Gajanand Financial Consultancy Pvt. Ltd. Vs PCIT (Central) (ITAT Nagpur)
Protective vs Substantive- Nagpur ITAT Quashes PCIT’s 263 Order – Protective Addition Cannot Be Re-engineered- Detailed Enquiry by AO Saves Assessment – Tribunal Rejects 263 Revision
Assessee filed appeal against the order of PCIT (Central) dated 05.03.2024 passed u/s 263 whereby assessment framed u/s 143(3) r.w.s. 147 was held erroneous & prejudicial to the interest of revenue.
Assessee had originally filed return declaring a loss of ₹4,250. Pursuant to search in Tapadiya Group on 16.01.2019, AO reopened the case & completed reassessment making addition of ₹5,57,10,000 u/s 68 on protective basis, holding that the Assessee had only provided accommodation entries to Tapadiya Polyester Pvt. Ltd. (TPPL). PCIT invoked revision u/s 263 alleging that AO had failed to bring to tax the balance ₹4.48 crore out of ₹10.05 crore investments, & directed reframing of assessment to add entire ₹10.17 crore.
Assessee challenged this action, contending that AO had conducted detailed enquiries through multiple notices & show-cause, applied his mind & consciously made protective addition, while the substantive addition already stood made in hands of TPPL & also in hands of Antariksh Barter Pvt. Ltd. on protective basis. It was urged that revision cannot be used to substitute one plausible view by another, more so when the issue was already sub-judice before CIT(A).
