PCIT Vs Mukul Kumar (Supreme Court of India)
The Supreme Court considered a special leave petition filed by the Revenue against a judgment dismissing its income tax appeal. At the outset, the Supreme Court condoned the delay but, after hearing counsel for the petitioner, held that the case did not warrant exercise of discretionary jurisdiction under Article 136 of the Constitution of India. Consequently, the petition was dismissed, and all pending applications stood disposed of.
The underlying litigation arose from an Income Tax Appeal filed under Section 260A of the Income-tax Act, 1961 against an order of the Income Tax Appellate Tribunal (ITAT), Mumbai dated 30 October 2023. The Revenue proposed several substantial questions of law, primarily challenging the ITAT’s decision to delete an addition of ₹3.73 crore made under Section 68 of the Act on account of alleged unexplained cash credits in the form of unsecured loans.
The Revenue contended that the assessee had failed to establish the identity, creditworthiness, and genuineness of the lender companies, and had not discharged the statutory onus under Section 68, including the burden under its first proviso. It was also argued that the Assessing Officer (AO) had raised serious doubts during assessment and remand proceedings, and that the ITAT erred in deleting the addition on the ground of inadequate inquiry by the AO. According to the Revenue, even if the lower authorities had shortcomings in inquiry, the Tribunal, as the final fact-finding authority, was obligated to conduct proper inquiry rather than simply delete the addition. Reliance was placed on judicial precedents to argue that a perverse order of the Tribunal would give rise to a substantial question of law.
