सं./ ITA No.558/CHANDI/2025 (िनधाŊरण वषŊ / Assessment Year: 2018-19) Shri Ravinder Singh S/o Darshan Singh (Prop. Darshan Bakers and New Darshan Bakers) Billan Wali Chapri Khanna, Ludhiana 141401 बनाम/ Vs. Pr. CIT-1 Aaykar Bhawan Rishi Nagar Ludhiana. ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. ACJPS-0927-K (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Sh. Sudhir Sehgal (Advocate) – Ld. AR ŮȑथŎकीओरसे / Respondent by : Smt. Kusum Bansal (CIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 17-07-2025 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, Ludhiana-1 (Pr. CIT) for the Assessment Year (AY) 2018-19 vide impugned order dated 23-03-2025 proposing revision of assessment as framed by Ld. Assessing Officer [AO] u/s.147 r.w.s. 144B of the Act on 16-02-2023. 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 did not file its return of income for this year. Pursuant to receipt of certain information that the assessee deposited cash of Rs.103.94 Lacs in its bank accounts, the source of which remained unexplained, the case was reopened. In response to notice u/s 148, the assessee filed return of income declaring income of Rs.2.03 Lacs. It transpired that the assessee acted as a proprietor of M/s New Darshan Bakers. His son Shri Satbir Singh was proprietor of another entity by the name M/s Darshan Bakers. M/s Darshan Bakers and M/s New Darshan Bakers were thus separate entities. It was stated that the impugned cash deposit actually belonged to Shri Satbir Singh. The PAN of the assessee got utilized while opening the impugned bank Account No. 60237510335 as maintained with Bank of Maharashtra. The PAN was not updated and therefore, the cash deposits were required to be dealt with in the hands of Shri Satbir Singh. In response to notice u/s 133(6), Shri Satbir Singh filed GST registration document, financial statements of M/s Darshan Bakers and certificate from Bank of Maharashtra in respect of impugned bank account regarding cash deposits. Considering the same, Ld. AO accepted the returned income and framed the assessment on 16-02- 2023. This order was subjected to impugned revision by revisionary authority. Printed from counselvise.com 3 4. The Ld. Pr. CIT, in para-4 of the show-cause notice, alleged that the turnover of M/s Darshan Baker was Rs.95.43 Lacs as against deposit of Rs.105.43 Lacs. The creditworthiness and genuineness of Shri Satbir Singh prop. M/s Darshan Baker was not verified by Ld. AO. The assessment order was passed without making any enquiries and verifications. Out of deposits of Rs.105.43 Lacs, an amount of Rs.57.90 Lacs was attributable to the assessee whereas Rs.47.35 Lacs belonged to Shri Satbir Singh. 5. Though the assessee opposed proposed revision, Ld. Pr. CIT alleged that Ld. AO failed to bring to tax cash deposit of Rs.47.35 Lacs stated to be belonging to Shri Satbir Singh. Accordingly, Ld. AO was directed to reframe the assessment after examining the flagged issue. Aggrieved, the assessee is in further appeal before us. 6. Upon perusal of assessment order, it could be seen that the case of the assessee was specifically reopened to examine the sources of cash deposit of Rs.103.94 Lacs in Bank of Maharashtra. During the course of assessment proceedings, specific queries were raised by Ld. AO on the sources of cash deposit and the assessee furnished various documents in its support. The assessee acted as a proprietor of M/s New Darshan Bakers and it filed financial statements and cash flows of M/s New Darshan Bakers along with computation of income. The assessee also furnished cash book of this entity as well as ledger copy of Bank of Maharashtra. Another entity M/s Darshan Bakers was stated to be belonging to his son. In support, the assessee furnished financial statements, GST registration certificate and affidavit of Shri Satbir Printed from counselvise.com 4 Singh proving him to be the owner of M/s Darshan Bakers. The bank certificate was also furnished. It was thus proved during the reassessment proceedings that part of the impugned cash deposits partly belonged to the assessee whereas part of the cash deposits belonged to his son. It was also proved that the PAN of the assessee got utilized while opening the impugned Account No. 60237510335 and accordingly, cash deposit were reported by the Bank under the PAN of the assessee. In response to notice u/s 133(6), Shri Satbir Singh filed bank certificate and affidavit to support the above facts. 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 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 Printed from counselvise.com 5 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. It is another aspect that the assessee could not be prejudiced by the fact that Ld. AO failed to bring to tax cash deposit of Rs.47.35 Lacs stated to be belonging to Shri Satbir Singh. It is an issue which could be germane to the assessment of Shri Satbir Singh only and certainly not in the assessment of the assessee. 7. The Hon’ble Supreme Court in Malabar Industrial Co. Ltd. vs. CIT (supra) has held that the phrase 'prejudicial to the 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 Printed from counselvise.com 6 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. 9. The appeal stands allowed in terms of our above order. Order pronounced on 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 "