Case Summary: ITA No. 779/DEL/2022 – Kuldeep Vs. Pr. CIT, Rohtak

In the landmark judgment of ITA No. 779/DEL/2022, the Income Tax Appellate Tribunal Delhi bench ‘C’ deliberated upon the appeal filed by Kuldeep against the order of the Principal Commissioner of Income Tax (Pr. CIT), Rohtak dated 24th March 2022 for the assessment year 2017-18. This appeal stands out due to its intricate examination of procedural aspects and substantive justice, marking a significant precedent in the annals of income tax jurisprudence in India.

Presided over by Shri C.M. Garg, Judicial Member, and Dr. B.R.R. Kumar, Accountant Member, the tribunal meticulously navigated through the complexities of the case, shedding light on the procedural nuances and the importance of allowing due opportunity for representation in revenue proceedings.

The appellant, Kuldeep, represented by Shri Prem Rajpal and Shri Pulak Rajpal, Advocates, challenged the Pr. CIT’s revisionary order under section 263 of the Income Tax Act, 1961. The core of the dispute revolved around the Pr. CIT’s decision to propose a reassessment, citing the absence of certain critical documents and the necessity of a more thorough inquiry or verification into the case’s specifics. This proposed reassessment was challenged as being not tenable and sustainable under the circumstances.

During the proceedings, significant attention was given to a joint bank account held by Kuldeep and his father, Shri Richpal Singh. The account became a focal point due to cash deposits made during the demonetization period. The appellant’s argument hinged on the assertion that the assessing officer (AO) had already taken a considered view on this matter, and any revision based on the absence of an explicit examination of this issue in the assessment order was unjustified.

The tribunal’s decision, delivered on 12th May 2023, favored the appellant. The meticulous examination revealed that the AO had indeed made inquiries into the nature of the cash deposits and taken appropriate actions based on the available information and affidavits provided by Shri Richpal Singh, Kuldeep’s father. The tribunal highlighted the promptness and due diligence exercised by the AO in informing the AO of Shri Richpal Singh about the affidavit and requesting further action, which substantiated the appellant’s claim.

In conclusion, the tribunal quashed the Pr. CIT’s revisionary order as unsustainable, citing the comprehensive inquiry conducted by the AO and the lack of justification for deeming the assessment order as erroneous and prejudicial to the revenue’s interest. This judgment not only reinstated the original assessment order for the assessment year 2017-18 but also underscored the imperative of procedural fairness and the weightage of substantiative evidence in tax proceedings.

The case of ITA No. 779/DEL/2022 thus sets a precedent for handling similar matters, emphasizing the need for thorough investigation and proper acknowledgment of provided evidence before reaching a conclusion. It reaffirms the principles of justice and equitable treatment in the tax adjudication process, ensuring that the rights of the assessee are protected against arbitrary revisionary actions.

Conclusion

The appeal of Kuldeep against the order of Pr. CIT, Rohtak for the assessment year 2017-18 was allowed, restoring the original assessment order and shedding light on the critical aspects of legal and procedural review in income tax appellate proceedings. The tribunal’s decision stands as a testament to the importance of detailed examination, factual clarity, and legal righteousness in the resolution of tax disputes.

Case Summary: ITA No. 779/DEL/2022 – Kuldeep Vs. Pr. CIT, Rohtak