Ravindra Dhaka Vs PCIT (ITAT Delhi)
The ITAT Delhi dismissed the assessee’s appeal and upheld the revision order passed by the PCIT u/s 263 holding that the assessment framed u/s 143(3) was erroneous and prejudicial to the interests of Revenue due to lack of proper enquiry. The case involved alleged cash payment of about ₹44.68 lakh for acquisition of property based on Investigation Wing material seized during search in another group. The Faceless AO had accepted the returned income since legible documents and cross-examination opportunity were not provided; however, the Tribunal held that the AO was still required to conduct independent verification before completing assessment. Since no meaningful investigation or enquiry was made on crucial information suggesting unexplained cash payment, invocation of section 263 was held valid and the PCIT’s direction to reframe assessment after proper verification was confirmed.
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeal is filed by assessee against the order dated 28.03.2025 by Ld. Pr. Commissioner of Income Tax, Faridabad [“Ld. PCIT”] passed u/s 263 of the Income Tax Act, 1961 [“the Act”] pertaining to Assessment Year 2020-21.
2. Brief facts of the case are that the assessee is an individual and filed his return of income, declaring total income at INR 27,12,580/-. The case was selected for limited scrutiny and during the course of assessment proceedings, the Faceless AO asked the JAO to provide legible copies of the documents relied upon by the Investigation Wing to allege that assessee has made cash payment of INR 44,68,000/-[wrongly mentioned as INR 48,64,000/-] in acquisition of property. However, as the legible copy could not be provided therefore, Faceless AO has passed the assessment order u/s 143(3) accepting the income as declared by the assessee. Thereafter, Ld. PCIT in terms of notice issued u/s 263 dated 15.01.2025 initiated the proceedings u/s 263 by holding the assessment order as erroneous and pre-judication to the interest of Revenue as no enquiry or investigation was carried out nor any additions with respect to the cash payment made on the purchase of property was made in the hands of the assessee.
