The Income Tax Appellate Tribunal (ITAT), Delhi Bench, presided over by Judicial Member Amit Shukla and Accountant Member Pradip Kumar Kedia, deliberated on the appeals filed by Pawan Kumar Agarwal against the orders of Pr. CIT – 12, New Delhi under section 263 of the Income-tax Act, 1961. These appeals concerned the assessment years 2010-11, 2011-12, and 2012-13 and were consolidated due to identical facts and legal issues.
Pawan Kumar Agarwal, proprietor of M/s. Supreme Gold engaged in the sale and purchase of bullion, faced scrutiny following a survey which later escalated to a search operation yielding significant cash seizures. Despite no incriminating evidence being discovered during the search, subsequent assessments saw substantial financial adjustments, later challenged by Agarwal.
The tribunal noted the absence of incriminating material, which was crucial for the assessment years in question as they had already attained finality. The Pr. CIT had raised several points about unreported transactions and undisclosed income, which were not substantiated with necessary evidence, leading to their appeal. The tribunal criticized the procedural errors and emphasized the need for concrete evidence when altering finalized assessments.
This case underscores the importance of evidence in tax proceedings and the boundaries of the CIT’s revisionary powers under section 263. The tribunal’s decision highlighted procedural fairness and the necessity of linking alleged discrepancies directly to incriminating material discovered during searches.
The ITAT set aside the Pr. CIT’s order, allowing Agarwal’s appeals and reinstating the original assessment orders. This case serves as a significant precedent on the limitations of CIT powers, especially in cases where the assessments have previously been settled.
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