PCIT Vs Rukmani Devi Jain (Allahabad High Court)
The Revenue filed appeals under Section 260A of the Income Tax Act challenging a common order dated 22 April 2025 passed by the Income Tax Appellate Tribunal, Agra Bench, in relation to Assessment Years 2015-16 and 2016-17. The Tribunal had allowed the assessee’s appeals against the Principal Commissioner of Income Tax’s order issued under Section 263. The assessee had earlier been assessed under Section 143(3). For A.Y. 2015-16, the assessee declared sales of ₹74.32 lakh and a net profit of ₹5.94 lakh under Section 44AD. During assessment proceedings, the Assessing Officer examined cash deposits of ₹122.31 lakh, found the assessee’s explanation unsatisfactory, and treated the deposits as sales receipts. On that basis, he proportionately increased the gross sales and enhanced the business income by ₹3.83 lakh.
The Principal Commissioner later exercised revisional jurisdiction under Section 263, holding that the original assessment order was erroneous and prejudicial to the interests of the Revenue. The Tribunal, after reviewing the record, concluded that two views were possible on the treatment of the cash deposits and that the Assessing Officer had adopted one such permissible view. It held that the Assessing Officer had undertaken enquiry during the original assessment proceedings and that no issue remained unexamined. Therefore, the conditions enabling revision under Section 263 were not satisfied. The Tribunal relied on Supreme Court decisions in Malabar Industrial Co. Ltd. v. CIT, CIT v. Max India Ltd., and Grasim Industries Ltd. v. CIT to support its conclusion.
