The Tax Publishers2019 TaxPub(DT) 6210 (Chd-Trib) : (2019) 178 ITD 0282 : (2019) 201 TTJ 0378

INCOME TAX ACT, 1961

section 263 Section 143(3) Section 147/56(2)(vii)

Where there was direct decision of Tribunal on the issue and which was followed by the AO the order passed under section 263 contrary to same decision would therefore, be tantamount to judicial indiscipline, as such, order passed by Pr. CIT was not therefore, we sustianable.

Revision under section 263 - Erroneous and prejudicial order - Plausable view taken by AO - Direct decision of Tribunal

Assessment was completed by the AO under section 143(3) accepting the returned income. Subsequently, the AO reopened the assessment under section 147 read with section 148 on the ground that the assessee during the year under consideration had received a gift of Rs. 5,90,000 from his 'HUF'. The AO was of the view that since the amount of said gift was more than Rs. 50,000, hence, the same was exigible to tax as 'income from other sources' under section 56(2)(vii). However, AO in the reopened assessment proceedings relied upon the decision as relied on by assessee of the Coordinate Rajkot Bench of the Tribunal order dt. 17-5-2011, in the case of Vineetkumar Raghavjibhai Bhalodia v. ITO passed in ITA No. 583/Rjt/2007] : 2011 TaxPub(DT) 1022 (Rjk-Trib) for assessment year 2005-06, which had been further followed by the Hyderabad Bench (SMC) of the Tribunal, order dt. 17-6-2015 in 'Mr. Biravelli Bhaskar v. ITO' ITA No. 398/Hyd/2015 for assessment year 2008-09. In the said decision it was held that the gift received by the assessee from the 'HUF' was not taxable. The AO accepted the contentions raised by the assessee and accordingly assessed the income of the assessee at the returned income. The Pr. CIT held that AO had made a mistake in not taking recourse to the clear and unambiguous provisions of section 56(2)(vii) and in unduly placing reliance on the judicial decisions which were not in accordance with the provisions of law. She, therefore, held that the order passed by the AO was erroneous and prejudicial to the interest of revenue.Held: Pr. CIT while passing the impugned order, held that the decisions of the Coordinate Benches of the Tribunal at Rajkot and Hydrabad were not correct decisions which, tantamount to judicial indiscipline. If such a course is allowed to subsist, then there will be no certainty and finality to the litigation. The decisions of the higher judicial authorities were binding upon the AO and the AO accordingly followed the same. In view of this, the AO took a possible view in the light of the direct judicial decisions on the issue. Under the circumstances, the order of the AO cannot be said to be erroneous. If the decisions passed by the higher authorities are not followed by the lower authorities, there will be chaos resulting into never ending litigation and multiplication of the cases. In view of the above discussion, the impugned order of the Pr. CIT was non sustainable as per law.

Applied:Malabar Industries Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :


INCOME TAX ACT, 1961

Section 4 Section 37(1)

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