PCIT Vs Kirti Anand (Punjab and Haryana High Court)
Punjab and Haryana High Court held that revisionary proceedings under section 263 of the Income Tax Act on the basis of audit objections raised by audit party justifiable since there was no verification done by AO during assessment proceedings.
Facts- The revenue assails the order passed by ITAT dated 14.10.2015, whereby the appeal filed by the assessee was allowed and order passed by CIT-II, Chandigarh dated 21.03.2013, was set aside and the order of assessment passed by the Assessing Officer dated 16.12.2010, was restored.
Notably, the matter is that order was passed by the CIT-II, Chandigarh, u/s. 263 of the Income Tax Act, 1961 and the basis for passing of the said order was that after the assessment proceedings were conducted by AO, the audit objections were raised and it was pointed out in the objections that the inquiry was not conducted as required by the concerned AO relating to the ownership and entitlement of the cars and houses which were said to be the alleged source of income for investment in the mutual funds amounting to Rs.58.30 Lakh approximately.
Conclusion- Held that in the present case, it is an admitted position that after the assessment order was passed, audit objections were raised with regard to inquiry said to have been conducted by the Assessing Officer and the audit – party recorded several major audit objections with respect to the investment made by the assessee in mutual funds/shares. There was no verification done by the Assessing Officer during the assessment proceedings relating to the explanation to be forwarded by the assessee. We, therefore, are satisfied that the order passed by the CIT under Section 263 of the Act in the facts and circumstances of the case cannot be said to be such which was to be interfered with by the ITAT.
