Case Law Details
Pavan Kandkur Vs PCIT (ITAT Bangalore)
Conclusion: In present facts of the case, the ITAT observed that proceedings under Section 263 of Income Tax Act, 1961 cannot be sustained if the tax payer had opted to settle the dispute under the Direct Tax Vivad Se Vishwas Act, 2020.
Facts: In present facts of the case, the appeal was filed by the assessee against the order of the learned CIT, Hubali passed under Section 263 of the Income Tax Act, 1961 (the Act) dated 23.03.2022 for AY 2017-18.
The brief facts of the case were that the assessee is a proprietor of the firm HVK Agencies, which is into the wholesale business of palm oil, sunflower oil and vegetable oil. The assessee filed the return of income for AY 2017-18 on 05.11.2017 declaring a total income of Rs. 1,46,760/-. The case was selected for complete scrutiny under CASS for and especially verifying the cash deposits during the demonetization period. Notice under Section 143(2) of the Act was duly served upon the assessee. The AO vide notice under Section 142(1) of the Act called for details such as computation of income, P&L Account, Balance Sheet and bank account statement. The bank account details of the assessee were obtained under Section 133(6) of the Act. The AO noticed certain discrepancies/violations on perusal of the details furnished by the assessee. There was a difference of Rs. 11,36,909/- noticed by the AO in the closing cash balance of the assessee as of 3 1.12.2016. The AO called for further details in this regard. The assessee vide letter dated 25.11.2019 explained and reconciled the discrepancy of Rs.11,36,909/- which will result in an unexplained difference of Rs.92,838/-. Accordingly the AO treated a sum of Rs.92,838/- as unaccounted cash credit under Section 68 of the Act and applied tax rate under Section 115BBE of the Act.
The PCIT initiated revision proceedings and issued show cause notice in response to which the assessee made submissions wherein it was stated that he has applied for the Direct Tax Vivad Se Viswas (DTVSV) scheme and has filed a letter before the CIT(A) for withdrawal of his appeal filed against the order passed under Section 143(3) of the Act. The assessee further submitted that the AO has already examined the details pertaining to the cash deposits during the assessment proceedings and has made the impugned addition by application of his mind. The PCIT did not accept the submissions of the assessee and set aside the order of the AO by u/s. 263 of the Act.
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