Sanjay Jhawar Vs PCIT (ITAT Lucknow)
Assessee challenged the revision order passed by PCIT u/s 263. There was a delay of 109 days in filing the appeal, which was condoned considering the medical exigency of Assessee’s mother.
The core issue was that PCIT set aside the assessment order u/s 263 by alleging that AO had not made sufficient enquiries regarding increase in unsecured loans & heavy cash deposits during demonetisation. However, Assessee contended that all documents, confirmations & explanations were already submitted before AO during scrutiny, & AO completed assessment only after detailed verification. Even during 263 proceedings, the Assessee again furnished all records, but PCIT did not consider the submissions or evidence at all & still set aside the assessment.
Tribunal observed that u/s 263, PCIT is legally bound to consider Assessee’s submissions & make a speaking order. Merely issuing notice u/s 263 is not enough- PCIT must deal with the explanations given. In this case, the Assessee had specifically explained that higher sales in the relevant year were due to early festival season, a normal business pattern, but PCIT failed to verify or deal with this explanation. Non-consideration of submissions amounts to violation of principles of natural justice.
