Section 263 cannot be invoked on issue on which AO passed order after considering detailed reply of Assessee

PCIT Vs Karan Polymers Pvt. Ltd (Calcutta High Court)

Short issue involved in the instant case is whether assumption of jurisdiction by PCIT under Section 263 of the Act was justified.

The learned Tribunal noted that the issue based on which the PCIT assumed jurisdiction under Section 263 of the Act was the very same issue which was the subject matter of the reopening proceedings which was done by the Assessing Officer under Section 148 of the Act. The learned Tribunal also noted that the assessee had filed a detailed submission to the reopening proceedings by reply dated 2^nd August, 2018 and records were placed before the Assessing Officer in the form of a paper book and after examining all the documents the Assessing Officer was satisfied that the assessee had not entered into any bogus/accommodation entry/transaction with the party in question and there is no element of undisclosed income.

Thus, in our considered view, the learned Tribunal rightly applied the legal position and also took note of the facts and held that the power under Section 263 of the Act could not have been invoked.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

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