INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Validity - Unexplained transaction of receipt of advance and subsequent repayment -

Assessee claimed refund of a sum of TDS. AO completed the assessment under section 143(3) read with section 147 assessing taxable income. CIT issued notice under section 263 seeking to revise the assessment order passed under section 143(3)/147. CIT was of the view that assessment order was passed without making proper inquiries/verification/investigations which should have been made before accepting the cash deposits in NRO account of assessee, therefore, assessment order is erroneous and prejudicial to interest of Revenue. Assessee submitted that assessment order was not erroneous and prejudicial to interest of revenue and also assessment was made after making inquiries or verification on all the facts Held: On going through the chronological events which led to AO to pass assessment order under section 143(3)/147 accepting the cash deposit, AO verified all the aspects and therefore, the view taken by CIT was only a second view which was not permissible under section 263. It is the settled proposition of law that for invoking jurisdiction under section 263, the twin conditions, namely, order was erroneous and order is prejudicial to the interest of the revenue must be satisfied. Since AO called for various details and after verification of the same has passed the order, therefore, the same cannot be treated as erroneous. Accordingly, order passed by CIT under section 263 was set aside.

Followed:Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC), Narasimha Reddy Peechu v. The ITO [ITA. No. 932/HYD/2017, dt. 20-7-2018], Amira Enterprises Ltd. v. Pr. CIT [ITA No. 3206/DEL/2017, Order dated 29-11-2017] : 2017 TaxPub(DT) 5411 (Del-Trib) and Shri Narayan Tatu Rane v. ITO (2016) 70 Taxmann.com 227 (Mum-Trib) : 2016 TaxPub(DT) 2516 (Mum-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14

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