Sh. Jagjeet Singh Vs DCIT ACIT (ITAT Amritsar)
Summary: ITAT Amritsar quashed the revisionary orders passed under Section 263 for AYs 2017-18 and 2018-19 in the case of Sh. Jagjeet Singh. The assessee’s assessments had been reopened on the basis of a ledger account found and seized during a search conducted on the Homeland Group. The Tribunal held that where the entire reassessment was founded on material discovered during search on another person, the appropriate statutory course was proceedings under Section 153C and not reassessment under Section 147. The Tribunal relied on DCIT Vs Dinakara Suvarna and held that the AO had erred in invoking reassessment proceedings under Section 147. Consequently, the subsequent action founded upon the invalid assessment was without jurisdiction. The Tribunal also accepted the assessee’s contention regarding the unsigned reasons recorded for reopening and noted that the cases relied upon on this issue were applicable. Independently, on the merits of Section 263, the Tribunal found that the Revenue had failed to establish that the AO’s order was erroneous and prejudicial to the interests of Revenue. The record showed that documents had been furnished and examined during assessment proceedings, while the assessment of Kapil Romanna had also been available before the assessee’s reassessment was completed. Mere allegation of non-application of mind was therefore insufficient. Holding that the PCIT’s findings were infirm and contrary to the factual record, the Tribunal concluded that it was not a fit case for invoking Section 263 and quashed the revisionary order. Both assessee appeals were allowed.
Cases Discussed
- Great Eastern Shipping Co. Ltd. v. National Faceless Assessment Centre/National e-Assessment Centre, [2023] 157 taxmann.com 442 (Bombay High Court) — Relied upon by the assessee on the proposition that unsigned or draft reasons cannot constitute final reasons recorded by the Assessing Officer; the Tribunal found the authorities relied upon on this issue applicable.
- DCIT v. Sri Dinakara Suvarna, [2023] 151 taxmann.com 489 (Supreme Court) — Relied upon and followed for holding that where reassessment was founded on material discovered during search, proceedings were required under Section 153C rather than Section 147.
- ITO v. Arun Kumar Kapoor, [2011] 16 taxmann.com 373 (ITAT Amritsar) — Relied upon by the assessee on applicability of Section 153C to material found during search.
- Surinder Singh, 2012 (9) TMI 1109 (ITAT Amritsar) — Relied upon by the assessee in support of the Section 153C jurisdictional objection.
- G. Koteswara Rao v. DCIT, [2015] 64 taxmann.com 159 (ITAT Visakhapatnam) — Relied upon by the assessee regarding the appropriate statutory proceedings where material is found during search.
- Kiran Singh v. Chaman Paswan, 1954 (4) TMI 48 (Supreme Court) — Relied upon for the principle that an order passed without jurisdiction is a nullity and its invalidity may be challenged whenever it is sought to be enforced or relied upon.
- PCIT v. Badal Prakash Jindal, [2023] 150 taxmann.com 483 (Orissa High Court) — Followed by the Tribunal for holding that consequential revisionary proceedings cannot survive where the foundational reassessment is without jurisdiction.
- Keshab Narayan Banerjee v. CIT, [1999] 238 ITR 694 (Calcutta High Court) — Relied upon for invalidity of Section 263 proceedings arising from a jurisdictionally defective reassessment.
- Meerut Roller Flour Mills (P.) Ltd. v. CIT, [2019] 110 taxmann.com 170/[2019] 267 Taxman 18 (Allahabad High Court) — Relied upon for the proposition that Section 263 cannot be invoked where the AO had made enquiries and applied his mind.
- CIT v. Nirav Modi, [2017] 77 taxmann.com 15 (Supreme Court) — Relied upon in support of the proposition that revision is not sustainable where the AO had conducted proper enquiries and adopted a view on the material.
- Geevee Enterprises v. Addl. CIT, 99 ITR 375 (Delhi High Court) — Cited by the assessee while addressing the distinction between absence of enquiry and an assessment made after enquiry.
- CIT v. Max India Ltd., (2007) 295 ITR 282 (Supreme Court) — Relied upon for the twin requirements that an assessment order must be both erroneous and prejudicial to Revenue before Section 263 jurisdiction can be exercised.
- Malabar Industrial Co. Ltd. v. CIT, (2000) 243 ITR 83 (Supreme Court) — Relied upon for the principle that Section 263 cannot be invoked merely because the Commissioner prefers another permissible view; the order must satisfy both statutory conditions of error and prejudice.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
