Income Tax Appellate Tribunal Delhi ‘H’ Bench Judgment Summary

Case Number: ITA No. 826/DEL/2022 for Assessment Year 2017-18

Appellant: Bharat Malhotra (Prop M/s Shri Nathji Jewels), Karnal

Respondent: Pr, CIT, Rohtak

Judgment Date: 30th November 2022

This document offers a detailed analysis of the judgment delivered by the Income Tax Appellate Tribunal (ITAT), Delhi ‘H’ Bench, concerning the appeal filed by Bharat Malhotra, the proprietor of M/s Shri Nathji Jewels, against the order under section 263 of the Income-tax Act, 1961 by the Pr, CIT, Rohtak for the assessment year 2017-18.

Background of the Case

The case originated from a grievance against the assumption of jurisdiction under section 263 by the Pr, CIT, Rohtak, and its consequent order deeming the assessment order passed by the Income Tax Officer, Ward-1, Karnal as erroneous and prejudicial to the interests of the Revenue. The primary issue revolved around the jurisdiction assumed under section 263 of the Income Tax Act and the correctness of the subjective assessment order.

Proceedings and Representations

Detailed arguments were presented by both sides, supported by relevant documentary evidence and judicial decisions. A significant point of contention was the addition of income admitted by the assessee during a survey operation and its tax implication under the amended section 115BBE of the Act.

Decision Analysis

The tribunal meticulously analyzed the facts of the case, the submissions from both parties, and the relevant legal provisions. It was established that the scope of section 263 is to correct orders that are erroneous insofar as they are prejudicial to the interests of the Revenue. However, the tribunal found that the order under review did not meet these criteria due to several legal interpretations regarding the applicability and effect of the amendment in section 115BBE.

Conclusion

The tribunal, after examining the legal positions and the submissions made, allowed the appeal filed by the assessee. It was concluded that the order by the Pr, CIT under section 263 was not justified in assuming jurisdiction and altering the original assessment order. Therefore, the tribunal restored the order passed by the Assessing Officer, emphasizing the importance of adhering to legal standards and providing clarity on the application of tax laws.

Outcome: Allowed

Income Tax Appellate Tribunal Decision for Bharat Malhotra (Prop M/s Shri Nathji Jewels) vs. Pr, CIT, Rohtak [ITA No. 826/DEL/2022] for A.Y. 2017-18