Renu Anandani Vs National Faceless Appeal Centre (ITAT Jabalpur)
Assessment was reopened u/s 147 r.w.s. 143(3) on allegation that Assessee claimed bogus STCL in Ashutosh Paper Mills shares using fabricated back-dated contract notes. AO made addition of ₹22,16,080 including bogus loss of ₹21,72,628.
Later, PCIT invoked 263 holding that shares credited to demat on 26.03.2012 valued at ₹3,56,680 were not proved to be the same as earlier offline purchases of ₹25,32,920, implying total unexplained investment of ₹28,89,600. AO, following 263 directions, added ₹7,16,972 u/s 69B, recomputed STCG on immovable property, & also added ₹3,60,291 as bogus balance investment. Total income was computed at ₹57,05,869.
Before CIT(A), Assessee argued that additions resulted in double taxation, investment already stood recorded, & AO presumed fictitious online investment without proof. CIT(A) dismissed the appeal stating directions of PCIT were binding & no appeal was filed against the 263 order.
Tribunal held CIT(A) was completely misdirected—PCIT’s 263 only set aside assessment for fresh enquiry; AO was required to apply independent mind & CIT(A) was equally bound to examine additions on merits. CIT(A)’s refusal to adjudicate, merely because AO acted per 263, amounted to abdication of duty. Further, CIT(A) issued notice offering video-conference option till 25.07.2023 but passed the order immediately on 12.07.2023, violating natural justice.
