Gaurav Purohit Vs PCIT (ITAT Jodhpur)
The Income Tax Appellate Tribunal (ITAT) Jodhpur bench was tasked with adjudicating the case of Gaurav Purohit versus the Principal Commissioner of Income Tax (PCIT). The case revolved around the reopening of Purohit’s assessment under Section 147 of the Income Tax Act based on third-party information. The reopening aimed to verify transactions conducted under Purohit’s PAN.
Proceedings: Upon reopening, Purohit actively participated in the assessment proceedings. The Assessing Officer (AO), through a notice dated December 5, 2017, raised several questions, particularly questions 5 and 6, which required detailed explanations from Purohit. Purohit responded to the notice, explaining the nature of the transactions and arguing against the necessity of an audit. He supported his contentions with detailed submissions, which the AO verified. Consequently, the AO recorded satisfaction with Purohit’s explanations and passed the assessment order on December 14, 2017.
Key Issues Raised by PCIT: The PCIT, invoking Section 263, contested the AO’s order, arguing it was erroneous and prejudicial to the interests of the revenue. The PCIT’s primary contention was that the AO accepted Purohit’s version without adequately verifying the Income Tax System (ITS) details against the transactions in the broker’s ledger account and the bank statement. Additionally, the PCIT directed the AO to verify sales from the broker’s ledger and stock exchanges (BSE/NSE) and to investigate transactions carried out by other parties using Purohit’s PAN.
