Tansingh Vs PCIT (TAT Raipur)
AO’s Mechanical Acceptance of Return Leads to Revision- Assessment Accepted Without Inquiry – Tribunal Upholds Pr.CIT’s Revision u/s 263 on Liquor Trader’s Case
Assessee, engaged in liquor trading, filed a return declaring income of ₹19.10 lakh in response to notice u/s 148. AO accepted the returned income in the reassessment order u/s 147/144B without conducting any detailed verification. Later, based on an audit objection citing CIT v. Mekala Bal Reddy (AP HC), it was noted that liquor business profits should be estimated at 5% of turnover. With turnover of ₹8.28 crore, the estimated profit should have been ₹41.43 lakh, leading to an under-assessment of ₹24.55 lakh & corresponding under-levy of tax of ₹7.59 lakh.
PCIT held that (i) AO failed to examine correctness of income computation & (ii) did not verify applicability of section 44AB, despite turnover exceeding ₹1 crore. Treating the assessment as summary & non-enquiry based, PCIT invoked section 263, terming it “erroneous & prejudicial to the interests of revenue.”
Before the Tribunal, Assessee remained absent despite multiple opportunities. Relying on Supreme Court guidance (Ishwarlal Mali Rathod v. Gopal & Ors., SLP 14117-14118/2021) that adjournments should not delay justice, the Bench proceeded ex parte.
