Case Number: ITA 1149/DEL/2020
Appellant: Avnish Chandra (HUF), Badaun
Respondent: Principal Commissioner of Income Tax (Pr. CIT), Moradabad
Assessment Year: 2016-17
Result: Revision of assessment order upheld
Case Filed On: 2020-05-18
Order Type: Final Tribunal Order
Date of Order: 2022-06-30
Pronounced On: 2022-06-30
This case involves Avnish Chandra (HUF) of Badaun appealing against the order of the Principal Commissioner of Income Tax (Pr. CIT), Moradabad, for the assessment year 2016-17. The appeal was heard by the Income Tax Appellate Tribunal (ITAT) and the revision of the assessment order under Section 263 of the Income Tax Act, 1961 was upheld.
The appellant, Avnish Chandra (HUF), filed its return of income for the assessment year 2016-17 declaring an income of Rs. 8,78,090. The case was selected for scrutiny based on the reason of large cash deposits in saving bank accounts. The Assessing Officer (AO) accepted the returned income and completed the assessment on 24.08.2017.
The Principal Commissioner of Income Tax (Pr. CIT), Moradabad, scrutinized the assessment order and issued a notice under Section 263 of the Income Tax Act, stating that the AO had failed to make proper inquiries regarding the cash deposits of Rs. 68,15,000 in the appellant’s bank accounts. The Pr. CIT observed that the AO had not obtained bank statements, cash books, or verified the genuineness of the deposits. Consequently, the assessment order was revised as it was considered erroneous and prejudicial to the interests of the Revenue.
The appellant argued that the books of account were produced during the assessment proceedings and were test-checked by the AO. The appellant claimed that the cash deposits were from trading receipts and Girvi (pawn) receipts. The appellant contended that the revision under Section 263 was unwarranted as the AO had conducted a thorough inquiry.
The respondent, represented by the Departmental Representative (DR), supported the revision order, stating that the AO had failed to conduct necessary inquiries and verify the genuineness of the cash deposits.
The tribunal observed that the AO had not conducted adequate inquiries to verify the genuineness of the cash deposits. The tribunal noted that the AO had failed to obtain the necessary documents such as the cash book, bank book, and KYC documents of the borrowers. The tribunal agreed with the Pr. CIT that the AO’s assessment order was made in a routine and casual manner.
The tribunal examined the documents and submissions made by the appellant and found that the primary requirement for doing money lending business, i.e., the money lending license, was not on record. The tribunal also noted that the appellant had failed to maintain proper records of the Girvi receipts and the AO had not verified the opening balance of advances given and their return in cash.
The ITAT upheld the order of the Pr. CIT, Moradabad, and confirmed the revision of the assessment order under Section 263 of the Income Tax Act, 1961. The appeal by Avnish Chandra (HUF) was dismissed.
The detailed analysis and thorough inquiry by the AO are essential to ensure the accuracy and legitimacy of the assessment process. The case highlights the need for due diligence and proper documentation in tax assessments.
Avnish Chandra (HUF), Badaun vs. Pr. CIT, Moradabad – ITA 1149/DEL/2020: Assessment Year 2016-17
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