In the Income Tax Appellate Tribunal, Delhi Bench ‘E’, New Delhi, Shri Narendra Goel, Prop. V.P. and Company, Muzaffarnagar, filed an appeal against the order of the Principal Commissioner of Income-tax (Pr.CIT), Dehradun, dated 9.3.2021, pertaining to the assessment year 2015-16. The appeal, ITA No. 470/DEL/2021, was directed against the order passed under Section 263 of the Income Tax Act, 1961.
The appellant, represented by Sh. Ankit Gupta, Advocate, contested the Pr.CIT’s order on several grounds, claiming that the order was illegal, without jurisdiction, and that the original assessment order passed under Section 143(3) was neither erroneous nor prejudicial to the interests of Revenue.
The appellant raised the following grounds:
During the assessment year 2015-16, the AO completed the assessment under Section 143(3) on 31.5.2017, determining the income at Rs.17,82,584/-. The Pr.CIT, upon examining the records, observed that the AO did not carry out requisite inquiries regarding advances from customers and the introduction of fresh capital. Consequently, a notice under Section 263 was issued, to which the appellant responded, but the response was deemed unsatisfactory by the Pr.CIT.
The Tribunal noted that the Pr.CIT exercised power under Section 263 based on the failure of the appellant to furnish documentary evidence in support of claims regarding:
The Tribunal referred to judicial precedents, including decisions by the Delhi High Court and the Allahabad High Court, which established that the Pr.CIT cannot invoke Section 263 merely because of a different opinion, especially when the AO’s view is plausible and based on adequate inquiry.
The Tribunal concluded that the Pr.CIT’s action under Section 263 was unjustified as the AO had made necessary inquiries and accepted the appellant’s explanations. The assessment order passed by the AO was neither erroneous nor prejudicial to the interests of Revenue. Therefore, the Tribunal set aside the Pr.CIT’s order and restored the original assessment order.
The appeal by Shri Narendra Goel was allowed, and the original assessment order under Section 143(3) was restored.
Order pronounced in open court on 17th May, 2022.
(PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER
Copy forwarded to:
Assistant Registrar ITAT, New Delhi
Narendra Goel vs. Pr CIT Dehradun – ITA 470/DEL/2021: Appeal against Section 263 Notice and Order
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