Case Number: ITA 644/DEL/2021
Appellant: Raj Kumar Karanwal, Muzaffarnagar
Respondent: Pr.CIT, Dehradun
Assessment Year: 2010-11
Case Filed On: 2021-06-01
Order Type: Final Tribunal Order
Date of Order: 2023-09-11
Pronounced On: 2023-09-11
This article provides an in-depth analysis of the case ITA No. 644/DEL/2021, where Raj Kumar Karanwal contested the jurisdiction under Section 263 of the Income Tax Act for the assessment year 2010-11. The case examines significant issues regarding the correctness of assessment verification and the jurisdiction of the Principal Commissioner of Income Tax (Pr. CIT).
Raj Kumar Karanwal, the appellant, is a wholesaler and distributor of medicines based in Muzaffarnagar. For the assessment year 2010-11, the Principal Commissioner of Income Tax (Pr. CIT), Dehradun, issued an order under Section 263 of the Income Tax Act, which the appellant contested. The appeal was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘H’ consisting of Shri Shamim Yahya, Accountant Member, and Ms. Astha Chandra, Judicial Member.
The primary issue was whether the Pr. CIT was justified in assuming jurisdiction under Section 263 of the Income Tax Act. Section 263 grants the Pr. CIT the authority to revise any order passed by the Assessing Officer (AO) if it is considered erroneous and prejudicial to the interests of the revenue.
The appellant argued that the AO had conducted necessary verifications and enquiries during the reassessment proceedings. The AO had issued notices under sections 142(1) and 143(2) and verified the appellant’s explanations and documentary evidence regarding cash deposits and property transactions.
The appellant, represented by Shri Sankalp Malik and Shri Sanjay Malik, Advocates, argued that the Pr. CIT’s order was based on incorrect facts and findings and violated the principles of natural justice. They contended that the AO had conducted thorough enquiries and verifications, and the Pr. CIT’s assumption of jurisdiction under Section 263 was unwarranted. The appellant cited various case laws to support their position, including decisions from the Hon’ble Apex Court and Hon’ble Delhi High Court.
The respondent, represented by Ms. Sapna Bhatia, CIT-DR, supported the Pr. CIT’s order and argued that the AO’s assessment was erroneous and prejudicial to the interests of the revenue. The respondent contended that the AO had failed to make proper enquiries and verifications regarding the appellant’s cash deposits, property transactions, and other financial details.
The tribunal carefully considered the arguments and the case records. It acknowledged that the AO had issued various notices and conducted detailed enquiries during the reassessment proceedings. The tribunal noted that the AO had verified the appellant’s explanations and documentary evidence regarding cash deposits and property transactions, including obtaining bank statements and conducting reconciliations.
The tribunal concluded that the Pr. CIT’s order under Section 263 was not sustainable, as the AO had made proper enquiries and verifications. The tribunal emphasized that the mere fact that the AO did not elaborate on the issues in the reassessment order did not justify the Pr. CIT’s assumption of jurisdiction under Section 263.
Final Judgment:
Income Tax Appellate Tribunal, Delhi Bench ‘H’ New Delhi
Before: Shri Shamim Yahya, Accountant Member & Ms. Astha Chandra, Judicial Member
Order:
The appeal filed by Raj Kumar Karanwal is allowed. The order under Section 263 by the Pr. CIT is set aside, and the assessment order passed by the AO is upheld. The tribunal emphasized that the AO had conducted thorough enquiries and verifications, and the Pr. CIT’s order was based on incorrect assumptions and findings.
Order Pronounced in the Open Court on 11th September 2023.
Signed:
Ms. Astha Chandra, Judicial Member
Shri Shamim Yahya, Accountant Member
Date: 11th September 2023
Raj Kumar Karanwal vs. Pr. CIT: Jurisdiction and Assessment Verification for AY 2010-11
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