INCOME TAX ACT, 1961

Section 263 Section 115BBE

Revision under section 263 - Erroneous and prejudicial order - Where Pr. CIT himself was not clear about the applicability of relevant provisions of section 115BBE as were not invoked by AO -

As per Pr. CIT, discrepancies found, confronted and accepted by assessee during the course of survey attracted deeming provisions of section 68, 69, 69A, 69B and 69C and the income referred therein was chargeable to tax at rate prescribed under section 115BBE. As it was not done so, therefore, order passed by AO was erroneous and to the interest of revenue. Held: Merely stating that excess cash was clearly covered under section 68 or 69A, excess stock was covered under section 69 or 69B, construction of Shed/Godown was covered under section 69B or 69C and advances made to Sundry Parties is covered under section 69, 69B or 69D was like an open ended hypothesis which is not supported by any specific finding that the matter shall fall under which of the specific sections and how the conditions stated therein were satisfied before said provisions were invoked. It was like laying a general rule, which was beyond the mandate of law, that wherever there is a survey and some income is detected or surrendered by the assessee, the deeming provisions are attracted by default and by virtue of the same, provisions of section 115BBE are attracted. Pr. CIT was to record his specific findings as to the applicability of relevant provisions and how the explanation called for and offered by assessee was not acceptable in the facts of case which was clearly absent in the instant case. Therefore, where Pr. CIT himself was not clear about the applicability of relevant provisions and in the same breath holding the AO to task by not invoking the said provisions was clearly shooting in the dark which could not be sustained in the eyes of law and the order so passed by AO, therefore, could not be be held as erroneous and prejudicial.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

INCOME TAX ACT, 1961

Section 263

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