The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT), quashed revision order holding that there is no ‘lack of investigation by the Assessing Officer (AO).
The appeal of the assessee, Hoshiarpur Traders, is directed against the order of the Pr. Commissioner of Income Tax [PCIT] for the order passed under Section 263 of the Income Tax Act 1961 for the A.Y. 2017-18. The assessee is a partnership firm and the dealer of the liquor. The assessment was completed under Section 143(3) of the Act.
The notice under Section 263 was issued by the PCIT and the details submission was filed by the assessee against the show cause notice and finally the PCIT had set aside two issues for further verification before the AO considering the assessment order erroneous and prejudicial to the revenue.
Primarily the set aside issues are a) Introduction of capital contributed by the partners; b) amount raise through unsecured loan. The ground for setting aside of the assessment order was that creditworthiness and the genuineness of the transaction was not verified during the assessment proceeding.
The Counsel for the assessee submitted that the source of the ‘introduction of capital’ was already be verified by the assessing authority related to the individual assessee during the individual scrutiny assessments and that both in assessing authority and before the Revisional Authority the assessee has submitted the details related to the loan creditors.
The Tribunal of Dr. M. L. Meena, Accountant Member and Anikesh Banerjee, Judicial Member observed that “Though the assessment order does not patently indicate that the issue in question had been considered by the Assessing Officer, the record showed that the Assessing Officer had applied his mind. Once such application of mind is discernible from the record, the proceedings under Section 263 would fall into the area of the Commissioner having a different opinion.”
The Bench concluded by opining that the investigation by the AO cannot be called ‘lack of investigation’ and that the PCIT has not brought any material on record to show that the view taken is contrary to law or the investigation is erroneous.
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