Rajesh Kumar Jalan Vs PCIT (ITAT Kolkata)
ITAT Kolkata held that CIT has not applied his mind analytically while assuming jurisdiction for taking cognizance under section 263 of the Income Tax Act. Thus, in absence of independent application of mind, invocation of revisionary provisions by CIT unsustainable.
Facts- Assessee at the relevant time was engaged in trading of cloth including sarees. AO had received information from Bureau of Investigation, Commercial Taxes, West Bengal during the meeting of REIC held on 23.03.2018. This information exhibits that the assessee had by fraudulent act opened seven Bank accounts under five proprietorship concerns and received a total sum of Rs.112,41,47,898/- over the years. AO recorded the reasons and reopened the assessment in both the assessment years.
AO was of the view that the alleged money credited to the account of the assessee in these two years is to be treated as unaccounted sales of the assessee. The Additional Commissioner of the Range forwarded a proposal to CIT for initiating proceedings u/s. 263 of the Income Tax Act against the assessee. Accordingly, issued a notice under section 263 and invited explanation of the assessee as to why assessment orders are not to be set aside being erroneous and prejudicial to the interest of Revenue. CIT was of the view that the alleged credit of sales ought to be treated as unexplained cash credit against the name of assessee. AO has erred in treating it as a gross turnover. CIT not being satisfied with the explanation of the assessee, set aside the assessment orders.
