Case Law Details
Prabhakar Jha Vs PCIT (ITAT Kolkata)
ITAT Kolkata held that invocation of revisionary power u/s 263 of the Income Tax Act without pointing out the error committed by AO and without recording a finding regarding escapement of income is unsustainable in law.
Facts- The assessee at the relevant time was running a Petrol Pump in the name and style of ‘Kuldeep Service Station’. It was engaged in purchase and sale of petroleum products. He has filed its return of income electronically on 12.03.2018 declaring total income of Rs.6,86,240/-. The case of the assessee was selected for scrutiny assessment on the issue of cash deposit during demonetisation. AO has passed an assessment order on 24.12.2019 u/s. 143(3) of the Act. AO has determined the total taxable income at Rs.8,09,810/- as against the returned income. He made certain disallowances out of salary to staff, miscellaneous expenses, travelling expenses etc.
The Commissioner took cognizance u/s. 263 of the Act and observed that a perusal of the assessment record would reveal that the assessee received contractual income of Rs.15,84,602/- from Indian Oil Corporation Limited. This contractual receipt was not disclosed in the Profit & Loss Account and AO did not raise any query in this regard, therefore, the order of the AO is erroneous as well as prejudicial to the interest of revenue.
Conclusion- In the present case, the ld. Commissioner harboured a belief that there is a contractual receipt of Rs.15,00,000/- and the ld. Assessing Officer did not make any inquiry about this contractual receipt. The moment assessee has explained the transaction, then it was for the ld. Commissioner to pinpoint, as to how this explanation is to be rejected and where error has been committed by the ld. Assessing Officer. But no such step has been taken by the ld. Commissioner. It is the ld. CIT who has to come to the conclusion that assessment order is erroneous before setting aside the order. In the present case, he has to examine and recorded a finding as to how this contractual receipt goad escapement of income for which assessment order is to be termed as erroneous. We find no such efforts have been made. Therefore the impugned order is not sustainable and it is quashed.
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