Court No. - 3
Case :- INCOME TAX APPEAL No. - 123 of 2019 Appellant :- The Pr. Commissioner Of Income Tax Respondent :- Champ Info Software Counsel for Appellant :- Gaurav Mahajan Counsel for Respondent :- Suyash Agarwal
Hon'ble Naheed Ara Moonis,J. Hon'ble Saumitra Dayal Singh,J.
Heard Sri Gaurav Mahajan, learned counsel for the revenue and Sri Suyash Agarwal, learned counsel for the assessee.
Present appeal has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') against the order dated 21.06.2019 passed by the Income Tax Appellate Tribunal, Delhi Bench in ITAT No. 2799/Del/2018, for the A.Y. 2013- 14.
Present appeal has been pressed on the following question of law;
"Whether in view of the clear language of explanation 2(a) of the Act, 1961, the Tribunal has erred in setting aside the order passed by the Principal Commissioner of Income Tax under Section 263 of that Act."
Having heard the learned counsel for the parties and having perused the record, we find that the assessee had filed its return for the A.Y. 2012-13 disclosing NIL income. It was subjected to regular assessment proceeding under Section 143(3) of the Act. In course of that assessment proceeding, the Assessing Authority doubted the genuineness of fresh capital introduced by the assessee Rs.9,02,09,297/- by Shaleen Bajpai- a partner in the assessee firm. In the course of that proceeding, replies were furnished by the said partner of the assessee firm to establish the source of capital thus introduced. In any case, upon inquiry the Assessee Authority accepted the explanation furnished by the assessee and assessed it at NIL income.
The aforesaid order was sought to be revised at the instance of Principal Commissioner of Income Tax, under his order dated 23.03.2018. The said order has been set aside by the Tribunal. Hence, this appeal.
Perusal of the order of the Tribunal reveals that the Tribunal has dealt with the issue in detail. It has examined the nature of the explanation furnished by the assessee, in the course of the assessment proceeding and it has thereafter concluded that proper inquiry had been made in the course of the assessment proceeding wherein assessee explained the source of the capital introduced. Any further inquiry as contemplated by the Principal Commissioner of Income Tax would be in the nature of inquiry into the source of the source, which is clearly not permissible under law. The Tribunal has also taken note of the attending circumstances in which the order came to be passed by the Principal Commissioner of Income Tax in the backdrop of proceeding under Section 148 of the Act.
Assuming the proceeding under Section 148 of the Act may not have influenced the order passed under Section 263 of the Act and that part of the reasoning may not be entirely correct, as suggested by the learned counsel for the revenue still, on the strength the finding recorded by the Tribunal as to the competence of the inquiry made during the course of the regular assessment proceeding, we find the statutory presumption arising under Explanation 2(a) to Section 263 of the Act stood dislodged. Finding of the Tribunal is clearly based on material facts on record and it has been recorded upon due application of mind. There being no ground to assail the finding of the Tribunal as perverse, the appeal lacks merit and is, accordingly, dismissed.
Order Date :- 21.9.2021 A.Kr.