Aadhya Infrastructure Vs PCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that revisionary jurisdiction under section 263 of the Income Tax Act cannot be invoked as AO exercised a plausible and legally valid view and revisionary jurisdiction cannot be invoked merely because PCIT holds a different view.
Facts- During the survey, the respective partners of the firms admitted undisclosed income arising from unrecorded receipts. These amounts were included in their respective returns of income. The case of both the assessee-firms was selected for scrutiny assessment, and the AO passed orders accepting the returned income of the assessees without any modification.
Later on, the PCIT determined that the AO failed to conduct proper verification regarding the nature and source of the undisclosed income admitted during the survey u/s. 133A of the Act. PCIT, observed that the AO accepted the undisclosed income as part of regular business receipts without investigating whether it was unexplained cash receipts u/s. 69A of the Act. The PCIT also observed that the undisclosed income was taxed at the normal rate of 30%, instead of the higher rate of 60% u/s. 115BBE of the Act, which applies to income covered under Sections 68 to 69D of the Act. Therefore, PCIT set aside the assessment orders and directed the AO to conduct fresh assessments after making the necessary inquiries and verifications. The AO was also instructed to consider the provisions of Sections 69A, 115BBE, 269ST, and 271DA of the Act, while passing the revised orders.
