Vaneet Gupta Vs ITO (ITAT Chandigarh)
ITAT Chandigarh held that initiation of revisionary proceedings under section 263 of the Income Tax Act on the basis of audit objection is not permissible. Accordingly, order of PCIT quashed and appeal of assessee allowed.
Facts- The assessee had not filed the return of income for the AY 2011-12, since the income was below the taxable limit. Notice u/s 148, dated 30.03.2018 was issued and the case of assessee was reopened u/s 148 on account of investment in the immovable property for Rs. 1.10 crore and cash deposit of Rs. 43,52,100/- in the saving bank account with ICICI Bank.
After the completion of the assessment, there was an ‘audit objection’ raised by the audit party, based on the same notice u/s. 263 was issued.
Conclusion- Held that though the A.O. has not agreed with the audit objection, the ld. PCIT initiated the proceedings u/s 263 vide notice u/s 263 dated 5/4.03.2021. The only issue raised was about the ‘ICICI Bank’ account having not been examined by the A.O. The issue was raised by the Audit party and, thus, the PCIT had only initiated proceedings u/s 263 on the basis of ‘Audit objection’ and which is not permitted.
