Shakti Basmati Rice Pvt Ltd challenged the reassessment order issued by the Principal Commissioner of Income Tax, Rohtak, under Section 263 of the Income Tax Act for the assessment year 2015-16. The Income Tax Appellate Tribunal (ITAT), Delhi, ruled in favor of the appellant, allowing the appeal and restoring the original assessment order.
The case, ITA No.522/Del/2021, was filed against the order of the PCIT who had cancelled the original assessment order of 2017, directing a fresh assessment. The PCIT held that the original assessing officer had erred in their duties by not conducting adequate inquiries into the assessee’s return, which was considered both erroneous and prejudicial to the revenue’s interests.
The appellant’s representative argued that the necessary inquiries were indeed made during the original assessment, detailing the measures taken to scrutinize the returns and the justification of expenses and income reported. Contrary to the claims of the PCIT, the original inquiries were adequate, and the assessment should not have been disturbed.
In their ruling, the ITAT members, Judicial Member Shri Saktijit Dey and Accountant Member Dr. B.R.R. Kumar, pointed out the adequate nature of the investigations and the compliance with the principles of natural justice. They highlighted that the assessing officer had indeed conducted proper investigations into the declared expenses and income, supporting their decision with substantial evidence.
The tribunal concluded that the PCIT’s order under Section 263 was unwarranted and not substantiated by the facts of the case. Thus, the tribunal set aside the PCIT’s order and restored the original assessment order, favoring the assessee.
Order pronounced in the open court on 13th May, 2022.
Appeal Allowed Against PCIT’s Order for Reassessment of Shakti Basmati Rice Pvt Ltd
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